Chapter 2: Strategic Flexibility in Turbulent Times: Impact of CEO’s Willingness and Permission to Change

The flexibility of corporations to adapt their strategy to a fast-changing environment can be a major source for competitive advantage and survival. While research mainly focuses on outcomes of this ability, little is known of how to foster it in organizations. Thus, by building on the upper echelons theory, the authors assume that the strategic flexibility of the company depends on the willingness and permission to change of the chief executive officer (CEO). To support the hypotheses, the authors apply the dimensions of commitment to change and work autonomy to the CEO and test for moderation under conditions of technological turbulence. The authors’ results based on medium-sized organizations in Germany show significant effects of both dimensions on strategic flexibility. In particular, under conditions of high technological turbulence, commitment based on loyalty and not on pressure together with autonomy on control and evaluation criteria is best suited to increase strategic flexibility. These insights extend the research literature and provide guidelines for CEOs and their supervisors alike.