Journal of Management Information and Decision Sciences (Print ISSN: 1524-7252; Online ISSN: 1532-5806)

Research Article: 2022 Vol: 25 Issue: 6S

The relationship between organizational agility and organizational performance, and the opposing challenges facing organizations

Nasser Mohammad Soud Jaradat, Palestine Ahliya University

Citation Information: Jaradat, N.M.S. (2022). The relationship between organizational agility and organizational performance, and the opposing challenges facing organizations. Journal of Management Information and Decision Sciences, 25(S6), 1-10.

Keywords

Organizational Agility, Organizational Performance, Flexibility, Challenges

Abstract

This study provides a rich and diverse review of literature on the subject of organizational agility; the subject is discussed fairly, in addition to different viewpoints on agility. Also, the dimensions of organizational agility are viewed and explained in Table.1. The important relationship between organizational performance and organizational agility is discussed and explained thoroughly, in addition to different perspectives on the matter emphasizing the importance between the two subjects. Also, the characteristics of an agile organization are listed in study, in addition to obstacles facing firms who try to turn to agile organizations. And in the end of this paper, a conclusion in addition to recommendations on how encounters the mentioned obstacles.

Introduction

Organizational performance is impacted by various elements, such as productivity, agility, and management commitment. After all, firms in all sizes aim to improve their performance, but some organizations lose track in the process to the extent of leading the firm to its fatality. A balance in achieving firm’s objectives, and surviving in today’s vicious competitive marketplace, should be a serious business concern. The present high innovation and speed climate changes make eccentrics and vulnerability in practically all organizations and power them to be more unique, to have more adaptable and agile capacities. Also, firms need to utilize these capacities viably. It has become inescapable for endeavors to change the hierarchical environment, authoritative construction and become more adaptable and agile organizations to stay aware of technological advancements and to conquer contest. Adaptability assumes a key part in organizations supporting their element in tempestuous and uncontrollable surroundings.

Literature Review

As of late, flexibility has drawn in the consideration of analysts and chiefs as a significant job in the present competitive advantage. There are many purposes behind this. The strength of the competitive environment in the beyond couple of many years has as of now been supplanted by rapidly expanding vulnerability and item life stages become more limited, clients' inclinations change quicker, and rivalry is escalating (Harraf, Wanasika, Tate & Talbott, 2015). Adaptability has various implications for various disciplines in writing. In top management, it is the ability of a firm to react beneficially to evolving climate (Appelbaum, Calla, Desautels & Hasan, 2017). In finance, it is the capacity to keep away from expensive financial mishaps just as underinvestment (Felipe, Roldán & Leal-Rodríguez, 2017). In industrial businesses, it alludes to the capacity of a manufacturing framework to react cost-successfully and quickly to changing creation needs and prerequisites (?itkien? & Deksnys, 2018). In the promotional field, it is characterized as a company's capacity to react rapidly to changing economic situations (Ravichandran, 2018). Adaptability is likewise the capacity of an organization to endure when contrarily impacted by changes in natural conditions (Felipe, Roldán & Leal-Rodríguez, 2016).

In any case, past the above definitions and simple impression of the significance of adaptability, hierarchical adaptability is another idea and analysts have still concentrated on it. Organizational agility can be characterized as firms being adaptable in a discipline or division as well as in all disciplines or offices. It is characterized as the capacity to react to unpredicted change and the ability to decide the degree of firms might practice in questionable conditions (Lu & (Ram) Ramamurthy, 2011).

Tallon, Queiroz, Coltman & Sharma (2019) expressed that an unthinking administration framework is proper to stable conditions, while an organismic structure is fitting to change conditions. At the end of the day, they guaranteed the utility of the thoughts of "unthinking" and "natural" the executives frameworks live for the most part in their being connected as reliant factors to the pace of the innovative premise of creation and the market dynamic circumstance. In repairman authoritative design, authority and control are regularly concentrated, and task normalization and specialization happen habitually. Interestingly, in a natural authoritative construction, a 'compliment' structure happens. That is, the ordered progression comprises of less levels, direction is all the more as often as possible decentralized, and representatives who are multifunctional, who work in frameworks where more prominent levels of even reconciliation happen, are all the more broadly found (Cegarra-Navarro, Soto-Acosta & Wensley, 2016). Commonly, natural organizations produce yields requiring the usage of gifted staff (Liu, Chan, Yang & Niu, 2018) allude to as 'Information Technology'. Interestingly, mechanical organizations are the most ideal for large scale manufacturing of a similar thing. The expertise prerequisites are moderately low for large scale manufacturing tasks, particularly if sequential construction systems precisely endorse the conduct of representatives. The mechanical kind of organization has the best an open door for amplifying usefulness while the natural sort has the best potential for animating advancement (Teece, Peteraf & Leih, 2016). Natural organizations are adaptable and center on rules less which works with advancement, permits less convention, more noteworthy clearness, and normally advance the improvement of all the more groundbreaking thoughts and conduct (Nafei, 2016). The accentuation on these qualities of natural organizations upholds capable staff with information and abilities and supports cooperation with outside individuals and organizations, high even correspondence, and commitment to all region of the organization, as well.

