International Journal of Innovation Management

Vol. 20, No. 3 (April 2016) 1650040 (18 pages)

© Imperial College Press
DOI: 10.1142/S1363919616500407

THE EFFECT OF STRATEGIC FORESIGHT ON

COMPETITIVE ADVANTAGE WITH THE MEDIATING
ROLE OF ORGANISATIONAL AMBIDEXTERITY
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AYDA AMNIATTALAB
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Faculty of Advanced Sciences and Technologies

University of Isfahan, Isfahan, Iran
aida.amniattalab@gmail.com

REZA ANSARI*
Department of Management
University of Isfahan, Isfahan, Iran
r.ansari@ase.ui.ac.ir

Published 4 November 2015

In the recent, the aspect of foresight is considered globally important. Specially, it has gained
a meaningful position in strategic planning. This study examines the quantitative relation-
ships between strategic foresight, ambidexterity and competitiveness of firms. Based on the
literature review, it appears that strategic foresight has positive impact on organisational
ambidexterity which in turn contributes to competitive advantage. We have utilised struc-
tural equations modeling (SEM) to empirically test the mentioned relationships in Iran’s
nanotechnology firms. Results show that the degree of strategic foresight has a direct effect
on organisational ambidexterity which in turn affects competitive advantage.

Keywords: Strategic foresight; organisational ambidexterity; competitive advantage; SEM.

Introduction
The scientific community is increasingly paying attention toward strategic foresight.
Increase in the number of publications concerning strategic foresight proves that this
field has become more important especially in Europe (Neef and Daheim, 2005; Roll
and Weber, 2006; Daheim and Uerz, 2006; Schwarz, 2007; Alsan, 2008). Nowadays,
business environment is faced with rapid changes due to discontinuities caused by

⁄
Corresponding author.

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 A. Amniattalab & R. Ansari

emerging technologies, socio-cultural shifts, political and legislative environment, or

alternative business models (Becker, 2002; Day and Schoemaker, 2005; Rohrbeck,
2008). Discontinuities or disruptions are defined as major shifts that can become
threats or opportunities for a firm (Ansoff, 1980; Day and Schoemaker, 2005;
Christensen, 2013). While product-life cycles and innovation cycles becomes
shorter, complexity and uncertainty increases. Strategic foresight — futures studies
in business — is a system of capabilities that allows firms “to navigate through
volatile, complex and uncertain environments” (Rohrbeck, 2008:2).
However, investigation on the role of strategic foresight on businesses has
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received scant attention. The existing literature on strategic foresight is primarily

based on case illustrations of generally big enterprises (e.g., Heger and Rohrbeck,
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2012; Öner and Beser, 2011; Vishnevskiy et al., 2014; Durst et al., 2014). Since
the importance of strategic foresight has now been recognised, academic
researchers have begun to focus on strategic foresight outcomes (e.g., Pinter, 2013;
Rohrbeck and Gemünden, 2011; Vecchiato, 2012; Battistella, 2013). In this paper,
we aim to investigate the effect of strategic foresight capabilities on firms’ inno-
vativeness and competitiveness.
Firms strive to master two types of innovation: explorative innovation, i.e.,
creating new products and services in new business fields often applying new
technologies and exploitative innovation, i.e., enhanced or new products and
services within the current business field. This kind of capability is called ambi-
dexterity. By becoming ambidextrous, firms aim to gain competitive advantage.
Though a prior study has examined the impact of strategic foresight organisational
ambidexterity in a different economic and geographical context (Paliokaitė et al.,
2014), investigation of relationships of strategic foresight with other firm perfor-
mance variables is scant. To authors’ knowledge, empirical evidence on whether
greater levels of strategic foresight strengthens or weakens organisational ambidex-
terity and competitive advantage is scant. To address this research gap, this paper
aims at examining the relationship between strategic foresight and competitive ad-
vantage considering the mediating role of organisational ambidexterity. Additionally,
the research scope of our paper is nanotechnology firms since they are mainly small
and medium sized enterprises and examining strategic foresight in SMEs is also
lacking (Jannek and Burmeister, 2008; Reger, 2001; Van Der Duin, 2006).

