=Paper=
{{Paper
|id=Vol-3857/paper15
|storemode=property
|title=Socio-technical foundations of sustainable business practices during VUCA
|pdfUrl=https://ceur-ws.org/Vol-3857/paper15.pdf
|volume=Vol-3857
|authors=Iva Atanassova,Peter Bednar
|dblpUrl=https://dblp.org/rec/conf/stpis/AtanassovaB24
}}
==Socio-technical foundations of sustainable business practices during VUCA==
https://ceur-ws.org/Vol-3857/paper15.pdf
Socio-technical foundations of sustainable business practices
during VUCA
Iva Atanassova1∗,†, Peter Bednar2 ,†
1
Business Management Department, University of Aberdeen, King’s College, Aberdeen AB24 3FX, United
Kingdom
2
School of Computing, Buckingham Building, Lion Terrace, Portsmouth PO1 3HE, United Kingdom
Abstract
This study explores 18 UK companies’ business practices across diverse sectors, emphasizing the role of
learning and organizational design as key foundations for managing uncertainty. Applying the Market In-
telligence Accumulation and Transfer Model (MIATM) 3.0, we uncover how organizations adjust to
changes, challenge, transform, and adapt operational practices in response to VUCA (volatile, uncertain,
complex, ambiguous) times. Results indicate that participants from knowledge-intensive and technology-
based firms, particularly those operating a B2B business model as well as entrepreneurial smaller firms,
exhibit a greater ability to learn and transform, attributed to leadership styles that promote an environ-
ment conducive to continuous learning and strategic reinvention. Conversely, rigid hierarchical struc-
tures and autocratic leadership are shown to impede business practices transformation due to poor know-
ledge flow and sharing, employee alienation from the company’s goals and purpose, centralized decision-
making, and hierarchical structure. The findings underscore the necessity of cultivating a culture that en-
courages proactive learning and employee-calculated risk-taking that enables decision-making through
collaboration and experimentation, backed by leadership that supports a dynamic, open-minded, and flex-
ible organizational design. Moreover, we provide a holistic model to guide organizational context design
for successful learning as a key foundation of business practice transformation in turbulent and uncertain
times.
Keywords 1
Learning, dynamic capability, MIATM model, uncertainty and ambiguity management
1. Introduction
Navigating a VUCA (volatile, uncertain, complex, ambiguous) environment demands that
companies adapt to rapid changes driven by post-COVID-19 recovery, advancements in
generative artificial intelligence (GenAI), economic shifts, and geopolitical tensions.
Organizations must engage deeply with the inherent uncertainties and ambiguities of these
changes and take appropriate actions. Thus, traditional strategic business planning needs to
evolve to prioritize the management of uncertainty, requiring organizations to reassess and
occasionally overturn their strategic underpinnings to avoid dysfunctional, defensive routines and
strategic paralysis [1, 2, 3]. This dynamic approach compels organizations to continuously learn
from external signals and reassess their strategies and operating practices to avoid stagnation in in-
effective or defensive routines, particularly dangerous in high-velocity industries and markets [2, 3,
4], such as the ones all companies operate in currently. Managing a VUCA environment is complex,
involving significant changes across several areas, including strategy [5],
The 10th International Conference on Socio-Technical Perspectives in IS (STPIS’24) August 16-17, 2024, Jönköping,
Sweden.
∗ Corresponding author: Dr Iva Atanassova
† These authors contributed equally.
iva.atanassova@abdn.ac.uk (I. Atanassova); peter.bednar@port.ac.uk (P. Bednar)
0000-0002-7910-187X (I. Atanassova); 0000-0002-3631-2626 (P. Bednar);
2024 Copyright for this paper by its author(s). Use permitted under Creative Commons License Attribution 4.0 International (CC BY 4.0)
CEUR
ceur-ws.org
Workshop ISSN 1613-0073
Proceedings
215
organizational structure and design [6, 7], work practices [8], resource and time allocation,
culture [2], and the types of services and products offered [9]. These changes impact the very
identity of an organization [1, 2, 10]. Effective transformation practices require organizations to ad-
opt flexible and responsive designs, led from the top, that enable continuous learning and adapta-
tion within their business ecosystems [2, 11].
Despite the importance of the above, many companies struggle with implementing
transformation and adaptation. Research suggests that companies need strong learning
capabilities at both individual and broader organizational team levels, defined as absorptive
capacity and considered a foundation of dynamic capabilities, to successfully transform their
operations and manage the shift to new ways of operating and/or transforming their existing
practices, processes, products [2, 12, 13]. Many aspects, however, of how to successfully
undertake learning for evolutionary change/practices transformation are still not well
understood [2, 8, 14]. For example, research from McKinsey [15] highlights that organizations, on
average, have realized less than one-third of the anticipated value from their digital
transformation efforts, with a substantial investment yet to deliver expected outcomes [15, 16, 17].
