Discussion Papers In Economics
And Business

FOSTERING ORGANIZATIONAL CAPABILITIES THROUGH SOFT SKILLS:A STRATEGIC IMPERATIVE FOR A VUCA WORLD

Dora Abidi

Discussion Paper 18-08

Graduate School of Economics andOsaka School of International Public Policy (OSIPP)
Osaka University, Toyonaka, Osaka 560-0043, JAPANFOSTERING ORGANIZATIONAL CAPABILITIES THROUGH SOFT SKILLS:A STRATEGIC IMPERATIVE FOR A VUCA WORLD

Dora Abidi

Discussion Paper 18-08

March 2018

Graduate School of Economics andOsaka School of International Public Policy (OSIPP)
Osaka University, Toyonaka, Osaka 560-0043, JAPANFOSTERING ORGANIZATIONAL CAPABILITIES THROUGH SOFT SKILLS:A STRATEGIC IMPERATIVE FOR A VUCA WORLD
Dora Abidi†
Abstract
During the last decade, the need and importance of soft skills are significantly increasing because of
three main reasons. Firstly, the firm’s performance is highly associated to the firm’ interaction with
its external environment that involves customers and local stakeholders. Secondly, the workplace
productivity is highly depending on the quality of relationship and communication among theemployees. Thirdly, today’s environment is considered as a VUCA (Volatile, Uncertain, Complex
and Ambiguous) situation and represents serious challenge. Thus, firms should create people oriented
skills such as problem solving and communication. In addition, decisions makers should develop an
accurate response when they meet the unexpected. They could be the employees from upper to midlevel position employees. Drawing on these critical conclusions, this study aims at providing
empirical evidence on the positive impact of employees’ soft skills on firm’s capabilities in terms ofinnovation performance, firm’s knowledge, explorative and exploitative behavior and strategic
flexibility. The survey was conducted with 67 firms based in Tunisia, which is one of the leading
emerging countries in the MENA region that has recently faced social and economic changes. Our
results concur with the employer survey and explain the reason why employers are increasingly
looking for these skills in their employees.
JEL classification
M12 Personnel management
Keywords
Soft skills, innovativeness, VUCA, Tunisia†

Ph.D. Student, Graduate School of Economics, Osaka University. abidi.dorra@gmail.com 06-6850-5247

