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Linking Agility to Environmental Sustainability of Emerging Market MNEs:

The Mediating Role of Individual Creativity and Flexible Work Arrangements

By

Abderaouf Bouguerra

Dr., Postdoctoral Researcher, Department of Accounting, Copenhagen Business School, Solbjerg

Plads 3, 2000 Frederiksberg, Denmark. E-mail: abo.acc@cbs.dk

Ismail Gölgeci#

Dr., Associate Professor of Marketing Strategy, School of Business and Social Sciences,

Department of Business Development and Technology, Aarhus University, Birk Centerpark 15,

Building 8001, 7400 Herning, Denmark. E-mail: i.golgeci@btech.au.dk

David M. Gligor

Dr., Assistant Professor of Marketing, University of Mississippi, 236 Holman, Oxford, 38655,

USA. E-mail: dgligor@bus.olemiss.edu

Ekrem Tatoglu

1. Professor, University of Sharjah, College of Business Administration, P.O. Box 27272,

Sharjah, United Arab Emirates, E-mail: etatoglu@sharjah.ac.ae

and

2. Ibn Haldun University, School of Business, Ulubatli Hasan Cad., No: 2 Basaksehir, 34494,

Istanbul, Turkey, E-mail: ekrem.tatoglu@ihu.edu.tr

#Corresponding Author

Abstract

Prior research has produced ample evidence showing that agility affects performance outcomes;

however, we know little about the link between agility and collaborative processes toward

environmental sustainability. This study examines the relationship between operational agility and

environmental collaboration, mediated by individual creativity and flexible work arrangements. Using

multilevel analysis of data obtained from 249 managers of 66 multinational enterprises (MNEs) in

Turkey, we find that operational agility through individual creativity and flexible work arrangements

leads to greater environmental collaboration. We contribute to the streams of literature on agility,

international management, and environmental sustainability by elucidating that operational agility of

emerging market MNEs tends to reduce environmental impacts and that individual creativity and

flexible work arrangements facilitate environmental collaboration to attain environmental success.

Keywords: Operational agility; environmental collaboration; individual creativity; flexible work

arrangements; MNEs; microfoundations, multilevel analysis.

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1. Introduction

Organizations increasingly integrate environmental practices and processes into mainstream strategic

and operational tasks. Controversies over environmental sustainability have fueled social concerns and

public pressure, dictating that manufacturers and service providers maintain agile and flexible practices

to reduce environmental impacts of their products and services (Clarke & Boersma, 2017; Mendleson

& Polonsky, 1995). As such, organizations, especially those with large international operations (e.g.,

MNEs) are facing increased pressure from governments and environmental constituents to promote

and achieve sustainable environmental goals, especially in the context of emerging markets. Within

this setting, organizational agility1 remains an essential capability to enhance collaborative processes

for environmental sustainability, due to its role in adapting and responding quickly to the external

environment, and also in supporting environmental practices beyond the firm boundaries (Gölgeci,

Gligor, et al., 2019; Vachon & Klassen, 2006, 2008). Collaborative processes, which constitute of

interorganizational relationships and network partners to enhance production capabilities and reduce

environmental impacts (Vachon & Klassen, 2008), are influenced to a large extent by the degree of

operational agility, because it adapts to changing environment to improve operations and processes

(Schmitz, 2017; Vachon & Klassen, 2008).

In this paper, we propose that operational agility of organizations are well placed to achieve

environmental sustainability through promoting collaborative processes and subsequently reducing

environmental concerns. Linking operational agility to environmental collaboration of MNEs is

important. First, operational agility is critical for competitiveness as it allows firms to quickly and

continuously adapt and respond to any market dynamics (e.g., resources, suppliers, customers, supply

chain, and production efficiency) and helps organizations improve product variety with minimal

environmental impact and thus increase cost-effectiveness (Ivory & Brooks, 2018; Newman & Hanna,

1996). Second, the study conext is important because beyond Turkey being an emerging market,

1 Organizational agility refers to the capacity of an organization to efficiently and effectively redeploy/redirect its

resources to value creating and value protecting (and capturing) higher-yield activities as internal and external

circumstances warrant (Teece et al., 2016). Organizational agility is generally classified into two perspectives:

operational agility and strategic agility (Brannen & Doz, 2012; Cao & Dowlatshahi, 2005).

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environmental concerns are becoming of prime importance to the Turkish government. For example,

Turkey has introduced plans and policies to direct businesses toward more environmentally sustainable

practices. These developments pressure MNEs in Turkey to adopt more efficient and flexible practices

to achieve sustainable environmental goals (Arda et al., 2018; Fainshmidt et al., 2016).

Although environmental collaboration has been receiving increased interest, little research has

been conducted to advance our understanding of the link between operational agility and

environmental collaboration in emerging markets. Likewise, research on how MNEs are involved in

environmental processes has been limited (Kolk, 2016). Given that agility enables organizations to

swiftly adapt and adjust their business processes to meet rapidly changing market demands and sustain

competitive advantage amid volatility (Sambamurthy et al., 2003), it may be plausible to expect that

agility can be used to sense and respond to emerging environmental and social demands by different

stakeholders (Christofi et al., 2013). However, with agility conceptualized as a firm-level capability,

the way its potential role in interorganizational environmental collaboration is manifested by

individuals remains unexplored. Accordingly, research on agility and environmental collaboration so

far has been focused on the organizational level and has somewhat neglected micro-level variables

(Gölgeci, Gligor, et al., 2019; Vázquez-Bustelo et al., 2007; Wu et al., 2017). Given that collaborative

processes reside within individuals (Conto et al., 2014), examining the influence of individual-level

micro variables is highly warranted as it can provide novel insights into the microfoundations of MNE

managers successfully applying their agility and engaging in environmental collaboration. Building on

this view, we explore the way individual creativity and flexible work arrangements (FWAs) exert an

influence on MNEs’ collaborative processes to achieve and sustain environmental effectiveness.

Extant research advocates that effectiveness in environmental collaboration can be attained not

only by organizational strategies and structures but also by distinct social relationships and individual

capabilities (Gölgeci, Gligor, et al., 2019). In this vein, individual capabilities, such as creativity, enable

firms to generate useful ideas and develop innovative solutions necessary for operational and strategic

effectiveness. As such, organizations need creative solutions and innovative responses to meet

environmental goals. Such innovative responses may depend on the creativity of individuals within

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firms. Adding to this, we posit that effective environmental collaboration can also be further enhanced

through FWAs (e.g., flexible hours, telecommuting, reduced work hours, and job sharing). We build

this argument on research showing that FWAs lead managers to increase aspects of their performance,

such as engagement, productivity, creativity, and morale (Mcnall et al., 2010).

This study aims to investigate the role of individual creativity and flexible work arrangements

in linking operational agility to environmental collaboration. Applying microfoundations approach and

analysis based on survey data from 249 managers nested in 66 MNEs operating in Turkey, we examine

the impact of operational agility on environmental collaboration, while exploring the mediating roles

of individual creativity and FWAs.

This study contributes to the literature on organizational agility, international management, and

environmental sustainability in several ways. First, to the best of our knowledge, this study is the first

to unpack the link between agility and environmental collaboration. Our encouraging findings should

prompt further research in this area. While extant literature examined organizational outcomes of

agility such as efficiency, innovation, and financial performance, our study goes further and illustrates

that agility can also help firms experience environmental benefits, by helping facilitate environmental

collaboration. In doing so, we examine the link between operational agility and environmental

collaboration within the context of MNEs operating in the emerging market of Turkey. As such, out

first contribution to international management sets the stage for better understanding how emerging

market MNEs (EM MNEs) leverage their operational agility to support environmental collaboration.

Second, we fine-tune the discourse beyond the broad discussion of agility and environmental

collaboration, by exploring the impact of agility on micro-level variables (e.g., individual level).

