Organizational capacity for change and firm performance in a transition economy

Abstract

This study explored some human resource and human systems' aspects of the competitive dynamics for firms attempting to survive and prosper within Russia, a highly volatile transition economy. Overall, this study adds to our understanding of international strategic human resource management, dynamic capabilities, and the generation of competitive advantage within transition economies.

We found that a relatively new construct derived from the dynamic capabilities and organizational change literatures, known as ‘organizational capacity for change,’ is positively associated with firm performance within a wide variety of Russian firms. Furthermore, we find that the relationship between organizational capacity for change and firm performance is stronger when there are relatively high levels of uncertainty with the task environment. Finally, we found that organizational capacity for change is an important attribute in all sizes of organizations, not just for large organizations as hypothesized.

Keywords:

• dynamic capabilities
• strategic change
• strategic human resource management

Notes

1. Firms that had substantial ownership on the part of the state and/or the Russian Oligarchs were excluded from this study so that only firms fully exposed to market forces were considered in this study.