New Horizons in Management series
Edited by Neal M. Ashkanasy and Cary L. Cooper
Chapter 34: How Contrasting Emotions can Enhance Strategic Agility
Quy Nguyen Huy Introduction In this chapter, I seek to nuance the predominantly negative view of emotion in the strategy literature by highlighting certain conditions under which emotion can enhance the organization’s adaptive ability. A growing dynamic capability literature suggests that competitive advantage could accrue to organizations that develop routines that enable change rather than routines that maintain operational stability (e.g., Blyler & Coﬀ, 2003; Helfat & Peteraf, 2003). Dynamic capability refers to ‘the ﬁrm’s ability to integrate, build and reconﬁgure internal and external competencies to address rapidly changing environments’ (Teece et al., 1997, p. 516). Dynamic capability enables the ﬁrm to innovate and change its strategies to match or create environmental changes (Eisenhardt & Martin, 2000). The ﬁrm is likely to gain competitive advantage if it can realize adaptive change more reliably and rapidly and with less cost than its competitors (Zott, 2003). At least two strategic processes contribute to dynamic capability: (i) the ﬁrm’s ability to reduce the cost of strategic change (Greve, 1999); and (ii) organizational learning (Szulanski, 1996). Together, these processes enable strategic agility, which refers to the ﬁrm’s ability to adapt to changing environments or to shape them. I choose these strategic processes for four reasons. First, they are inherent to the deﬁnition of dynamic capability. Second, they have been argued by strategy scholars to enable sustainable superior performance (see Zott, 2003). Third, the link between emotion and these capabilities can be substantiated by recent advances in the literature. Fourth, these capabilities complement one another. Organizations...
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