Organizational flexibility

Organizational flexibility
7 min read

Organizational flexibility

The organizational flexibility model, which was designed by Volberda, a professor of strategic management at the Erasmus University of Rotterdam, the Netherlands, guides management in the direction of understanding and identifying different types of flexibility and creating and maintaining flexible organizations.

Volberda's doctoral thesis was published in 1992 and was awarded the Igor Ansov Strategic Management Award the following year. His rationale for studying organizational flexibility was to provide a synthesis of many alternative approaches to flexibility. Flexibility had become a very popular topic in business by the late 1980s, as it was seen as an effective response to short-term product cycles and increasing diversification of market demand, but the concept lacked a solid theoretical foundation. After productivity in the 50s and 60s and quality in the 70s, early 1980s organizational flexibility was widely considered as the third wave of competition.

A review that included research areas such as corporate strategy, organizational-environmental relations, organizational learning, innovation, and entrepreneurship showed that flexibility represents a paradox between maintenance and change. On the one hand, organizations try to fully utilize current procedures, but on the other hand, they need to develop new skills dynamically.

The organizational flexibility model includes five building blocks. Three forces determine how to resolve the flexibility paradox: managerial capabilities, organizational design, and the impact of changing competitive forces. Management shapes current flexibility. Organizational conditions determine the potential for flexibility, and competitive forces determine what is needed. The level of inflexibility determines how quickly the flexibility compound can be adjusted over time. In response to how these aspects of flexibility interact with each other, organizations develop different organizational forms over time. The Importance of Flexibility as An Entrepreneur

  1. Management capabilities

The challenge of managing flexibility is to create a sufficient number and a combination of procedures to increase flexibility so that the organization can deal with issues in a timely and effective manner. Volbarda's model includes six types of control methods in this flexible combination. He begins by distinguishing between internal and external methods. Internal procedures focus on the organization trying to adapt to its environment. External procedures are defined as the managerial capacity to influence and control this environment. In both categories of internal and external procedures, three types of flexibility have been identified:

  • Organizational flexibility

Frequent, small and short-term changes are related to operational activities. These should be proportionate to the volume and mix of activities without significantly affecting the relationship between the organization and its environment. The goal is to create a perfect fit between the organization and its environment through a well-defined set of routines.

  • Structural flexibility

Management's ability to adapt the structure of the organization and its decision-making and communication processes in order to match the changes in the environment or create changes in the structure of the environment.

  • Strategic flexibility

It refers to the control procedures that must be related to the goals of the organization or its environment. This is rarely the case, and only in situations where the changes are unfamiliar and the outcome has a potentially large impact. For example, new technology platforms, new product-market portfolio, or new laws that dramatically change the competitive landscape. Conventional answers do not work to deal with this problem. Information is by definition soft and fuzzy.

The combination of these flexibilities constitutes the real flexibility of the organization. The Importance of Flexibility as An Entrepreneur

  1. Organization design

The organizational design includes the potential for organizational flexibility. This limits the form and contents of the real flexibility composition. Potential flexibility requires a change in two situations: when the required flexibility mix is ​​too small, a redesign effort aimed at eliminating organizational conditions, or when the required flexibility mix is ​​too large, rational justification to avoid chaos. It is essential. Volberda identified three main components that influence potential resilience. The three parts operate independently, but influence each other over time.

  • Technology

Organizational technology transforms inputs into outputs and includes hardware such as equipment, software as well as component skills and methods. Hardware and software configuration has also been considered. Technology varies from repetitive to non-repetitive.

  • Structure

Organizational structure is formed through hierarchical distribution of responsibilities and authority, planning and control systems, as well as coordination and informal decision-making.

  • Culture

Organizational culture is a system of ideas shared among organizational members and can range from conservative to innovative.

The managerial challenge is to provide the right technological, structural and cultural conditions to create a potential flexibility that can achieve the necessary combination of flexibility.

  1. Changing competitive forces

Turbulence in the organization's environment determines whether the combination of actual flexibility is sufficient or the potential flexibility of the organization. If the environment is stable, low flexibility is sufficient. The environment is divided into four levels:

The level of turbulence is determined using three subcategories:

  1. Complexity – includes both the number of elements in the environment as well as the level of internal communication.

  2. Dynamics – refers to both the rate of change in the environment and the intensity of change.

  3. Unpredictability – Management can anticipate changes when they occur in a linear or cyclical fashion, reducing the need for flexibility. Forecasting the future becomes more difficult when information is obscured by management oversight or simple unavailability.

The three dimensions are not of equal importance. Predictability has the highest weight and complexity has the lowest weight. The environmental component determines the required flexibility.

  1. evolvability

Flexibility involves creating, integrating, and using flexible procedures in a flexible way, or how can an organization develop new procedures or eliminate existing procedures while incorporating flexibility? Adaptability describes how a good fit between the environment and the organization can be maintained.

  1. Forms of organization

Volberda identified four forms of using a combination of flexibility and controllability: rigid, planned, flexible, and disordered organization. Using these ideal types, two paths of change emerged:

  1. The process of routinization

Every new organization begins as a disorderly organization that can be transformed into a flexible organization through strategic focus. Management's ability to process information and the environment allows for more and better methods to reduce the likelihood of fundamental changes and increase the predictability of the organization's behavior.

  1. The revival process

Through a process of professional revitalization that focuses on overcoming traditions and conservatism, an organization can begin to develop from a rigid organization to a planned organization. The revival of entrepreneurship, which includes leadership by entrepreneurs, removing process regulations and introducing freely structured organizational forms, allows the organization to migrate from a planned stage to a flexible stage. And thus, strategic neglect can turn an organization into chaos.

Oliver Reed 95
Joined: 7 months ago
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