The Effect of Organizational Resilience and Strategic Foresight on Firm Performance: Competitive Advantage as Mediating Variable

Document Type : Research article

Authors

Department of Pharmacoeconomics and Pharma Management, School of Pharmacy, Shahid Beheshti University of Medical Sciences, Tehran, Iran.

10.22037/ijpr.2021.116145.15723

Abstract

The pharmaceutical industry's performance in the global economy has been affected by the growing competition associated with globalization, economic liberalization, and the trade-related aspect of the intellectual property rights (TRIPS) agreement. To maintain performance, organizations need to consider strategic foresight (SF) and organizational resilience (OR) to anticipate future trends and survive crises. By proposing a conceptual framework, this study examines the relationship between organizational resilience, strategic foresight, competitive advantage (CA), and firm performance (FP). A conceptual framework was developed to assess the hypotheses in the pharmaceutical industry. Then, partial least squares structural equation modeling (PLS-SEM) was applied to investigate the relationships quantitatively. The results of structural equation modeling (SEM) based on the data generated from 202 completed questionnaires by the pharmaceutical companies in Iran demonstrate that OR, SF, and CA have significant positive impacts on FP. Moreover, CA partially mediates the relationship between OR and FP and also between SF and FP. The findings of this study enrich the existing literature by demonstrating that early detection of environmental change and resilient manner assist Iranian pharmaceutical firms to survive if joining the WTO. This is the first study that examines the direct and indirect effect of OR and SF on the FP, considering the mediating impact of CA. This investigation attempts to address the mechanisms through which OR and SF affect organizational performance, especially in the pharmaceutical industry.

Graphical Abstract

The Effect of Organizational Resilience and Strategic Foresight on Firm Performance: Competitive Advantage as Mediating Variable