Literature Review and Hypothesis Development

Strategic foresight, organisational ambidexterity and competitive advantage
Companies have started to use some kind of future-oriented planning known as
strategic foresight to respond to changes in their industry and to handle uncertainties
1650040-2
 The Effect of Strategic Foresight

as well (Vecchiato, 2014). The objective of these efforts is timely anticipation of

shifts so that the company will be able to respond excellently to challenges and
opportunities (Rohrbeck et al., 2007). Strategic foresight makes it possible to analyse
potential future developments in a business, market or technology environment and
provides implications for management (Heger and Rohrbeck, 2012). European
foresight monitoring network (EFMN) reported that foresight is used for seven
reasons within public and private sectors: (a) To foster innovation, provide input for
policy formation, (b) indulge in strategic thinking, (c) discover investment oppor-
tunities, (d) generate visions for the future, (e) anticipate significant challenges (f)
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trigger actions and (g) promote public debate (May, 2009).

Within literature, there is a separation between conceptualisations of strategic
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foresight, where strategic foresight is either seen as a process (Becker, 2002;

Horton, 1999) or as an organisational capability (Hines, 2002; Ratcliffe, 2006;
Rohrbeck, 2010; Tsoukas and Shepherd, 2004). According to the process ap-
proach, strategic foresight includes a linear process which rules the ordered steps a
corporate should experience if it wants to comprehend the future and quickly
respond to the gained insights (Horton, 1999; Martin, 1995; Voros, 2003).
According to the capability view, strategic foresight is not merely a process,
rather it takes advantage of all the means the firm needs to possess in order to
discover, conjecture and react to change (Rohrbeck, 2010); similar to the
Slaughter’s definition: “The ability to create and maintain a high-quality, coherent
and functional forward view and to use the arising insights in organisationally
useful ways; for example: to detect adverse conditions, guide policy, shape
strategy; to explore new markets, products and services” (Slaughter, 1998). In this
research, we have used the second approach through which strategic foresight is
perceived as a system of capabilities for recognising disruptions and emerging
trends together with generating suitable and prompt reactions.
Organisational literature suggests that in order to be successful in a dynamic
environment, firms have to become ambidextrous. It means that organisations
manage various tasks which differ regarding complexity and certainty through
diversified structures (Duncan, 1976). Ambidexterity has become a more impor-
tant precondition for organisations’ endurance and performance to successfully
encounter the pressure of growing customer demands as well as entrance of new
rivals. Ambidextrous organisations have shown excellent performance in different
aspects (Birkinshaw and Gupta, 2013; Junni et al., 2013; Turner et al., 2013;
O’Reilly and Tushman, 2013). According to March, exploration is mainly about
“search, variation, risk taking, experimentation, play, flexibility, discovery, inno-
vation”. Contrarily, exploitation is about “refinement, choice, production, effi-
ciency, selection, implementation, execution” (March, 1991). Conceptualisation of
the ambidextrous organisation disclosed the need for an appropriate equilibrium
1650040-3
 A. Amniattalab & R. Ansari

between exploration and exploitation which is exhibited by differentiation between

refinement of an existing technology and invention of a new one (March, 1991; He
and Wong, 2004). March (1991) argues that exploitation and exploration vie for
scarce resources. Additionally, the trade-off in assigning scarce resources to ex-
ploitation or exploration is similar to interplaying in the form of a zero-sum game
(Wei et al., 2014).

