Engaging Environmental Turbulence

In the academic debate on dealing with environmental turbulence survival or organizational success is being presented as a result of activating dynamic capabilities to repetitively create temporary advantages. A practical question left open in this debate is which organizational determinants matter in the development and deployment of dynamic capabilities. Based on existing strategic management literature this study has derived absorptive capacity, modular organizing, and lateral coordination as important determinants to invest in when confronted with environmental turbulence. The Netherlands armed forces have been selected as the study’s central research case, because this organization faces the similar demand of combining organizational change and stability as many profit organizations do. The study’s main assumption is that giving insight into the way in which the Netherlands armed forces apply the above mentioned determinants, could also be of value for organizations operating in a less extreme business context. The findings show that lateral coordination, absorptive capacity, and modular organizing some or less equally influence the activation of a mixture of strategic, structural, and operational dynamic capabilities. Furthermore, the results demonstrate that this mixture of dynamic capabilities has a positive impact on organizational performance as long as the level of environmental turbulence is not becoming too high. This has to do with the fact that dynamic capabilities follow a rather patterned mode of change, and are, therefore, less useful in situations of extreme turbulence, where primarily quick and ad hoc problem solving is required.

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