Although previous research has provided ample evidence of how agility influences macro-level level

factors (Eckstein et al., 2015; Wu et al., 2017), it has neglected micro-individual level factors. Building

on the international human resource management and learning literature and folllowing

microfoundations approach (e.g., Buckley et al., 2016; Morris et al., 2014; Shoham et al., 2017), our

study addresses this deficiency by examining the role of operational agility in individual creativity and

FWAs. Such work addresses some of the outstanding issues on the interaction between individual and

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organizational level factors in agility and environmental sustainability research. Likewise, it explains

why MNEs rely on their employees to translate their operational agility into improved environmental

collaboration. In this vein, we advance environmental sustainability and international management

literature by uncovering that individual creativity and FWAs are facilitators of environmental

collaboration to attain environmental success within the context of MNEs operating in Turkey.

Likewise, our examination of the role of individual creativity and FWAs addresses the point made by

scholars like Teece (2014a) concerning international business research overlooking management

phenomena and micro-level factors that underpin macro-level linkages. Our findings allow us to derive

some novel theoretical and practical implications that we detail in the latter part of the manuscript.

2. Theoretical background

2.1. MNEs’ operational agility and environmental collaboration

Over the years, the pace of change, the degree of interconnectivity, and environmental challenges

around the world have increased to such extent that MNEs increasingly need unique capabilities to

navigate in tumultuous settings and achieve performance outcomes beyond profitability and financial

performance (Grewatsch & Kleindienst, 2017; Mariadoss et al., 2011; Teece, 2014a). In particular,

environmental expectations by various stakeholders are increasingly fluid, multifaceted, complex, and

even paradoxical (Gölgeci, Gligor, et al., 2019; Ivory & Brooks, 2018). Such nature of environmental

expectations involves organizational capabilities that underpin swift and flexible response across a

wide range of global operations (Grewatsch & Kleindienst, 2017; Luzzini et al., 2015; Mariadoss et

al., 2011). Therefore, despite the lack of attention by extant research, the agility concept as a potential

capability to concurrently manage multiple environmental sustainability-related tensions or paradoxes

requires further attention (Fourné et al., 2014; Ivory & Brooks, 2018).

The concept of agility is applied to the business context to enhance the understanding of

business behavior in contemporary times of unprecedented pace of economic, political, social, and

technological change (Gligor, 2013). Agility signifies the firm’s ability to preempt and respond to

environmental changes swiftly (Gligor et al., 2013; Overby et al., 2006). The core premise of agility

concerns the firm’s capability to develop and maintain the flexibility to adapt to a set of factors and

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forces; including new technologies, customer demands, socio-economic concerns and foreign markets’

norms and values (Christopher, 2000; Doz & Kosonen, 2008, 2010; Ivory & Brooks, 2018; Overby et

al., 2006). Previous studies generally classify agility into two perspectives. One perspective is that

agility is externally focused generic capability, which helps organizations quickly adjust operations to

cope with changing market conditions and also changes in customers’ requirements and preferences

(Braunscheidel & Suresh, 2009). The other perspective rests on the fact that agility is not restrained as

a capability, but integrates various practices related to strategy or system (Brannen & Doz, 2012; Cao

& Dowlatshahi, 2005). This line of research is underpinned by the argument that an agile organization

should be not only flexible in its operations, but also in reconfiguring and restructuring its strategy to

be responsive and flexible to environmental changes.

Agility enables continuous alignment and realignment of specific tangible and intangible assets

and competences as well as business models to serve rapidly changing, multiple reality environments

(Doz & Kosonen, 2010). Also, agility allows firms to respond swiftly to market demands that are

distinct to the context in which they occur (Doz & Kosonen, 2008, 2010; Gligor et al., 2013; Gurkov

et al., 2017). Likewise, agility is closely interlinked with knowledge management (Oliva & Kotabe,

2019; Pereira et al., 2019). Agile firms develop and deploy strategies nimbly, sense and respond to

competitive forces, and seize new opportunities through the use of market knowledge. That said, agility

is not a unidimensional and abstract concept relevant solely at the strategic level. It is also applicable

at the operational level (Gligor, 2013), where strategy meets the real world and deploying agility in

daily operations matters more to the manifestation of agility beyond being an idea and a strategic tool.

Operational agility is defined as a firm’s ability to physically and rapidly cope with market or

demand changes (Lu & Ramamurthy, 2011). The core premise of operational agility concerns swift,

flexible, and responsive operations as a critical ground for enabling quick and fluid translation of

innovative initiatives in the face of changes (Lu & Ramamurthy, 2011). Operational agility is a

substantive (i.e., ordinary) capability that enables firms to better deploy their resources to reach their

domain-specific goals (see Teece, 2014a; 2014b for a discussion of the differences between substantive

capabilities and dynamic capabilities). Therefore, operational agility concentrates primarily on

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maneuvering and adjusting resources and daily operations of varied nature to provide a fast response

to changes. Such operations can include both internal operations that take place within organizational

boundaries and external operations that occur across organizational boundaries. In this research, we

are more interested in examining the way operational agility is manifested in MNEs’ external

operations relative to environmental collaboration.

Environmental collaboration refers to joint environmental goal-setting, shared environmental

planning, and business partners working together to reduce environmental impacts (Vachon &

Klassen, 2008). It involves activities such as joint product/service design for environmental

compliance, acquisition and joint deployment of sophisticated environmental technologies, and

cooperation for resource and waste reduction (Grekova et al., 2016; Vachon & Klassen, 2006).

Intensifying decoupling of business activities across organizational and national boundaries implies

that MNEs increasingly rely on global value chain partners to coordinate and execute their value

creation activities (Kano, 2018; Kotabe & Mudambi, 2009; Murphree & Anderson, 2018). As most of

the external ties of many MNEs are relational in nature (Kano, 2018), their interorganizational

activities aiming at achieving various performance outcomes, including environmental collaboration

often entail collaborative arrangements.

When MNEs operate in dynamic environments and run sophisticated business activities, they

may face multiple tensions or paradoxes regarding environmental sustainability (Ivory & Brooks,

2018). Likewise, given the scale of MNEs’ global business operations, much of their environmental

impact is rooted in their network, not within their organizational boundaries (Clarke & Boersma, 2017).

Due to grave environmental challenges the world faces, MNEs in both developed and emerging

markets are required to seek sustainable solutions by collaborating across geographic boundaries

(Grekova et al., 2016; Liu & Vrontis, 2017). Coupling this fact with the amplified environmental

expectations of multiple stakeholders, MNEs must work closely with their partners in a collaborative

fashion to improve their overall environmental footprint and generate a positive impact on their

environment (Caldwell et al., 2017; Klijn et al., 2008; Vachon & Klassen, 2006). Beyond traditional

yet increasingly ineffective practices such as environmental and safety checklist audits, collaborative

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efforts can help firm and their partners achieve better environmental performance (Plambeck et al.,

2012). Therefore, collaboration supporting the natural environment is an essential part of

environmentally sustainable strategies and activities for MNEs (Vachon & Klassen, 2008).

Despite the pivotal role of MNE strategy in environmental collaboration, it is not just a structural

arrangement devoid of social implications. Even if environmental collaboration policies can be crafted

and applied at the firm-level, its application and manifestation take place at the individual-level (Mitra

& Datta, 2014). The interactive and behavioral nature of environmental collaboration (Gölgeci, Gligor,

et al., 2019) amplifies the role of individuals embedded in collaborative arrangements and highlights

the importance of understanding the microfoundations of environmental collaboration.

2.2. Microfoundations of environmental collaboration

Humans, their capabilities, and activities are indispensable elements of MNEs (Budhwar et al., 2017).

MNEs increasingly rely on their human capital to create value and yield expected outcomes such as

performance and environmental sustainability (Martin et al., 2016; Wright & Mcmahan, 2011).

Though MNEs can be seen as organized value-creating systems (Kotabe & Mudambi, 2009), their

behavior is, in fact, resultant of the actions of their constituents i.e., employees (Coleman, 1990).

