From Agile Project Routines to Strategic Agility: A Three-Wave Time-Lagged Test of Sustainable Performance Under Dynamic Capabilities and Information Processing Theories

Abstract

Agile project management (APM) has become a dominant approach for managing uncertainty in dynamic industries. Yet the mechanisms through which project-level agility is associated with broader strategic adaptation and sustainability-oriented outcomes remain insufficiently explained. Drawing on dynamic capability theory (DCT) and organizational information processing theory (OIPT), this study develops and tests a time-ordered model in which APM is positively associated with strategic agility (SA), which, in turn, is associated with the three distinct dimensions of sustainable performance: economic, social, and environmental. In addition, agile leadership (AL) is theorized as a potential boundary condition that may strengthen the APM-SA relationship by enabling faster, higher-quality information processing and decision execution in uncertain contexts. To address common concerns regarding temporal precedence and common method bias in agility research, the study adopts a three-wave time-lagged design, collecting data at three points in time: APM and AL at Time 1, SA at Time 2, and the three performance dimensions at Time 3. The structural model is tested using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results show that APM is positively associated with subsequent SA, SA is positively associated with all three performance outcomes, and the indirect effects through SA are statistically supported across the three sustainable performance dimensions. However, AL does not significantly moderate the APM-SA relationship. Integrating DCT and OIPT, this study provides evidence that project-level agile routines may contribute to SA, which is subsequently associated with economic, social, and environmental performance.