The purpose of this paper is to investigate the effects of cognitive diversity and structural empowerment on strategic flexibility in the context of business performance.
Structural equation modeling (SEM) is used to statistically test the data that were collected from health-care organizations located in the USA.
SEM reveals the positive main effect of cognitive diversity on strategic flexibility, the moderating effect of structural empowerment on the effect of cognitive diversity on strategic flexibility and performance and the mediating effect of strategic flexibility on the joint effect of cognitive diversity and structural empowerment on business performance.
The study reveals that diversity in cognitive resources and workplace empowerment can jointly support business performance via strategic flexibility. The paper explains that this positive effect can take place because the two factors jointly enable business organizations to find better internal applications for new relevant information, thus allowing firms to quickly reorganize their internal resources in a way that leads to better performance.