The positive effect of strategic foresight on organisational ambidexterity

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Strategic foresight can have several impacts on the overall innovation process. Neef
and Daheim (2005) argue that in order to be successful, strategic foresight must be
integrated into organisational processes, such as strategy and innovation, as well as
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become more evident. According to Warnke and Heimeriks (2008), foresight can
support innovativeness in four ways: By providing a systemic instrument improving
innovation capability, bringing societal needs into attention, as an agenda-setting
process, and by providing anticipatory intelligence for decision-making. Gracht
et al. (2010) state that foresight can provide information on the corporation’s pe-
ripheral environment, specifically it can contribute to product development as an
input for the innovation process. According to Gracht et al. (2010) in order to shift
from a traditional industry-based economy to a knowledge-based economy, the
firms would need to utilise new concepts and methods in order to remain compet-
itive. The role of strategic foresight and innovation management is critical in this
context. According to Roveda and Vecchiato (2010), interactive workshops and
expert panels are suitable in promoting incremental innovations, “vision-oriented”
methodologies such as scenarios are more appropriate when radical innovations are
needed. Considering these explanations, we formulated the following hypothesis:

H1: Strategic foresight positively relates to organisational ambidexterity.

The positive effect of strategic foresight on competitive advantage

An organisation’s range of ability to set up a position ahead of its competitors is
referred as competitive advantage (Porter, 1985; McGinnis and Vallopra, 1999) by
which organisations demarcate themselves from competitors (Tracey et al., 1999).
From the resource-based view, three types of resources are specified that can
provide competitive advantage: (1) Physical capital resources include things such
as firm’s plant, equipment and finances, (2) organisational capital resources consist
of things such as the firms structure, planning, controlling and human resources
coordination and (3) human capital resources such as the skills, judgment and
intelligence of the firm’s employees (Barney, 1991). In order to identify the value
of a function and discover whether it provides competitive advantage for the firm,
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 The Effect of Strategic Foresight

the resources needs to be valuable, rare, inimitable and non-substitutable (Barney,

1991, 105; Eisenhardt and Martin, 2000, 1105).
Firms can gain competitive advantage by developing their new and differen-
tiated capabilities before their competitors replicate them (Kaivo-oja, 2006). Re-
gardless of their environmental characteristics, companies have to synchronise
many temporal cycles in order to sustain a competitive advantage (Rollwagen,
2008). Strategic foresight assumes that earlier detection of external changes will
provide temporary competitive advantage (Peterson, 2002; Tsoukas and Shepherd,
2004) and overall increase in competitiveness of the firm (Lackman et al., 2002).
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Therefore, we hypothesize:

H2: Strategic foresight positively relates to competitive advantage.

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The positive effect of organisational ambidexterity on competitive advantage

As mentioned above, if value, rareness, imitability and organisation are the
characteristics of companies’ resources, companies can employ them to obtain
competitive advantages (Learned, 1969; Porter, 1981). Innovation is a key source
of competitive advantage in the knowledge economy eon (Daghfous, 2004; Pra-
jogo and Ahmed, 2006). Innovation allows companies to create and utilise their
capabilities that cause sustainability of their business performance (Teece, 2007).
Innovation can protect profit margins and provide benefits for companies by de-
veloping “isolation mechanisms” (Lavie, 2006). Successful innovation is difficult
to imitate by periphery and allows firms to keep their advantages better (García-
Morales et al., 2007). Hence, the ambidexterity competency is influential in en-
abling the organisation to identify potential contribution of the projects to the
organisation’s long-term competitiveness. Consequently, the following hypotheses
are proposed with respect to the relationships between the variables in the research
model:

H3: Organisational ambidexterity positively relates to competitive advantage.

H4: Strategic foresight (a) positively associates with organisational ambidexterity
which (b) is positively associated with competitive advantage.

The proposed model is shown in Fig. 1.

Fig. 1. Theoretical model.

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 A. Amniattalab & R. Ansari

Methodology and Measurement

Data collection and the sample
Data for this study were collected through a questionnaire survey method. The
sample was generated through a search in the enterprise database in the Iran
nanotechnology initiative council website. 100 firms fulfilled the criteria of (1)
being an SME referring to a firm with fewer than 50 employees and (2) being
established three years prior to the survey date.
The response rate was 68%. Prior to distributing the questionnaires, two experts
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were asked to modify the questionnaire in the first pretest. Only CEOs were asked
to fill out the forms. Nanotechnology industry is one the most promising industries
since the late 90’s, and faces a high level of uncertainty and competitiveness, so
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firms in this industry easily demand strategic foresight, ambidexterity and com-
petitive advantage.

