Organizational Agility in Creating Dynamic Capability as an Adaptive Strategy in the Era of Industry 4.0: An Empirical Study of the Outsourcing Industry in Sri Lanka

Abstract

The outsourcing industry is one of the most critical industries in Sri Lanka, contributing significantly to the country's economy. The study aims to explore whether organizational agility can create dynamic capability as an adaptive strategy in the era of Industry 4.0 and identify the factors that mediate this relationship. The study employed a quantitative research design, and data was collected from 208 employees of outsourcing companies in Sri Lanka using a self-administered questionnaire. The collected data was analyzed using various statistical techniques, including reliability analysis, descriptive statistics, correlation analysis, and regression analysis. The findings of the study revealed that organizational agility has a significant positive effect on dynamic capability. Furthermore, the study found that information technology capability mediates the relationship between organizational agility and dynamic capability. The results of the study suggest that organizations should focus on developing agility and IT capabilities to create dynamic capabilities and remain competitive in the era of Industry 4.0. The study's implications are significant, as it provides valuable insights for outsourcing companies in Sri Lanka to develop their capabilities to remain competitive in the rapidly changing business environment. Additionally, the study contributes to the literature on organizational agility, dynamic capability, and Industry 4.0 by providing empirical evidence on the relationship between these constructs. The study provides a comprehensive understanding of the impact of organizational agility on dynamic capability in the outsourcing industry in Sri Lanka. The study's findings have significant implications for practitioners and policymakers in the outsourcing industry and other industries that are facing similar challenges in the era of Industry 4.0.