The Effect of Flexibility on the Execution and Adaptation of Organizational Processes in a Dynamic Environment

Abstract

Prior research across various disciplines consistently highlights the tradeoff between flexibility and efficiency in organizational processes and operations. Building on the theoretical perspectives related to organizational routines and sociotechnical systems, our study investigates managerial perceptions of process flexibility in operational contexts in a dynamic environment. We propose a research model in which perceptions of process execution misfit, defined as the difficulty in accommodating changing requirements during the execution of a process, negatively affect process performance and prompt process adaptation for future executions. However, process execution misfit recedes when managers perceive higher process flexibility affordance or the capacity of a process to allow adjustments. In addition, we posit that environmental dynamism moderates these relationships. A behavioral experiment demonstrated that process execution misfit negatively impacted process performance under conditions of low environmental dynamism but positively influenced process adaptation when dynamism was high. Importantly, our findings confirmed that perceived process flexibility afforded the alleviation of perceptions of process execution misfit. This study contributes to a deep understanding of managerial perceptions regarding process flexibility, providing theoretical and practical implications for effectively balancing efficiency and flexibility in operational contexts.