Measurement of the variables

The questionnaire comprised of 39 total items (Appendix 1). Strategic foresight
consists of three subcomponents — environmental scanning, strategic selection
and integrating capabilities — and was measured using a total of 27 items de-
veloped by Paliokaite and Pacesa (2014). To test the construct of organisational
ambidexterity, an eight-item scale proposed by Jansen (2005) is used where five of
them measure explorative innovation and three of them measure exploitative in-
novation. Also, a three-item scale proposed by Chen et al. (2009) is used to
measure competitive advantage. Each item was measured on a seven-point likert-
type scale ranging from one (strongly disagree; never) to seven (totally agree;
regularly). This study utilised SmartPLS 3 to verify the research framework and
hypotheses. The antecedent of this study is strategic foresight and the consequents
are organisational ambidexterity and competitive advantage while organisational
ambidexterity is also a partial mediator.

Empirical Results
This study utilises structural equation modeling (SEM) to verify the research
framework and hypotheses. SEM is a statistical methodology used extensively in
many scientific fields such as sociology, biology and economy. This methodology
provides a comprehensive method for researchers to quantify and test substantive
theories. In addition to this, structural equation models easily take measurement
errors into account that are common in most disciplines and typically subsume
latent variables (Raykov and Marcoulides, 2012).
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 The Effect of Strategic Foresight

In order to estimate the relationships of the model, we selected partial least

squares (PLS) which is a component-based approach of SEM. According to Hsu
et al. (2006), PLS is particularly suitable for small sample sizes as in this study.

The results of measurement model

The individual item reliabilities are examined through the factor loadings of the
items on the respective constructs. Only items with factor loadings of at least 0.5
are considered significant and retained in the model (Hair et al. 1998). The internal
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consistency of the model was assessed by calculating the composite reliability

(CR) and the Cronbach’s alpha of the measurements (Werts et al., 1974). The
usual homogeneity criteria for the CR and the Cronbach’s alpha is to be greater
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than 0.7. All the CR indices for the constructs surpass the recommended 0.7 and
the Cronbach’s alpha of the variables were also above 0.7 indicating that the items
comprising each scale are highly correlated with one another (Cronbach, 1951;
Nunnally, 1978) (see Appendix 1).
Convergent validity assesses whether or not constructs measure what is pur-
ported to measure. The convergent validity was assessed by calculating the av-
erage variance extracted (AVE) which indicates whether the construct variance can
be explained from the chosen indicators (Fornell and Larcker, 1981). The mini-
mum recommended value for each construct is at least 0.5 (Baggozi and Yi, 1988)
meaning that the indicators account for at least 50% of the variance. In order to
gain reliability of the constructs seven items were removed.
Discriminant validity means that every construct is significantly different from the
others. In all cases, the average variance extracted for each measure is greater than its
squared correlation with the other variables showing that all items included in the
analysis were loaded on the construct for which they were designed to measure; thus
proving discriminant validity of the measurement model (Appendix 2).
The significance of path coefficients and R2 values evaluates the hypothesized
relationships between constructs. As shown in Fig. 2, the standardised path
coefficients range from 0.605 to 0.968 except the one for the link between strategic
foresight and competitive advantage. Moreover, R2 values for all of the endoge-
nous constructs are between 0.397 and 0.936 which can be perceived high
according to Hair et al. (2011). The t-values of all the scales are above 1.96 which
shows the significance of all the items and the relationships between the variables.

The results of the structural model

The structural model resulting from the PLS analysis is summarised in Fig. 2,
where the explained variance of the endogenous variables (R2) and the standar-
dised path coefficients (
) are shown.
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Fig. 2. Final model of strategic foresight impact on competitive advantage with the mediating effect
of organisational ambidexterity.