In response to these challenges, the European Commission has launched Industry 5.0, promoting
the use of human-centric digital technologies and emphasizing the need for technology to be inclus-
ive and consider societal impacts [18]. Using human-centric digital technologies effectively requires
a balanced focus on both human and technological factors [19]. Professionals need to actively en-
gage in developing, planning, implementing, and using these technologies, either by directly apply-
ing socio-technical theory [20] or by seeking socio-technical alignments in their practices [21, 22].
Nonetheless, digital transformation must support the transformation of human activity, not the
other way around. Addressing technical changes without purposefully developing and designing
the human activities and processes intended to benefit from any technological aspect is an ongoing
problem [23].
Thus, the role of skilled individuals and the organizational facilitating context in driving
business practices transformation is underrated and not fully understood. Iden and Bygstad [24]
emphasize the need to understand the skills, actions, and motivations of individuals to explain how
these contribute to broader organizational capabilities [24, 25]. Therefore, undertaking a socio-tech-
nical perspective by applying the MIATM model is key to enabling flourishing context/design based
on learning and timely action[2]. Socio-technical practice design involves efforts to support parti-
cipating organizational actors to become change agents in their own environment [2; 25]. This
provides a possibility for participants to create visions about problemsolving and thus share in own-
ership/visions of solutions [25, 26, 27]. Furthermore, individuals do not operate in isolation; team
dynamics and structural processes play a crucial role in understanding larger phenomena [28, 29,
30]. Dynamic capabilities such as absorptive capacity/learning capacity [31] are crucial in such re-
spect, allowing individuals to assimilate realtime data, transform it into organizational learning, and
leverage this learning at a strategic level to adjust and/or transform competencies and operating
routines, detect and correct errors in ways that involve modifying an organization’s underlying
norms, policies, and objectives [32; 33; 34; 35]. Ciborra [36] suggested that leveraging information
technology for innovation involves transcending traditional formative contexts and promoting an
evolutionary approach to organizational practices, aligning closely with the dynamic capability
principles. The MIATM model is based on such an evolutionary approach, considering the organiza-
tional design crucial for individual to team to strategic level learning/absorptive capacity develop-
ment as a foundation for transformative/evolutionary organizational practices / dynamic capability
[2; 11]. This deeper level of learning, leading to fundamental change through rethinking underlying
assumptions and questioning existing practices and norms, is essential for managing ambiguity,
216
which involves recognizing and rethinking the premises of one’s actions, known as dynamic
capability [33; 34; 35].
This paper explores how such individual-to-organizational learning processes leading to
dynamic capability / evolutionary change operate and are enabled/impacted by flourishing
organizational context design within a selection of UK firms. The study examines how both formal
mechanisms and informal “learning by doing” strategies enable desirable change/practice
transformation in a diverse set of companies. By applying the MIATM model, this research
uncovers and highlights organizational context enablers and blockers of successful learning for
practices evolution/dynamic capability. Thus, the authors argue that the MIATM model is a
holistic model to drive successful learning and transformation by laying the critical foundations in
terms of organizational context design. It highlights the need for a culture that promotes continu-
ous learning and collaboration, facilitated by leadership that encourages a motivated and em-
powered workforce and a responsive, flexible organizational context, the resources, structures, and
systems needed to enable learning processes at individual and team levels and then transfer and
transform learning into change/evolution of operations at strategic/dynamic capability level [2;11].
The insights provided, along with the MIATM model, direct businesses towards adopting sustain-
able practices in the face of market unpredictability, highlighting organizational design and learn-
ing processes as essential key foundations for successful business transformation and evolution
during VUCA. Additionally, the MIATM offers a valuable diagnostic framework for organizations,
enabling them to pinpoint obstacles and deficiencies in organizational learning and context that
stop them from dynamic capabilities development/evolutionary change. By being underpinned by
the evolutionary/dynamic capability theory, the model is holistic and actionable in guiding the suc-
cessful transition to Industry 5.0, which requires human intelligence to work in sync with techno-
logy to produce more value-added sustainable products and goods [36; 37]. The MIATM model
sheds light on the organizational context and leadership as key foundations to sustainable business
operations and helps identify obstacles and deficiencies in organizational learning environments. In
such a way, the study also makes an important theoretical contribution to clarifying the key condi-
tions/context for dynamic capabilities development in terms of organizational context for learning
capacity development. The DC theory has been criticized that DCs are “black box” as they are very
idiosyncratic and thus not well understood [38; 39].
2. Related work
The increasing complexity of global markets and rapid advances in GenAI and technology compel
organizations to evolve beyond traditional strategy planning mechanisms and embrace more
dynamic and experimental approaches. The development of such capabilities is an ongoing
process of reflection and action, characterized by asking questions, seeking feedback,
experimenting, reflecting on results, and discussing errors or unexpected outcomes of actions [38].
