Managerial ties: How much do they matter for organizational agility?

Abstract

In a constantly changing business environment, firms are becoming increasingly dependent on organizational agility for survival and success. Although existing studies have recognized the importance of political and business ties in responding to market changes, few have examined how these ties affect organizational agility nor compared their relative effectiveness in shaping organizational agility. Drawing on social exchange theory, this study examines the comparative impacts of political and business ties on organizational agility and the contingent roles of competition intensity and legal enforceability. Using two-wave survey data collected from three top executives in 132 Chinese firms, we find business ties have a stronger positive effect on organizational agility than political ties. Competition intensity strengthens the positive impact of political ties but weakens the positive impact of business ties on organizational agility, which reduces the impact difference of political and business ties. Legal enforceability strengthens the positive impact of political ties but does not significantly influence the positive impact of business ties, which mitigates the impact difference of political and business ties. Accordingly, our findings provide new insights for the strategic utilization of political and business ties to achieve organizational agility in emerging economies.