Operational and strategic change during temporary turbulence: evidence from the COVID-19 pandemic

Environmental turbulence is a well-studied contingency of relationships involving firm strategy, structure, and performance. However, it is invariably regarded as a present condition of indeterminate duration. Indeed, some industries are regarded turbulent by their nature with little regard for past, present, or future. What of environmental turbulence which is high in level but short in duration? An empirical study is conducted in the COVID-19 context to investigate how firms respond operationally and strategically to what is perceived to be temporary turbulence. Predictors of both operational and strategic change are found to include the level of turbulence and the firm’s prior experience making changes. The types of operational change associated with performance improvement are adjusting production levels and budgets/spending. The type of strategic change associated with performance improvement is targeting new customers or markets. A conceptual framework incorporating both the level and duration of turbulence is proposed for future study.