Keywords


(1)      Hamel G and Välikangas L. The Quest for Resilience. Harv. Bus. Rev. (2003) 81: 52-63.
(2)      Becker P. Corporate foresight in Europe: a first overview. Univ. Bielefeld Inst. Sci. Technol. Stud. (2002) 13: 24.  
(3)      Day GS and Schoemaker PJH. Scanning the periphery. Harv. Bus. Rev. (2005) 83: 135-40.
(4)      Rohrbeck R. Towards a best-practice framework for strategic foresight: Building theory from case studies in multinational companies. In: IAMOT Conference Proceedings Dubai, UAE. (2008)
(5)      Kantur D and Iseri-Say A. Organizational resilience: A conceptual integrative framework. J. Manag. Organ. (2012) 18: 762-73.
(6)      Lengnick-Hall CA and Beck TE. Adaptive fit versus robust transformation: How organizations respond to environmental change. J. Manage. (2005) 31: 738–57.
(7)      Naswall K, Kuntz J and Malinen S. Employee Resilience Scale (EmpRes) Measurement Properties. Bus. Law J. (2013) 92: 94-6.
(8)      Britt TW, Shen W, Sinclair RR, Grossman MR and Klieger DM. How much do we really know about employee resilience? Ind. Organ. Psychol. (2016) 9: 378–404.
(9)      Manfield R. Organizational resilience: a dynamic capabilities approach. (PhD thesis) UQ Business School, The University of Queensland. (2016).
(10)    Mitroff II. From my perspective: Lessons from 9/11, are companies prepared today. Technol. Forecast. Chang. (2005) 72: 372–6.
(11)    Rohrbeck R, Arnold HM and Heuer J. Strategic Foresight-a case study on the Deutsche Telekom Laboratories. In: ISPIM-Asia Conference: New Delhi, India (2007).
(12)    Vecchiato R. Creating value through foresight: First mover advantages and strategic agility. Technol. Forecast. Soc. Change (2015) 101: 25–36.
(13)    Paliokaitė A and Pačėsa N. The relationship between organisational foresight and organisational ambidexterity. Technol. Forecast. Soc. Change (2014) 101: 165–81.
(14)    Kwak D-W, Seo YJ and Mason R. Investigating the relationship between supply chain innovation, risk management capabilities and competitive advantage in global supply chains. Int. J. Oper. Prod. Manag. (2018) 38: 2–21.
(15)    de Oliveira Teixeira E and Werther Jr WB. Resilience: Continuous renewal of competitive advantages. Bus. Horiz. (2013) 56: 333–42.
(16)    Munos B. Lessons from 60 years of pharmaceutical innovation. Nat. Rev. Drug Discov. (2009) 8: 959–68.
(17)    Kesič D. Strategic analysis of the world pharmaceutical industry. Manag. J. Contemp. Manag. issues (2009) 14: 59–76.
(18)    Lee A V, Vargo J and Seville E. Developing a tool to measure and compare organizations’ resilience. Nat. hazards Rev. (2013) 14: 29–41.
(19)    Chu Y. Resilience capabilities in the face of environmental turbulence: A case of Hong Kong small to medium enterprises. Dr. Philos. Thesis, RMIT Univ. Melbourne, VIC (2015).
(20)    Jaja SA, Amah E, Journals I and AccraJaja S. Mentoring and Organizational Resilience. A Study of Manufacturing Companies in Rivers State. IOSR J. Bus. Manag. (2014) 16: 1–9.
(21)    Walker B, Carpenter S, Anderies J, Abel N, Cumming G, Janssen M, Lebel L, Norberg J, Peterson GD and Pritchard R. Resilience management in social-ecological systems: a working hypothesis for a participatory approach. Conserv. Ecol. (2002) 6: 14.
(22)    Jr W. Materials Science & Engineering: An Introduction. Anti-Corrosion Methods Mater. (2000) 1: 31-47.
(23)    Barnett CK and Pratt M. From Threat-Rigidity to Flexibility: Toward a Learning Model of Autogenic Crisis in Organizations. J. Organ. Chang. Manag. (2000) 13: 74–88.
(24)    Powley E. Reclaiming resilience and safety: Resilience activation in the critical period of crisis. Hum. Relations (2009) 62: 1289–326.
(25)    Sheffi Y. Building a resilient supply chain. Harv. Bus. Rev. (2005) 1: 1–4.
(26)    Hollnagel E, Woods D and Leveson N. Resilience Engineering : Concepts and Precepts. Ashgate, Aldershot, UK. Resil. Eng. Concepts Precepts (2006).
(27)    Bhamra R, Dani S and Burnard K. Resilience: The concept, a literature review and future directions. Int. J. Prod. Res. (2011) 49: 5375–93.
