The Effects of Strategic Response Capabilities and Innovation on Performance and Risk

Line Ettrich, Torben Juul Andersen

Research output: Chapter in Book/Report/Conference proceedingBook chapterResearchpeer-review


The world in which companies operate today is volatile, uncertain, complex, and ambiguous, thus subjecting contemporary forms to an array of risks that challenge their viability in an increasingly competitive landscape. Organizations that cling to their traditional ways of operating impede their ability to survive while those able to embrace evolving changes and lever their strategic response capabilities (SRCs) will thrive against the odds. The possession of such capabilities has become a prominent explanation for effective adaptation to the impending changes but is rarely analyzed and tested empirically. Strategic adaptation typically assumes innovation as an important component, but we know little about how the innovative processes interact with the firm’s SRCs. Hence, this study investigates these implied relationships to discern their effects on organizational performance and risk outcomes. It explores the effects of SRCs and the role of innovation as intertwined adaptive mechanisms supporting strategic renewal that can attain superior performance and risk effects. The relationships are analyzed based on a large sample of US manufacturing firms over the decade 2010–2019. The study reveals that firms possessing effective SRCs have the ability to exploit opportunities and deflect risky situations to gain favorable performance and risk outcomes. While innovation indeed plays a role, the precise nature and dynamic effect thereof remain inconclusive.
Original languageEnglish
Title of host publicationStrategic Responses for a Sustainable Future : New Research in International Management
EditorsTorben Juul Andersen
Number of pages39
Place of PublicationBingley
PublisherEmerald Group Publishing
Publication date2021
ISBN (Print)9781800719309
ISBN (Electronic)9781800719293, 9781800719316
Publication statusPublished - 2021
SeriesEmerald Studies in Global Strategic Responsiveness


  • Adaptation
  • Bankruptcy risk
  • Financial returns
  • Innovation
  • Opportunity
  • Organizational slack
  • Real options
  • Strategic responsiveness

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