Therefore, the human element cannot be overlooked when explaining international management

phenomena that are often addressed through macro-level analysis.

Most management issues take place across multiple levels of analysis, involving individuals

and the organizational/interorganizational environments in which individuals operate (Mäkelä et al.,

2012; Steel & Taras, 2010). Methodological individualism stresses that individual-level factors are

necessary to explicate macro-level (i.e., organizational/interorganizational) phenomena and preclude

deficiencies in theorization and contradicting explanations (Felin & Foss, 2005). Although on the

surface, one macro-level issue appears to be influencing another macro-level issue, their relation can

only be explained through the transition of macro-micro-macro level forces (Coleman, 1990). “…

knowledge of how the actions of [systems’] parts combine to produce systematic behavior can be

expected to give greater predictability than statistical relations of surface characteristics of the system”

(Coleman, 1990 p. 3). This implies that analysis of individual activities, upon which individuals (i.e.,

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managers) act and are impacted by the macro(firm)-level forces (Felin & Foss, 2005), helps explain

microfoundations of macro-level phenomena.

Managers view the firm and its characteristics according to their own perceptions and values.

Thus, firm-level antecedents have a pivotal influence on managers and their capabilities and activities.

Drawing on this premise, we argue that environmental collaboration emerges from managers’

individual capabilities (i.e., creativity) and activities (i.e., FWAs) driven by MNEs operational agility.

This argument highlights that MNEs cannot be analyzed independent of managers and supposed

relationships between firm-level phenomena indeed function via individual-level phenomena. Thus, in

order to unpack the potential link between operational agility and environmental collaboration (both

conceptualized and measured at the firm level) of EM MNEs, we draw on microfoundations approach

to theoretically ground our arguments and hypotheses and examine the mediating role of individual

creativity and FWAs that are conceptualized and measured at the individual level.

Managers’ capabilities and activities are microfoundations of organizational activities (Mäkelä

et al., 2012; Wright & Mcmahan, 2011). They influence tactics and everyday activities of their firm.

More importantly, MNEs’ activities are rooted in the member-managers of these systems, as there is

no other entity than people to manifest them. Thus, environmental collaboration is dependent on the

capabilities and activities of managers working in MNEs. Below we delve deeper into individual

creativity and FWAs as capabilities and activities that convert operational agility into increased

environmental collaboration.

The research on creativity has generated a wide variety of definitions of the concept, some of

which define it as a characteristic of a person and others as a process (Oldham & Cummings, 1996).

We adopt a synthesized approach and define individual creativity as manifested capability of an

employee to intentionally create, introduce, and apply new ideas to benefit her/his firm (Janssen, 2000).

Creative managers pay greater attention to their context, are detail-oriented (Harvey & Novicevic,

2002), have sophisticated cognitive capabilities (Amabile et al., 2005), and are alert and adaptive

(Martinaityte et al., 2016).

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Creativity is essentially about discovering new ideas for changing products, services, and

processes to achieve a firm’s goals and has been considered a key to enduring advantage (Amabile et

al., 2005). Creative managers are among the most critical resources of MNEs to serve onerous

customer requirements, compete, and thrive amid external challenges (Santoro, Ferraris, & Winteler,

2019) and opportunities (De Vasconcellos et al., 2018; Martinaityte et al., 2016). In a similar vein,

creativity is a vital source of dynamism and adaptability (Maclean et al., 2015; Pandza & Thorpe, 2009)

that can serve as an essential ground for navigating arduous environmental collaboration tasks that may

involve paradoxical choices and situations.

MNEs invest heavily in attracting, supporting, and retaining creative employees (Bradley et

al., 2013), due to their complex structure and dynamic market requirements as well as amplified costs

of doing business stemming from unfamiliarity of the environment, cultural, political and economic

differences, and the geographic range of operations (Ferraris et al., 2016; Liu & Vrontis, 2017). The

importance of creativity of MNE managers is argued to accentuate their value for competing in a

hypercompetitive global marketplace (Harvey & Novicevic, 2002). Creative managers form the

backbone of business activities that matter and make a difference to MNEs’ competitive advantage in

economic, environmental, and social domains (Bradley et al., 2013; Hemphill, 2013).

Flexibility is considered an indispensable element of agility (Gligor et al., 2013; Swafford et

al., 2008). As a specific form of individual flexibility, flexible work arrangements refer to individually-

crafted HR policies and practices, formal or informal, which permit people to vary when, how, and

where work is carried out (Maxwell et al., 2007). FWAs denote one having discretion and means to

craft her/his job as s/he sees fit in line with the assessment of internal and external task-related forces

(Kelly & Kalev, 2006). FWAs are also positively related to developmental opportunities for managers

and negatively related to the work-family conflict that may eventually enhance managers’

organizational commitment (Hornung et al., 2008). Thus, FWAs allow managers to take their own

initiatives and be more resourceful and flexible in response to varying task requirements.

Given their often structured task environments (Yan et al., 2010), traditional MNEs may lack

attention and means to support managerial discretion and task autonomy as enablers of FWAs.

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Nonetheless, due to technological, social, and economic forces driving the need for FWAs (Kelly &

Kalev, 2006; Masuda et al., 2012), a growing number of MNES are compelled to design and implement

FWAs for their employees. Such a trend could also be reflected in the increasing number of managers

working in multiple locations or distantly and forming global virtual teams (Jimenez et al., 2017).

Much of the extant research has focused on the individual benefits of FWAs such as work-life

balance, job satisfaction, and career premiums (Hornung et al., 2008; Leslie et al., 2012; Masuda et al.,

2012; Mcnall et al., 2010). However, managers’ FWAs can also offer benefits to MNEs in the form of

greater aggraded flexibility in response to the requirements of market forces and the external

environment. They can convey the role of MNE strategies and capabilities to interorganizational

activities. In this vein, FWAs can be seen as a potential conduit between MNEs agility and ensuing

activities such as environmental collaboration that can be driven by agility.

3. Hypotheses

3.1. Operational agility and environmental collaboration

Increasing competition has been forcing firms to adopt advanced business paradigms including

environmental management as an increasingly important performance driver, along with agile

manufacturing which enables firms to survive in competitive business environments with multiple and

often paradoxical demands (Vinodh, 2010). Agility and sustainability can both be imperative to

meeting divergent customer demands and surviving competitive and environmental pressures in the

global marketplace (Christofi et al., 2013; Christopher, 2000; Li et al., 2017). In fact, past research

suggests that agile firms are better placed to navigate these challenging pathways of environmental

sustainability (Ivory & Brooks, 2018). The relevance of this notion is amplified for EM MNEs that

face paradoxical environmental requirements from multiple stakeholders across the globe amid their

complicated and large-scale global operations.

Complex and paradoxical activities such as environmental practices often require collaboration

beyond the boundaries of the focal MNE (Gölgeci, Gligor, et al., 2019; Vachon & Klassen, 2006,

2008). Environmental collaboration, in turn, involves a complex set of activities with the involvement

of multiple partners that may host different mindsets, follow different business practices, and maintain

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different priorities that require agile and adaptive processes to tackle. Such operational complexity of

environmental practices across organizational boundaries can render environmental collaboration

cumbersome and protracted. Thus, EM MNEs may be compelled to deploy operational agility to

streamline operational complexities of interorganizational environmental practices and be more

effective in participating in and managing environmental collaboration activities.

Environmental collaboration is a challenging and intricate task with unpredictable outcomes,

especially when undertaken across national borders (Harari, 2014; Luzzini et al., 2015) and when

initiated in emerging markets due to the lack of established principles guiding environmental practices

(Tatoglu et al., 2014). Operational agility can provide the necessary tools to navigate and succeed

within the fluid and unpredictable domain of environmental collaboration with behavioral aspects that

render the management of collaboration challenging. As the essence of operational agility is physically

and rapidly coping with external changes (Lu & Ramamurthy, 2011), EM MNEs with operational

agility can be in a better position to tackle the challenges of interorganizational environmental practices

and succeed in environmental collaboration.

