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Now that design is acknowledged as an important consideration for businesses and is recognized as having the potential for driving competitiveness, the only sure thing in adopting a business strategy is that there will always be unknown variables in uncertain environments. Keywords – Environmental Uncertainty, Time-Based Strategy, Business Performance, Design Firm. Relevance to Design Practice – In recent years, we have seen mounting evidence from exploration of the possible relationships among environment, strategy, and performance.
In essence, the use of design as an innovative activity is often treated as a means for increasing the competitiveness of enterprises or even of nations. However, today’s design firms, no matter how large or small, are increasingly confronted with external environmental turbulence and complexity.
A design firm needs to have various responses to these different sources of environmental uncertainty. We can see this as an example of time-based strategy, which is defined as “organizational timing and speed in the execution of product development, product delivery or service responsiveness” (Wagner & Digman, 1997, p.
Tyson (1997) noted in his book entitled Competition in the 21st Century that “Time-based competition will be the rule of the day” (p. Roy (1994) has pointed out that companies increasingly rely on design to create and develop new products or services as a means for achieving commercial success in the marketplace.
However, the “balanced scorecard” (BSC) structure proposed by Kaplan and Norton (1992) measures performance from four perspectives: financial measures, customer measures, internal business measures, and innovation and learning measures. The general conceptualization developed for this study and used in evaluating the design firms is based on the hypothesized moderating effects of environmental uncertainty on time-based strategy and business performance. Time-based strategy is a powerful approach that can be treated as a crucial variable linked to business performance (Stalk, 1988).
Hypothesis 1: A positive and significant association between time-based strategy and business performance exists in design firms. Dess and Beard (1984) argued that uncertainty is one major facet of environmental characteristics.
Hypothesis 2: A positive and significant association between perceived environmental uncertainty and business performance exists in design firms. Hypothesis 3a: The positive effect of the preemptor strategy on business performance is stronger when perceived environmental uncertainty is high in design firms. Hypothesis 3b: The negative effect of the follower strategy on business performance is stronger when perceived environmental uncertainty is high in design firms.
As stated earlier, Taiwanese design firms have recently worked hard at design-driven innovation and performed well at international design competitions.
According to the Industrial Development Bureau (IDB), in 2006, two major categories of the design industry were product design and service design, with visual communication design representing the major part of service design in Taiwan. To test the hypotheses suggested by the research framework, measures of each construct were initially developed by undertaking a thorough literature review.
Design firms are usually very small, a factor affecting their influencing powers (UK Design Council, 2005). Exploratory factor analysis (EFA) was used to analyze the factors of environmental uncertainty, time-based strategy, and business performance with Varimax rotation and criterion with an Eigenvalue of common factors greater than one.
Table 9 shows the results of the regression equations for the relationships between independent variables and three dimensions of business performance: adaptability, efficiency, and innovation. Hypothesis 1 posited that a positive and significant association between time-based strategy and business performance exists in design firms.
Hypothesis 2 posited that a positive and significant association between perceived environmental uncertainty and business performance exists in design firms.
Hypothesis 3a posited that the positive effect of the preemptor strategy on business performance is stronger when perceived environmental uncertainty is high in design firms. By examining design firms in Taiwan, this study explored the moderating effects of environmental uncertainty on time-based strategy and business performance. In conclusion, this study has taken a further step in the direction of examining the moderating effects of environmental uncertainty on time-based strategy and business performance in design firms.
Given the paucity of empirical research on the issues examined in this study, these findings are tentative rather than definitive. This study received partial financial support from the National Science Council of the Republic of China, under Grant No. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising.
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Prior findings on the relationship between environmental uncertainty, time-based strategy, and business performance have been inconsistent. However, very little attention has been paid to the effects of these relationships on design consultancy businesses. Copyright for this article is retained by the authors, with first publication rights granted to the International Journal of Design. He received a bachelor’s degree in industrial design from National Kaohsiung Normal University (NKNU) in 2007, and a master’s in design from NTUST in 2009.
Yet so far, there has been relatively little research on the role of these relationships in the service sector.