Singh, Sharma, Hill & Schnackenberg (2013) have considered hierarchical adaptability as a collection of authoritative and administrative abilities that permit organizations to adjust rapidly under such natural movements. In reality, we can say that the natural framework is a framework that is a generally foundational comprehension of flexibility utilized to keep up with and adjust firms to the various changes connected with firms' methodologies. More flexible and natural organizations that are outfitted with better abilities empower workers to exhibit their innovativeness and various capacities and they can defeat this dynamic by their expertise to accomplish competitive advantage in dubious innovation and complex climate. In this powerful and complex climate, we can consider the natural organizations which permit adjusting firms to rapidly ecological changes as flexible organizations. In this manner, the solution to whether or not hierarchical adaptability supports authoritative agility is significant.

The term of agility should be established in administration hypothesis (Joiner, 2019). Right on time during the 1990s, the new answer for dealing with a dynamic and changing climate arose agility. Agile production is the capacity to get by and flourish in a competitive environment of constant and flighty change by responding rapidly and adequately to evolving markets, driven by client characterized items and administrations (Nejatian & Zarei, 2013).

The founders of the "agility" idea at the Iacocca Institute, of Lehigh University (USA) characterized it as an assembling framework with abilities (all shapes of technologies, human resources, well-prepared management, data) to meet the quickly changing requirements of the commercial center (speed, adaptability, clients, contenders, providers, foundation, responsiveness). Agility is the fruitful utilization of competitive bases like speed, adaptability, advancement, and quality by the method for the combination of reconfigurable assets and best acts of an information rich climate to give client driven items and administrations in a quick evolving climate (Yusuf et al., 1999). Agility underlines speed and flexibility as the essential credits of a spry organization (Dahmardeh & Banihashemi, 2010).

A similarly significant characteristic of agility is the compelling reaction to change and vulnerability (Nejatian & Zarei, 2013). A few creators express that reacting to change in legitimate ways and taking advantage of and exploiting changes are the fundamental elements of agility (Molla & Peszynski, 2012). Agility alludes to the proactive reactions to changes (Bessant et al., 2001). Agility alludes to the utilization of changes as inborn open doors in a fierce climate (Koçyi?it & Akkaya, 2020).

Agility alludes to the capacity to get by and progress in a variable and erratic climate (Nejatian, Zarei, Nejati & Zanjirchi, 2018). Hierarchical adaptability addresses an organization's ability to change its inward constructions and cycles in a foreordained reaction to changes in the climate. Versatility underlies the attack of authoritative activities to their current circumstance while flexibility accentuates the status of hierarchical assets and the simplicity of asset assembly. The "agility" idea incorporates both adaptability and versatility. Agility, as a business idea, was authored in an assembling setting especially corresponding to adaptable assembling frameworks (Bahrami, Kiani, Montazeralfaraj, Zadeh & Zadeh, 2016).

Agility is another idea in contemporary authoritative idea. One essayist has characterized the course of agility as far as the capacities important to accomplish light development in the organization (Bi, Davidson, Kam & Smyrnios, 2013). Agility is the capacity to react to unusual changes with speedy reaction and benefit (Harsch & Festing, 2020). Agility is a hierarchical capacity to respond rapidly and viably to a climate that can change profoundly (Charbonnier-Voirin, 2011).

The concept of agility implies quick, nimble, and dynamic development. Additionally, agility alludes to the capacity to quick and simple development and quickly thinks with an insightful technique. The root or beginning of readiness is gotten from nimble creation and this is an idea that has been introduced during later years. Agile manufacturing has been acknowledged as a fruitful system by makers that set them up for an extensive performance (Mao, Liu & Zhang, 2015).

