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The global business context is turbulent and becoming a dynamic complex system where small events can trigger large outcomes that are difficult to predict. This gives urgency to the search for responsive global organizations that are able to adapt the multinational corporate strategy so it provides a better fit with the changing demands of the environment. An important key to this challenge is to activate the responsive potential of the many individuals in the multinational corporation and use them to inform strategic decisions and gain updated insights from the field and instill an organizational culture with supportive structures that will release the entrepreneurial human potential throughout the global organization. The eight chapters presented in this book provide useful insights to fuel these considerations.

We operate in a complex dynamic world where human activities interfere with the environment in ways that may cause unpredictable extreme outcomes that reflect exposure to uncertainty and unknown factors as opposed to identifiable risk events. As humans, we tend to downplay the effects of uncertainty and create a false sense of security by adopting formal control-based management practices where we in truth face more uncertainties than we realize. Hence, we attempt to assess extreme disaster events to mitigate adverse effects but fail to address the underlying causes for the exposures rooted in the way we have organized global economic activities. Exposures partially derive from the way enterprises govern their economic assets while systemic exposures derive from the way we conduct our global business practices. Identified exposures are typically local whereas the systemic causes are global with collective societal effects. Therefore, mitigating enterprise exposures will not address the global systemic causes for the extreme societal effects. To reach more sustainable solutions we must involve businesses that operate the global economy as well as the societies they operate in around the world. Given the extreme uncertainty of systemic risks, grand solutions cannot be derived from computational analytics but require experimentation among engaged public and private organizations and open collaborative learning to identify viable solutions from diverse insights. We must embrace uncertainty to explore innovative opportunities for proposed solutions and implement them in gradual co-evolving progression to develop viable sustainable economic outcomes.

This first chapter argues that turbulent environments require adaptive strategy for survival and continued prosperity and thereby introduces the attempts to determine effective response capabilities in contemporary firms, which are presented in the ensuing chapters. The background in prior strategy research is outlined to position the various contributions within a proper backdrop as potential extensions to prior insights generated in the strategic management field. It suggests a need for multiple methodological approaches to gain new diverse and relevant knowledge from rich qualitative field studies as well as quantitative data probes and computational analyses. Finally, the ensuing chapters are briefly presented to provide a coherent view of the contributions made by this specific collection of chapters that the authors hope will inspire and fuel ongoing work in this important area.

The world in which companies operate today is volatile, uncertain, complex, and ambiguous, thus subjecting contemporary forms to an array of risks that challenge their viability in an increasingly competitive landscape. Organizations that cling to their traditional ways of operating impede their ability to survive while those able to embrace evolving changes and lever their strategic response capabilities (SRCs) will thrive against the odds. The possession of such capabilities has become a prominent explanation for effective adaptation to the impending changes but is rarely analyzed and tested empirically. Strategic adaptation typically assumes innovation as an important component, but we know little about how the innovative processes interact with the firm’s SRCs. Hence, this study investigates these implied relationships to discern their effects on organizational performance and risk outcomes. It explores the effects of SRCs and the role of innovation as intertwined adaptive mechanisms supporting strategic renewal that can attain superior performance and risk effects. The relationships are analyzed based on a large sample of US manufacturing firms over the decade 2010–2019. The study reveals that firms possessing effective SRCs have the ability to exploit opportunities and deflect risky situations to gain favorable performance and risk outcomes. While innovation indeed plays a role, the precise nature and dynamic effect thereof remain inconclusive.

The author introduces a strategic responsiveness model that reflects an organization’s ability to sense environmental changes and learn from emergent adaptive responses that attempt to realign organizational activities and gain a better fit with the changing conditions. The author shows in computational simulations how superior strategic adaptation is associated with higher average returns and lower performance risk among firms that compete in the same industry contexts and generate negatively skewed outcome distributions consistent with empirical observations. The model is refined to incorporate an interactive strategy-making process, where experiential insights from decentralized initiatives update forward-looking projections in central planning. The ensuing analysis demonstrates how this adaptive strategy-making approach further enhances the favorable risk-return outcomes. The author discusses these findings and the implications for the study of dynamic adaptive strategy-making processes.