Introduction
According to many strategy experts, today’s environment is described as VUCA: volatile, uncertain, complex andambiguous (Johansen & Euchner, 2013). Thus, managers need to carry out their firm’s strategy intelligently andskillfully to respond to today’s challenges. “Leaders, from CEOs to any other internal manager, therefore have amajor role to play in ensuring their organizations are responding to the requirements of the VUCA businessenvironment “(Sarkar and Sarkar, 2016, p.9). Thus, organizational growth depends on management judgment anddecision when they meet the unexpected, which also depends on their skills.
Skills could be technical skills (that require a field of expertise and involve working with specific type ofequipment, data, software, etc. (Laker & Powel., 2011) and soft skills (“refer to a broad set of skills, competencies,
behaviors, attitudes, and personal qualities that enable people to effectively navigate their environment, work wellwith others, perform well, and achieve their goals.” (Lippman et al., (2015, p: 4)). Laker and Powel (2011) report
the growing awareness of soft skills importance because technical skills, even for technical positions, are notsufficient for sustainable success beyond an entry level position.
The recent employers survey conducted by Manpower and Adecco emphasized the growing demand for such skillsby employers (Lippman et al, 2015) and the soft skills gap in today’s workforce (Handel, 2003; Hurrell, 2016;
ManpowerGroup, 2013). From the employers’ perspective, crucial soft skills include critical thinking,communication, teamwork, and work ethic (Lippman et al. 2015).
Similarly, soft skills have been also increasingly required by Tunisian businesses and more importantly after the
revolution. In 2012-2014, Tunisian firms have faced several labor issues because of the multiple protests andstrikes (Economist, 2012; Issa et al., 2014). Some managers failed to effectively communicate with theirsubordinates to solve HR issues, others also failed to implement new organizational changes and innovations
because of the resistance of the employees.
Most of empirical workforce researches focus on technical skills and most specifically in the industry field. Indeed,technical skills are important and directly linked to the firm’s performance. They are required for managerial andtechnical positions as well as for the entry level position in order to fulfill the assigned tasks. However, theresponsibilities of upper middle level positions include project management, team supervision, training andmentoring of subordinates, assigning work, ensuring consistent application of organizational policies, planning,
and undertaking strategic and procedural change such as innovations. So, employees technical and soft skills (suchas such as higher order thinking, social and communications) are both required to fulfill their responsibilities.
Furthermore, innovations highly depend on the management capabilities to develop, communicate and implement
the new ideas to their subordinates in both services and manufacturing fields (Lippman et al., 2015; Tether et al.,2005).
Recent surveys pointed out the importance of soft skills and the increase need of firms in soft skills. The result of2004 Scottish Employers Skill Survey (FutureSkillsScotland, 2005) suggests that soft skills are in short supply andshows that the four most lacking skills in UK were all ‘soft skills’.
However, empirical and theoretical studies have not fully determined the impact of employees’ soft skills on firm’s
capabilities such as innovation, knowledge and strategic flexibility. Similarly, the need of soft skills for innovation
has not been empirically addressed and the prior studies are still limited regarding soft skills and its impact oninnovation performance (Tether et al., 2005). Consequently, Tether et al (2005) carried out a literature review
about the interaction between innovation and skills and pointed out the need to examine the relationship between‘soft skills’ and innovation in both service and industry fields.
Thus, this research intends to study to what extent upper and middle level employees’ soft skills will impact thefirm’s capabilities in terms of innovation, behavior, knowledge and strategic flexibility. From this perspective, we
focus on managers, professional and technical employees.
Two areas of research are relevant to the present paper: VUCA and soft skills. The first refers to the importanceof employees’ soft skills for successful innovations, as well as on firm’s behavior, knowledge and strategic
flexibility. These last three capabilities are also considered by prior researches as stimulators for innovation.
Secondly, Tunisia is one of the emerging countries that experienced the social and economic uprising called“Jasmine revolution” in 2011. So, Tunisia is an interesting research site of VUCA environment. Finally, according
Tunisia Labor Market Study (Fhi360, 2015), Tunisian companies are struggling with internal labor issues andhighly demanding for upper and middle level employees possessing soft skills. Thus, many companies havereviewed their HR strategy to offer informal and formal training on soft skills to create better workplacecommunication and dynamism.

Literature Review
VUCA
VUCA is the acronym of four environmental aspects: volatility, uncertainty, complexity. It has been used in thepast by the US army and recently in the business lexicon because of the recent economic and social changes

