Environmental Uncertainty in the Influence of Strategic Change on Financial Performance
Main Article Content
Triyonowati*
Rika Rahayu
Mar'atus Zahro
Dewi Maryam
The increasingly competitive business environment has a negative impact on company performance. Companies are expected to create strategic competitiveness to maintain their competitive advantage and sustain their performance. Strategic change is a company's effort to adapt to a competitive environment. Additionally, changes in the external environment create environmental uncertainty, which can further deteriorate company performance. Therefore, strategic change becomes the primary choice for companies to improve performance when environmental uncertainty increases. This study aims to analyze the effect of strategic change on company performance and the role of environmental uncertainty in moderating this relationship. Using purposive sampling, this study utilizes data from 503 manufacturing companies that are listed on the Indonesia Stock Exchange from 2016 to 2020. Multiple linear regression and moderated regression analyses are employed as the analytical techniques. The results of this study indicate that strategic change has a positive and significant effect on company performance, and environmental uncertainty strengthens this influence.
Atuahene-Gima, K. (2005). Resolving the Capability–Rigidity Paradox in New Product Innovation. Journal of Marketing, 69(4), 61-83. https://doi.org/10.1509/jmkg.2005.69.4.61
Becheikh, N., Landry, R., & Amara, N. (2006). Strategic Factors that Affect Technological Innovation in SME in Manufacturing Sector. Canadian Journal of Administrative Sciences-Revue Canadienne Des Sciences De L Administration, 23(4), 275-300.
Bendickson, J., Gur, F. A., & Taylor, E. C. (2018). Reducing Environmental Uncertainty: How High Performance Work Systems Moderate the Resource Dependence‐Firm Performance Relationship. Canadian Journal of Administrative Sciences/Revue Canadienne des Sciences de l'Administration, 35(2), 252-264. https://doi.org/10.1002/cjas.1412
Bhatt, G., Emdad, A., Roberts, N., & Grover, V. (2010). Building and Leveraging Information in Dynamic Environments: The Role of IT Infrastructure Flexibility as Enabler of Organizational Responsiveness and Competitive Advantage. Information & Management, 47(7-8), 341-349. https://doi.org/10.1016/j.im.2010.08.001
Boeker, W. (1997). Strategic Change: The Influence of Managerial Characteristics and Organizational Growth. Academy of Management Journal, 40(1), 152-170. https://doi.org/10.5465/257024
Cadeaux, J., & Ng, A. (2012). Environmental Uncertainty and Forward Integration in Marketing: Theory and Meta‐Analysis. European Journal of Marketing, 46(1/2), 5-30. https://doi.org/10.1108/03090561211189202
Chen, Y. L., & Cheng, L. C. (2010). An Approach to Group Ranking Decisions in a Dynamic Environment. Decision Support Systems, 48(4): 622–634. https://doi.org/10.1016/j.dss.2009.12.003
Chereau, P., & Meschi, P. X. (2019). The Performance Implications of the Strategy–Business Model Fit. Journal of Small Business and Enterprise Development, 26(3), 441-463. https://doi.org/10.1108/JSBED-04-2018-0122
Dwyer, F. R., & Welsh, M. A. (1985). Environmental Relationships of the Internal Political Economy of Marketing Channels. Journal of Marketing Research, 22(4), 397-414. https://doi.org/10.1177/002224378502200405
Gibson, C. B., & Birkinshaw, J. (2004). The Antecedents, Consequences, and Mediating Role of Organizational Ambidexterity. Academy of management Journal, 47(2), 209-226. https://doi.org/10.5465/20159573
Gordon, L. A., & Narayanan, V. K. (1984). Management Accounting Systems, Perceived Environmental Uncertainty and Organization Structure: An Empirical Investigation. Accounting, Organizations and Society, 9(1), 33-47. https://doi.org/10.1016/0361-3682(84)90028-X
Herrmann, P., & Nadkarni, S. (2014). Managing Strategic Change: The Duality of CEO Personality. Strategic Management Journal, 35(9), 1318-1342. https://doi.org/10.1002/smj.2156
Hitt, M. A., Bierman, L., Shimizu, K., & Kochhar, R. (2001). Direct and Moderating Effects of Human Capital on Strategy and Performance in Professional Service Firms: A Resource-Based Perspective. Academy of Management Journal, 44(1), 13-28. https://doi.org/10.5465/3069334
