Organisational Flexibility: a simulation model Martin Kunc, WBS & Amaia Sopelana, PhD student in University of the Basque Country (UPV/EHU) and researcher in TECNALIA R&I [email protected] 31 31 st st International Conference of the System Dynamics International Conference of the System Dynamics Society in Cambridge, Massachusetts. July 21-25 (2013) Society in Cambridge, Massachusetts. July 21-25 (2013)
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Organisational
Flexibility: a
simulation modelMartin Kunc, WBS & Amaia Sopelana, PhD student in University of the Basque Country (UPV/EHU) and researcher in TECNALIA R&I [email protected]
3131stst International Conference of the System Dynamics International Conference of the System Dynamics Society in Cambridge, Massachusetts. July 21-25 (2013)Society in Cambridge, Massachusetts. July 21-25 (2013)
Contents •Introduction •Theoretical Background•SD model •Simulation findings•Conclussions & future steps
3131stst International Conference of the System Dynamics Society in Cambridge, Massachusetts. July 21-25 (2013) International Conference of the System Dynamics Society in Cambridge, Massachusetts. July 21-25 (2013)
Introduction
Main motivation of the research is twofold:•Partial analysis of organizational flexibility and its components may cause change strategies to be misunderstood and not effectively implemented. •The absence of temporal dimension in such analysis hinders the identification and evaluation of the core constraints affecting change at enterprise level.Considering the complexity concerns and the lack of comprehensive modelling of the 'organisational flexibility' concept, this paper attempts to use system dynamics modelling (Sastry, 1997) to develop a more robust theoretical description.
Introduction: Research motivation Introduction: Research motivation
Theoretical background
Theoretical Background: Volberda’s TheoryTheoretical Background: Volberda’s Theory
Changing com petitive forces
Changing Changing com petitive forcescom petitive forces
Sufficiency ofFlexibility Mix Sufficiency ofFlexibility Mix
Adequacy of organizational design
Adequacy of organizational design Absorptive Capacity Absorptive Capacity
Managerial Task
Organizational Design Task
Environmental S canning
Changing Flexible Form sChanging Flexible Form sChanging Flexible Form s
Organizational Flexibility
Organizational Flexibility
MetaflexibilityMetaflexibility
Environm ental Turbulence Environm ental Environm ental Turbulence Turbulence
Organizational Organizational ResponsivenessResponsiveness
Extensiveness Extensiveness of Flexibility of Flexibility
MixMix
Changing com petitive forces
Changing Changing com petitive forcescom petitive forces
Sufficiency ofFlexibility Mix Sufficiency ofFlexibility Mix
Adequacy of organizational design
Adequacy of organizational design Absorptive Capacity Absorptive Capacity
Managerial Task
Organizational Design Task
Environmental S canning
Changing Flexible Form sChanging Flexible Form sChanging Flexible Form s
Organizational Flexibility
Organizational Flexibility
MetaflexibilityMetaflexibility
Environm ental Turbulence Environm ental Environm ental Turbulence Turbulence
Organizational Organizational ResponsivenessResponsiveness
Extensiveness Extensiveness of Flexibility of Flexibility
MixMix
Figure 1 Components of organisational flexibility (adapted from Volberda, 1998)
On Organizational Flexibility context, On Organizational Flexibility context, Volberda anticipated the possibility of Volberda anticipated the possibility of modelling the adaptation process from a modelling the adaptation process from a dynamic point of view: dynamic point of view: “Flexibility is not a static condition, but it is a dynamic process. Time is a very essential factor of organizational flexibility.” (1998: (1998: 235). 235).