1

(financial crisis and social revolutions) that make the next decade the most turbulent ever (Bennett & Lemoine,2014; Johansen & Euchner, 2013). As a result, managers face the uncertainty of business sustainability as well as
their workforce performance. Sarkar and Sarkar (2016) argue that upper and middle level employees are the key
actors in ensuring that their firms are accurately responding to VUCA environment requirements. Similarly,
Johansen and Euchner (2013) highlight the importance of thinking and acting differently within the organization.
They suggest that today’s managers need to develop new skills that will enable them to update their intuition andskills and fulfill their managerial responsibilities.
Tunisia is one of the leading emerging countries in the Middle East North Africa region (MENA). Since 1990,
Tunisia has opted for a progressive liberal economic approach and has pursued a development strategy based on
import substitution. Later, free trade agreements have been conducted to help the economy to enter the global
market. Moreover, Tunisia is experiencing rapid social and economic changes because of the jasmine revolution
and the democratic transition (Economist, 2012; Issa et al., 2014). In the present research, we focus on the VUCA
environment and we choose Tunisia as a research ground because of these multiple changes and the highly
unpredictable future.
Soft Skills
A skill is the ability to well execute tasks and most likely to be acquired through experience, education or training(Tether et al., 2005).It is widely related to the overall competence, expertise, knowledge that a person could possess.
In the business world, improving skills is as important as it is the main driver of performance and productivity(Tether et al., 2005). Skills take many forms. The most two common types of skills are technical/hard skills andsoft skills. Technical skills is the bundle of knowledge and technical facility that are required to execute one’s job
successfully. Soft skills refer to the overall skills and competencies that affect the person’s behavior and personal
characteristics in their interaction with their peers at the workplace. “These skills are broadly applicable andcomplement other skills such as technical, vocational, and academic skills” (Lippman et al., 2015, p.4).
Based on an extensive review of theoretical and empirical research, Lippman et al. (2015) develop five categories
of soft skills desired by the business community. 1) Social skills refer to the ability to behave and get along wellwith other people by respecting them, resolving any possible conflict, collaborating and relationship building. 2)
Communication skills consist of the overall workplace communication types (oral, written, non-verbal, andlistening skills). 3) Higher-order thinking refers to three abilities: problem solving, critical thinking and decisionmaking. 4) Self-control is the ability to delay gratification, control impulses, direct and focus attention, manage
emotions, and regulate behaviors. 5) A positive self-concept reflects self-confidence, self-efficacy, self-awarenessand beliefs, as well as self-esteem and a sense of well-being and pride. Other soft skills have been also sought byemployers and endorsed by researchers such as responsibility, and self-motivation but with less attention (Lippman
et al., 2015).
According to past research, employees’ soft skills play a major role in strengthening the firm’s capabilities
internally and externally. Whatever it is its typology, even innovation, involves developing non-technical skills(Tethter et al., 2005). For instance, developing empathetic relationships with the external environment is a corecomponent in the service field such as airline stewards (Williams, 2003). More importantly, the value added in theindustry sector does not only involve interaction between the service provider and the customer, but also theinteraction among employees to optimize communication and coordination in the workplace.

Hypothesis Development
Our research problem stresses the linkage between upper and middle level employees’ soft skills and the following
firm’s capabilities: innovation, knowledge capabilities, explorative and exploitative behavior, and strategic
flexibility.
Soft Skills and Innovation
Since the prior studies of Schumpeter (1934), innovation has been one of the most studied construct because of its
positive impact on a firm’s growth. It is the best tool to gain and sustain competitive advantages. It refers to theadoption of an idea or behavior that is new to the organization (Tamayo-Torres et al., 2010). Innovation has beenstudied not only as a simple decision rather than a learning and knowledge development process (Bouzid &Boughzala, 2010; Charreire, 2003). It refers to the improvement of an existing idea and/or the successful
exploitation of a new one. It could be by the development or improvement of product or process as well as thechange of organizational or marketing working methods that are intended for wealth creation and raisingprofitability (Mortensen & Bloch, 2005).
According to the European Community Survey 2001, the fourth most critical factor hampering innovation in
Europe is the lack of qualified employees (Lucking, 2004). Moreover, more than the fifth of employers reporting2

