Toward the Flexible Form: How to Remain Vital in Hypercompetitive Environments

Abstract

Hypercompetition has received much attention, but an important question has not been answered: What organizational forms lead to success in hypercompetitive environments? Hypercompetition forces firms to move more quickly and boldly and to experiment in ways that do not conform to traditional administrative theory. Bureaucratic vertical forms severely hamper the ability to respond to accelerating competition. Flexible forms, in contrast, can respond to a wide variety of changes in the competitive environment in an appropriate and timely way. The author examines several alternative flexible forms for coping with hypercompetitive environments. Flexibility derives from the repertoire of managerial capabilities (management challenge) and the responsiveness of the organization (organization design challenge). On the basis of theories of control, the author argues that organizational flexibility is inherently paradoxical and requires a constructive friction between change and preservation. The paradox of flexibility is portrayed in a conceptual model that relates competitive environments, certain types of flexibility, and organizational conditions. The author develops a rich typology of organizational forms for coping with hypercompetition, each of which reflects a particular way of addressing change and preservation. Furthermore, he explores different trajectories of organizational development over time, especially those relating to revitalization. The implications of the typology for strategy and organization design research in hypercompetitive environments are profound.