Modelling the factors affecting organizational flexibility in MSMEs

Abstract

Purpose In the era of multiple global disruptions, firms are finding it to continue their business. MSMEs are impacted more as they have constrained resources. Organizational flexibility has emerged as an organizational and management principle that would help firms stay competitive even in volatile markets. This study aims to present a set of guidelines and insights for MSME managers to implement organizational flexibility in their organizations. Design/methodology/approach This study uses total interpretive structural modelling to study how the various factors contributing to organizational flexibility behave together. Behavioural theory is used to explain why organizations need to incorporate flexibility, and systems theory of organization is used to explain why an organization needs to have open boundaries. Findings Organizational flexibility is a principle that may be supported by the systems theory of organization. The study has shown that it is important for MSMEs to have supply chain collaborations to be more flexible. The study also shows pressure from competitors as the key driver that would make a firm more flexible, and that adequate support from management and technological skills are required to drive flexibility in an organization. Research limitations/implications Single respondent bias may have occurred in this study. This can be eliminated by interviewing multiple people from the same organization. Further research around the reasoning for linkages can be explored with theory-driven grounded studies. Originality/value This study attempts to use a multi-criteria decision-making technique to present insights to managers to help them make their organizations flexible.