However, research shows that adaptive learning in social systems is fundamentally problematic and
rare [1, 38, 39]. Learning can foster positive outcomes if actively cultivated within an organization’s
culture that promotes dialogue, critical evaluation, collaborative learning, and aligning individual
efforts with organizational goals [1, 40].
The ability to learn from errors, abandon outdated routines, and adapt to changes is
acknowledged as essential for survival [41-43]. Breaking barriers like entrenched practices, broken
communication flow, cultures of fear, and rigid autocratic hierarchical leadership structures is cru-
cial [1, 44]. Developing sustainable learning capabilities within teams is crucial for sustainable
growth during unstable periods, allowing organizations to assimilate real-time market data and
evolve competencies for interpreting and applying external knowledge for value
217
creation, known as dynamic capability [32, 45, 33]. Therefore, a key factor for organizational
excellence, especially in highly volatile markets, is the possession of real-time learning and
adaptation mechanisms and capabilities seen and defined in the dynamic capability stream of liter-
ature as unique heterogeneous resources due to their valuable, rare, inimitable, and nonsubstitut-
able (VRIN) qualities [33, 46, 47].
To be able to do so, however, companies need a social practice design (SPD) that focuses on
organizational change in the context of the development of new information systems. SPD
promotes a way to design sustainable interaction between people, computers, and work by
explicitly highlighting the engagement of participants in processes of co-design of work practices.
The SPD scope of interest is focusing on the design and introduction of new participatory
activities or new ways to accomplish tasks by humans in a professional work context. This
provides a possibility for participants to create visions about problem-solving and thus share in the
ownership of visions of solutions (see, for example, Cattani and Jacucci, 2006; Jacucci, 2007) [28; 29;
30; 39]. The perspective is fully human-centered, and the problem space entered is the one that sur-
faces when users need to integrate technology/new information within their own activities, which
by definition means that they always have to change the way they work when the use and develop-
ment of technology is introduced within their work activities [29]. To be able to account for those
social-tech dimensions, the MIATM model [2, 11] is used to study the suitability/preparedness of
organizational context (actors involved, resources, structure and systems, and culture) and how
they impact the individual and then organizational learning processes and follow-up evolution
(seize and absorb new information, sense-make and exploit/shape new actions) [48;49;50]. To the
best of our knowledge, there is no other holistic model based on the foundation of individual to or-
ganizational-level learning, accounting for the idiosyncratic organizational context, as a foundation
of successful practices/business transformation.
2.1. Organizational Design for Dynamic Capabilities
Dynamic capabilities are based on an organization's ability to seize and absorb, make sense of, and
exploit market signals into opportunities and strategic actions and reconfigure resources swiftly
[46]. Eisenhardt and Martin [33] and Teece [48] highlight that the rapid assimilation of market data
and the ability to respond with agility are crucial for maintaining a competitive edge. Dynamic cap-
abilities facilitate an organization's ability to sense, shape, and seize internal and external condi-
tions, developing novel capabilities to address rapidly changing environments by developing novel
capabilities [38]. The dynamic capabilities view acknowledges the importance of capabilities like
product design and manufacturing but argues that success in volatile industries requires adaptive
processes and structures that enable companies to change their operating capabilities by anticipat-
ing and learning from market shifts, developing and integrating new technologies, and thus foresee
and capture new market opportunities[49; 50; 51]. To succeed, companies need to solve ambiguous
problems, be agile and innovative to respond quickly to competitive pressure, and thrive in an un-
precedented environment [8]. They need to learn and enable change by exploiting both daily opera-
tional routines and exploring new opportunities through proactive scanning, learning, and prompt
action. These organizations, often referred to as “ambidextrous organizations,” effectively manage
current operational processes while remaining vigilant and adaptable to changes in the external en-
vironment, a practice known as “managing paradox” or “managing contradictory demands” [52].
Earlier research has revealed the importance of employee learning as a prerequisite to fine-tuning
expertise and coping with the rapid obsolescence of competence [48, 51]. As organizations become
more complex and dynamic, individuals’ ability to learn from experience becomes
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increasingly important: the knowledge and skills of employees must be constantly developed to stay
aligned with emergent changes [52, 53, 54].
Learning and development of such capabilities are ongoing processes involving informationsens-
ing, seizing and sharing, feedback-seeking, and experimenting [39]. Despite the crucial importance
of learning and adaptation, adaptive learning in social systems remains problematic and rare (2; 40;
41; 42].
Linking to Schumpeter’s [55] idea of creative destruction, the process of unlearning is essential
for staying attuned to the dynamic nature of modern business landscapes [21, 10]. Ciborra and
Lanzara [56] suggest that innovation opportunities lie in open reflexive organizational contexts,
and “context-making” interventions can bring them to light, necessitating the evolution of
foundational structures, culture, and norms to foster genuine innovation and adaptability.
