Organizational Flexibility and Project Portfolio Performance: The Roles of Environmental Uncertainty and Innovation Capability

Abstract

This study explores empirically the underlying mechanism through which organizational flexibility affects the performance of its project portfolio, using innovation capability as a mediator, and examines the moderating role of environmental uncertainty in the relationship between organizational flexibility and innovation capability. Data collected from 201 firms were analyzed using partial least squares structural equation modeling with SmartPLS software. The study shows that organizational flexibility positively affects innovation capability and that innovation capability has a positive impact on project portfolio performance. Further, innovation capability positively mediates the relationship between organizational flexibility and its project portfolio’s performance. The adverse moderating effect of environmental uncertainty on the relationship between flexibility and innovation capability also found. The study contributes to innovation theory by using quantitative data to address the role of flexibility in improving innovation capability and the performance of project portfolios and provides a framework that managers can use to enhance the performance.

Keywords:

• Organizational Flexibility
• Innovation Capability
• Environmental Uncertainty
• Project Portfolio

EMJ Focus Areas:

• Decision Making & Risk Management
• Operations Management
• Organization Development & Change
• Program & Project Management

Disclosure Statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Muhammad Aamir Saeed

Muhammad Aamir Saeed is serving as a lecturer in the Department of Management Sciences, COMSATS University Islamabad, Wah Campus. He completed his PhD from the Department of Business Administration, Business School, Nankai University, China. He received his master’s degree from the Institute of Quality and Technology Management, University of The Punjab, Lahore, Pakistan. After completion of his master’s degree, he served in the Planning and Development Department, Government of the Punjab, Pakistan. His research areas are project portfolio performance, project risk management, and innovation management, strategic management and operations Management.

Humaira Tabassum

Humaira Tabassum completed her doctoral degree from Zhou Enlai School of Government, Nankai University, China. She received her master’s degree from the GC University, Faisalabad and served in the Department of Education, Government of Punjab, Pakistan before starting her doctoral studies. Her research areas are educational innovation in organizations, educational management, and curriculum innovation. She has published in peer-reviewed national and international journals.

Muhammad Mohsin Zahid

Muhammad Mohsin Zahid co-founded the market research firm Neuron Solutions, where he serves as the head of R&D. He has a PhD in marketing and earlier served as assistant professor and coordinator of graduate programs in the Department of the Management Sciences, COMSATS University Islamabad, Wah Campus, Pakistan. Before starting his teaching career, he served various organizations as management expert and trainer. He teaches project management applications and research methodology courses to graduate classes. His research interests include social media marketing, business education, marketing and management training and project management. He has published in peer-reviewed national and international journals. As an international trainer Mohsin has conducted three hundred plus training sessions for corporate and nonprofit clients in seven countries.

Yuanyuan Jiao

Yuanyuan Jiao is a professor in the Department of Business Administration, Business School, Nankai University, China. She completed her PhD in management sciences and engineering and her post-doctoral studies in management sciences and engineering from the Management School of Tianjin University, China. Her research direction is innovation management, project management, and operations management. She has published in a number of journals, including Journal of Management Case Studies, Project Management Technology, Science & Technology Progress and Policy.

Shazia Nauman

Dr. Shazia Nauman is a professor of project management in the Riphah School of Business and Management, Riphah International University. Her research interests include empowerment, leadership, innovation, and knowledge management & stakeholder project management.