the skills gaps affirm that these gaps have delayed innovation delay in general and organizational innovation more
specifically (Lucking, 2004).
In theory, the importance of soft skills has been increasingly recognized across different businesses because it
positively impacts the performance through interdependency and team working (Vincent, 2011). Some recent
researches confirm the theory by exploring the impact of soft skills such as managerial and marketing skills on thefirm’s growth. For instance, the Cambridge Centre for Business Research survey confirmed that managerial andmarketing skills are crucial to SME’s growth in UK. Tether et al. (2005) explain these findings by the necessity ofmanagerial skills for successful innovation which is essential for growth. However, the direct impact of soft skills
and firm’s innovation performance has not been empirically addressed.
Organizational innovation refers to the change of management practices and/or organizational structure for more
efficient team work and organizational process. It includes two main stages: innovation development andimplementation.
The stage of innovation development requires skills such as higher order thinking (problem solving, criticalthinking). For instance, managers with high order thinking will be able not only to quickly identify anorganizational issue and collect information from multiple sources but also assess different options and develop areasonable solution (Lippman et al, 2015). Then, the implementation of an organizational innovation would
involve all the firm’s employees. In this case, managers will be in charge of innovation announcement andintroduction. The way the top management team communicates their decision in the workplace will affect theengagement of the overall employees. Consequently, strong general communication skills will lead to a higher
commitment degree, facilitate coordination and information flow between decisions makers which will help theinnovation to thrive. As a result, we assume that managers with stronger soft skills would positively impact theorganizational innovation.
H1: Upper and middle level employees’ soft skills are positively correlated with the organizational innovation
performance.
Soft Skills and Knowledge
The importance of soft skills has been addressed from different angles. Claxton et al. (2016) discuss the importanceof soft skills integration since the school stage. They argue that the development of students and teachers soft skills
will lead to positive interaction and practices which will in return contribute to the school’s improvement. For
instance, soft skills will enable teachers and students s not only to share their knowledge but also to strengthen it.
Similar to the school, the firm will be an interaction and learning workplace between managers and their teams
where soft skills contribute for a better interaction and exchange.
The firm’s knowledge is considered as an important intangible resource that can create a sustainable competitive
advantage and reinforce the firm’s capabilities (Hitt et al., 1999). Moreover, it helps the firm to have a moreaccurate view of the current and future market changes as well as take strategic and tactical decisions (Cohen &Levinthal, 1990).
The most common types of knowledge are the declarative knowledge (operational information e.g., monthly
financial data) and the procedural knowledge (know-how and expertise) (Lesgold, 1988). Following Gupta and
Govindarajan (2000) and Wiklund and Shepherd (2003), we focus on procedural knowledge which is theknowledge of organizational procedures (how to do things) and occurs by learning from experience with similar
situations (Lesgold, 1988). Procedural knowledge also involves the knowledge about markets and technology thathave strong impact on firm’s future decisions and performance since they boost the firm’s ability to predict market
changes, to exploit opportunities and act accurately. Thus, the greater is the firm’s knowledge, the more accurate
its innovations decisions would be. Furthermore, Nonaka (1991) argue that knowledge is the acute factor of
business success and the main innovation source, most particularly in highly uncertain environments.
However, "Knowledge of methods alone will not suffice; there must be the desire, the will to employ them. This
desire is an affair of personal dispositions" (Dewey & we Think, 1933, p. 30). In other words, the outcomes of theknowledge do not only depend of the knowledge’s quality but also the personal disposition and skills of the person.
Managers with high soft skills such self-positive concept and self-motivation would be more motivated to strive
for a better version of themselves and their company as well. They are more committed to their firm’s growth andwilling to share their knowledge.
Moreover, soft skills such as social skills and communication are essential for an effective sharing and coordination
processes. These skills will facilitate the transmission, understanding and the interpretation of the shared ideas andknowledge. Furthermore, managers with high soft skills are able to encourage employees to clearly communicate
their ideas, their work-strategy and how they can integrate all new ideas within the group. Thus, managers will not
only engage employees in a knowledge sharing process but also learn how to apply this knowledge to newsituations. Given such situations, managers will foster thinking and learning abilities among the firm andemployees will become more self-aware and more self-directed. These two factors will affect the firm’s knowledge
by sharing and learning from the past knowledge.
H2: The firm’s knowledge is positively associated with upper and mid-level employees’ soft skills.