According to results, strategic foresight has a positive relationship to organi-

sational ambidexterity (
¼ 0:724, P-value ¼ 0:000) as suggested by H1. It is
also noteworthy that other relationships between the hidden constructs that con-
nect five dimensions (environmental scanning, strategic selection and integrating
capabilities, explorative innovation and exploitative innovation) to two main
variables (strategic foresight and organisational ambidexterity) are also significant;
this illustrates the main constructs are properly explained by dimensions. As
shown in (a), the direct effect of strategic foresight on competitive advantage (as
assumed in H2) is significant (
¼ 0:466, P-value ¼ 0:000). However, in the
presence of the mediator this relationship becomes insignificant (
¼ 0:034,
P-value ¼ 0:782). Further, the R2 value for the dependent variable’s competitive
advantage augments when the mediator is included. This means that organisational
ambidexterity fully mediates the relationship between foresight and competitive
advantage (Baron and Kenny, 1986). Moreover, organisational ambidexterity
significantly affects competitive advantage as assumed by H3 (
¼ 0:605,
P-value ¼ 0:000).

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(a)

(b)

Fig. 3. Summary of relationships’ tests in the structural model. (a) Model with direct effect and
(b) Model with mediating effect.

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 A. Amniattalab & R. Ansari

Conclusions
Theoretical contribution
This study contributes to current literature in three ways. First, this study quan-
titatively tests the theoretically assumed direct effect of strategic foresight on (1)
ambidexterity competency and (2) competitive advantage of a firm. This also
demonstrates the important role of strategic foresight in the context of corporates.
Second, this study helps to better understand the influence of strategic foresight on
competitive advantage by investigating the role of organisational ambidexterity.
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We find out how firms owning foresight capabilities can gain competitive ad-
vantage by means of exploitative and explorative innovations. Hereby, this study
enriches existing research on strategic foresight by adding an important but pre-
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viously neglected contextual component, thus offering new insights into the
contextual approach to strategic foresight. This study investigates complex rela-
tionships between strategic foresight and ambidexterity under different contextual
conditions.

Managerial implications
This research empirically proves the positive effect of strategic foresight on am-
bidexterity as well as on competitive advantage. As a consequence, it would be
beneficial for firm managers to start implementing foresight practices throughout
their work place. The research indicated that the more the investments in strategic
foresight, the better are the innovation competencies. Besides, the better are the
innovation performance, the better is the competitive advantage.
Corporate managers should plan for the future in order to be ahead of threats
and be aware of opportunities for growth. Research results suggest balancing all
strategic foresight capabilities: Environmental scanning, strategic selection and
integrating capabilities. For example, firms should scan their environment regu-
larly when developing a systematic vision. Communication is a crucial production
factor. Therefore, close relationships with clients and suppliers and diverse net-
works in the business environment have to be encouraged by management. The
R&D department must simply be able to invent new ideas and assimilate several
ideas stemming from outside the organisation. To achieve this objective,
researchers must be in close contact with the marketing team who often understand
the expectations of both customers and suppliers.
Managers also should learn to evaluate costs but consider returns as well. By
considering the cost of missing out on new product opportunities or early warnings
of upcoming threats, managers can perceive the importance of foresight. As a

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 The Effect of Strategic Foresight

result, it would be better to consider an additional cost for foresight projects as a

part of the R&D expenditure.

Limitations and future research

Despite theoretical contributions and managerial implications, this study has some
limitations that should be addressed in future research. First, the focus point of this
research was the nanotechnology industry of Iran which is a limited sample in an
economic sector in a limited geography. So, further studies can focus on other
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national industries (e.g., petrol, gas, petrochemical, transportation and tourism) or

countries and compare with this study. Secondly, in order to measure competitive
advantage we used three items developed by Chen et al. (2009). We suggest next
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researchers to measure this construct with different items. A third area of attention
is the additional variables that might be added to the model, such as strategic
foresight antecedents, and other mediators or moderators might be included.