As the external environment in which these design firms exist is changing rapidly and continually, how to properly adopt strategic choices in response to environmental uncertainty has become a great challenge. First, we review the literature from which the definitions and domains of environmental uncertainty, time-based strategy, and business performance emerge.
136) defines uncertainty as unpredictability of the state of the environment, inability to predict the impact of environmental change, and inability to foresee the consequences of a response choice. Hertenstein, Platt, and Brown (2001) have also asserted that design can play a significant role in a firm’s competitiveness.
Hoque (2004) noted that “a number of researchers report an increased organizational use of non-financial measures for performance evaluations in the last few years” (p. Pineno (2002) highlighted that the BSC, including both objective and subjective measures, is used to communicate and evaluate achievement of the mission and strategy of an organization.
The conceptual framework presented in Figure 1 outlines the impact of time-based strategy on business performance, the potential effects of environmental uncertainty on business performance, and the relationship between time-based strategy and business performance.
Cordero (1991) contended that the firm which is proactive can preempt competition from entering the market with new versions of a product. Furthermore, the strategic choices made by managers are influenced by the environmental pressures of the industry (Hibbets, Albright, & Funk, 2003). Taiwan’s design firms are primarily rooted in mass production rather than marketing and sales.
In 2008, Taiwan firms received a total of 201 international design awards, including 99 iF design awards, 66 red dot design awards, 31 G-Mark design awards, and 5 IDEA design awards (IDB, 2008a). Generally speaking, the design industry in Taiwan can be further divided into design firms and in-house design units. Then, a two-round Delphi process was conducted to determine the clarity of the scale items used in all of the research constructs—environmental uncertainty (see Table 1), time-based strategy (see Table 2) and business performance (see Table 3)—for the design firms before mailing the questionnaires. Moreover, through KMO (Kaiser-Meyer-Olkin Measure) and Bartlett’s test of sphericity, this study examined the correlation between different research variables. In Step 1 (Models 1, 5, and 9 of Table 9), firm age, firm assets and manpower were entered as a set of control variables. The factor of design-differentiation preemptor had significant and positive effects on adaptability and innovation, but no significant effect on efficiency (see Models 2, 6, and 10 of Table 9).
We found that technological evolutions (TE), market dynamics (MD) and competitor movements (CM) were statistically significant and positively associated with adaptability, while client preferences (CP) had no significant effect. The hierarchical moderated regression analysis with interaction terms determines whether there is a moderating relationship between time-based strategy and business performance. We will begin our discussion by reviewing the empirical findings, then turn to the general implications. All journal content, except where otherwise noted, is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 2.5 License. To know how to get there you need an objective assessment of current capabilities and how they match to those the organisation will need to achieve its vision. These come under what we call "The 6 Ps":PLANNING - Innovation must be linked to strategySuccessful leaders link core business processes to their strategic goals and annual business planning targets, and innovation is no exception.
Meanwhile, the ‘strategic planning’ dimension of design consultancy firms has not attracted a great deal of attention. The results of this study clearly demonstrate that design firms which focus on long-term issues should not only consider the value of a time-based strategy but also should be aware of the types of environmental uncertainty present if they wish to achieve superior business performance. All journal content, except where otherwise noted, is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 2.5 License. In general, a design firm, as a professional service provider, possesses abstract design knowledge or skills and provides related design expertise to its clients for a fee.
Lawrence and Lorsch (1967) embraced the notion that environmental uncertainty is both a threat and an opportunity to the development of an organization’s internal structures and processes. One significant example of a company that has adopted a preemptive strategic approach is IDEO.
In general, a design firm that offers quick responses to clients’ needs is likely to attract more clients and to encourage loyalty, thereby increasing its pricing competitiveness.
Second, we develop and test a conceptual model of the research hypotheses that examine the relationships among environmental uncertainty, time-based strategy and business performance. Furthermore, some researchers (Cheng, 1983; Galbraith, 1973) have argued that a firm encounters uncertainty when the information they possess is less than the information required to achieve their goals. According to a study conducted by Maidique and Patch (1982), one of the fundamental strategic choices facing firms is that of strategic timing, that is, whether to be first movers (first-to-market), fast followers (second-to-market), or late movers (late-to-market).
