Inside the black box: Investigating agility as a dynamic capability for sustaining a competitive advantage within consulting firms

A fundamental question in the field of strategic management is how firms achieve and sustain a competitive advantage. The resource-based view (RBV) and its dynamic capabilities extensions have been used in answering this question but are criticized for being defined at too high a level and not resulting in a prescription for practicing managers. The primary purpose of the study was to explore organizational agility as a dynamic capability for sustaining a competitive advantage. In addition, a secondary purpose of the study was to provide applicable knowledge for attaining and maintaining a sustainable advantage. Five questions addressing (a) the relationship between organizational agility and firm performance within the consulting industry; (b) the modifying effects of environmental dynamism, environmental complexity, and coordination uncertainty on the relationship between organizational agility and firm performance within the consulting industry; (c) significant differences in these relationships across consulting firms of different sizes (small, medium, large); (d) the impact of environmental dynamism, environmental complexity, and coordination uncertainty within the consulting industry; and (e) whether the competitive advantage mediates the relationship between organizational agility and performance were investigated using MANOVA, multivariate regression models, and bivariate and partial correlation tests. The results showed (a) a strong positive correlation exists between operational agility activities and both market-related overall performance and internal overall performance; (b) customer agility was related to market-related overall performance and internal overall performance only through the relationship with operational agility; (c) environmental dynamism, environmental complexity, and coordination uncertainty had no effect on the relationship between agility and performance, but environmental dynamism and coordination uncertainty were significantly related to agility; (d) firm size had no significant effect on performance and agility activities; and (e) competitive advantage did not mediate the relationship between organizational agility and performance. Suggestions for practical activities to sustain a competitive advantage were also developed for use by practicing managers.