Different Perspectives on Organizational Agility

As per the various meanings of the word agility, the idea of speed and fast reaction, and furthermore the ideas of gathering work and shared objective in regard to the word organization, can be induced. Dexterity can be characterized as the quickness and fast reaction of an agreeable gathering to the progressions made by the climate encompassing them to arrive at an objective (Chen & Siau, 2012).

Organizational agility is the organization's capacity to react rapidly and viably to unforeseen open doors, as well as giving, ahead of time, arrangements that address expected issues (Panda & Rath, 2017).

Organizational agility is the capacity to make due and fill in a surprising cutthroat climate of consistent change through quick reaction to changing business sectors and through gathering the cravings and necessities of clients, regardless of whether of items or administrations (Saha, Gregar & Sáha, 2017).

Organizational agility is the fruitful use of the opposition rules, like speed, adaptability, advancement, and quality, through the method for combination of assets and the rebuilding of best practices in the climate of specialized information, through the arrangement of administrations or items that meet clients' inclinations considering a quickly evolving climate (Akkaya & Tabak, 2020).

Organizational agility is the organization's capacity to work easily in a rapidly and reliably changing and divided worldwide market climate, through creating top caliber and compelling execution (Yeganegi & Azar, 2012).

Organizational agility empowers the organization to do a progression of explicit assignments effectively, as well as dealing with the open doors and dangers in the business exercises viably (Almahamid, Awwad & McAdams, 2010). Organizational agility makes organizations more receptive to advertise patterns, and quicker as far as the conveyance of items and administrations contrasted with non-coordinated ones.

Organizational agility is made out of three elements of sensor agility, direction, and readiness practice and application (Nafei, 2016). Organizational agility isn't as it were "adaptable" to take special care of unsurprising changes yet in addition ready to react and adjust to unusual changes rapidly and productively (Panda & Rath, 2016).

Organizational agility can be considered the condition of authoritative execution as far as adaptability and flexibility and is achievable through the organization's exercises. Specifically, from the cycle-based viewpoint, organizational agility is a collection of cycles that permit an organization to detect changes and react proficiently and viably in a convenient and financially savvy way in the inward and outer conditions. Detecting alludes to an organization's capacity to identify, catch and decipher hierarchical open doors (Krotov, Junglas & Steel, 2015). Reacting addresses a hierarchical capacity to prepare and change assets to respond to the open doors that it detects (Panda & Rath, 2018). Organizational agility is the authoritative ability to sensor reaction effectively to the potential open doors and dangers in the market without wasting much time (Sazesh & Siadat, 2018).

Organizational agility is a proactive administration procedure that targets keeping up with the organization's assets and accomplishing the longings of clients without wasting any time (Cepeda & Arias-Pérez, 2019). The concept of organizational agility is gotten from the presentation attributes of a light-footed organization and is established in two related ideas "authoritative versatility" and "hierarchical adaptability". Authoritative versatility centers on how an organization's structure, design, and level of formalization impact its capacity to rapidly adjust to its business climate (Mehrabi, Siyadat & Allameh, 2013).

Organizational agility comprises of a few key components. They are (1) speed and adaptability, (2) reacting to changes in the general climate, (3) excellent items, (4) items and administrations of precise data, (5) connecting with social issues and the climate, (6) unique innovations gathering, and (7) inner joining inside the foundations and among one another (Chung, Lee & Kim, 2014). Organizational agility is the course of plan, and the cancelation of specialty units, markets, and enterprises to re-center around separated center abilities (Zhou, Bi, Liu, Fang & Hua, 2018). Organizational agility is a bundle of thoughts that focuses on constant improvement, level authoritative designs, and work groups, halting waste or misfortune, proficient utilization of assets, and dealing with the chain of planning. Japanese organizations have embraced the idea of Organizational agility as far as decreasing expenses through the expulsion of waste (Menon & Suresh, 2020).

Organizational agility rapidly meets client demands, offers new items, and gets on essential unions or disposes of them. This implies that organizations are in pressing need of vital coalitions to tackle the issues of their clients, rather than giving items or one assistance. The crucial purpose for the need of organizational agility is looking for the center capacities, from one viewpoint, distinguishing the business climate and catching amazing open doors, then again (Theyel & Hofmann, 2020).