Generally speaking, indicators of business performance are results-oriented, so some imperceptible or procedural outcomes often have been overlooked. Neufeld, Simeoni, and Taylor (2001) have argued that the BSC offers the most promising of all approaches when it comes to helping research organizations measure performance and achieve operational excellence.
As for the relationship between environmental uncertainty and business performance, Reed and DeFillippi (1990) claimed that environmental uncertainty has a negative relation to business performance. Christensen (1997) argued that preemptive and innovative firms tend to adopt a proactive approach in dealing with new product development in emerging or highly unpredictable markets.
During the 1980s, Taiwan, similar to other Asian countries such as Singapore and Korea, experienced tremendous growth in computer production. Based on strategic thinking and management, the main difference between these is: the former aims at defining target markets or business regions, while the latter focuses on organizational functions. Ten design managers who were familiar with the issues of the design business were selected from five different design firms to examine these items. In this study, exploratory factor analysis was used to generate the predicated factor(s) that emerged from the scale items of firm manpower and firm assets.
In other words, the participants regarded the environmental uncertainty of these three items to be lower than that of the others. In Step 2 (Models 2, 6, and 10 of Table 9), the two extracted factors of time-based strategy, design-differentiation preemptor (DDP) and design-cost follower (DCF), were entered as a set of main effect variables. One possible explanation for this result may be that, in the context of our sample, being early or speedy to market with a design differentiation strategy could quickly capture new or emerging clients and meet target clients’ needs, thereby producing high adaptation and innovation in an unpredictable setting.
Furthermore, the present study found that market dynamics (MD) uncertainty was a significantly positive predictor of innovation, while competitor movements (CM) uncertainty was a significant negative predictor.


The findings indicated that environmental uncertainty related to technological evolutions (TE) and competitor movements (CM) had moderating impacts on the relationship between design-differentiation preemptor (DDP) strategy and adaptability. Our research has extended knowledge in strategy and performance research in three essential aspects. We believe the present study can contribute to the literature of design management in a number of ways. The first limitation is the cross-sectional nature of the study, which might limit its ability to capture the causal relationship among environmental uncertainty, time-based strategy and business performance. The externalization of R&D activities and the growing market of product development services.
Appropriateness of accounting data in performance evaluation: An empirical examination of environmental uncertainty as an intervening variable. A contingency model of the association between strategy, environmental uncertainty and performance measurement: Impact on organizational performance. Relating Porter’s business strategies to environment and structure: Analysis and performance Implications. Miles and Snow typology of strategy, perceived environmental uncertainty, and organizational performance. The recent growth performance of US firms in the industrial design sector: An exploratory study.
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These can then be used to plan change activities in the three key areas of People, Process (including Policy) and Technology. Thus, in this paper, we explore the moderating effects of environmental uncertainty on the relationship between time-based strategy and business performance in design firms. By virtue of their appearance in this open-access journal, articles are free to use, with proper attribution, in educational and other non-commercial settings. The term ‘design service,’ as a service provided by design consultancy firms (hereafter called ‘design firms’), covers a wide range of activities, from conducting research and developing emerging products to making final products and marketing them (Vanchan, 2007). It has been widely recognized that the inability to predict external changes can hinder success and even cause failure (Duncan, 1972).
This well-known and innovative design and consultancy firm has moved beyond product, service, and experience design to an attempt to put itself in a position to be the first firm to help clients design a culture (Utterback et al., 2006). As a result, Daft (2004) claimed that environmental uncertainty can be explained as a lack of critical environmental information when managers make decisions.
