The Law of Requisite Variety and the Organizational Performance: An Empirical Analysis of the Pakistani Cellular Sector

D’Aveni (1994) states that environmental uncertainty is creating such a situation where means and ends relationships are unknown and survival is in danger. Now question arises how firms can route towards better performance and sustainability? The top management demography (Milliken and Martins, 1996), learning (Dodgson, 1993 and Meyer, 1982), and innovation (Russell and Russell, 1992), researchers endorse that in volatile environment creating and maintaining requisite variety is pre requisite for learning, innovation and better performance. Current study is an effort to check out the effect of requisite variety on organizational learning and innovation directly and on performance directly as well as indirectly through mediation of learning and innovation in cellular sector of Pakistan. Results show that requisite variety has direct and significant impact on learning and innovation whereas, direct effect of requisite variety could not be verified on performance, however model highlights that it influences the performance through the mediation of learning and innovation.