Organizations are encouraged not only to correct errors within existing frameworks but to
fundamentally question and reformulate those frameworks themselves and develop dynamic capab-
ilities for evolutionary change. This method is particularly effective in environments characterized
by VUCA conditions where not only are the solutions unclear, but so too are the problems. As the
realms of big data and GenAI continue to expand, the imperative for organizations to cultivate such
responsive and adaptive learning processes and capabilities to convert learning into strategic action
grows. This entails deploying volatile external conditions into market intelligence, subsequently
converting these insights into actions to capitalize on emerging opportunities [32, 2].
This study aims to deepen the understanding of how organizational context/design impacts and
is a key foundation for successful individual to organizational learning through leveraging real-time
market intelligence for new capabilities for business transformation in a rapidly evolving market.
We argue that the success of such learning leading to dynamic capability development requires
flexible and learning-enabling organizational design as a foundation as per the MIATM model.
2.2. Role of Prior Knowledge, Path Dependency, and Transactive Memory Systems
The application of well/prior developed absorptive capabilities and transactive memory systems in
organizations enhances the capability to manage knowledge effectively among team members [57].
This system allows groups to collectively transmit, make sense of, store, retrieve, and communicate
knowledge more effectively, which is crucial in complex problem-solving situations. By enabling
learning and information flow and understanding who knows what, leaders can better coordinate
their actions and innovate more effectively, thus enhancing their dynamic capabilities. This concept
aligns with the notion of prior knowledge in dynamic capabilities, emphasizing the importance of
information absorption and transformation routines. Knowledge is cumulative, and the more ab-
sorptive capacity organizations develop, the better they become at continuing this growth [34].
2.3. Impact of Leadership and Organizational Culture on Learning Routines
Leadership plays a crucial role in fostering an environment conducive to learning and
adaptability. Leaders who embrace a vision of continuous learning and encourage their
organizations to question existing norms and adapt to new realities help foster a culture of
curiosity, calculated risk-taking, and innovation. Empowering employees to take active roles in
problem-solving and decision-making processes enhances the organization's overall
responsiveness to change. As organizational sociologist Stinchcombe [58] noted, “If organizations
have to deal with uncertainties, then someplace in the organization there have to be people who bring
information to bear on those uncertainties.”
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2.4. Necessity of a Supportive Organizational Structure
The structure of an organization significantly impacts its dynamic capabilities. Structures and
systems that promote cross-departmental communication and information flow, collaboration, and
the questioning and discarding of outdated practices enable faster problem-solving and opportunity
capture. Decentralized decision-making empowers individuals at various levels, enhancing the or-
ganization's ability to respond swiftly to changes without being bogged down by bureaucratic
delays. Ciborra’s [56] insights on leveraging information technology for organizational innovation
emphasize the transformation of “formative contexts,” suggesting that organizations must evolve
their foundational structures to foster genuine innovation and adaptability. As suggested by Felin
and Powell [6], organizational design is a crucial enabler of dynamic capabilities.
Building on these concepts and noting the current lack of a comprehensive model for
organizational design, the MIATM model developed by Atanassova and Bednar [2; 11] is applied.
The model is explored in the next section, illustrating how this framework can guide the practical
application of these theories in enhancing organizational learning and strategic responsiveness and
identifying areas for improvement.
3. The MIATM Model
Achieving dynamic capabilities through real-time learning and strategic adaptation requires a
paradigm shift away from multilayered reporting structures, rigid annual budgeting, complianceori-
ented culture, separation of business practices and technology, and other traits dominating organiz-
ations for the past hundred years. Thus, a discontinuity of this operating style should provide an
opportunity for organizations to turn their operating models into a competitive advantage [59; 60;
61]. Our research focuses on how the organizational context, encompassing resources, actors, struc-
tures, systems, and culture, influences individual (seize/developing an understanding for opportun-
ity capture) and organizational-level learning (sense-making and exploiting of new understanding)
processes interact to develop dynamic capabilities to enable change/transformation in the face of
VUCA times. The study adopts the MIATM model proposed by Atanassova and Bednar [2; 11]. This
model is instrumental in guiding the understanding of knowledge acquisition, transfer, and capabil-
ity creation processes and the facilitating context required that is crucial for a firm’s operational
success in dynamic environments. Moreover, the model encompasses / accounts for the idiosyn-
cratic context as a key foundation for enabling the individual to organizational-level learning and
successful capability development (micro to macro). Thus, the model presents a holistic lens/per-
spective of dynamic capabilities micro to macro development and foundations and adds to dynamic
capability literature where dynamic capabilities are often referred to as black box, and there are nu-
merous calls for further research on their micro-foundations [33; 38].
