Coping with uncertainty is a fundamental challenge for businesses. One way they are able to respond is by building up tactical flexibility. By viewing airlines' flexibility results to regulatory uncertainty associated with their inclusion in the European Union Emission Trading Scheme, this article suggests that firms can react to regulatory uncertainty by developing such flexibility in two ways: they can either anticipate the potential effects of altering regulatory conditions and try to prepare for them; or they could adapt quickly and efficiently to them once the regulatory scenario has become clear.
By examining evidence from nine case studies, the article illustrates that each kind of response takes a particular bundle of capabilities and identifies the organizational capabilities needed to pursue an anticipatory or adaptive strategy.
PUBLICATION DATE: November 11, 2011 PRODUCT #: CMR496-PDF-ENG
This is just an excerpt. This case is about GLOBAL BUSINESS
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