Proactive and reactive strategic flexibility in coping with environmental change in innovation

This study examines the effects of strategic flexibility on innovation performance byincorporating proactive and reactive strategic flexibility into the framework of strategicflexibility and the moderating effects of environmental change by subdividing this constructinto rate and turbulence. An empirical study of 180 sample Chinese manufacturing firmsshows that: (1) both proactive and reactive strategic flexibility have positive effects oninnovation performance, (2) rate of environmental change significantly positively moderatesthe relationship between proactive strategic flexibility and innovation performance as well assignificantly negatively moderates the relationship between reactive strategic flexibility andinnovation performance and (3) turbulence of environmental change significantly positivelymoderates the relationship between reactive strategic flexibility and innovation performance. The results indicate that firms that face a fast rate of environmental change should directmore attention to proactive strategic flexibility; however, firms that face a high turbulence ofenvironmental change should pay more attention to reactive strategic flexibility.