Organizational agility is the assembling framework for physical and non-actual innovation, HR, taught administration, and data to meet the quickly changing necessities of the market in a way that accomplishes the cravings and requirements of the clients on schedule (Park, 2011).

Considering this, the scientist recognizes organizational agility as the organization's capacity to accomplish its goals, through the improvement of its items expanding information on its HR, influencing the advancement of the organization, and easing up its development in a quickly evolving climate.

Organizational Agility Main Dimensions (Park, Y. 2011)

Table 1
Organizational Agility Dimensions
Dimensions of OA Clarification of dimensions
Sensing Agility Combination of detecting and attracting significant business simultaneously
Decision-Making
Agility
Interpreting events, recognizing opportunities, hazards and taking an action plans in time
Acting Agility Reshaping organizational resources drastically and modifying business processes and the provision of services or new products to market in time

The Connection between Organizational Agility and Organizational Performance

Organizational performance is the capacity of the organization to accomplish its drawn-out objectives (Anca-Ioana, 2019). It is what surpasses the ordinary normal Performance, other than being a piece of a progression of great exhibitions (Cai, Huang, Liu, Davison & Liang, 2013).

Organizational performance is a determinant of its actual presence. Deliberate or sudden decrease in organizational performance level might prompt authoritative demise or mortality, a circumstance that happens when an organization comes up short, close down its tasks, and disbands its constituent components (Panda & Rath, 2021).

Notwithstanding the huge corpus of examination and concentrates on organizational performance, no settlement on the idea of organizational performance is found. Regardless of this distinction, most specialists express their organizational performance through the achievement accomplished by the organization in accomplishing its destinations. Organizational performance is an impression of the organization's capacity to accomplish its objectives, or at the end of the day, the organization's capacity to accomplish long haul objectives (Ali, Miah & Khan, 2018).

Subsequently, after a careful survey of the various ideas of organizational performance, it tends to be contended that organizational performance in its least difficult structure is the ideal outcomes that the organization looks to accomplish proficiently and successfully.

Organizational performance can be characterized as a combination of assets, abilities of the organization that are being utilized productively and adequately to accomplish its destinations (?itkien? & Deksnys, 2018). Organizational performance is the level of the results of the organization subsequent to leading procedure on its bits of feedbacks. Organizational performance is the result of the exercises that happen inside the organization (Teece, Peteraf & Leih, 2016).

Agile Organization Characteristics

Any firm who aspires to increase the agility and the flexibility of their methods of management needs to acquire certain attributes (Paasivaara & Lassenius, 2019).

Assuring that All Involved Parties are on the Same Page

One of the fundamental characteristics of agile organizations is that they are focused on making an incentive for all partners. The principal thought is to move concentration to results as opposed to simply yielding. That is the reason there is a common perspective and vision for everyone to follow as pioneers expect to continually impart it while allowing individuals to choose how to best help it with their everyday exercises.

This requires extremist transparency across the whole authoritative construction and a culture shift to a more open climate that empowers information sharing. Practically speaking, organizations accomplish that by zeroing in further developing joint effort among groups and setting up low-tech, high-contact devices that emanate data. This helps keep all departments in total agreement and expands their feeling of having a place with the normal reason.

Besides, Agile Organizations center around looking for input continually from both internal and external partners to perceive how well they are executing on the undeniable level vision. This permits chiefs to consistently assess the advancement of key objectives and choose whether to speed up them or change course to oblige changing economic situations.

Shorter, Less detailed Decision-Making Process

Also, another fundamental attribute of agile organizations is the reality they perceive that the most effective way to limit hazard is to accept vulnerability. Rather than growing long haul and definite plans which signal bogus security, organizations need to take part in more fast independent direction by regularly delivering worth to the market.

Agile organizations achieve that by lessening bunch sizes of everything from individual work things to significant level key destinations to assemble quick criticism from the market. Then, they take part in standard learning cycles where they ponder any new data, adjust to changes, and constantly search for improvements. New companies vigorously utilize those standards to adopt creative items. Notwithstanding, even huge, grounded organizations need to embrace them by making arrangement between all departments and considering them to be little new companies that deliver value to the previous market offering.

The thought isn't simply to ensure that the groups are fostering the right item or administration yet in addition that the whole organization moves in the correct heading. By coordinating regular "test, learn, adjust" cycles, organizations become fit for overseeing vulnerability, better getting intricacy, and along these lines improve at a quicker rate.