Lieberman and Montgomery (1988) have pointed out that the advantages first movers enjoy include technological leadership, access to scarce assets, and the ability to switch products or services. Although business performance can be measured and judged from various perspectives, Walker and Ruekert (1987) proposed a three-dimensional conceptualization of performance consisting of effectiveness, efficiency, and adaptability. Perhaps more importantly, the BSC provides a basis for linking measures to strategy (Bremser & Parsky, 2004). Nevertheless, Osborn and Hunt (1974) found that the complexity of the environment is partially associated with organizational effectiveness; that is, complexity does not directly effect business performance. Miller (1988) found that a cost leadership strategy has a negative relationship with uncertainty, especially among high performers. As research on design firms may allow us to observe their ability to adapt to the environment more clearly and, thus, discern the competitiveness of a specific industry, strategy at the business level will be investigated in this study. After two Delphi rounds, concordance had been achieved in all, except for 11 items, consisting of seven measured items of environmental uncertainty (competitor quality, competitor technology, competitor speed, pricing policy, design regulations, laws related to labor and capital, and interest rate changes), one measured item of time-based strategy (high-efficiency distribution channels), and three measured items of business performance (successful design, various design patents granted, and market share).
It was found that one extracted factor, renamed as firm size, of the factor analysis of firm manpower and firm assets accounted for 71.872% of the total variance.
In Step 3 (Models 3, 7, and 11 of Table 9), the four extracted factors of environmental uncertainty, technological evolutions (TE), market dynamics (MD), client preferences (CP), and competitor movements (CM), were entered as a set of moderating variables. Also, the factor of design-cost follower had a significantly positive effect on efficiency, but no significant effect on adaptability and innovation. The results indicate that better innovation performance could be pursued by a design firm under low-perceived uncertain market dynamics or high-perceived uncertain competitor movements. First, the study reinforces the argument that no single time-based strategy has been proven best in all instances (Schnaars, 1986).
First, the findings reveal that design firms tend to adopt different time-based strategies in pursuing different performance outcomes. Therefore, a longitudinal research approach using multiple informants would be useful for providing evidence of causation that cannot be obtained using the cross-sectional approach.
Operations strategy, environmental uncertainty and performance: A path analytic model of industries in developing countries.
The competitive environment and strategy of target costing implementers: Evidence from the field.
National systems of economic learning: The case of technology diffusion management in East Asia.
Three types of perceived uncertainty about the environment: State, effect, and response uncertainty.
Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Based on data collected from 80 design firms in Taiwan, the findings first reveal that these firms can adopt different time-based strategies to pursue different performance outcomes. In general, a good design firm will continuously be searching for ways in which to differentiate its design services from its competitors so as to create a greater margin of competitiveness. First, the design sector, characterized as it is by its knowledge-intensive services and value-added solutions, operates in the midst of a great deal of uncertainty and risk. Finally, we discuss the results of the study and offer design management implications, limitations, and directions for future research.
Under these circumstances, the environment represents the factors that influence a design firm’s operations, while uncertainty stands for the lack of information required to achieve their goals. However, Lieberman and Montgomery (1988) have identified the following disadvantages of being a first mover: 1) free ride effects, 2) technological and market uncertainty, 3) shifts in technology or customer needs, and 4) incumbent inertia. Effectiveness is defined as the success of business products and services compared with those of a company’s competitors in the marketplace. Moreover, from the design management point of view, as Borja de Mozota (2006) asserted, the BSC is also a cause-and-effect model, since each perspective has an impact on others. Clearly, higher environmental uncertainty necessitates different efforts in order to move confidently toward better performance. The focus of the study is the range of available strategic choices with regard to different dimensions of environmental uncertainty. Meanwhile, concordance was defined as agreement among 80 percent or more of the 10 design managers. Also, the factor scores of firm size, as the control variable, are used in the moderated regression analyses in the next section. Last, in regards to business performance, the respondents revealed that they achieved good business performance with regard to “design team cooperation” (Mean=4.03) during the past year.
Then, the cross products of each aspect of main effect variables and each aspect of moderating variables were entered into the fourth step (Models 4, 8, and 12 of Table 9).
One feasible interpretation of this result is that the design-cost follower strategy creates the basis for a price competitive advantage, which is a key efficiency driver in the present sample firms.
Unexpectedly, client preferences (CP) had no significant effect on any of the three dimensions of business performance, though it was highly identified by the respondents. It also could be said that design firms facing higher uncertainty with regard to technological evolution or competitor movements tend to employ the differentiation strategy to quickly capture new or emerging clients and to meet target clients’ needs, thereby producing high adaptation to an unpredictable setting.