Furthermore, interorganizational collaboration being a multifaceted phenomenon with

ingrained elements of conflict and competition can have negative implications for environmental

practices (Ritala & Hurmelinna-Laukkanen, 2009). Operational agility can enable EM MNEs to

resolve potential incongruent goals and environmental practices of global partners and to face the

challenge of executing environmental collaboration activities that can be decoupled across time and

space (Caldwell et al., 2017; Fourné et al., 2014). EM MNEs with operational agility can have a better

possibility to manage complex environmental practices across firm boundaries and adapt to the

changing nature of collaborative arrangements in response to internal and external demands. Therefore,

we expect that EM MNEs’ operational agility can be a valuable capability to underpin their

environmental collaboration.

Hypothesis 1: Operational agility of emerging-market MNEs is positively associated with

environmental collaboration.

3.2. The mediating role of individual creativity and flexible work arrangements

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Many MNEs around the world face the daunting task of reconciling tensions between task and product

standardization and creativity and innovation (Shalley & Gilson, 2017). Such tensions are often

amplified by the size of MNEs which exacerbates the need for structuration and formalization to

achieve consistency and efficiency and creativity and exploration to achieve responsiveness and

effectiveness (Theodosiou & Leonidou, 2003). Similarly, particularly EM MNEs suffer from the lack

of established business structure and institutional support when conducting their business activities and

creating environmental value (Clarke & Boersma, 2017).

The scope and magnitude of environmental challenges EM MNEs face grow exponentially

with the geographic scope of their business operations (Clarke & Boersma, 2017; Ferraris et al., 2016;

Ivory & Brooks, 2018). Thus, EM MNEs increasingly need better deployment and utilization of their

capabilities such as operational agility for effective environmental collaboration with different

stakeholders (Caldwell et al., 2017; Gölgeci, Gligor, et al., 2019; Liu & Vrontis, 2017; Vachon &

Klassen, 2008). We argue that individual creativity and FWAs can be mediating mechanisms for

translating operational agility into improved environmental collaboration.

Operational agility as an organizational capability developed and applied as part of the EM

MNE strategy provides conducive ground to support individual creativity of emerging-market MNE

managers. EM MNEs following agile principles and developing flexible structures to improve agile

capabilities are more likely to design and maintain policies that support individual creativity (Di Minin

et al., 2014). Unlike rigid MNEs where individual creativity and initiative-taking may be discouraged

for the sake of efficiency and standardization, agile EM MNEs allow more room for managerial

discretion and creativity for rapid and flexible responses to environmental demands. Resolute decision-

making and responsiveness are essential dimensions of agility (Gligor et al., 2013), and EM MNEs

seeking to support these qualities may need to invest in individual creativity. EM MNEs with the

capability of operational agility in place can be in a better position to attract, support, and maintain

creative managers.

On the other hand, strategic environmental collaborations entail potential dilemmas such as the

proper extent of control, goal specification, and budget requirements as well as the coordination and

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organization of disparate goals, incentives, and management practices (Caldwell et al., 2017; Klijn et

al., 2008). Emerging-market MNE managers who follow creative processes are better positioned to

find solutions to resolve potential problems in the joint pursuit of environmental goals. When partners

of divergent backgrounds and priorities come together to work on improving environmental outcomes,

creative managers can see through the subtleties of such challenging collaborations and can find

innovative ways to tackle the complicated environmental problems they face (Ritala & Hurmelinna-

Laukkanen, 2009). For example, creativity can help overcome managerial dilemmas related to

interaction with partners, strategic orientation, management style, and process dynamics in the

interorganizational context of complex environmental projects across multiple countries (Klijn et al.,

2008). Likewise, as institutions underpinning environmental standards are very different across

national settings (Fainshmidt et al., 2016), creative managers can improvise to overcome unexpected

contingencies and bridge the gap between partners. Therefore, we expect that individual creativity can

underlie environmental collaboration if it is enacted by EM MNEs’ operational agility.

Taken together, we view individual creativity as a linchpin between operational agility and

environmental collaboration as it can help convey the influence of operational agility on environmental

collaboration through creative activities by focal emerging-market MNE managers.

Hypothesis 2: Individual creativity of emerging-market MNE managers mediates the link between

operational agility and environmental collaboration.

At its core, operational agility involves MNEs’ deliberate strategy and activity formulation

toward greater flexibility in the way their employees execute their tasks (Lu & Ramamurthy, 2011).

This means that EM MNEs that continuously align and realign their tangible and intangible resources

to achieve greater operational agility are also likely to invest in FWAs for their managers. When

emerging-market MNEs’ agility-related priorities, capabilities, and processes are in place, managers

can find greater leeway to adjust their tasks, working hours, and place of work as new work

requirements arise. Contemporary EM MNEs that are swift and responsive to a multitude of market

demands and quickly evolving environments eliminate silos, bureaucracy, and top-down hierarchies

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and emphasize quick changes, flexible resources, and creative teams to ensure a successful stream of

activities (Aghina et al., 2018).

Furthermore, though operational agility does not necessarily mean boundless or constant

changes to business activities (Overby et al., 2006), managers can find themselves in need of being

flexible with what and how they do to comply with their firms’ agile strategies and tactics. For example,

managers’ work tempo and working hours may need to be attuned to changing environmental demands

or the relational dynamics of collaboration in environmental projects. Likewise, a network of

empowered EM MNE teams working together to solve the complex environmental problems can rely

on the rapid decision and learning cycles that feed FWAs (Aghina et al., 2018).

On the other side of the coin, FWAs of partner firms’ managers are often needed for goal

alignment and relational coordination in environmental collaborations (Caldwell et al., 2017). In many

emerging markets, the dynamic coexistence of a set of business paradigms, organizational cultures,

and management systems that feed FWAs (Gölgeci, Karakas, et al., 2019) can yield creative third-way

solutions to complex environmental problems and facilitate environmental collaboration tasks. When

emerging-market MNE managers exhibit flexibility in the way they work, they also manifest greater

willingness to accommodate the challenging requirements of environmental collaboration. EM MNEs

can, for instance, assign their flexible managers as organizational implants to their partner firms to

enhance commitment to (Grawe et al., 2012) and facilitate processes for environmental collaboration.

When managers are ready and willing to embark upon new challenges and are flexible in so doing,

they are more likely to succeed in facing the challenges of environmental collaboration and work with

their partners to achieve environmental objectives.

Thus, we expect that while EM MNEs’ operational agility encourages and supports managers’

FWAs, FWAs are needed to convey operational agility’s influence on environmental collaboration

across EM MNEs and their partners. Operational agility can manifest itself in how emerging-market

MNE managers arrange their work, and those managers’ flexibility in working hours, spatial

arrangements, and task descriptions can underlie successful interorganizational execution of

environmental collaboration. This leads to the following hypothesis.

16

Hypothesis 3: Flexible work arrangements of emerging-market MNE managers mediate the link

between operational agility and environmental collaboration.

The conceptual model of our paper is presented in Fig. 1.

[Insert Fig. 1]

4. Method

4.1. Survey setting

We selected Turkey as the research site for several reasons. First, Turkey is undisputedly the leading

economy in Southeastern Europe and the Middle East and has been one of the G20 member countries

due to the importance of its economy to the world's financial markets. Execution of a rigorous

macroeconomic strategy coupled with prudent fiscal policies and major structural reforms since early

2000 has also transformed the country into one of the major recipients of foreign direct investment

(FDI) in both regions of Southeastern Europe and the Middle East. The total FDI stock increased nearly

thirteen times, from US$ 15 billion in 2003 to US$ 193 billion as of 2017 (Invest in Turkey, 2018).

Second, while Turkey is a sizable emerging market, it is relatively under-researched context and

exhibits common industrial, institutional and organizational features with other big emerging markets

like Brazil and Mexico (Fainshmidt et al., 2016), which may improve the generalizability of our results.

