The Contingent Effects of New Venture's Improvisational Capability and Ambidextrous Search

Despite the growing interests on the construct of improvisation, there is a limited understanding of the specific conditions under which improvisational capability can be shaped and effectively drive the performance. This article explores the antecedents and outcomes of the new venture's improvisational capability. We propose that the “proactive-reactive” search helps build improvisational capability in the interaction with environmental turbulence. Based on a sample of 257 Chinese start-ups, the hierarchical linear regression model was used to test hypotheses. We find that, in fast-changing environments, proactive search has an enhanced positive association with improvisational capability, but under low environmental turbulence, only the reactive search is effectual. Our findings also demonstrate that the effect of improvisational capability in driving a new firm's performance depends on the level of environmental turbulence.