(28)    McManus S. Organisational resilience in New Zealand [Ph. D. thesis]. Univ. Canterbury, Christchurch, New Zeal. (2008).
(29)    Lengnick-Hall CA, Beck TE and Lengnick-Hall ML. Developing a capacity for organizational resilience through strategic human resource management. Hum. Resour. Manag. Rev. (2011) 21: 243–55.
(30)    Koronis E and Ponis S. Better than before: the resilient organization in crisis mode. J. Bus. Strategy (2018) 39: 32–42.
(31)    Brown SL. and Eisenhardt K. The Art of Continuous Change: Linking Complexity Theory and Time-Paced Evolution in Relentlessly Shifting Organizations. Adm. Sci. Q. (1997) 42: 1–34.
(32)    Tracey M, Vonderembse MA and Lim JS. Manufacturing technology and strategy formulation: keys to enhancing competitiveness and improving performance. J. Oper. Manag. (1999) 17: 411–28.
(33)    McGinnis MA and Vallopra RM. Purchasing and supplier involvement in process improvement: a source of competitive advantage. J. supply Chain Manag. (1999) 35: 42–50.
(34)    Porter ME. Competitive advantage: creating and sustaining superior performance. New York Free. (1985) 43: 214.
(35)    Barney J. Firm resources and sustained competitive advantage. J. Manage. (1991) 17: 99–120.
(36)    Eisenhardt KM and Martin JA. Dynamic capabilities: what are they? Strateg. Manag. J. (2000) 21: 1105–21.
(37)    Porter ME. Competitive strategy techniques for analyzing industries and competitors. Free Press, New York (1980).
(38)    Khan SZ, Yang Q and Waheed A. Investment in intangible resources and capabilities spurs sustainable competitive advantage and firm performance. Corp. Soc. Responsib. Environ. Manag. (2019) 26: 285–95.
(39)    Majeed S. The Impact of Competitive Advantage on Organizational Performance. Eur. J. Bus. Manag. (2011) 3: 191–6.
(40)    Rahim FBT and Zainuddin Y Bin. The impact of technological innovation capabilities on competitive advantage and firm performance in the automotive industry in Malaysia. In: AIP Conference Proceedings AIP Publishing LLC (2019).
(41)    Henke M. Enterprise and supply risk management. In: Supply Chain Risk Springer (2009) 177–85.
(42)    Sharma S and Sharma SK. Probing the links between team resilience, competitive advantage, and organizational effectiveness: Evidence from information technology industry. Bus. Perspect. Res. (2020) 8: 289–307.
(43)    Mallak L. Putting organizational resilience to work. Ind. Manag. (1998) 5: 8–13.
(44)    Comfort LK, Sungu Y, Johnson D and Dunn M. Complex systems in crisis: Anticipation and resilience in dynamic environments. J. contingencies Cris. Manag. (2001) 9: 144–58.
(45)    Corey C and Deitch E. Factors Affecting Business Recovery Immediately After Hurricane Katrina. J. Contingencies Cris. Manag. (2011) 19: 169–81.
(46)    Weihrich H, Koontz H, and Cannice M V. Management : a global and entrepreneurial perspective. Tata McGraw-Hill, New Delhi (2008) 78–146.
(47)    Drucker PF. Management challenges for the 21st century. HarperBusiness, New York (1999) 35–47.
(48)    Major E, Asch D, and Cordey-Hayes M. Foresight as a core competence. Futures (2001) 33: 91–107.
(49)    Napitupulu IH. Organizational culture in management accounting information system: Survey on state-owned enterprises (SOEs) Indonesia. Glob. Bus. Rev. (2018) 19: 556–71.
(50)    Lackman CL, Saban K and Lanasa JM. Organizing the competitive intelligence function: a benchmarking study. Compet. Intell. Rev. Publ. (2000) 11: 17–27.
(51)    Baskarada S, Shrimpton D, and Ng S. Learning through foresight. Foresight (2016) 18: 414–33.
(52)    Bereznoy A. Corporate Foresight in Multinational Business Strategies. Foresight (2017) 11: 9–22.
(53)    Rohrbeck R and Kum ME. Corporate foresight and its impact on firm performance: A longitudinal analysis. Technol. Forecast. Soc. Change (2018) 129: 105–16.
(54)    Arokodare M A and Asikhia OU. Strategic agility: Achieving superior organizational performance through strategic foresight. Glob. J. Manag. Bus. Res. (2020) 20: 7–16.
(55)    Raykov T and Marcoulides GA. A First Course in Structural Equation Modeling. Taylor & Francis (2012). Available from: URL: https://books.google.ne/books?id=K-pkAgAAQBAJ
