Abstract
This study focuses on the relationship between strategic flexibility and absorptive capacity — past literature recognised the two constructs as critical in the context of a firm’s responsiveness to imminent exogenous changes. Consequently, the objective of this paper is to put forward a set of new hypotheses that empirically test the effects of two dimensions of absorptive capacity, potential and realised absorptive capacity, on strategic flexibility in the context of business performance. In this way, the study aims to contribute to past research on strategy and innovation management by explaining when strategic flexibility could lead to better performance.
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