Theoretical Background Theoretical Background
SD model
ORGANIZATIONAL FLEXIBILITY
FLEXFORM
Extensivenessof flex mix CHANGE in
Exten FM
ResponsivenessCHANGE inResponsiveness
Pressure tochangeINCREASE
PChDECREASE
PCh
FractionalDECREASE PCh
ImplementationTime
EnvironmentalTurbulence
perceived ET
M etaflexiblity
perceived ETchange
Change inM etaflex
<ImplementationTime>
Sufficiency offlex m ix
B1-A
Adequacy ofO rg design
B1-B
absorptive-capacitym anagem ent
R1
SD Model: Formalization SD Model: Formalization Model according to Model according to Volberda’s OF TheoryVolberda’s OF Theory
SD Model: Formalization SD Model: Formalization
ORGANIZATIONALFLEXIBILITY
Ability to changethe Flex form
FLEXFORM
EnvironmentalTurbulence
perceived ET
M etaflexiblity
PerceptionTime
perceived ETchange
absorptive-capacitym anagem ent
R1
Pressure tochange
Extended Extended Model Model
SD Model: Formalization SD Model: Formalization Extended Extended Model Model
Extensiveness offlex mixCHANGE in
Exten FM
ResponsivenessCHANGE inResponsiveness
FLEX FORM
Pressure to change
ImplementationTime
B1-A
B1-B
Adequacy ofO rg design
Sufficiency offlex m ix
ORGANIZATIONALF LEXIBILITY
SD Model: Formalization SD Model: Formalization
Extended Extended Model Model
ORGANIZATIONALF LEXIBILITY
Ability to changethe Flex form
Pressure tochange
Resistanceto change
Increase R toCH
Decrease Rto CH
Fractional DECREASEResistance
FractionalINCREASEResistance
Gap inResistance
Resistancegoal
O rganizationalreaction to changes
R2
Simulation findings
Simulation: Base Case – Simulation: Base Case – routinization routinization
Pressure to change0
-0.5
-1
-1.5
-20 6 12 18 24 30 36 42 48 54 60
Time (M onth)
Pressure to change : Base Case_rout Dmnl
Simulation: Base Case – Simulation: Base Case – revitalizationrevitalization
4
Required vs Current Flexible Form4
3.5
3
2.5
20 6 12 18 24 30 36 42 48 54 60
Time (M onth)
Dmnl
FLEX FORM : a1Environmental Turbulence : a1
ORGANIZATIONAL FLEXIBILITY0
-0.15
-0.3
-0.45
-0.60 6 12 18 24 30 36 42 48 54 60
Time (M onth)
Dmnl
ORGANIZATIONAL FLEXIBILITY : a1
Pressure to change0.8
0.6
0.4
0.2
00 6 12 18 24 30 36 42 48 54 60
Time (M onth)
Dmnl
Pressure to change : a1
Simulation : Extended modelSimulation : Extended modelORGANIZATIONAL FLEXIBILITY
0.2
0.1
0
-0.1
-0.20 6 12 18 24 30 36 42 48 54 60
Time (M onth)
Dmnl
ORGANIZATIONAL FLEXIBILITY : Extended m odel_routORGANIZATIONAL FLEXIBILITY : Extended m odel_revit
FLEX FORM4
3.5
3
2.5
20 6 12 18 24 30 36 42 48 54 60
Time (M onth)FLEX FORM : Extended model_routFLEX FORM : Extended model_revit
Pressure to change0.4
0.2
0
-0.2
-0.40 6 12 18 24 30 36 42 48 54 60
Time (M onth)
Dmnl
Pressure to change : Extended model_routPressure to change : Extended model_revit
PropositionsPropositions
Summary of Propositions Generated from Simulation Experiments
Proposition
Firm’s characteristics
Impact on OF
P1 ‘Perception time’ affects impact of Metaflexibility
Favors less accurate perception of ET.
P2 Extra time will be needed to effectively implement and transmit the changes.
Allows to predict the changes by considering the delay
P3 Ability to change is influenced by the resistance to change
Some change strategies cannot be implemented or are implemented without success
Conclusions
The research contributes with a more robust OFtheory The simulation experiments demonstrate that the impact
of change strategies on OF is non-linear and complex in nature
Dynamic propositions support Volberda’s theory and complement the transition guidelines proposed by Volberda.
FUTURE STEPS: In order to search for evidence of the implementation
of flexibility practices: empirical validation of Dynamic Propositions will be provided by a longitudinal industrial field study of seven engineering enterprises during the period 2004-2011
A qualitative analysis of the empirical data and SD simulation results on such an empirical data will be compared to support the contribution of SD modelling to the dynamic analysis of an organisational theory.
ConclusionsConclusions
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