This sub-theme seeks to explore the implications of heightened turbulence for the “varieties of capitalism.” From a strategy practice perspective, the competitive and institutional context of business looms large because it fundamentally shapes the rules of the game. For instance, extended industry rivalry, competition laws, intellectual property protections, the labor market organization, and more generally the regulation of business policies, operations, and financial transactions strongly affect what will be considered in a particular economic system as efficient governance (including corporate finance), optimal resource allocation, and ultimately good strategy. What constitutes good strategy will include domain choices, pricing and differentiation decisions, the organization of innovation, location selection, growth and profitability targets, financing and human capital development, the distribution of financial returns, etc. Recent examples of turbulence include capricious stakeholder and political challenges to the very foundations of capitalism; geopolitical instability; ideology-driven attempts at decoupling national economies; rapidly evolving threats to cyber security; and a myriad of pressures imposed on organizations by many market and non-market stakeholders. Which economic systems will ultimately best equip their home-grown organizations to succeed in the turbulent marketplace and how can internationally operating firms bridge the divides among competing systems?

This sub-theme seeks to explore the implications of heightened turbulence for the emergence of new organizational forms and the successful adaptation of existing organizational structures. Innovative organizational designs and new variations of past templates are presently being introduced throughout the world to cope with heightened turbulence. Different categories of governance structures, including family-owned firms, publicly listed companies, private equity structures, state-ownership, venture capital funded initiatives, business networks, etc. will typically engage in idiosyncratic resource allocation processes, and their strategies will be affected very differently—both positively and negatively—by environmental turbulence. For example, private-equity based firms are less vulnerable to (sometimes unreasonable) stakeholder demands than publicly listed companies. Many state-owned companies have access to the deep pockets of government and can therefore more easily pursue long-term strategies and resource allocation without much concern for short-term performance impacts or for financial performance more generally. Multinational enterprises face pressures to transform their global integrative structure and to micro-modularize their value chains. In addition, novel structural elements may be introduced such as temporary organizations with their own financial, human and knowledge capital, divorced from the core structure and permitting new ventures and collaborative arrangements when facing especially severe VUCA conditions. Exploratory acquisitions (small bets) can similarly allow entry and diversification into new markets where turbulence is high and long-term planning is difficult. Disposable factories having only a fraction of the capacity of a permanent plant, a much lower capital intensity, and less irreversibility of assets permit experimenting in turbulent contexts. Modular or mobile factories sometimes facilitated by additive manufacturing and green production technologies, can likewise easily be moved from high-turbulence to low-turbulence locations if needed. Disaggregated headquarters in hierarchical organizations permit an improved forecasting structure with better sensing of localized sources of turbulence and more effective strategy responses. Collaborative, community based organizational forms with crowds of problem solvers can also be useful in mitigating the impact of turbulence through better sensing and seizing capabilities. These are only examples of a wide array of organization-level, entrepreneurial innovations that can be deployed to address turbulence.

A business model is a set of purposively crafted routines and managerial practices meant to create value out of assembling and combining financial, human and knowledge resources; to deliver this value to customers; and to capture at least part of this value in the form of profitable growth. This sub-theme seeks to address which innovative business models can best support organizations and their networks in addressing heightened turbulence arising from large-scale and difficult to predict changes in demand, supply, technology, or stakeholder pressures. For instance, heightened turbulence can be caused by rapid and unpredictable technological change as with the industry 4.0 technologies, or by increased stakeholder pressures for societal value creation as with circular economy, sharing economy, zero-carbon, and sustainable global value chain (GVC) approaches. Turbulence means that a stable and standardized business model is unlikely to lead to superior economic performance. Business model adaptation and innovation are therefore required but also have governance costs. Firms cannot continuously and without being highly selective alter their core value proposition with its cost and revenue models, or their partner networks, distribution channels, target customers, etc. to accommodate turbulence. Large organizations such as multinational enterprises can engage in business model diversification to maximize the responsiveness to localized sources of turbulence, but such diversification also has limits because of the danger of “de-focusing” resources from the firm’s primary business model. In theory, firms can develop a dynamic capability in business model design. However, business model transitions to address turbulence are challenging because any organization needs clarity on governance—on how it will deal with a multitude of stakeholders—and on the principles guiding its resource allocation process. Even the recent scalable business models involving digital assets and n-sided markets do require a carefully crafted and coherent approach to strategy, governance, and resource allocation.

This sub-theme seeks to identify innovative practices and processes for managing financial, human, and knowledge capital that can best support firms and their networks in addressing heightened turbulence. Within each resource domain, the implications of large-scale environmental disruptions call for executives to alter existing practices and processes—or develop and implement new ones altogether. In the sphere of corporate finance, for instance, what can executives do to face changing access to finance and maintain their ability to fund high-growth initiatives and high-potential innovation projects? In the human capital sphere, what can executives do to address new constraints, demands and expectations from their stakeholders, and/or to integrate newly established practices and processes for hybrid and remote work into their organization’s strategic human resources management? In the sphere of knowledge management, what new practices and processes do executives mobilize to determine how best to locate their innovation activities internationally, to manage knowledge-intensive collaboration within their international teams and/or with foreign partners, and/or to develop and protect their knowledge reservoirs adequately? Lastly, what can executives do to integrate new or adapted practices and processes in each resource domain so that they enable and support a coherent, overarching strategy? How can they integrate these practices and processes within the overall resource domain’s management and subsequently with the other resource domains? Although this theme lends itself naturally to works stemming from the behavioral strategy, practice, and process communities, we enthusiastically welcome relevant submissions from across all interest groups, with research articulated at any levels of analysis and mobilizing any type of relevant data (qualitative or quantitative) and analytical technique.