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Organizational Capabilities
• Learning Orientation
• Market Orientation
• Manufacturing Capability
• Managerial Capability
Trust
Dynamic Capability
• Agility Capability
Agility, which emerged since 1990s in the literature is considered a major capability that
emphasizing the ability to adjust and change [39]. Agility is the ability to survive and prosper in a
competitive environment with continuous and unpredictable changes by reacting quickly and
effectively [12]. Some important attributes of agility emphasized in all definitions include: speed,
effective responsiveness; proactiveness; and availability of slack resources [57]. Speed is the firm’s
ability to accomplish tasks in the shortest possible time, such tasks includes quick new product
development, fast operation, quick learning of new technology, and fast adaptation to change, etc. [39].
Responsiveness is the ability to identify changes and opportunities, respond reactively or proactively
to them, and recover from them [38]. Proactiveness is the capability to act proactively, taking initiative
in improving current circumstances or creating new favorable ones [2]. Organizational slack is defined
by Bourgeois (1981, p. 29) as a cushion of actual or potential resources, which firms can use to initiate
changes in strategies for environment adapting; they are accumulated for pursuing market and
competitive opportunities in the future [43].
2.2. Organizational capabilities
Four key organizational capabilities are identified from the literature as significant for firm’s
competitive advantages. They are market orientation, learning orientation, managerial capability and
manufacturing capability. Market orientation has been defined as an important organizational culture
that creates the necessary behaviors for understanding and fulfilling customers’ expressed needs [32],
and also latent needs [35]. The concept of market orientation is focusing continuously on discovering
new opportunities for target-customers, especially under dynamic market or competitive environments
[34]. Managerial capability is innate and learned abilities, and expertise of managers in a firm [1] [14]
[24]. It directly affects the firm’s performance by integrating, reintegrating firms’ resources and
capabilities [29], and the partnership performance by the managers’ coordination and control of
operation [8]. Learning orientation “is comprised by the continually evolving knowledge stocks
existing in individuals, groups and the organization, which flow to continuously exploit and explore
knowledge in accordance with the environmental conditions” [37] (p.501). It allows the transfer of
tacit knowledge, resources and capabilities in the partnership, thus providing opportunities to develop
new capabilities [7]. Manufacturing capability directly influences a firm’s success because such a
capability has the potential to support and shape corporate strategy [11]. Various studies have
indicated the direct impact of manufacturing capability on the manufacturing and organizational
performance [25]. A core manufacturing capability is a multifaceted complex concept and is multidimensional
and implies cost, quality, delivery, and flexibility [11] [25]. Based on the above, we
develop the following hypotheses:
H1: Market Orientation is positively associated with Agility.
H2: Learning Orientation is positively associated with Agility.
H3: Managerial Capability is positively associated with Agility.
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