Impact of Uncertainty on Organizational Strategy and Structure: Mersin Foreign Trade Firms' Response to Covid-19

Purpose – This study examines the changes made by organizations in their structures and strategies in response to the environmental uncertainty caused by the Covid-19 pandemic. The contingency theory suggests that organizations try to survive by changing to adapt to their environment in the face of sudden changes in their environment. The aim of this study is to reveal what kind of strategic and structural changes organizations in Turkey have made during the Covid-19 pandemic. Design/methodology/approach – In order to evaluate whether the environmental uncertainty caused by the Covid-19 pandemic leads to strategic and structural change as stated in the theory, 76 foreign trade firms registered with the Mersin Chamber of Commerce and Industry and ranked in the top 100 in the list of export transactions originating from Mersin port, with annual export sales of more than $10 million, were chosen as the study’s sample. The data were collected through a questionnaire. Simple linear and ordinal logistic regression analyses were used to analyze the data. Findings – Increase in environmental uncertainty has a positive and significant relationship with the organization's orientation towards differentiation strategy, while it has no effect on the organization's orientation towards cost leadership strategy. In addition, structural change in the mechanistic direction has a positive and significant effect on the organization's orientation towards cost leadership strategy, while structural change has no significant effect on the orientation towards differentiation strategy. Moreover, environmental uncertainty did not have a significant effect on structural change. Finally, no significant relationship was found between the change in the strategy of the organization and the mechanistic change of the organizational structure. Overall, although the Covid-19 pandemic increased environmental uncertainty, organizations in the sample of this study did not make significant structural and strategic changes. Discussion – Organizations were not completely indifferent to environmental change, responded to change tactically with temporary and instantaneous reactions and did not make sustainable permanent changes. The excessive rise in prices (sales) led to unexpected and extraordinary increase in profitability and thus organizations did not consider major change necessary.