220
Figure 1: The MIATM Model 3.0 (Atanassova and Bednar, 2022)
Our research consists of three phases/processes aligned with the MIATM model. The first
phase involves developing an understanding of the organizational background, understanding mar-
ket dynamism, triggers of organizational learning, and prior knowledge. The second phase focuses
on the processes of absorptive capacity and individual learning at the operating capability level. It
examines the processes of recognition and absorption of new external information proactively, as
well as the organizational conditions enabling or hindering these learning processes (paths / prior
knowledge / transactive memory / and assets, such as resources, actors, structure, and systems, or-
ganizational culture). The third phase explores the assimilation/sensemaking and transfer of learn-
ing within the organization, as well as the process of capturing value from that shared learning by
exploiting the learned in terms of changes to operating practices (deepening capabilities) or com-
plete removal/renewal of routines/products/processes/practices (broadening dynamic capabilities
development). Dynamic capabilities are measured and understood through the changes in ordinary/
operating capability [34, 61].
4. Methodology
To collect data, interviews were conducted with employees from 18 diverse B2B and B2C
organizations in the UK. The aim was to understand whether employees were provided with the
context, culture, and resources to explore and learn from external market signals and apply this
learning to develop improved/desirable change in their operations. The interviews, lasting 40 to 60
minutes each, were conducted by experienced academic researchers in English. The semistructured
interviews followed the MIATM model framework, seeking to identify features, sources, and organ-
izational contexts that facilitate or impede dynamic capabilities development as per the model (in-
terview protocol is available per request). Data analysis involved coding and thematic analysis, ex-
amining each construct of the MIATM model separately to identify patterns and themes and their
interactions in transforming practices.
The reliability and validity of the study were ensured by categorizing data to prevent
misunderstandings or oversimplifications. The analysis examined the organizational background
221
and prior knowledge, market dynamism, triggers of learning processes, individual learning at the
operational level, sense-making, and the transfer to strategic capability at the organizational
level. Dynamic capabilities were defined as those that change, create, or extend organizational
operating capabilities and possess and develop VRIN resources/characteristics [32, 58, 34]. The cred-
ibility of the data was ensured through simultaneous data collection and analysis, prolonged en-
gagement, in-depth understanding of the organizational context, and member checks. The research-
ers’ analysis examined each construct of the MIATM model separately: organizational background
and prior knowledge, market dynamism and triggers of the learning processes, individual learning
at the operating level, sense-making, and transfer to dynamic/strategic capability at the organiza-
tional level, and the contributing context. Lastly, it examined how the three routines developed
over time and enabled operational evolution, organizational excellence (micro to macro level), and
the development of valuable, rare, inimitable, non-substitutable (VRIN) resources. Something was
considered a dynamic capability if it changed, created, or extended organizational operating capab-
ilities by creating or extending VRIN resources and abilities. Respondents’ validations were per-
formed as and when needed to ensure that their views and behaviors were correctly understood.
4.1. Participant Selection
Eighteen participants were interviewed, including employees from four B2B organizations, four
from both B2C and B2B models, and ten from B2C organizations. These participants were drawn
from knowledge-intensive industries such as ICT, governmental rescue services, healthcare,
human resource consulting, and education, where knowledge development and management are
crucial. Two entrepreneurial small companies were included for their learning-by-doing
approaches and quick adaptation capabilities [62]. Additionally, participants from eight
traditional industry businesses were interviewed to ensure comparability, as these companies often
face challenges in adapting due to complex structures and bureaucratic inertia.
This diverse participant pool was selected to illuminate how micro-to-macro processes of
learning unfold and identify any organizational contexts that hinder them. The goal was to
develop "information-rich cases" that offer deep insights into the central issues of the study [63].
The interviewees spanned all organizational levels, providing comprehensive perspectives on the
support from leaders and managers. This approach ensured a more accurate understanding of or-
ganizational support, as employee accounts often reveal more reliable indicators of actual support
compared to managerial self-perceptions.
5. Findings
The findings of this study significantly enhance the understanding of how organizational
design/context influences individual learning as a micro-foundation of organizational learning and
competitive advantage, shaping dynamic capability in terms of strategic agility within organiza-
tions. The research focuses on the interconnectedness of a thriving organizational context, either
enabling or blocking learning routines, which subsequently leads to the development of dynamic
capabilities. The application of the MIATM 3.0 model revealed insightful differences in how organ-
izations handle learning processes, uncovering areas for improvement and strategies for enhancing
capability and agility in volatile, uncertain, complex, and ambiguous (VUCA) environments. De-
tailed discussions of these key findings, structured under the MIATM model, are provided in the
next section, highlighting the contrasting dynamics between "Learning fit companies" and "Learn-
ing unprepared."
222
5.1 Learning Fit Companies
In our study, the term "learning fit companies" encompasses organizations exemplifying
proactive learning leading to evolutionary change through dynamic capability across a diverse
range of sectors. These include participants from technology-driven firms and knowledge-
intensive business services (KIBS).
