Building dynamic capabilities to cope with environmental uncertainty: The role of strategic foresight

Abstract

Increasing environmental uncertainty poses significant challenges for organizations. Although scholars generally agree that companies require dynamic capabilities to flexibly respond to and shape uncertain environments, only little empirical research has been conducted on the factors that facilitate the development of these capabilities. This study addresses this gap and introduces strategic foresight as an important antecedent of firms’ dynamic capabilities. The paper investigates the impact of strategic foresight on two distinct types of dynamic capabilities, namely strategic flexibility and decision rationality, and how the influence of strategic foresight is moderated by the degree of environmental uncertainty. We test our hypotheses by adopting a mixed-methods approach, using both qualitative information gathered trough five expert interviews, as well as survey data collected from 79 managers familiar with strategic foresight practices. The obtained results indicate a significant positive impact of strategic foresight on firms’ strategic flexibility and decision rationality. Furthermore, this study finds that environmental uncertainty strengthens the positive effect of strategic foresight on strategic flexibility. Contributions to strategic foresight research and managerial practice for firms trying to cope with continuously increasing levels of environmental uncertainty are discussed.