Time-Based Strategy and Business Performance under Environmental Uncertainty: An Empirical Study of Design Firms in Taiwan

Tung-Jung David Sung, Yi-Ta Lu, Shu-Shiuan Ho

Now that design is acknowledged as an important consideration for businesses and is recognized as having the potential for driving competitiveness, the only sure thing in adopting a business strategy is that there will always be unknown variables in uncertain environments. Prior findings on the relationship between environmental uncertainty, time-based strategy, and business performance have been inconsistent. Meanwhile, the ‘strategic planning’ dimension of design consultancy firms has not attracted a great deal of attention. Thus, in this paper, we explore the moderating effects of environmental uncertainty on the relationship between time-based strategy and business performance in design firms. Based on data collected from 80 design firms in Taiwan, the findings first reveal that these firms can adopt different time-based strategies to pursue different performance outcomes. Second, the results show that three of four types of environmental uncertainty have direct effects on measures of business performance such as adaptability and innovation. Third, the findings suggest that appropriate matches between environmental uncertainty and time-based strategy can result in superior business performance. Specifically, the results indicate that the design-differentiation preemptor (DDP) strategy is beneficial for a design firm when it comes to achieving superior adaptability in an environment of high-perceived technological evolutions (TE) or competitor movements (CM) uncertainty. In addition, a design firm can adopt the DDP strategy in order to obtain superior levels of innovation in an environment of low-perceived customer demands (CD) uncertainty. However, the findings reveal that there are no moderating effects of environmental uncertainty found with the design-cost follower (DCF) strategy. Last of all, the limitations of this study and future research possibilities are also discussed.