Strategic Flexibility

How Can An Organization Develop Strategic Flexibility?
Strategic Flexibility – Everything you should know

Strategic flexibility is a company’s ability to react by allocating different resources capable of responding to significant changes in an external environment. The company will recognize major environmental shifts to counter these changes and recognize factors to recover past commitments when the environment returns to its initial condition. In this article, we will discuss everything a company should possess to respond and rely on alternate courses of action to respond to environmental changes.

Introduction to Strategic Flexibility

A company’s capacity to respond effectively to adjustments can provide a strong basis for strategic flexibility. It can be used by companies, depending on the nature of transition and its effect on the entity, as an attack and a defense mechanism. Strategic flexibility allows a company to achieve a competitive edge over rivals who find it difficult to replicate the ability to produce decision-making and various tactical agility in coping with complex situations. Successful adjustment through strategic flexibility will lead to better results, mitigating the rivals ‘ problem of imitation. This is the sole reason for decision-makers to have strategic flexibility in its different forms.

Two levels can be used in the concept of strategic flexibility. Firstly, at the company level, companies’ willingness to adjust and adapt successively to changes in the environment as discussed above. Secondly, when decision-makers provide innovative and alternative solutions, they have been developed and deliberated in decision-making. Both applications are not jointly exclusive since companies must adapt to such changes to create different decision-makers’ options.

Key Factors

Four key factors need to be addressed in formulating strategic flexibility based on external change:

The time to react to a significant change. Various solutions are available. The organization’s viewpoints on transition.Focus region of the generated versatility.

Managers will consider all four factors when formulating policy, but this phase is not straightforward because both internal and external situations are still prone to many uncertainties. Organizational and psychological assumptions can lead to potential problems that make it much harder for administrators to recognize improvements and respond in a fast timeframe. Therefore, it is the duty of managers to recognize developments and devote sufficient resources to deal with them so that a competent management group guarantees the correct choices are made, and resources are not expended on insignificant ventures that might be detrimental to the company. The ability to show flexibility will increase an organization’s value, as the business can adapt to change more easily and thereby manage risk better.

Roles of Strategic Flexibility

As discussed, strategic flexibility is an attribute helping organizations plan for improving their environment. It requires a multi-element collaboration of interventions in theoretical experiments, aiming to forecast multiple scenarios, develop strategies for each situation, obtain the tools and abilities necessary to carry out those strategies, introduce the possible strategies, and plan the substitute’s role quickly. The strategy, design, and execution are related to strategic flexibility. Empirical research indicates that, even if they participate in daily scheduling procedures, competitive and productive businesses consider external factors’ effects. In such situations, the strategy generally includes the elements that differ according to external conditions. Their theories of design rely on threats and benefits, viewed as possible competitive advantage streams. They symbolize a coherent framework for policy creation and choice.

Strategic flexibility is required for companies to break down institutional procedures and resist exploratory innovations to eliminate organizational lethargy (read more about procedures and sop meaning). Thanks to the flexibility of asset use and system design, they represent a kind of capacity that allows companies to gain a competitive advantage in stormy markets. Many management experts stress that flexibility in organizational structures, management of resources, and production processes is essential. As the organizational principle for structuring and synchronizing various resources and operating structures is Strategic flexibility, it can not affect the company’s development output on its own. It could increase the value of development in current technological capabilities. Most researchers contend that the positive effect of technical knowledge on work enhances Strategic flexibility. In other words, with high technological capability, flexibility contributes to more explorative practices.

Advantages of Strategic Flexibility

Even when traditional systems seem to work just fine, a flexible organization is willing to try new approaches and procedures. Alternatively, a flexible organization should look for ways to do something that operates better effectively than you already have. As a flexible enterprise, you should be willing to review and modify your corporate policies so that your product is encouraged so that you can enhance your company policy. The most flexible organizations offer a broad range of options for their employees. Such businesses help employees pursue more rewarding personal lives while also encouraging staff to meet their work obligations. One way that might support this is to make it possible or give your workers a flexible work schedule. That would be an advantage for your workers because those with family or other commitments will benefit.

Based on your skills, the management structure is dynamic, and you can get the most out of the employees. A good manager knows how to bring together people with different talents and then unite them for one cause. You have a versatile group that can cope with various problems as you combine the team and complement each other’s abilities. They will be able to meet every challenge and make the organization more effective in doing so. Throughout economic and technological contexts, a flexible organization can also tackle complexity. In technical, legislative, or even economic changes, a team with strategic flexibility will take action quickly to solve the issues.

Strategic Flexibility Example

For example, we have company A that has its own eCommerce product. If a new company B with a very similar product appears on the market, then our company A needs to have Strategic Flexibility! Company A can decrease price, increase promotion, invest in research and product quality development, etc.
Company A can do two things :
1) offense mechanism – before company B launch their product
2) defense mechanism – after company B launch their product

Key Takeaways

To sum it up, as we can see, strategic flexibility is a collection of capacities to address different requirements and needs in a competitive market that is complex and unpredictable. It involves managing confusion as well as threats in an organization. In all areas of operations, companies develop and adapt strategic flexibility to remain competitive in this challenging world.



Igor has been a trader since 2007. Currently, Igor works for several prop trading companies. He is an expert in financial niche, long-term trading, and weekly technical levels. The primary field of Igor's research is the application of machine learning in algorithmic trading. Education: Computer Engineering and Ph.D. in machine learning. Igor regularly publishes trading-related videos on the Fxigor Youtube channel. To contact Igor write on:

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