5.1.1 Background
Participants in this category integrated both structured and informal environmental scanning meth-
ods into their business operations. Some employed agile/scrum/kanban project management meth-
odologies to encourage rapid decision-making and error correction, while others used ad-hoc, ex-
perimental, learning-by-doing approaches characteristic of small entrepreneurial firms. Both ap-
proaches were founded on a profound belief that change is constant and that adapting to change
and uncertainty quickly is essential for survival. A Director of Design (DD) emphasized, "Agility
and the ability to learn on the job are key," highlighting the necessity of these skills in today's busi-
ness environment. Similarly, a Senior Consultant (SC) in healthcare recruitment noted, "To keep my
knowledge and abilities current and useful in a field that is always changing, I am committed to a pro-
gram of lifelong learning and growth."
The ability to monitor the environment and adapt was underscored as key and a competitive
edge. Participants acknowledged the significance of being responsive to technological
advancements, new competition, and market price fluctuations, always with an eye toward
strategic alignment with organizational goals. This readiness to adapt was seen as foundational to
their success in fostering a learning culture within their organizations. As DD encapsulated this
ethos, "Provide quality, continuous innovation, through customer-focused service," highlighting the
importance of maintaining a clear understanding of the organization's mission amidst the challen-
ging external environment. Similarly, SC emphasized the necessity of flexibility and consistency in
healthcare recruiting, asserting, "Technology and automation help us simplify our operations and
provide value," enabling continual adjustments to better serve their stakeholders. The participants
demonstrated overall awareness and receptiveness to industry dynamics, along with a clear under-
standing of their companies’ goals/strategic direction and missions.
5.1.2 Recognition and Adaptability
Learning fit companies were adept at anticipating industry trends and customer needs, which is
crucial for developing dynamic capability. The Data Analytics and Organization Team (DART), as
illustrated in a rescue service scenario, played a pivotal role in helping the rescue service stay on
top of all environmental dynamics. The Quality Assurance Manager (QAM) stated, "We use a
specialist data analysis and modeling organization to crunch numbers on our current and future risks,"
showcasing the critical role of cross-functional teams in enhancing operational efficiency through
strategic data analysis and sharing. Communication technologies for knowledge sharing and stor-
age, such as SharePoint, OneNote, Outlook, and MS Teams, facilitated effective transmission and
storage of information.
The QAM outlined their process of drafting and disseminating high-order strategic goals to
organizational departments and teams and requesting their involvement and contribution to ensure
broad organizational involvement and alignment, employee buy-in, and adaptability. Incorporating
feedback from operational levels was essential as it was perceived as "fueling appropriate changes in
tactics or operations," demonstrating the employees’ involvement, alignment, and buy-in importance
and the necessity to navigate VUCA conditions effectively. Continuous adaptation to industry shifts
is underscored by a healthcare recruitment SC, who notes the importance of a learning and un-
learning mindset. Similarly, the Customer Service employee in a small restaurant (CS) and English
Teacher (ET) interviewees highlighted competitive monitoring and environmental scanning
through "ad-hoc research practices," indicating proactive measures taken to stay competitive. The SC
pointed out the importance of such vigilant environmental scanning and learning for the
223
identification and emergence of new service models and for helping clients adopt new ways of
working to improve quality, efficiency, and outcomes. "Keep up with the latest trends: innovative
staffing solutions that utilize the latest technology, such as virtual interviews and remote work ar-
rangements. Also, expanding your professional network and learning about the latest developments in
the sector. Interacting with colleagues and mentors is crucial too." These insights into the practices
and mindsets of learning fit companies and highlight their ability to maintain strategic agility and
operational excellence through proactive learning and adaptability, which is crucial for sustaining
competitive advantage in rapidly changing environments.
5.1.3 Assimilation and Sense-Making
During the interviews, participants from dynamic organizations highlighted the importance of
assimilation and internal, collaborative cross-departmental meetings and informal discussions in
developing new understandings for opportunity capture and decision-making. This process is sup-
ported by the use of digital tools, which enhance communication, knowledge sharing, and storage.
A software developer pointed out the use of diverse tools for collaboration and knowledge storage,
emphasizing the significance of technology in knowledge sharing.
The QAM from the rescue service mentioned, "For areas such as risks to our community, we
have continuous horizon scanning activities," employing systems like Farynor and Power BI for data
storage and analysis. This proactive stance towards risk management and the emphasis on being
"very open and not constrained when undertaking the evaluation" illustrate the dynamic approach to
navigating uncertainty and complexity. The QAM noted that strategy development in their organiz-
ation often involves working with unclear objectives and refining them through continuous inform-
ation absorption and analysis: "We often work with unclear objectives and use the information and
analysis to refine the objectives," highlighting the vigilant, dynamic approach to learning and
strategy development in their organization, where environmental scanning and identified trends/
changes/opportunities/threats are transformed to strategic change/action/ business changes are im-
plemented and goals are set based on the real-time new learning developed.
The collaborative ethos extends to healthcare recruitment, where the SC emphasized
teamwork: "For everyone's wants to be satisfied, it's crucial that they work together effectively." Train-
ing and development initiatives are highlighted as essential for providing employees with the ne-
cessary skills and knowledge. Both extrinsic and intrinsic rewards were pointed out as essential and
employed in learning fit companies to ensure that employees are aligned and even driving strategic
goals and operating routines transformation.