3Soft Skills and Firm’s Exploitative Behavior
Exploitative organizational behavior refers to the use and refinement of existing knowledge and skills in thedevelopment of the new ideas to be implement by the firm (Lubatkin et al., 2006). Exploitation could occur by theincremental change of the existing technologies and marketing strategies that respond to the existing market’s
needs (Harry & Schroeder, 2000).
By definition, exploitation involves the treatment of the existing knowledge and occurs after building up the firm’sknowledge. However, knowledge collection and use both depends on the communication capabilities of employees.
Communication skills refers to the effective expression, transmission, understanding and interpretation ofknowledge and ideas (Lippman et al., 2015). Similarly, the level of communication will improve the quality of thefirm’s knowledge as well as the outcome of this knowledge.
Furthermore, managers with strong soft skills will discuss their current issues to generate solutions from the current
available information and knowledge. They will be more independent in solving work problems by employing
available resources and knowledge, thinking through steps of a task and making thoughtful decisions (Lippman etal., 2015). This would positively impact the knowledge exploitation process and improve their firm’s capabilities.
Thus, we assume that soft skills will facilitate the exploitation and fine-tuning of the firm’s current knowledge togenerate new insights applicable to new environmental changes.
H3: Upper and middle level employees’ soft skills positively impact the firm’s exploitative behavior.
Soft Skills and Firm’s Explorative Behavior
Lubatkin et al (2006) define organizational explorative behavior as the search and pursuit of new knowledge andskills to improve the firm’s capabilities. The explorative behavior implies both contradictory and complementaryknowledge processes to the exploitative behavior (Floyd & Lane, 2000). For instance, exploration takes places by
the development of new trajectories that could be technological or marketing (Nonaka, 1994).
Managers with high soft skills will communicate their ideas more effectively and smoothly with their team on the
one hand, and on the other hand, they will stimulate new knowledge generation by their ability to learn, thinkcritically and take initiative. Thus, they will look to improve their existing capabilities to explore new improvement
areas and making decisions accurately. These abilities are one of three soft skills that today’s firms seek in theiremployees (Fhi360, 2015).
In the VUCA world, environmental changes are fast and unexpected. In such a context, explorative behavior isconsidered essential because it strengthens the firm’s capability to respond more accurately and shape its
environmental trends (Lubatkin et al., 2006). For instance, managers with strong soft skills such as a positive selfconcept or higher order thinking, will demonstrate the ability to anticipate future changes, consequences andchallenges (Lippman et al., 2015). So, they would act more accurately in response to the new conditions. They
would also be most likely open to experience which is one of the big five personality factors that describe
intellectually curious people.
In this case, managers tend not only to look for new experiences and explore novelty, but also to be creative andthink differently (McCrae, 1987; Zhao & Seibert, 2006). Thus, managers with strong soft skills will take initiative,
prefer to be a fist mover and improve their firm’s capabilities by exploring new areas of improvement andknowledge.
H4: Upper and middle level employees’ soft skills positively impact the firm’s explorative behavior.
Soft Skills and Strategic Flexibility
For over two decades, the concept of strategic flexibility has gained a preeminent place in strategic management
researches. It refers to the ability of the company to respond to various demands from the changing competitiveenvironment (Sanchez, 1995).
Hitt et al. (1998) expand the above definition to point out its different aspects. The strategic flexibility refers to 3
abilities: to identify fast environmental changes, to allocate resources for new strategic choices in response toperceived changes and, to quickly respond when it is needed to stop or reverse its previously allocated resourcesto new choices (Hitt et al., 1998). Penrose (1959, p.24) who contributed highly to Resources Based View
researches, considers the firm as a collection of productive resources and denotes that "it is never resources
themselves that are the "inputs" in the production process, but only the services that the resources can render”.
Sanchez (1995, p138) stressed Penrose’s view by explaining that the term ‘services’ designates the way by which
the company uses its resources. Consequently, the firm’s strategic flexibility is obtained not only from theflexibilities aspects of its resources but also from its ability to allocate/ or assign them to alternative strategic
actions. In other words, the strategic flexibility is materialized jointly from the flexibility of its resources and its
coordination capabilities to effectively use its resources according to its specific strategic goal (Yuan et al., 2010).
Yuan et al. (2010, p302) argue, building on the literature of Sanchez (1995) that coordination flexibility consistsof the ability (1) to find new uses and/or new combinations of existing resources; (2) to find new uses and/or new
combinations of external resources; (3) to deploy resources rapidly through organizational systems and processes4to targeted uses; and (4) to cope with emerging problems effectively to increase the benefit from a fast changing
environment.
Given such features, decisions makers’ soft skills such as high-order thinking would influence positively the way
they find and use resources. More importantly, strong communications skills and high order thinking would be avaluable asset in a VUCA environment since it is important to quickly make and implement decisions that willallow the firm to benefit and/or avoid from the environmental opportunities and/or threats.
H5: Upper and middle level employees’ soft skills is positively associated with the firm’s strategic flexibility.

