The best equilibrium in organizational flexibility-stability continuums

Abstract

Purpose This work aims to analyse the flexibility-stability continuum and explore the question of where the best equilibrium lies on this continuum and to what extent it can be realized. Design/methodology/approach After analysing the concepts of flexibility and stability, along with their trade-off relationship, from a theoretical standpoint, the optimum in the flexibility-stability continuum is determined by means of a triangulation of theories. The subsequent operation to determine best possible practice is also accomplished via a theoretical analysis. Findings Organizational flexibility and stability are two poles of a continuum that are interdependent. The optimum in a flexibility-stability continuum lies, according to Gossen's first law, where marginal utility is zero. Determination of the optimum requires a great deal of information, however, which is difficult to collate and process because of its complexity. As an alternative to the “optimum”, “best possible practice” is introduced. This provides an alternative to the less satisfactory method of “best practice according to benchmarking.” Originality/value The value of this work lies in finding an optimum in the flexibility-stability continuum. As the (theoretical) optimum is difficult to determine and realize due to inherent complexities, “best possible practice” is presented as an alternative. This takes into account the idea of optimization meaning no improvement is possible if the goal is achieved. “Best possible practice” defines an implementable, best possible state that can be used for organizational goal formulation. To achieve the best possible equilibrium in the flexibility-stability continuum, the respective advantages of stability and flexibility should be ideally exploited to lead to competitive advantage.