More specifically, design firms employing the design-differentiation preemptor strategy are likely to achieve better business performance with regard to adaptability and innovation, while firms employing the design-cost follower strategy are likely to achieve better business performance with regard to efficiency.
Specifically, the results show that design firms which adopt the DDP strategy are likely to be pursuing superior business performance in areas such as adaptability and innovation, while design firms which adopt the DCF strategy are likely to be aiming for superior efficiency.
Second, as shown in Table 4, because the sample firms chosen from the design industry were small businesses, which have a distinct advantage over larger firms in the sense that being small is likely to allow greater responsiveness, and, in turn, flexibility with regard to the environment (Dean, Brown, & Bamford, 1998), the results should be cautiously applied to large firms, even though firm size did not significantly influence the relationships studied. The impacts of speed-to-market on new product success: The moderating effects of uncertainty. A tentative exploration into the amount and equivocality of information processing in organizational work units. Management accounting systems, perceived environmental uncertainty and organization structure: An empirical investigation. Contingent product design and marketing strategies influencing new product success and failure in U.S. Integrating operations and marketing perspectives of product innovation: The influence of organizational process factors and capabilities on development performance.
Second, the results show that three of four types of environmental uncertainty have direct effects on measures of business performance such as adaptability and innovation. Time-based strategy and business performance under environmental uncertainty: An empirical study of design firms in Taiwan. Thus far, however, academics as well as practitioners seem to have a very limited understanding of how design firms make strategic decisions in the interests of their business, especially when these firms are themselves trying to help clients formulate strategies that can take advantage of the opportunities presented in a highly uncertain business environment. This compels design firms to engage heavily in service activities that represent a response to change. Therefore, a key premise in the normative literature is that a time-based strategy that will result in superior performance is dependent on the existing environmental circumstances. Therefore, environmental uncertainty can be defined as a situation in which a design firm has little information about its external environment to use in achieving its organizational goals. Numerous studies examining the relationship between time-based strategy and business performance have provided equivocal results. Efficiency is treated as an index (a set of outputs of business products and services divided by a set of inputs of resources employed in implementing them).
Therefore, the BSC could be treated as a feasible framework for clustering and balancing performance measures. Although not all findings suggest that environmental uncertainty has a direct effect on business performance, we contend that a design firm’s ability to perceive and predict environmental uncertainty is essential to business success. Up to the 1990s, Taiwan’s design industry grew rapidly along with the high demand for cost-effective products; however, it entered a dark period during the early 2000s. In addition, more and more Taiwanese enterprises have established in-house departments, which could lead to a decrease in the number of commitments to design firms.
As a result, the final questionnaire in this study included 13 measured items of environmental uncertainty, 12 measured items of time-based strategy, and 9 measured items of business performance. However, the mean score of “winning design awards” was 2.40, representing the average rate of “winning design awards” at the range of 41~60%.
With regard to perceived environmental uncertainty, four extracted factors were renamed as: technological evolutions (TE), market dynamics (MD), client preferences (CP), and competitor movements (CM). If the interaction accounts for a significant amount of incremental variance to support the hypothesis, then there is a significant moderating effect of environmental uncertainty on the relationship between time-based strategy and business performance.
Considered jointly, the results indicate that both types of time-based strategy are important determinants of business performance, but they displayed different effects on each of the three types of business performance. This surprising result can be interpreted in the light of the nature of Taiwan’s design industry.
As evident in Model 8 of Table 9, the interactions of two types of time-based strategy and four types of environmental uncertainty had no significant effect on efficiency. Second, we believe our findings contribute to the design field in providing more detailed insights concerning the effects of environmental uncertainty on business performance. Such distinctions are essential if design firms wish to understand how to develop their own distinctive design competencies and monitor their own design service needs. Third, not all potential moderators of the linkage between time-based strategy and business performance have been explored here.
Aligning manufacturing capabilities with business strategy: An empirical study in high-tech industry. Differences in large and small firm responses to environmental context: Strategic implications from a comparative analysis of business formations. Marketing’s role in the implementation of business strategies: A critical review and conceptual framework. Third, the findings suggest that appropriate matches between environmental uncertainty and time-based strategy can result in superior business performance.