Third, as in most emerging markets, the external environment in Turkey is very dynamic, where firms

inherit more flexible and agile practices, necessary to adapt and adjust to any environmental changes

(Arda et al., 2018; Fainshmidt et al., 2016; Tatoglu et al., 2014). Furthermore, MNEs are especially

suitable for our study because they are facing increased pressure from governments and environmental

constituents to promote and achieve sustainable environmental goals, especially in the context of

emerging markets. For instance, the Turkish government has introduced national development plans

and policies to direct businesses toward more environmentally sustainable practices.

The government imposes strict rules particularly to foreign and private organizations to be

aware and adopt more environmental practices; and also to be more engaged in tackling issues related

to environmental sustainability (Cakar & Alakavuklar, 2014). Within this context, MNEs, in particular,

are shifting their primary focus from achieving superior economic performance in terms of higher

17

profit and sales, to environmental and social performance. To achieve these goals, MNEs need to adopt

more flexible and agile practices to improve their production efficiency and meet environmental goals

and requirements. All of which renders a suitable context to investigate the link between operational

agility and collaborative processes toward environmental sustainability of MNEs in Turkey.

4.2. Sampling and data collection

The sampling frame for MNEs in Turkey was drawn from the database of a government body: General

Directorate of Foreign Investment (GDFI), which maintains the records of all FDI firms operating in

Turkey. GDFI also acts as a one-stop agency for implementing regulations about FDI. As of 2017, the

database of GDFI consists of 58,954 FDI firms. For this survey, we excluded ventures with a capital

value of less than ten million US$, as most of these firms were small businesses owned by a single

person or established through ordinary partnerships with no recognizable environmentally sustainable

practices. We also excluded ventures with foreign ownership of less than 10 % (Demirbag et al., 2007).

We employed a structured questionnaire to gather firm-level and individual-level data from

MNEs in Turkey. The survey questionnaire was originally written in English and then translated into

Turkish using the back-translation procedure recommended by Brislin (1986). The process of back-

translation was useful to identify potential misunderstanding and misinterpretations before

administering the questionnaire. To ensure the validity and consistency of the translation, two bilingual

scholars verified the back-translated English and Turkish versions of the survey.

Based on a random sampling selection procedure, 500 MNEs was generated and constituted

the sample for the study. We prequalified potential participants within each firm by their

responsibilities, expertise, and holistic understanding of core managerial functions and manufacturing

processes, as recommended by Dillman (2007). We used multiple respondents for each firm and

mailed a total of 1800 questionnaires (2 to 5 respondents in each firm) requesting that survey

respondents possess a holistic view of organizational processes and their outcomes, and also a high

degree of operational knowledge/expertise within a firm. This step helped us to foster the accuracy of

the data and increases the validity of responses. The questionnaires were returned in sealed envelopes

and with attached business cards.

18

After two waves of data collection and two reminders, 257 questionnaires were returned, of

which 249 questionnaires were usable (from a total of 66 MNEs) representing an effective response

rate of 13.8 %. The response rate is considered satisfactory and also comparable to those of research

in similar contexts, given the nature of the research and the type of potential participant (Kriauciunas

et al., 2011). The characteristics of the questionnaire respondent MNEs are summarized in Table 1.

[Insert Table 1]

To evaluate non-response bias, we followed two steps. First, we compared responses from

early and late respondents and found no statistically significant differences. Secondly, a randomly

selected group of 45 non-participants MNEs and the participating 249 indicated no significant

differences for any of these demographic variables: number of employees, firm size, and firm sales

volume. Hence, we concluded that non-response bias did not pose a significant issue in our study.

4.3. Measures

All of our measures are based on 5-point Likert scales (1=“strongly disagree” to 5=“strongly agree”)

and are drawn from previous research. We used managers’ perceptual evaluation to measure each

variable in our study. Perceptual measures by managers reflect the actual state of a firm and capture a

firm’s behavior and capabilities. These measures are widely used in recent empirical research (Gölgeci,

Gligor, et al., 2019; Leslie et al., 2012; Singh et al., 2016).

4.3.1. Operational agility

Operational agility (OA) was measured using three items drawn from Lu and Ramamurthy (2011).

Managers were asked to assess how agile the operations inside their organizations are and their firms’

ability to adjust their production to meet market demand.

4.3.2. Individual creativity

Individual creativity (IC) was measured using three items developed by Janssen (2000). Managers

assess their ability to generate creative ideas and find solutions.

4.3.3. Flexible work arrangements

19

Flexible work arrangements (FWAs) measure the extent to which managers obtain flexible work

practices by their organizations. These arrangements include flexible hours, telecommuting, reduced

work hours, and job sharing. Seven items adapted from Leslie et al. (2012) were used to measure FWA.

4.3.4. Environmental collaboration

Environmental collaboration (EC) measures how organizations are performing regarding the degree

of their collaboration with supplier partners to improve and achieve environmental goals. EC was

measured by six items drawn from Vachon and Klassen (2006).

4.3.5. Control variables

We controlled for the variables of firm size, manager’s work experience, and educational level. We

measured firm size (SIZE) by five ordinal categories consisting of the number of employees ranging

from less than 250 to more than 5000 employees. SIZE is a common control variable to capture

whether there is a potential influence of the number of employees on the outcome variable. Manager’s

work experience (EXP) was measured through five categories in the same firm ranging between less

than 5 years to more than 40 years. We measured educational level (EDU) by five ordinal categories

based on the qualifications obtained at university, to control for its potential influence. The

measurement of the control variables is shown in Table 1.

4.4. Analysis

Due to the hierarchical nature of our data (i.e., individual- and organizational-levels) and the structure

of our sample (249 employees nested in 66 MNEs), we conducted multilevel analysis using the

software MLwiN to explain microfoundations of environmental collaboration and control for any

possible nesting effects of organizational level and employee level factors on the relationship we tested

(Rasbash et al., 2009). Multilevel analysis is an important tool to understand how individual

capabilities and activities underlie organizational outcomes and to advance research adopting

microfoundations approach (Aguinis & Molina-Azorín, 2015).

To test statistically whether multilevel analysis was the appropriate statistical technique for our

study, we followed the procedure recommended by Klein et al. (1999). We compared a model of one

structure (individual-level) to a model at two levels (individuals nested in MNEs). The results show

20

that the difference in log-likelihood (518.38 – 510.95=7.43; p<.01) is significant. Then, we compared

the percentage of variance at level 2 to overall variance, i.e., we divided 0.065 (level 2 variance) by

0.470 (the total variance) and found 0.138. Any value above 0.1 justifies the use of multilevel analysis

technique (Klein et al., 1999). From the above, there is a valid justification to use multilevel analysis

in the present study.

To test the indirect relationship between operational agility and environmental collaboration

through individual creativity and FWAs, we employed a procedure recommended by Bauer et al.

(2006). Thus, we used online tool Monte Carlo Markov Chain (MCMC) simulations with 20,000

iterations to obtain confidence intervals for the indirect effects. The online tool helps to develop R2

value and test the indirect effect (mediation). The indirect effect (mediation) is significant if the

confidence internals does not contain the value of zero (Selig & Preacher, 2008).

5. Results

Three steps were undertaken to report our results. First, we conducted confirmatory factor analysis

(CFA) to demonstrate whether the study’s variables and model provide a good fit. Secondly, we

addressed the possibility of common method bias (CMB) using different design and statistical

techniques. Finally, we used multilevel analysis to test our proposed hypotheses.

5.1. Confirmatory factor analysis

We conducted confirmatory factor analysis (CFA) to test the discriminant validity of our measures

using AMOS software (Byrne, 2001). Table 2 reports the fit statistics for CFA. The results supported

the discriminant validity of the measures and report a good fit with the data [χ2=528.75; DF=146;

χ2/df=3.62, p<.01; comparative fit index (CFI)=0.79; incremental fit index (IFI)=0.80; Tucker-Lewis

index (TFI)=0.72; root-mean-square error of approximation (RMSEA)=0.103].

