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Adaptive Strategy-making and Left-skewed Performance Outcomes*

Torben Juul Andersen (Copenhagen Business School, Denmark)

Responding to Uncertain Conditions: New Research on Strategic Adaptation

ISBN: 978-1-80455-965-9, eISBN: 978-1-80455-964-2

Publication date: 14 March 2023


In view of a disruptive environment, the authors consider theories that explain left-skewed performance outcomes and inverse risk–return relationships where some rationales imply causal dependencies with slightly differing outcomes while others refer to spurious artifacts. These literatures are briefly outlined and dynamic response capabilities introduced as an alternative perspective expressed as strategic responsiveness where commonly observed performance outcomes derive from heterogeneous response capabilities among firms that compete in dynamic environments. Financial performance outcomes are analyzed empirically based on a comprehensive corporate dataset where computational simulations of adaptive strategy making among firms generate comparable outcomes from a simple strategic responsiveness model. The findings demonstrate how diverse adaptive strategy-making processes can generate a substantial part, if not all, of the commonly observed artifacts of firm financial performance. The implications of these results are discussed pointing to propitious approaches of analyzing the impact of dynamic adaptive strategies.



Andersen, T.J. (2023), "Adaptive Strategy-making and Left-skewed Performance Outcomes*", Andersen, T.J. (Ed.) Responding to Uncertain Conditions: New Research on Strategic Adaptation (Emerald Studies in Global Strategic Responsiveness), Emerald Publishing Limited, Leeds, pp. 17-39.



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