The ET added, "Training and development programs help guide this process so that workers acquire
the expertise they need to do their jobs well."
In education, the ET highlighted the importance of experimenting and testing new teaching
methods and innovative methodologies.
5.1.4 Exploitation of Learning / Dynamic Capabilities
In terms of dynamic capabilities, the following examples have been identified. The DD
emphasized the strategic pivot towards direct customer engagement to enhance revenue and re-
claim customer relationships: "Through research and advancing digital technology, we understood the
need to cut the middleman and sell directly to customers through the website." This move not only
aimed at profit maximization by reducing costs but also streamlined workflows, enhancing cus-
tomer understanding and relationships significantly. Thus, they focused on providing "quality, con-
tinuous innovation, through customer-focused service," underscoring the importance of direct cus-
tomer engagement leveraging digital technology for business practices transformation and provid-
ing more valuable products/services by solving critical customer problems. They were able to re-
flect, question current practices, and change them to re-capture value (dynamic capability).
224
The QAM of a fire rescue service elaborated on a holistic method to craft their community risk
management plan, involving third-party data modeling and extensive internal review and
contribution. This meticulous process culminated in a robust four-year strategy encompassing 36
key objectives: "We scan the environment for changes, contextualize the risk, assess impact, develop
options, select a strategy, consult stakeholders, and then implement, monitor, and review the
strategy." Such vigilance, adaptability, and responsive strategy were claimed as critical for
community service focused on counteracting unpredictable change.
In education, the ET highlighted their openness to revamping teaching methods for enhanced
learning experiences, including "revising time, experimenting with technology, adapting materials,
and tailoring teaching styles based on learner feedback and style." This adaptive approach is crucial
for making education more accessible, current, and engaging.
The CS from an entrepreneurial restaurant discussed how insights from ad-hoc (typical
intuitive entrepreneurial) competitor analysis lead to adjustments in their culinary offerings: "De-
pending on their objective, like if they were sampling competitors’ food, this information might influ-
ence changes in internal recipes or processes to improve which the chefs would be responsible for,"
showcasing an entrepreneurial, "learning by doing" and quick experimentation approach as the
foundation of operating routines changes, and competitive advantage through quick adaptations,
also seen as dynamic capabilities.
5.2 Learning Unprepared Companies
Contrasting with learning fit companies, "learning unprepared companies" are organizations,
primarily within traditional sectors, exhibiting rigid and less adaptable learning and information
management approaches and autocratic leadership style. These include participants from
industries such as tourism, accommodation, and healthcare.
5.2.1 Background and Learning Triggers
Participants from these organizations show a marked disengagement from proactive learning, with
an outlined top-down communication approach that leaves employees disengaged and even alien-
ated from broader company objectives. A Logistic Assistant (LA) described their role as confined to
specific tasks without broader strategic insight. A Sales Advisor (SA) noted, "No, to convert walk-ins
into sales with a KPI of 12%," indicating a focus solely on immediate sales targets without a broader
understanding of the company's strategy or goals. A Network Engineer (NE) in the NHS stated, "As
an assistant manager, I do not detect changes; the higher-up staff like regional managers are supposed
to. I only have to implement and follow the changes made," highlighting a reactive approach to
change: "When something goes wrong, it needs action."
A dental clinic assistant (DA) pointed out: "There were no aims and objectives. No targets.
Receiving feedback from the manager based on changes that need to occur, such as packages and prices.
Stable industry, no vigilance; “the managers will communicate any necessary changes." Moreover, the
DA described the workplace environment as "very overwhelming and stressful," where "leadership
doesn't allow room for growth or changes to occur," highlighting a lack of opportunity for profes-
sional development or contribution to organizational change, even fear of making mistakes. The
DA described herself as overwhelmed and operating in significant stress and ambiguity.
5.2.2 Recognition, Assimilation and Sense-Making
The interviewed LA described communication as "clear and easy to understand," yet he did not
know the organizational goals, mission, and vision, exhibiting a complete disconnect from
broader company goals. This system, where employees are passive recipients of information,
contributed to a reactive rather than proactive workplace culture. The hierarchical structure of
these companies meant that information flowed top-down, with little to no input or active
engagement from lower-level employees. For example, the LA mentioned, "It is not relevant to
225
know company objectives." This sentiment was echoed by another employee, who said, "As an
assistant manager, I do not detect changes; the higher-up staff, like regional managers are supposed to.
I only have to implement and follow the changes made."
