For many companies, dealing with fast-paced, hypercompetitive, and highly uncertain environments often involves ‘knee jerk’ responses from management teams to curtail growth plans, cut expenses, and build financial reserves. While such strategies improve the likelihood of a firm’s survival in the short-term, they may hold numerous longer term negative implications for a firm’s competitiveness, performance, and survival. Performance improvement strategies generally involve increasing revenues or decreasing expenses. However, the combined contributions (i.e. the Strategic Agility) of both of these approaches to improving performance, and the implications of heterogeneity to their contribution, remain under theorized and insufficiently examined, particularly in highly uncertain environments. The objective of this article is to challenge the conventional wisdom (and presumed benefits) of common ‘reactionary’ strategies to uncertain environments by examining the viability of strategic agility (e.g., managing both revenues and expenses), as an alternative approach.
Drnevich, Paul L.; Dulek, Ronald; and Jackson, William
"REVENUES OR EXPENSES? CLARIFYING THE CONTRIBUTIONS OF CORE CAPABILITIES TO FIRM PERFORMANCE IN UNCERTAIN ENVIRONMENTS (INTERACTIVE PAPER),"
Frontiers of Entrepreneurship Research: Vol. 32
, Article 18.
Available at: http://digitalknowledge.babson.edu/fer/vol32/iss12/18