ABSTRACT
This chapter focuses on the capabilities and strategies involved in the development and use of organizational agility. Organizational agility is necessary to respond effectively to disruptive events, development of new technologies, institutional changes, and other environmental changes. These factors require firms to continuously change allowing them to adapt to new environmental requirements and achieve at least a temporary equilibrium. To be more agile, firms develop and enact dynamic capabilities, allowing them to design and implement adaptive and shaping strategies. Shaping strategies are more entrepreneurial to exploit opportunities that exist in uncertain conditions. Meta capabilities—third-order capabilities—are used to create new dynamic capabilities and capability configurations. Dynamic capability development entails investments in skills, planning, and preparation for future changes, whereas enactment involves the execution, realization, and application of dynamic capabilities. Two critical components of organizational agility are an organization’s human capital and relationships with its stakeholders. Human capital is a major component of the organization’s capabilities, and stakeholders provide access to resources that help to reduce the risk and uncertainty caused by major changes. Leveraging managerial capabilities is a critical component of strategic leadership. Strategic leaders mold human capital, stakeholder relationships, and other resources to design and implement strategies that foster organizational agility. The chapter ends with an examination of potential future research questions and methodological approaches that will advance our knowledge and understanding of organizational agility.