Technological Focus

Instead of digitalizing existing cycles, agile organizations aim to coordinate new technological advancements into their functional cycles and practices. Another cooperation, correspondence, and the board instruments, for instance, don't just present a better approach for cooperating and overseeing projects yet can likewise save a great deal of time.

Current Obstacles and Futuristic Aspirations

While organizational agility is probably going to be embraced by enormous organizations, it's innately more straightforward for more modest and agile organizations. Big firms that have CFOs and CHROs who are content with the current practices might confront opposition. Social and attitude changes beginning at the highest point of the organization might be important. Regardless of whether the leader group is lined up with the technique, loads of organizations talk about a decent game without making the vital authoritative changes. Being agile has turned into a popular expression, and many are glad to rehash the expression without the aggravation of changing the manner in which they deal with their organizations. In any case, organizations that are effective in exploring these progressions will probably be the pioneers who have more noteworthy representative commitment, accomplish closer cooperation effort with clients, and fabricate better arrangements (Kalenda, Hyna & Rossi, 2018).

Also, there are many common and uncommon challenges that stand in the way of firms when turning to agile organizations, such as organizational resistance, as there is the normal maxim that in the event that there is no obstruction, there is likely no change. During any change exertion, associations will confront some degree of opposition; the objective is to minimalize how much obstruction. While managerial resistance is a common issue, the pace of the top-level management when it is time to make a decision is critical. Being one of the fundamental parts of organizational agility is the capacity to recognize opportunities and hazards and foster a strategy rapidly. Nonetheless, the speed of decision-making in associations is regularly attached to admittance to opportune and solid data, the layers of order included, and the presence of a danger loath culture. Another significant obstacle that can delay or even prevent the firm from turning to an agile organization is lack of knowledge management, knowledge management is the utilization of an organized cycle to assist data and knowledge with streaming to the perfect individuals brilliantly so they can act all the more productively and really to find, get, offer and use knowledge to make esteem. Without powerful knowledge management, associations may not know what data is significant or have a technique that guarantees individuals can get to the data they need when they need it (Appelbaum, Calla, Desautels & Hasan, 2017).

Conclusion and Recommendations

Accomplishing organizational agility requires a major shift to a more straightforward climate and a mentality of "test, learn and adjust". While many firms are struggling to turn their managerial methods to an agile one, this study recommends that such managements handle the mentioned challenges and obstacles logically and gradually. When dealing with an issue like managerial resistance, a firm needs improve their communication methods, as well as increase the involvement of the stakeholders, furnish management with the knowledge it needs to convey to coordinate reports and show others how it’s done. Keep interchanges transparent. Be straightforward, in any event, while conveying unpleasant news. Also, responsible managements should connect with stakeholders simultaneously. Utilize intelligent correspondence strategies, for example, center gatherings, war games, web-based media, publicly supporting, and representative drove preparing. To speed up decision-making, firms need to change the solace level for expected danger through instruments like prescient investigation and situation arranging, which assist associations with thoroughly considering possible choices before they act or through changing the standards and practices attached to hazard avoidance (Tallon, Queiroz, Coltman & Sharma, 2019). To change the solace level, firms need to imply new conduct standards. Overcoming hazard avoidance is regularly a multisided issue since representatives is not happy going outside of their job and there is a regrettable underlying meaning with disappointment. Also, firms should provide a secure environment to take risk, without huge stakes on the line, also, acknowledge and reward employees who take risks. To guarantee successful knowledge management, associations need to make a methodology to deal with the catch of, guarantee availability to, and draw in representatives in utilizing the caught knowledge. There are a few accepted procedures that associations can think about while further developing their knowledge management capacities. Knowledge must be embedded in the progression of work. It's essential to convey data when, where, and how workers need it. To achieve this objective, associations need to focus on the requirements of the clients and ponder how to place knowledge in the way, or business cycle of the clients.

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Received: 06-May-2022, Manuscript No. JMIDS-22-11468; Editor assigned: 09-May-2022, PreQC No. JMIDS-22-11468 (PQ); Reviewed: 23-May-2022, QC No. JMIDS-22-11468; Revised: 30-May-2022, Manuscript No. JMIDS-22-11468 (R); Published: 06-Jun-2022

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