(56)    Hsu SH, Chen W and Hsieh M. Robustness testing of PLS, LISREL, EQS and ANN-based SEM for measuring customer satisfaction. Total Qual. Manag. Bus. Excell. (2006) 17: 355–72.
(57)    Jayaram J, Oke A and Prajogo D. The antecedents and consequences of product and process innovation strategy implementation in Australian manufacturing firms. Int. J. Prod. Res. (2014) 52: 4424–39.
(58)    Zhou KZ, Brown JR and Dev CS. Market orientation, competitive advantage, and performance: A demand-based perspective. J. Bus. Res. (2009) 62: 1063–70.
(59)    Abeysekara N, Wang H, and Kuruppuarachchi D. Effect of supply-chain resilience on firm performance and competitive advantage. Bus. Process. Manag. J. (2019) 25: 1673–95.
(60)    Chen YS, Lin MJJ and Chang CH. The positive effects of relationship learning and absorptive capacity on innovation performance and competitive advantage in industrial markets. Ind. Mark. Manag. (2009) 38: 152–8.
(61)    Armstrong JS and Overton TS. Estimating nonresponse bias in mail surveys. J. Mark. Res. (1977) 14: 396–402.
(62)    Podsakoff PM and Organ DW. Self-reports in organizational research: Problems and prospects. J. Manage. (1986) 12: 531–44.
(63)    Werts CE, Linn RL and Jöreskog KG. Intraclass reliability estimates: Testing structural assumptions. Educ. Psychol. Meas. (1974) 34: 25–33.
(64)    Briones Peñalver AJ, Bernal Conesa JA and de Nieves Nieto C. Analysis of corporate social responsibility in Spanish agribusiness and its influence on innovation and performance. Corp. Soc. Responsib. Environ. Manag. (2018) 25: 182–93.
(65)    Hair JF. Multivariate data analysis : a global perspective. Pearson Education, Upper Saddle River, N.J.; London (2010).
(66)    Hu L and Bentler PM. Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Struct. Equ. Model. A Multidiscip. J. (1999) 6: 1–55.
(67)    Wetzels M, Odekerken-Schröder G and Van Oppen C. Using PLS path modeling for assessing hierarchical construct models: Guidelines and empirical illustration. MIS Q. (2009) 33: 177–195.
(68)    Sarstedt M, Ringle CM and Hair JF. Partial least squares structural equation modeling. Handb. Mark. Res. (2017) 26: 1–40.
(69)    Webb B and Schlemmer F. Resilience as a Source of Competitive Advantage for Small Information Technology Companies BT - The Transfer and Diffusion of Information Technology for Organizational Resilience. Springer (2006) 181–97.
(70)    Suryaningtyas D, Sudiro A, Eka TA and Dodi IW. Organizational resilience and organizational performance: examining the mediating roles of resilient leadership and organizational culture. Acad. Strateg. Manag. J. (2019) 18: 1–7.
(71)    Rahimi M and Ahmadi P KH. Commercial Effects of Iran’s Membership in the Wto in Drug Industry. Hakim Res. J. (2011) 14: 73–7.
(72)    Seeger MW, Ulmer RR, Novak JM and Sellnow T. Post-crisis discourse and organizational change, failure and renewal. J. Organ. Chang. Manag. (2005) 18: 78–95.
(73)    Tsoukas H and Shepherd J. Coping with the future: Developing organizational foresightfulness. Futures (2004) 36: 137–44.
(74)    Peterson JW. Leveraging technology foresight to create temporal advantage. Technol. Forecast. Soc. Change (2002) 69: 485–94.
(75)    Chiva R and Alegre J. Organizational learning capability and job satisfaction: An empirical assessment in the ceramic tile industry. Br. J. Manag. (2009) 20: 323–40.
(76)    Guinot J, Chiva R and Mallén F. Organizational trust and performance: Is organizational learning capability a missing link? J. Manag. Organ. (2013) 19: 559–82.
(77)    Jiménez-Jiménez D and Sanz-Valle R. Innovation, organizational learning, and performance. J. Bus. Res. (2011) 64: 408–17.
(78)    Rodríguez-Sánchez A, Guinot J, Chiva R and López-Cabrales Á. How to emerge stronger: Antecedents and consequences of organizational resilience. J. Manag. Organ. (2019) 14: 1–18.
(89)    van der Vegt GS, Essens P, Wahlström M and George G. From the editors—Managing risk and resilience. Acad. Manag. J. (2015) 58: 971–80.