This research project, which builds on the conceptual work of Henk Volberda on the flexible firm, empirically investigates four aspects of organizational flexibility. Our analysis of data of over 1900 firms and over 3000 respondents shows (1) that several increasing levels of organizational flexibility can be distinguished, from operational to strategic flexibility, and these are formed by increasingly complex components of organizations. (2) Flexibility pays off particularly in unpredictable and dynamic markets. In less turbulent markets it pays not to invest in the highest order type of flexibility; operational flexibility will be more efficient, compared to strategic flexibility, in predictable markets. (3) The assumption that smaller firms by definition are better able to develop strategic flexibility than larger firms are, appears not to hold completely. Large firms are able to develop strategic flexibility as well, be it through different means. Once sufficiently flexible, large firms are better positioned to reap the benefits. The study further, and finally, shows (4) that firms can apply two different criteria to adjust the organization to the environment and create strategic fit: by adjusting to the requirements of their unique task environment or by adjusting to more generic institutional norms and best practices in the market. Both ‘ways of learning by organisations’ affect each other and will in business reality exist next to each other.

Additional Metadata
Keywords contingency theory, dynamic capabilities, empirical analysis, environmental turbulence, firm size, organisation design, organisational flexibility, strategic fit
JEL Firm Behavior (jel D21), Firm Objectives, Organization, and Behavior: General (jel L20), Business Administration and Business Economics; Marketing; Accounting (jel M)
Promotor H.W. Volberda (Henk) , E. Verwaal (Ernst)
Publisher Erasmus University Rotterdam , Erasmus Research Institute of Management
Sponsor Rotterdam School of Management (RSM) Erasmus University Rotterdam (EUR) Prof.dr. ing. F.A.J. van den Bosch Dr. H.J. Bruining Prof.dr. R.M. Burton Prof.dr. P.M.A.R. Heugens Prof.dr. A.J. Verdu Jover Prof.dr. E.J. Zajac
ISBN 978-90-5892-215-1
Persistent URL hdl.handle.net/1765/16182
Series ERIM Ph.D. Series Research in Management
Citation
van der Weerdt, N.P. (2009, June 23). Organizational Flexibility for Hypercompetitive Markets (No. EPS-2009-173-STR). ERIM Ph.D. Series Research in Management. Erasmus Research Institute of Management. Retrieved from http://hdl.handle.net/1765/16182