The ability to sense developments in operational (steady-state) and dynamic (growth) capabilities provides early signals about how the firm adapts its operations to ongoing changes in the environment. Frontline employees engage in the daily transactions and sense the firm's operating conditions and ability to deal with the environment that eventually will affect performance and strategic outcomes. The environmental sensing is a central cognitive feature and constitutes an information source for operations strategy decisions. Drawing on aggregated judgmental time-series forecasting techniques, this article develops a sensing instrument an employee-sensed operational conduct (ESOC) index for updated information as an essential decision support mechanism. This sensing capacity is firm-specific and difficult to replicate once in place and thus can provide a basis for sustainable competitive advantage.
Bibliographical notePublished online: 21. March 2017
- Dynamic capabilities
- Decision support mechanism
- Judgmental time-series forecasting
- Operational capabilities
- Operations strategy