THE EFFECT OF ENVIRONMENTAL UNCERTAINTY AND TOP MANAGEMENT TEAM FORESIGHT ON BUSINESS CYCLE ORIENTATION AND ORGANIZATIONAL AMBIDEXTERITY: THE CASE OF MINING AND CPO INDUSTRY IN INDONESIA
Dr. Dimas Angga Negoro Prof. Firmanzah, PhD. Sari Wahyuni, Ph.D. Dr. Lily Sudhartio
University of Indonesia
Abstract
The ups and down in commodity prices is arguably important challenges to deal with for commodity-based firms in order to strive and survive. The increasing volatility of this business cycle has increased the difficulties in responding strategically. An empirical study has been undertaken to build an organizational model for commodity-based firms to deal with this issue fundamentally. This study used the Structural Equation Modeling–Partial Least Square (SEM-PLS) methodology to analyze 130 top management representing 99 different mining and Crude Palm Oil companies in Indonesia. It found that commodity-based firm can have better performance by being an ambidextrous organization. In order to achieve this, firms need to have orientation towards its business cycle and this orientation is determined by its top management foresight and environmental uncertainties. This study contributes to the existing literature on strategic management in relation to ambidextrous organization, managerial foresight, organizational orientation, environmental uncertainty, and its performance implications. The study provides managerial advice by proposing a model that could give valuable insights in the purpose of building business cycle ambidextrous company.
Keywords: Ambidexterity, Business cycle orientation, Top management foresight, Business performance, Commodity based firms, Strategic management
Topic: Strategic Management