Second, the increasing importance of design services in today’s knowledge-based economy has significant theoretical and practical implications on design practice.
Sutcliffi and Zaheer (1998) have noted that environmental uncertainty is a complex construct, since it is comprised of different factors from different areas.


Building on the findings of the studies by Kaplan and Norton (1992) and Walker and Ruekert (1987), our study classifies measures of business performance into four dimensions—effectiveness, efficiency, innovativeness, and adaptability—for assessing the performance of the design firms in the study. Sea changes in the global economy and global competition have necessitated that Taiwan’s design firms, if they are to remain internationally competitive, aim to develop to the highest level. At present, Taiwan’s design industry is being subjected to significant change, with the emergence of alternative design service providers, diversification in the range of design services offered, and greater integration of design and technology for implementation.
Consistent with the purpose of this study, design firms that focus mainly on product design and visual communication design were selected.
As for the 13 measured items of environmental uncertainty, the respondents were asked to indicate the degree of predictability for each measured item. One possible explanation for this is that participation in design competitions was not the major business objective of most of the design firms. As to time-based strategy, two extracted factors were renamed as: design-differentiation preemptor (DDP) and design-cost follower (DCF).
To check for multicollinearity, we ran regressions to generate variance inflation factors (VIFs) for each independent and control variable.
However, environmental uncertainty in relation to market dynamics (MD) had moderating impacts on the relationship between DDP strategy and innovation (see Model 12 of Table 9). In particular, the findings suggest that technological evolutions (TE), market dynamics (MD) and competitor movements (CM) have direct effects on adaptability. Second, the findings also reveal that three of four types of environmental uncertainty have direct effects on business performance. Given the great importance of diffusion of the RBV through the strategy literature, there is a need for additional research to further examine other moderating factors, such as capability (Teece, 2007). Specifically, the results indicate that the design-differentiation preemptor (DDP) strategy is beneficial for a design firm when it comes to achieving superior adaptability in an environment of high-perceived technological evolutions (TE) or competitor movements (CM) uncertainty. He has also been a Patent Examiner for the Intellectual Property Office in Taiwan for a number of years. In this respect, Song and Montoya-Weiss (2001) have asserted that uncertainty should be studied in relation to specific components of the environment in order to properly attribute its causes. Thus, there is a need to further examine the effects of time-based strategy on the business performance of design firms. To be explicit, effectiveness is most closely associated with nonfinancial goals, efficiency is highly associated with achieving profitability, and adaptability is associated with adaptation to change. The approaches used for measurement of business performance of the firms are shown in Table 3. Likewise, the findings of Walsh, Roy, Bruce, and Potter (1992) indicated that a firm pursuing a second-to-market strategy can be just as successful as one that adopts a first-to-market strategy. After investigating the electronics industry, Souder and Song (1997) found that, under higher market uncertainty, firms could adopt a radical design to enhance new product development performance. In such a competitive landscape, finding ways for design firms to make progress and to survive is vital.
A total of 122 eligible design firms listed under the sub-categories of product design (number DE1) and visual communication design (number DE2), under the main category of design service (DE), of the Technical Services Login System of Taiwan’s Industrial Development Bureau (IDB, 2008b), were chosen as the sample. In this construct, a five-point Likert scale, ranging from “very low” to “very high,” was used.
Regarding business performance, three extracted factors were renamed as: adaptability, efficiency, and innovation. It was found that the average value of VIFs associated with each coefficient was lower than 1, suggesting no serious problems with multicollinearity. These design firms are not directly involved in their clients’ marketing activities, isolating them from the customer. This result indicated that adopting a design-differentiation preemptor strategy is beneficial for design firms in achieving superior innovation in an environment of low-perceived market dynamics (MD) uncertainty. It could be that design firms facing a lower level of environmental uncertainty in terms of technological evolutions, market dynamics, and competitor movements see it as an opportunity to improve their adaptability. In particular, the results suggest that design firms facing low-perceived uncertainty in the areas of technological evolutions, market dynamics, and competitor movements are likely to chase after better adaptability. Last, the current findings pertain to design firms in Taiwan, and results may differ in other settings; therefore, future work is necessary to validate the findings in other industries or countries to rule out possible sample biases. In addition, a design firm can adopt the DDP strategy in order to obtain superior levels of innovation in an environment of low-perceived customer demands (CD) uncertainty.