Appendix 1. The Loadings of the Items and the Reliability

and Convergent Validity of Constructs

Factor Cronbach’s
Items loadings C.R Alpha AVE
Strategic foresight 0.917 0.905 0.720
Label Environmental scanning capabilities 0.875 0.826 0.540
ES1 We have an active network of contacts with the 0.592
scientific and research community.
ES2 We collect information on patents. 0.798
ES3 We survey experts on their opinions, for example 0.706
by using questionnaires, panels, focus groups,
workshops, interviews, one to one meetings.
ES4 We are scanning in all areas (technological, 0.823
political, competitor, customer and socio-
cultural environment).
ES5 We also scan for developments in the markets and/ 0.729
or industries that we are not currently involved
in.
ES6 We also consider new issues, trends and 0.740
technologies whose relevance to our business
cannot yet be assessed.
Strategic selection capabilities 0.889 0.857 0.500

(Continued )

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 A. Amniattalab & R. Ansari

Appendix 1. (Continued )

Factor Cronbach’s
Items loadings C.R Alpha AVE
SS1 In our company, we analyse in detail the potential 0.673
future conditions.
SS2 We forecast the potential future conditions. 0.674
SS3 We use scenarios to describe potential futures. 0.698
SS4 We have a systematic vision development process. 0.736
SS5 We apply visioning methods, for example balanced 0.694
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scorecard, appreciation inquiry, road-mapping.

SS6 There is total agreement on our organisational 0.710
vision across all levels, functions and divisions.
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SS7 Our company develops activity plans that optimise 0.764

progress toward the organisational strategy.
SS8 Our company applies rigorous measurement of 0.703
business performance against goals and
objectives.
Integrating capabilities 0.858 0.801 0.503
I1 There are regular incentives for wider vision 0.664
(recognition by senior management and/or
financial rewards).
I2 Bringing external information into the company is 0.801
encouraged by top management.
I3 The activities of the different departments are well 0.675
coordinated.
I4 Every employee is expected to build and maintain 0.701
formal and informal networks to other units.
I5 In our company, information is shared freely across 0.688
functions and hierarchical levels.
I6 Continued organisational learning is encouraged 0.718
and there is time/opportunity to improve skills
and capabilities.
Organisational ambidexterity 0.904 0.876 0.879
Explorative innovation 0.880 0.827 0.596
ERI1 We invent new products and services. 0.648
ERI2 We commercialise products and services that are 0.849
completely new to our company.
ERI3 We frequently utilise new opportunities in new 0.869
markets.
ERI4 Our company regularly uses new distribution 0.707
channels.
ERI5 We regularly search for and approach new clients 0.766
in new markets.

(Continued )

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 The Effect of Strategic Foresight

Appendix 1. (Continued )

Factor Cronbach’s
Items loadings C.R Alpha AVE

Exploitative innovation 0.851 0.744 0.662

EII1 We frequently refine the precision of existing 0.904
products and services.
EII2 We regularly implement small adaptations to 0.609
existing products and services.
EII3 We improve our provision’s efficiency of products 0.895
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and services.
Competitive advantage 0.857 0.781 0.601
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CA1 Our company has the competitive advantage of 0.811

low-cost compared to other competitors
CA2 Our company has better managerial capability than 0.642
other competitors
CA3 Our company’s profitability is better than other 0.829
competitors
CA4 Our company is the first mover in some important 0.796
fields and occupies the important position

Appendix 2. Discriminant Validity of Constructs

Competitive Environmental Exploitative Integrating Explorative Strategic

advantage scanning innovation capability innovation selection
Competitive 0.775
advantage
Environmental 0.313 0.735
scanning
Exploitative 0.510 0.490 0.814
innovation
Integrating 0.510 0.564 0.723 0.721
capability
Explorative 0.660 0.503 0.755 0.660 0.815
innovation
Strategic 0.413 0.557 0.416 0.586 0.609 0.703
selection

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 A. Amniattalab & R. Ansari

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