Building the Flexible Firm

Henk Volberda

Volberda's book brings together much that has written on strategic management thinking over the last thirty or forty years, and doesn't pretend to offer simple solutions to complex problems, unlike so many of the highly successful and popular books which feature on most managers' shelves. What it does offer is a thorough-going analysis of the nature of flexibility and well worked out programme for action to develop flexibility in organisations.

When Peters and Waterman published In Search of Excellence in 1982 they started a trend for management authors to become stars, commanding enormous fees for advising companies on how to implement the latest management idea. They also introduced the 'curse of the management guru' - be held up as a model of best practice and watch your sales and profits slide! Simplified versions of complex ideas have all too easily been presented as THE solution to management problems, and when they fail, are written off. TQM and Business Process Re-engineering have both been victims of this 'instant success' hype.

Is 'flexibility' just another reworking of old ideas? Volberda, Professor of Strategic Management and Business Policy at Erasmus University, argues convincingly that is far more than that, although it builds on many existing ideas. He describes flexibility as being both a management task (Are managers able to respond at the right time and in the right way?) and an organisation design task (Can the organisation react at the right time in the directed way?). Managers have a key responsibility, at all levels, to make flexibility a reality, but cannot do so if the organisation is not properly geared to the demands placed on it.

For Volberda, flexibility is the response to the increasingly competitive changes in the environment (for both public and private sector organisations) and changes in the dominant mode of management thinking. This latter is particularly closely argued, and provides the reader with a thorough review of the all the most significant writers on organisation theory over the last few decades - and provides a useful introduction to the topic for anyone new to the subject and for many of us wanting to refresh our memories and to gain an coherent overview of competing theories.

Perhaps the most significant contribution which Volberda makes to a fuller understanding of what determines an organisation's flexibility is the Flexibility and Audit Redesign (FAR) system, an audit system which analyses an organisation's ability to respond flexibly, using the dimensions of:

• environmental turbulence (the external pressures for change);
• organisational flexibility (organisational procedures and strategies);
• technology (production processes);
• structure (organisational form and management); and
• culture (organisational identity, leadership style and external orientation).

The profile of an organisation which results, identifies the potential for flexibility and points clearly at the areas in which changes are needed to enable flexibility to develop. Case studies of three organisations (the Dutch Postbank, Philips Semiconductors and the Dutch Gas Company) show how FAR was used to identify their current state and inform the development activities which enabled them to develop much greater operational flexibility.

Managers on Diploma programmes or candidates working towards Level 5 S/NVQs will find that this demanding but insightful book can challenge their thinking about their role in determining organisational flexibility. Centres which offer consultancy services to public and private sector organisations may find that this book opens up a completely new set of opportunities for them in providing services to their clients (particularly given the details of the FAR audit instrument). There will be few practitioners who, having read Volberga's though-provoking analysis, will not feel that meeting the challenge presented by the book has not been worth the effort.

by Henk Volberda (Oxford University Press: 1998 £25.00)

Review from 'Progress' published by NEBS Management, June 1998