Research Method
Sample and Data Collection
Our study is based on a sample of 67 firms from four different sectors (Electronics, apparel, healthcare and retail).
A questionnaire was sent by email to managers of 480 firms in April 2016 and only 8 questionnaires have been
received. Given the low response associated with online questionnaire, we conducted direct interviews with 59
Tunisian executives within May and June 2016. Most Tunisian researches on firms have been based on face-toface meetings since it is the most efficient method to collect data in Tunisia even though it is more difficult to
conduct. Table 1 provides a description of our sample in terms of interviewees’ position, firm’s size and sector.
Table 1: Sample characteristics
SectorElectronics
ApparelHealth care
Retail23
26
13
5

Employees
20 – 100
100 - 199
200 - 499
500 - 999
>1000
N = 67.

13
13
25
7
9

Ownership
Familybusinesses
Non-familybusinesses

30
37Year of Establishment
1960-197910
1980-1989
8
1990-1999
25
2000-200919
2010-20155

Location
Tunis
Sfax
SousseMonastir
BizerteOther
Respondents
GeneralManagerCEO
Chief Officer
HR Manager

19
9
9
8
6
16

27
7
8
25

Variable Measurement
This study applies a quantitative approach that appraises each of the 6 research factors: managers’ soft skills,
innovation, firm’s knowledge, strategic flexibility, explorative and exploitative behavior.
Managers, professionals and technicians are the decisions makers in the firm and their decisions are driven by theirtechnical and soft skills. However, Claxton et al. (2016) assume that soft skills cannot be assessed using summative,
right-answer forms of assessment. Thus, assessing the overall managers’ soft skills of each enterprise is quitedifficult because such skills are never fully mastered. Furthermore, soft skills gaps is most likely be due toineffective organizational processes such as poor recruitment, selection and training practices (Hurrell, 2016).
Consequently, we assume employees who are taking soft skills training, possess higher soft skills than the ones
who are not. Following Bartel (1994), we measure the percentage of trained people among each of the employees’
categories in each firm in order to assess the level of soft skills in each firm.
During the interviews, we have described the notion of soft skills in order to avoid any misunderstanding or
confusion. We have also provided the following explanation of soft skills training in the questionnaire that havebeen sent: “Soft skills refer to the ability of employees to communicate and collaborate effectively with peers, toregulate behaviors and emotions, to think critically, to solve problems, and to exercise creativity in the executionof their daily job, to expand and develop communication and pedagogical skills and to understand and adjust toboth the formal workplace culture, social and work environment norms and to integrate both of these in relation
to their own personal goals, expectations and values”.
To identify upper and middle level positions, we used the guidelines of employees provided by Equal Employment
Opportunity Commission (EEO) as following: 1) Managers: set broad policies, exercise overall responsibility for5execution of these policies, and direct individual departments. 2) Professionals and technicians: Occupations
requiring at least 3 years of experience, college graduation or experience of such kind and amount as to provide acomparable background and combination of scientific knowledge.
Regarding organizational innovation, we explained and asked respondents to assess their firm’s organizationalinnovation compared to firms operating in the same sector (Ritala et al., 2015). It occurs when an organizational
methods or work procedures have been newly implemented or significantly improved.
The firm’s knowledge was measured using 1 item that is related to managerial capabilities (Wiklund & Shepherd,2003). Participants evaluated the firm’s management expertise compared to companies operating in the same field.
We chose this item because managerial capabilities is directly related to organizational innovation that our study
focuses on and we assume that it is affected by employees’ skills.
Explorative (E) and Exploitative (O) behaviors have been measured using items that have been tested by Lubatkin
et al. (2006) and Cingoz and Akdogan (2013). Respondents were asked to assess their agreement from 1 “strongly
disagree,” to 5 “strongly agree” with the following statements respectively: (E) The firm looks for novel ideas bythinking “outside the box”; (O) The firm continuously improves the reliability of its products and services.
Measures of strategic flexibility were collected from the survey conducted with managers. They assessed theiragreement from 1 “strongly disagree,” to 5 “strongly agree” with the following statement: the company’s strategyemphasizes versatility and empowerment in allocating human resources. This items has been used and tested by
Grewal and Tansuhaj (2001) and Nadkarni and Herrmann (2010) to assess strategic flexibility.

