Strategic ambiguity as managerial practice: dynamic managerial capabilities and performance under digital transformation

Purpose The managers working in volatile environments face an apparent paradox: coordination requires concise instructions and effective adaptation requires flexibility. In this paper, the authors introduce the concept of strategic ambiguity (SA) as a managerial intention that influences decision-making in uncertain situations. It analyzes the mediating indirect correlation between SA and firm performance by introducing dynamic managerial capabilities (DMCs) and analyzes digital transformation (DT) as a situational moderator. Design/methodology/approach The empirical test is conducted through a moderated mediation model tested using survey data collected from 393 Jordanian manufacturing small- and medium-sized enterprises (SMEs), where analysis is done using partial least squares structural equation modeling (PLS-SEM). Findings Strategic ambiguity and DMCs are positively associated with each other and with firm performance. The SA-performance relationship has DMCs as its transmission mechanism. The DMC-performance connection is enhanced in digital transformation, thus acting as a situational amplifier, but not as a driver. The informal coordination practices explain how ambiguity is realized within the weak institutional setting of the emerging market conditions. Originality/value The research reconceptualizes strategic ambiguity as a choice by a manager and not a failure in communication. It builds on the body of existing literature on the topic of ambiguity tolerance by showing how ambiguity can lead to the activation of capability and clarifying the circumstances in which digital transformation can increase the effectiveness of managers in emerging-market SMEs.