[Insert Table 2]

We assessed the discriminant and convergent validity of our model by examining the average

variance extracted (AVE) measures and the squared correlations among the variables. The results in

Table 3 show that AVE values are higher than 0.50, which mean that the level of convergent validity

for our survey instrument is acceptable, as recommended by Fornell and Larcker (1981).

21

[Insert Table 3]

5.2. Common method bias

To address the possibility of common method bias (CMB) for our study, we used multiple design-

related techniques (i.e., psychological separation, methodological separation, and using multiple

sources) and statistical techniques (i.e., Harman’s single factor, and marker variable technique). In the

first step, various design-related techniques were used to reduce potential CMB. To do so, we initially

pre-qualified potential respondents that have core knowledge of the research topic. Then, we informed

all potential participants that their responses are confidential and anonymous. We received for each

respondent a questionnaire in a sealed envelope, which helped us to reduce the threat of any social

desirability bias (Podsakoff et al., 2012). Additionally, we separated the independent and independent

variables/constructs from each other and randomized the items within each construct. Finally, we used

two and six qualified participants in each MNE to enhance the validity and consistency of responses

(Craighead et al., 2011). Collecting data from multiple informants was purposeful to tease out any

differences in perceiving the agility of an organization and its environmental outcomes, which reduces

the possibility for CMB effect in this study.

Further, we used a structured questionnaire that is carefully constructed. In so doing, we draw

an initial list of questions generated from previous studies and given to three academics from different

universities in the UK. These scholars provided feedback about the wording and grammar and

proposed useful techniques to improve the clarity and consistency of the questions. Following this, we

sent the questionnaire to two academics based on Turkey. They helped us to redesign the structure of

the questions and refine some questions that comply with the context/site of our research. These steps

were necessary to maximize clarity, accuracy, and cohesiveness of the questions in our survey.

In the second step, two statistical tests were undertaken for CMB. Firstly, we employed

Harman’s single factor test to verify whether a single factor can explain the majority of the variance

(Podsakoff et al., 2003). In so doing, the number of factors was constrained to a single factor. If there

is considerable common variance, it means that the single factor is expected to generate the majority

of the covariance among all factors. The results show that the single factor did not account for the

22

majority of the variance in the items. Secondly, we used marker variable technique following

Podsakoff et al. (2012) recommendation. To do so, we took the smallest correlation between the marker

variable and the substantive variables as an estimate of the CMB effects. Then, we subtracted the

lowest positive correlation between self-report variables from each correlation value. The result of

correlation values reflects CMB adjusted correlations. The absolute differences were relatively small

in our findings, ranging between 0.01 and 0.005. Prior research highlights relatively small differences

between the unadjusted and common method bias-adjusted correlations, means that CMB is a problem.

Thus, based on the above discussion, CMB was not deemed to pose a severe problem in our study.

5.3. Hypotheses testing

The descriptive statistics, reliability estimates, and correlations of all measures are reported in Table 4.

In each model, we examined tolerance values and variance inflation factors (VIF) to account for

multicollinearity. The results show that all tolerance values were more than 0.90, and all VIF scores

were between 1.06 and 1.09, affirming that multicollinearity is not a serious issue in our study (Hair et

al., 2010).

[Insert Table 4]

Table 5 shows the results of multilevel analysis. Table 5 reports the results of the direct effect

of operational agility on environmental collaboration. It also reports the results of the mediation effects

of operational agility with environmental collaboration through individual creativity and FWAs. Model

1 includes only control variables. Model 2 includes dependent variable and reports the results of the

direct effect of operational agility on environmental collaboration. Two models to test the mediation

effect of individual creativity on the relationship between operational agility and environmental

collaboration (Models 3 and 4). Also, two models are set to report the mediation effect of FWAs on

the relationship between operational agility and environmental collaboration (Models 5 and 6).

Model 2 indicates that there is strong support for Hypothesis 1, in that operational agility has a

significant positive effect on environmental collaboration (y=.17, p<.01). We found strong support for

the two mediation hypotheses (Hypotheses 2 and 3). To test Hypothesis 2, which predicts that

operational agility has an indirect and positive relationship with environmental collaboration via

23

individual creativity, we followed the recommendations by Bauer et al. (2006). The results in Table 5

(Model 3) indicate that operational agility is positively and significantly associated with individual

creativity (y=.28, p<.01). Additionally, Model 4 shows that operational agility is positively and

significantly associated with environmental collaboration when individual creativity is taken into

account (y=.41, p<.01). Further, we conducted MCMC simulations to obtain confidence intervals for

our proposed indirect effects. We used an online tool that develops R2 value to test the mediation as

suggested by Selig and Preacher (2008). The bootstrapping test reported that the indirect effect of

operational agility on environmental collaboration via individual creativity was significant (i.e.,

indirect effect=.07, p<.01). Also, the 95 percent confidence interval (CI: -0.13 – 0.49) of the indirect

effect did not contain zero. Thus, strong support was found for Hypothesis 2.

Similarly, Hypothesis 3, which predicts that operational agility has an indirect and positive

relationship with environmental collaboration via FWAs, was supported. As indicated in Table 5

(Model 5), operational agility is positively and significantly associated with FWAs (y=.22, p<.01).

Model 6 illustrates that operational agility is positively and significantly associated with environmental

collaboration when FWAs are taken into account (y=.13, p<.01). Similar to previous hypotheses, we

used MCMC online tool stimulations to obtain confidence intervals for the indirect effects, as

suggested by Selig and Preacher (2008). The bootstrapping test reported that the indirect effect of

operational agility on environmental collaboration via FWAs was significant (i.e., indirect effect=.05,

p<.01). Also, the 95 percent confidence interval (CI -0.10 – 0.21) of the indirect effect did not contain

zero. Thus, strong support was found for Hypothesis 3.

[Insert Table 5]

5.4. Discussion of findings

Our results show that the mediation effects, via individual creativity and FWAs, is higher than the

direct effect of operational agility on environmental collaboration. This finding reveals that

environmental collaboration is improved and sustained by developing distinct individual capabilities.

Evidence shows that the increase of environmental collaboration from operational agility rests

primarily on individual creativity and also FWAs. While operational agility provides a basis to develop

24

environmental collaboration, individual capabilities (individual creativity and FWAs) represent

microfoundations of environmental collaboration. Our findings are largely supportive of extant studies

(Gligor et al., 2015; Gligor & Holcomb, 2012; Vázquez-Bustelo et al., 2007), highlighting additional

benefits of agility. In the next section, we go into further detail of the individual results and discuss our

findings in light of the existing literature.

6. Conclusions and implications

Our main research objective was to shed further light on the link between agility and environmental

collaboration, especially within MNEs operating in emerging markets. To achieve this goal, we

collected and analyzed data from 249 managers of 66 MNEs in Turkey. This research endeavor

allowed us to identify several key findings.

6.1. Key findings

Our results show that the operational agility of MNEs is positively associated with environmental

collaboration. Further, the link between operational agility and environmental collaboration is

mediated by individual creativity of MNE managers and by FWAs of MNE managers. Additionally,

the mediation effect of individual creativity and FWAs is stronger than the direct effect of operational

agility on environmental collaboration. Given the magnitude of environmental impacts coupled with

institutional pressures and social concerns, organizations are increasingly compelled to adopt more

flexible approaches to enhance collaborative processes geared toward environmental sustainability.

Moreover, organizations, especially those with large international operations (e.g., MNEs), exhibit

dynamic operational practices in collaboration with their supply chain partners to provide sustainable

environmental solutions (Clarke & Boersma, 2017; Vachon & Klassen, 2006). As collaborative

processes reside in organizational mechanisms and also in individual capabilities, they may not be fully

realized unless they are actually developed and implemented via various interorganizational activities

exercised by individual managers (Schillebeeckx et al., 2016). Building on this view, the present study

highlights the role of individual creativity and FWAs as mediating means to convert operational agility

into environmental collaboration. In so doing, the study has several implications for research and

practice, which are laid out below.