5.2.3 Exploitation of Learning / Dynamic Capabilities
The focus of these organizations, as reported by participants, is on maintaining existing business
practices and operating models and showing significant reluctance and fear of change. Due to
poor management and communication practices, employees were alienated from company
strategic and learning practices, thus not fulfilling their full potential. They were solely motivated
by extrinsic rewards – bonuses and job security, without any intrinsic motivation to contribute/fit
organizational goals, as they were even unaware, disengaged from them. The Corporate Law
Personal Assistant (PA) noted, "Leadership is very strict. The manager makes changes without speak-
ing to employees on decisions," highlighting a culture that discourages initiative and adaptation, ali-
enating employees. Moreover, a culture of fear in the dental clinic manifested in defensive routines,
with the DA saying: "Being able to maneuver in a negative environment, keeping to yourself more of-
ten and speaking less." This corporate culture often fostered passivity, dependence, and subordina-
tion, resulting in significant insecurity and ambiguity among teams. This culture of blame and fear
of failure, combined with a lack of open communication, led employees to feel disempowered and
disinclined to take initiative, even fearful of change.
6. Discussion and Conclusion
Our research and the application of the MIATM model uncovered a stark contrast between the
two types of organizational contexts. Employees in learning fit companies, primarily pertaining to
the B2B tech, ICT, and knowledge-intensive sectors, demonstrated remarkable adaptability, employ-
ing networking, open-mindedness, and a learning-by-doing approach. These practices were intensi-
fied by digital technologies and data proliferation and were supported by already established and
working prior knowledge/prior absorptive capacity routines/ learning routines and established
transactive memories within the companies. The interviewees demonstrated engagement in and
willingness to experiment and contribute to the company’s future moves, good knowledge of the
company’s mission and goals, quick communication, ownership, autonomy, calculated risk-taking,
and readiness to change. In contrast, employees in more traditional B2C industries, especially those
lower in the organizational hierarchy, struggled with change initiatives. The participants from such
"learning unprepared companies" displayed a tendency to stick to established routines, often being
unaware of company goals and vision, demonstrating resistance to change, fear of blame and fail-
ure, and reliance solely on extrinsic motivations like salary, job security, and performance-related
key performance indicators (KPIs).
Leadership emerged as a pivotal factor in this dynamic. In learning-fit companies, leadership
fosters a proactive, experimental, and vigilant learning culture, emphasizing intrinsic, purpose-re-
lated motivation to work. Conversely, in learning unprepared settings, leadership tended to be more
risk-averse, reactive, and operationally focused, particularly on efficiencies and costcutting, waiting
for the “things to get back to normal” with a top-down management approach and hierarchical or-
ganizational structure. This dichotomy highlighted the significant role of leadership in either en-
abling or impeding employee learning initiatives and flourishing organizational context for man-
aging dynamic and uncertain environments. The study identified two distinct types of leadership
practices: defensive and ambidextrous. Defensive leadership tended to be reactive and risk-averse,
whereas ambidextrous leadership balanced efficiency with a keen eye on environmental changes,
transforming insights into strategic actions. These leaders managed contradictory demands and
viewed change as an opportunity for sustainable competitive advantage. Our findings indicate that
while employees may possess the ability to learn and adapt, they often lack the enabling organiza-
tional context and leadership empowerment needed to effectively engage in and apply this learning.
This gap was especially evident in larger, hierarchical B2C organizations compared to smaller, more
agile,
226
entrepreneurial B2B companies and particularly affected junior employees lower in the
organizational hierarchy. Our research confirms that differences in organizational context and lead-
ership are more indicative of firm performance variances than industry differences. This study un-
derscores the critical importance of organizational context and leadership in facilitating a proactive
learning culture and learning and quick adaptation routines within flourishing organizational cul-
ture as the foundation of capability development for a desirable change. It highlights the MIATM
3.0 model as an actionable framework for studying and understanding these dynamics and guiding
organizations toward sustainable practice transformation based on real-time learning and real-time
response to VUCA conditions.
The findings underscore the importance of establishing a flourishing context and
organizational design for dynamic capability through absorptive capacity development in
managing VUCA effectively. This will enable companies to not only respond to immediate
challenges but also to proactively shape their market environments by developing dynamic
capabilities such as new products, partnerships, systems, and ways of working. Developing and ap-
plying dynamic capabilities successfully involves evolving alongside external changes and co-creat-
ing their business future through stakeholder interactions facilitated by a conducive internal organ-
izational climate and a culture of learning, open-mindedness, and employee empowerment. These
elements, along with empowering leadership, underpin organizational long-term success and sus-
tainability in an unpredictable world, as facilitated by the dynamic capabilities and VRIN resources
they continuously develop. The findings suggest that traditional management practices and auto-
cratic leadership need urgent reevaluation in today’s complex business environment, as those prac-
tices add to the uncertainty and ambiguity for employees and thus hinder individual and organiza-
tional growth. The study highlights organizational learning as a vital capability for evolving/trans-
forming practices in response to uncertainty in VUCA environments and the MIATM model as an
actionable guide and diagnostic tool to identify barriers and gaps in organizational learning capabil-
ities and facilitating context, thus uncovering the idiosyncratic nature and context, which facilitates
dynamic capability development.
227
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