Data Analysis and Results
In the present study, we intend to appraise the impact of soft skills of decisions makers on the firm’s capabilities.
The main target groups are managers, professionals and technicians since they are directly or indirectly involvedin the decision making process that will affect the firm’s behavior and capabilities. Consequently, we seek tocompare between two groups of companies in term of their employees’ soft skills. We assume that the group 1
involves firms that are providing soft skills training to high proportion of their employees so their employees
possess high soft skills. In the contrast, group 2 includes firms that do not provide or provides soft skills training
to a low proportion of their employees and so their soft skills are lower than the first group’s employees.
Given such comparison, we have used the student test to compare between the two groups in terms of 5 criteria:organizational innovation, exploitative and explorative orientation, knowledge and strategic flexibility.
The survey instrument with 5 items representing each criteria was evaluated for content validity that refers to what
extent the instrument measures the concept the researcher intends to measure (Bagozzi & Phillips, 1982). The
current study considers three types of validity tests: content validity, construct validity, and criterion validity (Hairet al., 1998).
The validity analysis on measurement instruments is essential for multiple reasons. First, it provides confidence
that the empirical findings accurately reflect the proposed constructs. Second, empirically-validated scales can beused directly in other studies in the field for different populations and for longitudinal studies (Flynn et al., 1994).
Content validity is confirmed when there is general consensus among researchers that the instrument covers all
aspects of the variable being measured (Bohrnstedt, 1983). It is subjectively assessed by the researchers. In thisstudy, the measurement instrument was developed based on the literature and then approved with practitioners andresearchers. Thus, it is considered to have content validity.
Tests for the factor means. The means and standard deviations for the each of 5 factors with high or low soft skills
are shown in Table 2. Organizational innovation and firm’s knowledge have been assessed using a 7-point Likert
scale. Thus, the means indicates respectively 5.74 and 5.03 for firms with high proportion of trained employees
and between 4.69 and 4.21 for firms with low proportion of trained employees. However, the strategic flexibility,
exploitative and explorative behavior were measured by a 5-point Likert scale and the mean ranged between 4.11
and 3.26 for firms with high proportion of trained employees and between 3.92 and 2.19 for firms with low
proportion of trained employees.
Table 2. T-test ResultsGroup of firms with high proportion of trained employees: SS1 <- subset(df, SSH=="1") =35
Group of firms with low proportion of trained employees: SS2 <- subset(df, SSH=="0") =32
Factors
SS1
SS2
T-test pvalue
Mean
Sd
Mean
Sd
5.74
0.234
4.69
0.950
0.0009
H1: Organizational Innovation***6

F-testp-value
0.04

H2: Firm’s Knowledge**
H3: Exploitative Behavior*
H4: Explorative Behavior *H5: Strategic Flexibility *Manufacturing Sector†
Family Business*
Total Employees*

5.63
4.37
3.63
3.89
0.629
0.314
995

0.34
0.486
0.304
0.347
0.754
0.44
41.5

4.72
4.03
3.09
3.31
0.812
0.594
243

1.38
1.973
1.23
1.410
3.062
1.79
168.5

0.002
0.05
0.05
0.03
0.1
0.02
0.05

0.3
1
0.2
0.3
0.2
0.7
<2e-16

For 5-point scale, a score of 4 or more, between 3 and 4 or less than 3, indicates respectively a high, moderate or
low agreement with the factor (Rahman, 2000). Generally, results indicate that there is a high and moderateagreement for both groups.
In particular, strategic flexibility had the highest overall mean followed by the organizational innovation for both
firms with high and low proportion of trained employees, showing that employees soft skills play an importantrole in stimulating the strategic flexibility and innovation capabilities among these firms. The small standard
deviations indicate that there is general agreement on the role of strategic flexibility. Exploitative behavior had thethird highest overall mean rating followed by knowledge and explorative behavior for both firms.
The mean ratings of all factors indicates that there is a difference between the two groups of enterprises. The
t-test shown in table 2 indicates significant differences between the 2 groups of firms with high and low proportionof trained employees on soft skills. These results are consistent with all our hypothesis as well as the findings ofLippman et al (2015) and responding to the Tether et al. (2005). Our research is significant because it iscomplementary to other similar researches that have focused on developed countries; in contrast to our researchthat focuses on a more challenging environment such as the VUCA one.