25

6.2. Theoretical implications

The study’s results allow us to make theoretical contributions across different domains. First, we

augment the agility literature in several ways. To the best of our knowledge, our study is the first to

shed light on the complex relationship between agility and environmental collaboration. We build on

extant studies that have examined the performance outcomes of agility. The pertinent literature

indicates that agility helps firms improve aspects of their performance such as efficiency, effectiveness,

product and service quality, and financial performance (Gligor et al., 2015; Gligor & Holcomb, 2012;

Vázquez-Bustelo et al., 2007). We contribute to this stream of literature by providing empirical

evidence that agility also positively influences a firm’s ability to collaborate with stakeholders to

reduce its environmental footprint. Thus, while past studies focused extensively on the economic

benefits experienced by firms that embrace and implement agility principles, our study is the first one

to recognize the potential environmental benefits that can be derived from agile practices. This

indicates that agility can have a positive impact not only on the immediate firm shareholders but also

on the firm’s extended stakeholders and the society as a whole.

We then contribute to the international management literature by exploring the impact of agility

on microfoundations phenomena within MNEs (i.e., employees). Previous agility literature has mainly

examined how agility influences macro-level phenomena and its role as a source of competitive

advantage at the firm-level (Eckstein et al., 2015; Wu et al., 2017). We expand this stream of research

by examining the impact of operational agility on individual creativity and FWAs. Our findings show

a direct link between operational agility and these variables and further reveal that individual creativity

and FWAs convey the positive influence of agility on environmental collaboration. Thus, this study is

a significant addition to nascent agility research in international business/management literature (Li et

al., 2018; Vaillant & Lafuente, 2018), as it tackles individual mechanisms applied by EM MNEs’

managers to link their operational agility to environmental collaboration. Additionally, this initial study

should serve to stimulate further research examining the impact of agility on microfoundations

phenomena across national borders.

26

Moreover, our findings help expand the literature examining sources of desirable performance

outcomes within MNEs. To illustrate, previous studies explored how MNEs can improve innovative

performance (Elia et al., 2019; Ferraris, Santoro, & Bresciani, 2017; Ferraris, Santoro, & Dezi, 2017),

knowledge transfer performance (Ferraris et al., 2018), marketing performance (Sharma et al., 2016),

or financial performance (Gabrielsson et al., 2016), to name a few. Specifically, our study shows that

MNEs can improve environmental collaboration by increasing their levels of agility; this relationship

can be strengthened by promoting individual creativity and offering FWAs.

Furthermore, we augment the literature addressing human-resource-related issues within

MNEs in the context of emerging economies. Past studies indicate that human resource practices pose

unique challenges and opportunities within emerging economies (Budhwar et al., 2017; Stokes et al.,

2016). Our findings contribute to this research discourse by highlighting human resource-related

practices that can help enhance environmental collaboration. Specifically, we explore the roles of

FWAs and individual creativity within the context of Turkish MNEs. Thus, we identify additional

human resource practices that MNEs can employ to enhance desirable performance outcomes within

emerging economies.

Finally, we contribute to the stream of literature on environmental sustainability within MNEs

(Luxmore et al., 2018; Wu & Ma, 2016). Specifically, we expand on the scarce studies examining the

factors that facilitate environmental collaboration (Green Jr et al., 2012; Vachon & Klassen, 2006).

Our findings help uncover the impact of agility, along with individual creativity and flexible work

practices, on environmental collaboration. That is, flexible individual capabilities, together with

organizational activities and mechanisms, can provide the impetus for MNEs to engage further in

environmentally-focused relational exchanges (i.e., environmental collaboration). As such, it is

imperative that both organizations and employees engage in processes designed to enhance

collaborative relationships among suppliers. Indeed, operational agility, along with individual

creativity and FWAs, can help network partners engage in shared discussions and decisions; and adapt

to the needs of the relationships to not only solve environmental tensions but also sustain

environmental commitment. This study adds to the current literature by documenting that

27

environmental collaboration, which is facilitated by flexible individual capabilities and organizational

mechanisms, plays a superior role in improving environmental and social elements of sustainability.

This is a noteworthy contribution considering that environmental sustainability has become a key

concern for multiple stakeholders, including private and public institutions (De Brito et al., 2008;

Gölgeci, Gligor, et al., 2019).

6.3. Managerial implications

Our study also helps provide some useful insights for managers. Our findings suggest to managers that

investing in operational agility helps MNEs better engage in environmental collaboration. As such, our

findings offer managers an additional impetus for investing in operational agility. Further, since agility-

related developments can require significant financial commitments, and significant financial

commitments typically require consensus decision-making within most MNEs, managers can use our

findings to persuade their colleagues of the benefits of agility.

Our results also highlight to managers the importance of individual creativity and FWAs in

achieving the desired levels of environmental collaboration. Although organizational agility by itself

positively impacts environmental collaboration, we suggest to managers that such impact is

underpinned and enhanced by individual creativity and FWAs. In fact, our results show that the

mediation effect of individual creativity and FWAs is higher than the direct effect of operational agility

on environmental collaboration. On the one hand, individual creativity and FWAs can substantially

increase the positive impact of agility on environmental collaboration. On the other hand, under

conditions of low individual creativity and in FWAs, MNEs are less likely to reap the full potential

benefits of agility. This further reinforces the important role of microfoundations phenomena (i.e.,

employees) in promoting environmental collaboration. Thus, to achieve the desired level of

environmental collaboration, it is not sufficient for MNEs to devote resources to enhance operational

agility, they should also promote individual creativity and FWAs. Considered together, individual

creativity and FWAs allow employees to be more responsive to customers’ needs and thus more agile.

This suggests that both organizational agility and individual agility are needed to maximize the impact

on environmental collaboration.

28

Our findings allow us to derive further managerial takeaways. Specifically, while MNEs can,

typically at will, adjust the work arrangements of their managers and thus enhance the level of

environmental collaboration, it is more difficult for MNEs to enhance managers’ individual creativity.

As such, MNEs who seek to engage in environmental collaboration successfully should carefully

evaluate the level of individual creativity of job candidates. Individual creativity is a rather innate trait

that is difficult to train. Thus, it is easier for MNEs to hire creative individuals than it is to attempt to

improve employee creativity. This suggests that MNEs who struggle with environmental collaboration

should consider hiring additional managers who exhibit high levels of creativity, while concomitantly

providing current managers opportunities for professional development that are focused on creativity

enhancement. Furthermore, MNEs should promote individual creativity among existing employees.

To do so, MNEs could offer incentives for employees who display creativity and generate novel

solutions to organizational issues. The use of incentives is likely to cultivate a culture of creativity,

which would facilitate its sustainability within MNEs.

Furthermore, managers should adjust their and their employees’ work arrangements and make

the work arrangements more flexible, while ensuring consistency with organizational goals and

objectives. While more FWAs can help enhance environmental collaboration, managers should still

be cautious of the potential ‘dark side’ of increased flexibility. That is, FWAs, such as telecommuting

and flexible work hours, can result in employees gaming the system if not implemented with proper

controls and accountability systems. For example, flexible hours could result in employees not being

available when MNEs’ customers or suppliers require their attention.

Finally, while operational agility alone cannot assure success in environmental collaboration,

it can be an essential precursor to individual capabilities and activities that underlie environmental

collaboration, which is fast becoming an imperative task for many MNEs. In this vein, it is important

to note that strategy, structures, processes, and people work together to maintain and leverage agility

toward strategic ends, and dynamic managers that ignite passion are key to fit MNEs’ agile elements

together (Aghina et al., 2018). Thus, MNEs are advised to invest in creative managers and FWAs

29

together with clear flat structures, active partnerships, and rapid iteration and experimentation as

hallmarks of agility to make a positive impact on their natural environment.