His recent design and research interests have focused on design management, service design, and intelligent product design for the elderly. Thus, if strategic planning is lacking, a design firm is likely to be handicapped in any efforts to focus on long-term issues or to develop the unique design competencies necessary to achieve a sustainable competitive advantage.
In comparison to design firms in the US, Europe or Japan, the firms in many Asian countries face their own set of challenges, including those challenges presented by the emergence of new local brands in the home market, competition from foreign design firms, and a lack of long-term strategic planning (Eckersley, Spaeth, Borsboom, Johnston, & Hesse, 2003).
Lawrence and Lorsch (1967) divided environmental uncertainty according to two main dimensions: market and technology. By integrating the time-based competitive viewpoint and the idea of competitive advantage, Chang, Lin, Wea, and Sheu (2002) developed an integrative taxonomy of business strategies that captures the extent to which firms are proactive or reactive in relation to their environment. Thus, a moderating effect of perceived environmental uncertainty on the relationship between time-based strategy and business strategy is accepted.
Taken together, the above characteristics make Taiwan’s design firms an interesting subject of study.
Questionnaires were sent to the design executives or design managers of the selected design firms. As for the 12 measured items of time-based strategy, the respondents were asked to indicate the importance of each time-based approach relative to achieving a competitive advantage. Also, the perceived uncertainty of market dynamics (MD) was a positive predictor of innovation, while perceived uncertainty related to competitor movements (CM) was a negative predictor.
And design firms that are encountering high-perceived uncertainty in the area of competitor movements or low-perceived uncertainty with regard to market dynamics are likely to pursue a greater degree of innovation. However, it should be noted that single industry studies are warranted when the internal validity of the study is more important than generalization of the results (McKee, Varadarajan, & Pride, 1989, p. However, the findings reveal that there are no moderating effects of environmental uncertainty found with the design-cost follower (DCF) strategy.
He has had research articles accepted for publication in the International Journal of Technology Management and Design Studies.
Of course, a strategy needs to take into account the demands for flexibility and responsiveness to clients’ needs as well as other factors involving various degrees of environmental uncertainty. Design firms in Taiwan offer a good representation of those firms that are confronting these unique Asian challenges and coming up with unique solutions.
Govindarajan (1984) further proposed four types of environmental uncertainty, related to: 1) customers, 2) competitors for markets and resources, 3) suppliers of material, labor, and capital, and 4) regulation groups (such as government agencies or unions). In this construct, a five-point Likert scale, ranging from “least important” to “most important,” was used. In contrast, Hypothesis 3b posited that the negative effect of the follower strategy on business performance is stronger when perceived environmental uncertainty is high in design firms. The reasons for these results could be that, in a predictable marketplace, a design firm is likely to strive for innovative designs as a way to outperform its competitors; however, a design firm that fully understands its competitors’ movements is likely to tend toward a less proactive approach, which may result in difficulties achieving superior innovation. Third, the findings reveal that appropriate matches between environmental uncertainty and time-based strategy can result in superior business outcomes.
