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Organisational flexibility in an emergent economy

By Andrés Hatum


The management literature has claimed that the complexity of business contexts has made firms confront hypercompetitive( D'Aveni, 1994) or high-velocity environments (Brown and Eisenhardt, 1997). Behind such claims lies a new interest in the dynamics of adaptation and in particular in a firm's flexibility as a way of adjusting under conditions of uncertainty (Volberda, 1999).\ud This study takes up the challenge of exploring the dynamics of organisational adaptation under the conditions of environmental volatility that characterised Argentina over the period 1989-1999. The empirical focus of the thesis is the study of the determinants of organisational flexibility in four family-owned companies: two flexible and two less flexible from the edible oil industry (i. e., a deregulated industry) and pharmaceutical industry (i. e., an industry in the process of deregulation).\ud By means of an innovative analysis (which includes longitudinal analysis, coding analysis, statistical analysis and the use of original display charts) we were able to show what determines whether an organisation is flexible. The findings of our case study were interrogated and interpreted by developing theoretical ideas from three areas of literature between which historically there has been no interface. These are the literatures on organisational flexibility, organisational innovativeness and institutional embeddedness. \ud In our empirical results we identified five determinants of organisational flexibility as a set of organisational and managerial capabilities that enabled some firms to adapt quickly in a highly competitive environment (i. e., heterogeneity of the dominant coalition, centralisation and formalisation of decision-making, low macroculture embeddedness, environmental scanning, and a strong organisational identity). The study also sheds light on the process of transformation and adaptation of family firms - an area that has not yet been the subject of extensive empirical inquiry (Aronoff and Ward, 1997)

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