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Two measures of organizational flexibility

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  • Guido Fioretti

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    Abstract

    Since the second half of the past century, increasingly flexible organizational forms have been appearing among firms. However, while hierarchies are easily described, too few mathematical tools are available for flexible organizations. In this article, two measures are proposed in order to assess the state and trend of flexible organizations. The first of these measures is based on information waste, which occurs whenever information is classified into categories. The second measure is based on duplication of operations. The underlying idea is that firms have an endogenous drive towards organizational configurations where waste of information and duplication of operations are minimized. However, environmental uncertainty may require some flexibility, which is ensured by cognitive processes that discard some information as well as by parallel undertaking of similar actions. Copyright Springer-Verlag 2012

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    File URL: http://hdl.handle.net/10.1007/s00191-011-0229-1
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    Bibliographic Info

    Article provided by Springer in its journal Journal of Evolutionary Economics.

    Volume (Year): 22 (2012)
    Issue (Month): 5 (November)
    Pages: 957-979

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    Handle: RePEc:spr:joevec:v:22:y:2012:i:5:p:957-979

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    Web page: http://link.springer.de/link/service/journals/00191/index.htm

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    Related research

    Keywords: Flexible organizations; New organizational forms; Firm restructuring; Theory of the firm; D23; L20;

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    1. Marengo, L, 1992. "Coordination and Organizational Learning in the Firm," Journal of Evolutionary Economics, Springer, vol. 2(4), pages 313-26, December.
    2. Sah, Raaj Kumar & Stiglitz, Joseph E, 1988. "Committees, Hierarchies and Polyarchies," Economic Journal, Royal Economic Society, vol. 98(391), pages 451-70, June.
    3. Oberg, Achim & Walgenbach, Peter, 2008. "Hierarchical structures of communication in a network organization," Scandinavian Journal of Management, Elsevier, vol. 24(3), pages 183-198, September.
    4. Van Zandt, Timothy, 1995. "Hierarchical computation of the resource allocation problem," European Economic Review, Elsevier, vol. 39(3-4), pages 700-708, April.
    5. Aoki, Masahiko, 1986. "Horizontal vs. Vertical Information Structure of the Firm," American Economic Review, American Economic Association, vol. 76(5), pages 971-83, December.
    6. Mathias Dewatripont & Patrick Bolton, 1994. "The firm as a communication network," ULB Institutional Repository 2013/9595, ULB -- Universite Libre de Bruxelles.
    7. Bengt Holmstrom & John Roberts, 1998. "The Boundaries of the Firm Revisited," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 73-94, Fall.
    8. Raaj Kumar Sah & Joseph E. Stiglitz, 1987. "The Architecture of Economic Systems: Hierarchies and Polyarchies," NBER Working Papers 1334, National Bureau of Economic Research, Inc.
    9. Gianmario Verona & Davide Ravasi, 2003. "Unbundling dynamic capabilities: an exploratory study of continuous product innovation," Industrial and Corporate Change, Oxford University Press, vol. 12(3), pages 577-606, June.
    10. Ravasi, Davide & Verona, Gianmario, 2001. "Organising the process of knowledge integration: the benefits of structural ambiguity," Scandinavian Journal of Management, Elsevier, vol. 17(1), pages 41-66, March.
    11. Sah, Raaj Kumar & Stiglitz, Joseph E, 1985. "Human Fallibility and Economic Organization," American Economic Review, American Economic Association, vol. 75(2), pages 292-97, May.
    12. Radner, Roy, 1993. "The Organization of Decentralized Information Processing," Econometrica, Econometric Society, vol. 61(5), pages 1109-46, September.
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    Cited by:
    1. Frolov, Daniil & Shulimova, Anna, 2014. "The Institutionalization of Socio-Responsible Business: Global Trends and Regional Features," MPRA Paper 54963, University Library of Munich, Germany.

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