Strategic Improvisation in Turbulent Times: The Role of Information Systems

Abstract

To remain competitive in today’s highly dynamic environments, organizations often need to act rapidly. To deal with urgent issues, top managers have to rapidly assess and act upon opportunities and threats. Strategic improvisation, a dynamic capability defined as top managers’ ability to spontaneously and creatively integrate, build, and reconfigure internal and external resources and capabilities to address unpredictable and rapidly changing strategic opportunities and threats, may positively impact organizational processes and overall performance. Additionally, information systems (IS) may facilitate strategic improvisation. For senior managers, the effective use of IS may enable the detection of new opportunities and threats, while facilitating the exploitation of existing knowledge to address them. Using the dynamic capabilities perspective, this research addresses three research questions: 1) To what extent do IS and technology enable effective strategic improvisation? 2) How do organizational, information and knowledge factors influence strategic improvisation? 3) What are the specific effects of strategic improvisation on organizational outcomes? The research proceeded in two main phases. First, case studies were conducted in two highly dynamic industries, software and consulting. Top managers from four medium-sized Canadian organizations were interviewed, and interview transcripts analyzed and coded. The second phase of the project was a survey, with data collected from 143 top managers in 100 medium-sized Canadian organizations. Results were analyzed using two methods, structural equation modeling and crisp set qualitative comparative analysis. This study benefits both research and practice. It contributes to the literature on IT impact by establishing the role played by two IT capabilities, IT infrastructure flexibility and information management/knowledge management (IM/KM) capability in enabling strategic improvisation, as well as the moderating role of IS/IT strategy, especially innovative IS/IT strategy. This research benefits the improvisation research by studying improvisation at the top management level and demonstrating its impact on product/service flexibility, process flexibility and organizational learning. Findings also suggest that there are many ways to achieve strategic improvisation, through various configurations of organizational memory, IM/KM capability and IT infrastructure flexibility. Last, this research provides managers with practical recommendations on the most effective ways to develop a strategic improvisation capability.