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A Penny Saved Is a Penny Earned: How Executive Cognitive Flexibility Drives Performance Through Strategic Resource Reallocation

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  • Xiaochuan Guo

    (School of Management, Shanghai University, Shanghai 200444, China)

  • La Tao

    (School of Management, Shanghai University, Shanghai 200444, China)

  • You Chen

    (School of Management, Shanghai University, Shanghai 200444, China)

  • Xue Lei

    (School of Management, Shanghai University, Shanghai 200444, China)

Abstract

In an era where sustainable development is increasingly a core strategic issue for businesses, how top management, as the architects of corporate strategy, can achieve a synergy of economic, social, and environmental benefits through internal management mechanisms to promote corporate sustainability is a central focus for both academia and practice. This study aims to explore how Executive Cognitive Flexibility (CF) influences Firm Performance and to uncover the mediating effects of Non-market Strategy. We use panel data from Chinese A-share listed companies between 2016 and 2022 to examine and empirically analyze this mechanism. Our findings indicate that CF has a positive impact on Firm Performance. This relationship is realized through the pathway of Non-market Strategy, specifically manifesting as a reduction in Corporate Social Responsibility (CSR) and an increase in Corporate Political Activity (CPA). Further analysis reveals that the impact of executive cognitive flexibility on firm performance is differentially influenced by internal and external environmental contexts. The findings of this study provide important practical insights and policy recommendations for companies on cultivating executive cognitive flexibility, optimizing non-market strategies, and enhancing firm performance in various internal and external environments.

Suggested Citation

  • Xiaochuan Guo & La Tao & You Chen & Xue Lei, 2025. "A Penny Saved Is a Penny Earned: How Executive Cognitive Flexibility Drives Performance Through Strategic Resource Reallocation," Sustainability, MDPI, vol. 17(15), pages 1-27, July.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:15:p:6698-:d:1707925
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