Building the Flexible Firm: How to Remain Competitive

Building the Flexible Firm: How to Remain Competitive

Building the Flexible Firm: How to Remain Competitive

Building the Flexible Firm: How to Remain Competitive

Synopsis

How do firms cope with changing environments? Is flexibility really the solution? How can we measure a firm's flexibility? Can a more flexible firm be created? Based on an Igor Ansoff Award-winning study and now available for the first time in paperback, Henk Volberda's Building the Flexible Firm shows how flexibility has become the new strategic challenge for contemporary firms. Although traditional organizational forms have worked well in the relatively stable environments of the past, the globalization of markets, rapid technological change, shortening product life cycles, and increasing aggressiveness of competitors have radically altered the ground rules for competing in the 1990s and beyond. Increased competition forces firms to move more quickly and boldly than before, and to experiment in ways that do not conform to traditional administrative theory. This book offers a wealth of insights into the way firms can increase their flexibility. It is based on extensive interviews with practitioners and supported by many longitudinal case studies on flexibility improvement within large corporations. The author provides a strategic framework which explains what types of flexibility are effective under different organizational conditions and environmental characteristics. He also demonstrates an integrated method for diagnosing a firm's flexibility and for guiding the transition to greater flexibility and responsiveness.

Excerpt

As a researcher and consultant, I have studied a variety of organizations for more than ten years. in this voyage of discovery, I have been struck by the conflicting forces of change and preservation. How do firms promote order and control, while having to respond, innovate, and learn? As a new graduate in Business Administration, I was impressed by the highly sophisticated structures, the elaborate planning and control systems, the formal job descriptions, and strong corporate values of most of the companies I studied. None the less, these successful firms of the 1970s and early 1980s, still focusing on stability and preservation, had tremendous problems with accelerating competitive change. Some years later, I was surprised by the loose structures, emergent strategies, and weak corporate values of the consulting firms, universities, service firms, and research and development (R&D) institutions I worked for. Although they showed a remarkable capacity for change, innovation, and creativity, they did not have the strategic vision nor coherent culture to efficiently implement change. Despite the clear benefits of these extreme forms, I was convinced that there was a better way to organize that could combine the best of both worlds: the flexible firm. the flexible firm facilitates creativity, innovation, and speed, while maintaining coordination, focus, and control.

Nowadays, changing competitive environments are forcing companies in almost every sector to re-examine their organizational form. There seems to be a growing consensus among managers that the path to future forms of organizing leads away from traditional prescriptions advocating top-down control, rationality, and hierarchy. Managers and practitioners are heralding flexibility as the new hallmark of organizational excellence. Moreover, the business literature on organizational change is replete with prescriptions and directives with regard to the design and management of new organizational forms. Characteristics of such new forms seem to include flatter hierarchies, decentralized decision‐ making, greater tolerance for ambiguity, empowerment of employees, capacity for renewal, and self-organizing units.

Despite all the business literature offering these signposts for flexible forms, there is relatively little theory on flexibility. Managers in today's competitive environment are engaged in organizational experiments without the guidance of an appropriate theory or framework. of course, numerous management gurus have . . .

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