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Organizational Flexibility

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What Is Organizational Flexibility?
Flexibility is the ability to adapt when confronted with new circumstances. A flexible organization defends quickly against threats and moves rapidly to take advantage of opportunities.
Flexibility provides the organization with the ability to adapt to change and respond quickly to market forces and uncertainty in its environment.
Technology changes the pace of work. It has speeded up order routing and processing on the stock exchange. Technology can also be used to shorten product development cycles.
In general, technology speeds up the pace of work and increases the capacity of the organization to process information.
What Is Organizational Flexibility?
With properly designed systems, the organization can increase its ability to respond to customers, competitors, and the environment in general.
Click the Icons

1.
Information Technology alters the space and time boundaries of work. Using electronic mail and computer conferencing, colleagues working on a project do not have to be in the same physical location.


2.
People who work together in the same office can communicate easily if traveling. With a laptop, you can conduct some kinds of business from virtually any location at any time of the day or night.
Technology has the ability to change the pace of work and to alter time and space boundaries for work. These impacts of technology can be seen as increasing organizational flexibility.
Creating New Types of Organizations
Technology makes it possible to create new forms of organizations through the use of different design variables.
A variable is something that takes on different values. For example, one calculates the interest payment (P) on a simple loan by taking the interest rate (0 times the loan's outstanding balance (B) or P = I B. In this equation, P, i, and B are all variables; they can take on different values. The interest rate might vary for different customers or types of loans. Obviously the outstanding balance will differ among loans.
Creating New Types of Organizations
For organizations, we have design variables like the span of control, a number that can take on different values. Span of control refers to the number of people that a manager is responsible for. An organization that has chosen a span of control of 7 subordinates for each manager will be hierarchical while one that chooses a span of 20 will be much flatter.
Information Technology is defined to include computers, communications, video conferencing, artificial intelligence, virtual reality, mobile phones and tablets, etc.
The problem with conventional organization design literature is its failure to recognize the new design variables enabled by information technology. In the case of linking mechanisms, IT such as e-mail or groupware can be used instead of conventional solutions such as task forces or liaison agents.
On the next slide we will look at some conventional variables and IT variables according to their different classes within the organization.
Conventional and IT Design Variables
Drag the variable class to the blank to read about the different conventional design variables and the IT design variables used by the organization. To clear, replace the variable class.
1. Structural

2. Interorganizational Relations

3. Communications

4. Work process
IT Design Variables
 Virtual components

 Linking mechanisms

 Electronic linking

 Technological levelling
Conventional design variables

 Definition of organizational subunits

 Determining purpose, output of subunits


 Reporting mechanisms

 Linking mechanisms

 Control mechanisms

 Staffing


Conventional Design Variables

 Make vs Buy decision

 Exchange of materials

 Communications mechanisms
IT Design Variables

 Electronic customer/supplier
relationships

 Electronic linking

Conventional Design Variables

 Formal channels

 Informal communications /
collaboration
IT Design Variables

 Electronic communications

 Technological Matrixing

 Electronic customer/supplier
relationships

Conventional Design Variables

 Tasks

 Workflows

 Dependencies

 Output of process

 Buffers
IT Design Variables

 Production automation

 Electronic workflows

Creating New Types of Organizations
The new IT-enabled variables may be totally distinct from traditional design variables. IT-enabled variables may also be an extension of traditional variables, as in the case of linking mechanisms.
Conventional design variables drawn from the literature on organization design are contrasted with new kinds of IT design variables.
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1. Structural
Virtual components

The organization can use IT to create components that do not exist in conventional form. For example, some manufacturers want parts suppliers to "substitute" for their inventory. The supplier is linked through electronic data interchange with the manufacturer. Using overnight delivery, the supplier provides parts to the manufacturer just as they are needed for production. The manufacturer now has a virtual raw materials inventory owned by the supplier until it arrives for production.
Electronic linking

Through electronic mail, electronic or video conferencing, it is possible to form links within and across all organizational boundaries. New workgroups form quickly and easily. Electronic linking also facilitates monitoring and coordination, especially from remote locations.
1. Technological levelling
IT can substitute for layers of management and for a number of management tasks. In some bureaucratic organizations, layers of management exist to look at, edit, and approve messages that flow from the layer below them to the level above. Electronic communications can eliminate some of these layers.
In addition, a manager's span of control can be increased since electronic communications can be more efficient than phone or personal contact for certain kinds of tasks, particularly those dealing with administrative matters. Technology makes it possible to increase the span of control and possibly eliminate layers in the organization, levelling it in the process.
3
2. Work Process
Production automation
The use of technology to automate manufacturing processes is well documented in magazines and newspapers. IT is also used extensively for automating information processing and assembly line tasks in the financial industry. In cases where the product of a firm is information, IT is the factory.
Electronic workflows
Interest in process reengineering has led to the development of workflow languages and systems. As organizations eliminate paper and perform most of their processing using electronic forms and images, workflow languages will be used to route documents electronically to individuals and workgroups that need access to them. Applications that can traverse networks to find information and carry messages will facilitate electronic workflows. Electronic workflows also contribute to the monitoring and coordination of work.
4
3. Communications
Electronic communications
Electronic mail, electronic bulletin boards, and fax all offer alternatives to formal channels of communications.
Technological Matrixing
Through the use of e-mail, video and electronic conferencing, and fax, matrix organizations can be created at will. For example, a company could form a temporary task force from marketing, sales, and production using e-mail and groupware to prepare for a trade show; participants would report electronically to their departmental supervisors and to the team leader for the show, creating a matrix organization based on technology.
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4. Interorganizational Relations
Electronic customer/supplier relationships

Companies and industries are rapidly adopting electronic data interchange (EDI), Internet, and Intranet technologies to speed the ordering process and improve accuracy. These technologies help the organization monitor and coordinate relationships with other organizations, for example, firms acting as virtual components. It is interesting to note that there is no specific IT variable next to the traditional variable "control mechanisms."
Firms have used information systems to provide control after the organization has been designed. Examples include budgets, project management applications, and similar monitoring systems. For example, Mrs Fields Cookies uses a variety of traditional and IT variables in creating an organization with extensive controls. However, even in this case, there is no one IT control variable in the design.

Click the numbers to read about the variables.