Hoque, Z. (2004). A Contingency Model of the Association Between Strategy, Environmental Uncertainty and Performance Measurement: Impact on Organizational Performance. International Business Review, 13(4), 485-502. https://doi.org/10.1016/j.ibusrev.2004.04.003
Hou, B., Hong, J., & Zhu, R. (2019). Exploration/Exploitation Innovation and Firm Performance: The Mediation of Entrepreneurial Orientation and Moderation of Competitive Intensity. Journal of Asia Business Studies, 13(4), 489-506. https://doi.org/10.1108/JABS-11-2017-0206
Jansen, J. J., Van Den Bosch, F. A., & Volberda, H. W. (2006). Exploratory Innovation, Exploitative Innovation, and Performance: Effects of Organizational Antecedents and Environmental Moderators. Management Science, 52(11), 1661-1674. https://doi.org/10.1287/mnsc.1060.0576
Kipkirong Tarus, D., & Aime, F. (2014). Board Demographic Diversity, Firm Performance and Strategic Change: A Test of Moderation. Management Research Review, 37(12), 1110-1136. https://doi.org/10.1108/MRR-03-2013-0056
Kraatz, M. S., & Zajac, E. J. (2001). How Organizational Resources Affect Strategic Change and Performance in Turbulent Environments: Theory and Evidence. Organization Science, 12(5): 632–657. https://doi.org/10.1287/orsc.12.5.632.10088
Lueg, R., & Borisov, B. G. (2014). Archival or Perceived Measures of Environmental Uncertainty? Conceptualization and New Empirical Evidence. European Management Journal, 32(4), 658-671. https://doi.org/10.1016/j.emj.2013.11.004
Miles, R. E., Snow, C. C., Meyer, A. D., & Coleman Jr, H. J. (1978). Organizational Strategy, Structure, and Process. Academy of Management Review, 3(3), 546-562. https://doi.org/10.5465/amr.1978.4305755
Otley, D. T. (1980). The Contingency Theory of Management Accounting: Achievement and Prognosis. Accounting, Organizations and Society, 5(4), 413-428. https://doi.org/10.1016/0361-3682(80)90040-9
Parnell, J. A., Long, Z., & Lester, D. (2015). Competitive Strategy, Capabilities and Uncertainty in Small and Medium Sized Enterprises (SMEs) in China and the United States. Management Decision, 53(2), 402-431. https://doi.org/10.1108/MD-04-2014-0222
Purba, A. R., Isnurhadi, I., Widiyanti, M., & Adam, M. (2019). Pengaruh Pengukuran Kinerja Akuntansi Perusahaan Berstrategi Prospector dan Defender terhadap Return Saham pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia (BEI). Jurnal Manajemen dan Bisnis Sriwijaya, 17(1), 41-60. https://doi.org/10.29259/jmbs.v17i1.9029
Saraswati, E., & Atmini, S. (2007). Reaksi Pasar terhadap Pengukuran Kinerja Akuntansi Perusahaan Prospector dan Defender: Bukti Tambahan Untuk Periode Setelah Krisis. Simposium Nasional Akuntansi X.
Sirmon, D. G., Hitt, M. A., & Ireland, R. D. (2007). Managing Firm Resources in Dynamic Environments to Create Value: Looking Inside the Black Box. Academy of Management Review, 32(1), 273-292. https://doi.org/10.5465/amr.2007.23466005
Sudaryati, E., & Amelia, F. (2015). Analisis Perbandingan Kinerja Keuangan Perusahaan Prospector dan Defender (Studi pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia Periode Tahun 2010-2012). (JRAMB) Jurnal Riset Akuntansi Mercu Buana, 1(2), 138-164. https://doi.org/10.26486/jramb.v1i2.202
Wang, K., Pellegrini, M. M., Xue, J., & Wang, C. (2020). Environment Uncertainty and a Firm’s Strategic Change the Moderating Role of Political Connection and Family Ownership. Journal of Family Business Management, 10(4): 313–327. https://doi.org/10.1108/JFBM-06-2019-0041
Wang, M. C., & Fang, S. C. (2012). The Moderating Effect of Environmental Uncertainty on the Relationship between Network Structures and the Innovative Performance of a New Venture. Journal of Business and Industrial Marketing, 27(4): 311–323. https://doi.org/10.1108/08858621211221689
Zhang, Y., & Rajagopalan, N. (2010). Once an Outsider, Always an Outsider? CEO Origin, Strategic Change, and Firm Performance. Strategic Management Journal, 31: 334–346. https://doi.org/10.1002/smj.812
Zhao, J., Carney, M., Zhang, S., & Zhu, L. (2020). How Does an Intra-Family Succession Effect Strategic Change and Performance in China’s Family Firms? Asia Pacific Journal of Management, 37(2): 363–389. https://doi.org/10.1007/s10490-018-9568-x
