Competitive Advantage as an Outcome of Strategic Intent: A Review of Literature

Abstract

Discontinuous environmental changes that are inconsistent with organizations dominant logics can create crises for companies. Organizations must increasingly deal with discontinuous, complex and unpredictable change. Learning to respond to weak signals of environmental changes constitutes the development of dynamic capabilities for environmental adaptation, or what is simply called, adaptive capabilities. Adaptive capabilities can help to trigger and guide strategic renewal processes. The difference in firm performance depends on the ability of the adaptation, namely the firm’s efforts to understand and adapt to threats and opportunities from environmental change. Enhancing adaptive capabilities enables firms to gain a competitive advantage while also improving performance. The study entails conceptual literature, theoretical literature, empirical literature as well as proposed theoretical model. The purpose of the study is to review existing conceptual, theoretical and empirical literature on adaptive capability and organizational performance with a view to highlighting the knowledge gaps suitable to form basis for future research work. Existing empirical literature on the relationship between adaptive capability and organizational performance have been conducted in developed countries using small samples hence diversity of contextual variables. The review also revealed key indicators of organizational performance as one of the outcomes of adaptive capability in organizations. From the reviewed literature, a set of relationships for the dimension of adaptive capability and organizational performance were modeled as a guide for future research work in the field of strategic