Bottom-up learning, strategic flexibility and strategic change

Purpose - How do firms make effective strategic change when competitive advantage deteriorates fast in a dynamic environment? Based on information-processing theory and organizational inertia theory, the purpose of this paper is to investigate how bottom-up learning affects the speed and magnitude of strategic change and if these relationships are contingent on strategic flexibility. Design/methodology/approach - Using data of 213 firms in China, the authors conduct an empirical test of hypotheses through a stepwise multivariate regression approach. Findings - The empirical study suggests that resource flexibility weakens the positive relationship between bottom-up learning and the speed of strategic change while strengthens the impact of bottom-up learning on the magnitude of strategic change. In addition, coordination flexibility strengthens the positive impact of bottom-up learning on the speed and magnitude of strategic change. Originality/value - The findings not only provide a more nuanced and in-depth understanding of strategic change, but also offer strong guidance for firms on how to make better use of strategic flexibility in order to benefit from bottom-up learning.