An organizational sensemaking theorizing of how firms construct digitally enabled strategic agility

Abstract

Existing theories on digitally enabled strategic agility have predominantly adopted a dynamic capability perspective, explaining how it fosters competitive advantage. However, such theories provide insufficient clarity on how organizations navigate the “equivocality” that arises from abundant but often unstructured and ambiguous information and signals to formulate an effective response to environmental dynamism. We address this literature gap by developing a novel organizational-sensemaking-based framework where digitally enabled strategic agility emerges from a combination of digital orientation, information governance, and digital transformation. We test the series of hypotheses depicted in the theoretical framework empirically by collecting survey data from the Australian healthcare sector. The statistical findings reveal that digital orientation influences digitally enabled strategic agility through the individual and serial mediation of information governance and digital transformation, with no direct impact observed. Our findings highlight the importance of organizational sensemaking in achieving effective responses to environmental changes, crucial for fully realizing digitally enabled strategic agility.