Last of all, the limitations of this study and future research possibilities are also discussed. In combination, the development of a strategy is as important in a design firm as in a manufacturing firm, though the strategy content and the priorities emphasized may be different. Taiwan design firms have in recent years been working hard to develop innovative designs and have performed well at international design competitions. Porter (1980) proposed five types of environmental uncertainty, related to: 1) suppliers, 2) customers, 3) competitors, 4) latent competitors, and 5) alternative products. The first mailing included: a cover letter addressed to each recipient explaining the purpose and importance of the study, a self-administered questionnaire, and a pre-paid reply envelope. The overall set of interaction terms between the design-cost follower (DCF) strategy and the four types of environmental uncertainty did not account for a significant amount of the incremental variance for any of the three dimensions of business performance. Third, the study represents a contribution to the overlooked research area of the moderating roles of environmental uncertainty on time-based strategy and business performance. In specific, the results suggest that a design firm can employ a DDP strategy to achieve superior adaptability under high-perceived uncertainty regarding technological evolutions or competitor movements. Despite these limitations, the preliminary empirical findings and the implications for design management can definitely serve as a basis or as guidelines for understanding the alignment of environmental uncertainty, time-based strategy, and business performance, especially when design firms need to develop their strategic planning in order to focus on long-term issues. These firms have been operating, moreover, in the midst of a transformation economy, one that has been undergoing continual shifts, from an agrarian- to an industrial-based economy, to a service-based economy, and now toward an experience-based one, a process which reinforces the effect of ‘match’ on business performance. One of the critical research insights of the study is that the effect of a design-differentiation preemptor strategy on adaptability increases with high-perceived uncertainty regarding technological evolutions (TE). Or, a firm can also adopt the DDP strategy to obtain superior innovation under low-perceived uncertainty in relation to market dynamics. For the above reasons, we have chosen to use Taiwan design firms as the subject of this study. As no labor union has been established in the design sector, industrial relations need not be considered in an analysis of environmental uncertainty in such a study.
A total of 82 questionnaires were returned and 80 were defined as valid samples, with an effective response rate of 65.6%.
Taken together, the findings showed that technological evolution, competitor movements, and market dynamics had significantly moderating effects on the relationship between time-based strategy and business performance for the sample firms.
Yet, surprisingly, the findings also reveal that there are no moderating effects of environmental uncertainty found with the DCF strategy. We believe that the outcomes of the study will offer valuable insights for other Asian countries, such as China, India, and South Korea.
Therefore, we have adopted seven of the eight types proposed by Hoque (2004) for the assessment of environmental uncertainty among design firms.
In this study, we adopt this set of key decision variables of time-based strategy suggested by Chang et al. 168) results that technological uncertainty moderates the relationship between a strategic response and operational outcomes. One possible explanation for this is that design firms which adopt the DCF strategy tend to be less conscious of environmental uncertainty issues. Table 1 shows the approaches used for measurement of these seven types of environmental uncertainty.
Likewise, uncertainty with regard to competitor movements (CM) moderates the relationship between a design-differentiation preemptor strategy and adaptability. Stated differently, if a design firm intends to transform its current business strategy into the DDP strategy, it should devote greater efforts to learning how to measure and ameliorate related uncertainties. All of the items in the measurement sets have been adjusted based on the characteristics of the design consultancy services. First, Namiki (1989) argued that strategic typologies have to be tested and validated for usefulness through empirical investigation.
Also, market dynamics (MD) moderates the relationship between a design-differentiation preemptor strategy and innovation.
Given the long time frame required for design firms to implement an appropriate time-based strategy, this study reinforces the argument that a good match (or fit) between environmental characteristics and strategic orientation can lead to superior business performance.
To sum up, the managerial prescription from the above findings is that, in our sample context, adopting a design-differentiation preemptor (DDP) strategy is beneficial for a design firm seeking to achieve superior business performance through adaptability when there exists high-perceived uncertainty regarding technological evolutions (TE) or competitor movements (CM), while adopting a DDP strategy is beneficial for improving performance through innovation in an environment of low-perceived market dynamics (MD) uncertainty. This is in partial agreement with the claim of Jennings and Haughton (2002): “…being faster doesn’t mean being out of breath.
Second, their strategies bear some relationship to other well-known strategy categorizations found in prior studies, such as those of Maidique and Patch (1982), Miles and Snow (1978), and Porter (1980). In other words, better understanding of the nature of environmental uncertainty will allow design firms to better manage their design project portfolios and to allocate the resources necessary for getting a better design job done more flexibly when speed is critical.
Perhaps more importantly, business strategy for a design firm accounts not only for its mission and long-term objectives, but also its relative position in comparison to its competitors in the design service marketplace. The approaches used for measurement of time-based strategy for the design firms are shown in Table 2.



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