Conclusion, Implications and limitations
Indeed, organizational performance is driven by the firm’s core activities such as the strategic planning. However,in today‘s world, VUCA conditions will most likely interfere with the firm’s strategic planning and so affect theorganizational performance. Thus, the full understanding of the future becomes impossible and the developmentof a detailed planning remains useless (Bennett & Lemoine, 2014). Under those circumstances, firms need to build
and strengthen their strategic capabilities (such as innovation, and strategic flexibility etc.) to be able to respondand benefit from the threats and opportunities of the changing environment.
In our study, we examine the impact of decisions makers’ (managers, professional and technical employees) soft
skills on the firm’s strategic capabilities. We focus on 5 capabilities that are valuable for the firm’s competitivenessin a VUCA world: innovation, explorative and exploitative behavior, knowledge and strategic flexibility.
To assess the value added of decisions makers’ soft skills, we have conducted a comparative analysis using the ttest. We compared two groups (1, 2) of firms with high and low proportion of trained employees. We assumed
that the employees in companies (group1) that are providing soft skills training possess a stronger soft skills thanthe ones that are taking training (firms group 2).
Our results show that the innovation, strategic flexibility, knowledge, exploratory and exploitative behavior
indicate a higher level in the companies with higher level of soft skills (high proportion of trained employees).
This group of employees is directly involved in the strategic decision making and their skills are essential for theorganizational performance. For instance, managers with high order thinking would think through steps of a
mission and anticipate challenges as well as the consequences of their decisions and their firm’s actions (Lippman
et al, 2015). This ability will allow them to make more accurate decisions for their firms in response to VUCA
changes. Similarly, strong communication skills are required to succeed in teamwork projects such asorganizational innovation, where professional and technical employees will coordinate and communicate on adaily basis to implement new organizational practices.
Prior theoretical and empirical studies that address the importance of employees’ skills for the organizational
performance, focuses on technical skills rather than soft skills. However, even in the developed countries like theUS, today’s workforce suffers not only from the lack of technical skills but most importantly from the lack of soft
skills. For instance, 44percent of the participant responses indicated soft skills, such as communication, criticalthinking, creativity, and collaboration, as the area with the largest US skills gap. Only 22percent cited a lack of7

technical skills as the culprit for the workforce skills gap: with leadership (14percent), and computer skills(12percent) (Adecco, 2013).
Despite the increasing need of soft skills by employers and employees, a limited number of studies have been
conducted. Moreover, the majority of those studies on soft skills needs, gap or shortage, are in the form of employer
surveys ( Lippman et al., 2015) without any focus on empirical evidence of the impact of the employees soft skillson the firm’s capabilities. In addition, some empirical researchers on soft skills have been mainly focusing on
developed countries (Lippman et al., 2015).
“For the most kinds of training, outcomes are as much organizational as individual” (Bishop, 1996). Althoughtechnical skills are important for the employer to hire employees, often it is their workforce soft skills that areneeded for a higher level position and sustainable growth. Our research explores the importance of soft skills in
Tunisia which is an emerging market in a post-revolutionary context. Our purpose was not to provide definitive
implications of the employees’ soft skills for firms or compare its output to the technical skills, but rather to focus
on how it contributes to workforce development in the VUCA world. With a specific focus on employees’ soft
skills, we demonstrate their possible impact on strategic capabilities of the firm. Our research did not focus on a
specific type of soft skills because there is no clear consensus about which soft skills are most critical for workforce
success (Lippman et al., 2015). So the assessment of each impact of the five soft skills on the firm’s capabilities
was not considered. However, our research suggests a key future research direction and could be extended into alarge-scale study. Such a study would develop a conceptual work of the impact of each type of soft skills andcontribute to the understanding of the kinds of soft skills required by organization and their business impact.

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