6.4. Limitations and future research

Our study has some limitations that also provide fruitful avenues for further research. First, we

collected our data within the setting of an emerging market. Although the choice of context provides

several benefits as illustrated in the method section, future research should attempt to replicate our

findings within other contexts, including those of developed countries. In our study, we focused on the

role of operational agility in enhancing environmental collaboration. Future research can help further

build theory in this area by exploring the role of other capabilities that have been suggested in the

literature to provide MNEs with a competitive advantage, such as innovativeness, resilience, or

flexibility. Similarly, at a micro-level, we explored the roles of individual creativity and FWAs. As

such, future studies should examine other possible individual-level factors that might be relevant to

environmental collaboration, such as employees’ ethics, organizational commitment, and

environmental perceptions. Finally, the findings lack generalizability due to the narrow focus of our

sample characteristics. This study targeted upper-level and well-educated employees who have

senior/executive managerial positions. In this setting, the participants possess core managerial

expertise, rich knowledge of their firms’ operations, and are also involved in strategic decision making.

Therefore, there is a need for future research to use different sample populations (e.g., senior/junior

management levels) to gain a deeper understanding of how individual creativity and FWAs vary across

hierarchical positions that consequently may affect the degree of environmental collaboration. Finally,

our findings show that the mediation effect of individual creativity and FWAs is stronger than the

direct effect of operational agility on environmental collaboration. It can be argued that individual

creativity and flexible arrangements facilitate employee agility. As such, future research should

empirically examine the interplay between individual/employee agility and organizational agility and

its impact on organizational performance. Such studies could provide novel insights into sources of

superior organizational performance.

30

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36

Fig. 1. Conceptual model

37

Table 1. Characteristics of respondent firms

Characteristic Number %

Respondent type Upper level (CEO, chairman, and board member) 65 0.26

Medium level (Director/head of department) 118 0.47

Lower level (First-line manager and supervisor) 66 0.26

Education level High school 13 0.05

Some college 27 0.11

Bachelor’s degree 124 0.50

Master’s degree 73 0.29

Doctorate 7 0.03

Other (e.g. professional certificate) 5 0.02

Work experience Less than 1 year 12 0.05

1-3 years 42 0.17

4-9 years 78 0.31

10-15 years 52 0.21

More than 15 years 65 0.26

Industry sector Industrial, automotive and electrical equipment 19 0.07

Textile and apparel 20 0.08

Food and beverage 15 0.06

Forestry products and paper 19 0.07

Chemical & pharmaceuticals 10 0.04

Furniture and wood products 10 0.04

Machinery and equipment 21 0.08

Cement, glass, and ceramics 5 0.02

Metal and steel 6 0.02

Construction and related products 4 0.01

Petroleum and energy 14 0.05

Consumer electronics and appliances 22 0.09

Transportation and logistics 19 0.07

Healthcare services 32 0.13

IT and software 12 0.05

Tourism and hotel 5 0.02

Financial services 12 0.05

Market research 4 0.01

Number of employees Less than 250 64 0.26

250-500 57 0.23

501-1000 52 0.20

1001-5000 39 0.15

More than 5000 37 0.14

N 249

38

Table 2. Confirmatory factor analysis results

Constructs Items Standardized

loadingsa

CRb

Operational Agility OA 0.69

We fulfill demands for rapid-response, special requests of our customers whenever such demands arise, our customers have confidence in our ability. OA1 0.46

We can quickly scale up or scale down our production/service levels to support fluctuations in demand from the market. OA2 0.69 Whenever there is a disruption in supply from our suppliers we can quickly make necessary alternative arrangements and internal

adjustments.

OA3 0.77

Individual Creativity IC 0.69

I generate new ideas for difficult issues. IC1 0.61

I search out new working methods, techniques or instruments. IC2 0.66

I generate original solutions for problems. IC3 0.70

Flexible Work Arrangements FWA 0.84

This organization considers my personal needs when making my work schedule. FWA1 0.25

At my request, my organization has accommodated my off-the-job demands when assigning my work hours. FWA2 0.39

Outside of formal leave and sick time, my organization allows me to take time off to attend to non-work-related issues. FWA3 0.37

Because of my particular circumstances, my organization allows me to do work from somewhere other than the main office. FWA4 0.85

My organization allows me to complete a portion of work outside the office. FWA5 0.86

Occasionally, I am allowed to work from outside the office. FWA6 0.78

Telecommuting (working from home) is seen as a positive aspect in this organization. FWA7 0.67

Environmental Collaboration EC 0.83

Our organization cooperates with its suppliers to achieve environmental objectives.

EC1 0.42

Our organization provides its suppliers with design specification that include environmental requirements for purchased items. EC2 0.60

Our organization encourages its suppliers to develop new source reduction strategies. EC3 0.71

Our organization cooperates with its suppliers to improve their waste reduction initiatives. EC4 0.66

Our organization works with its suppliers for cleaner production. EC5 0.83

Our organization collaborates with its suppliers to acquire materials, parts and/or services that support its environmental goals. EC6 0.80

Notes: aAll loadings are significant at p<0.001 bCR=Composite reliability

39

Table 3. Convergent and discriminant validity of the measurement modela

Constructs Number of Items AVEb OA IC FWA EC

OA 3 0.55 0.74

IC 3 0.71 0.16 0.84

FWA 7 0.63 0.21 0.24 0.79

EC 6 0.70 0.18 0.35 0.21 0.83

Notes: aItalicized values on the diagonal are the square root of the AVE values. bAverage variance extracted.

Table 4. Means, standard deviations, and correlations among variables

Variable Mean S.D. 1 2 3 4 5 6 7

1. 1. SIZE 2.70 1.39 1

2. 2. EXP 3.45 1.18 0.03 1

3. 3. EDU 3.18 0.95 -0.01 -0.10 1

4. 4. OA 3.80 0.74 0.03 0.01 -0.05 1

5. 5. IC 4.12 0.57 -0.20* 0.06 -0.01 0.17* 1

6. 6. FWA 3.42 0.83 -0.10 0.02 0.02 0.21* 0.24* 1

7. 7. EC 3.80 0.68 0.02 -0.06 0.01 0.19* 0.36* 0.22* 1

Notes:

N=249 managers nested in 66 MNEs.

*p<0.01.

40

Table 5. Results of multilevel analysis for the hypothesized model

Model 1 Model 2 Model 3 Model 4 Model 5 Model 6

β SE t β SE t β SE t β SE t β SE t β SE t

Intercept 3.90 0.24 16.25* 3.90 0.24 16.25* 4.10 0.26 15.76* 3.90 0.23 16.95* 4.10 0.25 16.40* 3.90 0.24 16.25*

SIZE 0.03 0.02 1.50* 0.04 0.02 2.00* -0.03 0.03 -1.00 0.04 0.02 2.00* -0.03 0.02 -1.50* 0.04 0.02 2.00*

EXP -0.04 0.04 -1.00* -0.05 0.04 -1.25* 0.006 0.04 0.15 -0.06 0.03 -2.00* 0.007 0.04 0.17 -0.05 0.04 -1.25*

EDU -0.03 0.04 -0.75* -0.02 0.04 -0.50* -0.06 0.08 -0.75* -0.02 0.04 -0.50* -0.06 0.05 -1.20* -0.02 0.04 -0.50*

Direct effect

OA EC 0.17 0.06 2.83* 0.10 0.05 2.00* 0.13 0.06 2.16*

Mediation 1

OA IC 0.28 0.08 3.50*

OA via IC 0.41 0.07 5.85*

Mediation 2

OA FWA 0.22 0.05 4.40*

OA via FWA 0.13 0.05 2.60*

Change in 2 log likelihood

Level 1 intercept variance (SE) 0.07 0.03 0.06 0.03 0.08 0.04 0.06 0.03 0.08 0.04 0.05 0.03

Level 2 intercept variance (SE) 0.40 0.040 0.40 0.05 0.50 0.05 0.30 0.04 0.40 0.05 0.40 0.04

Notes:

N=249 managers nested in 66 MNEs.

*p<0.01.