The Impact Of Potential Absorptive Capacity On Strategic Flexibility Through Organizational Unlearning Under The Influence Of Environmental Dynamism

Abstract

The study talks about strategic flexibility antecedent and mechanism to add the the body of knowledge for research community. Environment of the business is changing continuously which is evident by rapid change in demands of customers, change in government policies and rapid shifting of competitor’s strategies which encourages companies to keep shifting their strategies to be aligned with environment. In order to achieve this organization continuously acquire knowledge through potential absorptive capacity. [1]There are certain existing habits, knowledge and beliefs which need to be updated through the process of unlearning in order to use newly acquired knowledge so that company can be flexible in its strategies as old and obsolete knowledge create rigidity. Environmental dynamism acts as moderator between potential absorptive capacity and strategic flexibility. Data is collected from 300 pharmaceutical firms in Pakistan and analysis through smart pls. Findings show that potential absorptive capacity has positive effect on strategic flexibility whereas organizational unlearning positively mediates the relationship. Environmental dynamism positively moderates the relationship between potential absorptive capacity and strategic flexibility. The paper ends with discussion and future avenues.