From tariffs to transformation: how higher import costs drive remote work and innovation capability

Purpose This paper aims to investigate how the increasing prices of imports – particularly resulting from tariffs – establish an organization-wide compunction to change. Design/methodology/approach This paper will be conceptual in nature, demonstrating a dynamic capability view-based framework, and articulating seven propositions to underpin the examination of how a localized economy is triggered by an external economic shock which then cascades through reconfiguration of the organization’s supply chain pressure, provocation to adopt technology and the shape of the organization’s workforce to produce outcomes that are strategic and human related. Findings From the framework developed, it will be illustrated that the pressure from increased import costs on the reconfiguration of the supply chain establishes the need for localization strategies and an accelerated pace of technology adoption due to the digital transformation. All of these tensions develop an ambience that enables remote working, therefore developing outcomes that are fosterable within an organization, specifically innovation capacity, employee well-being and job satisfaction. Practical implications This paper lays an important grounding for managers who operate in uncertain situations, such as trade, but also provides emphasis on interrelatedness between localization of the supply chain, digital technology and flexible working arrangements to develop resilience and maintain competitive advantage. Originality/value This is an original paper that contributes to management scholarship that links perspectives on trade-induced cost shocks to remote work outcomes and also introduces and describes a new framework for responding to outside-in pressures to either create adaptive capabilities or benefit from lifestyle transformation work experience by employees.