Organizational Agility in Dynamic Environments Assessment Answer

Organizational Agility in dynamic environments: Why it is important, how it works, and how organization can develop it?

Organizational Agility

While the agility of the enterprise faces questions of the business executives, the positive outcome of the same cannot be denied by them. It has been agreed that business agility brings in more positive outcomes for enterprises (Yusuf et al., 2022). While earlier the idea of organizational agility had been a concept, desired by the business to be included in their business, contemporary time has seen a significant use of the change of same in the success of the businesses. The aim of this essay is to understand how organizational agility proves to be effective in a dynamic organizational environment. It will also focus on understanding the importance of organizational agility and how it can be utilized and developed by organizations to ensure success in their business.

The response of the organization against the changes or the ability of the organization to adapt to those changes has been referred to as organizational agility (Žitkienė & Deksnys, 2018). Organizations face changes when their demands are changed by stakeholders, shareholders, customers, and the market. How the competitive pressure is handled by the company also comes under the concern of organizational agility. An agile organization directs its focus toward prioritizing how to nurture opportunities to create values for themselves. Flexibility to adapt to those changes along with the speed and the scale at which stability is attained by the organizations acts as a marker of their agility. The structure stability in these organizations is provided by the centre of their structures which enhances the speed of their response to the changes in the market (Tallon et al., 2019).

Process Theory of Change

The theoretical underpinning that ensures a better understanding of organizational stability is through process theory of change. The theory reflects that agility in an organization emerges as a result of a dialectic interplay that happens between the needs of the organization to respond to and recognize the changes (Wufka & Ralph, 2015). It also posits that rather than affecting the success directly, agility is more concerned with moderating the negative effect of the change on the success. Overall, the theory reflects upon the facts that the conflicts between the stakeholders develop the needs for the change. The change is thereby responded to by the team who alter themselves as well as their artifacts and processes (Wufka & Ralph, 2015). The recognition-response dialect gives birth to agility as per the proposition of theory. The role of agility as per the 'Process Theory of Change' is to moderate the negative impact that the need for the change highly reflects upon the success that might be attained. Other similar theories have considered looking at agility as the paradigm that has been promoted in order to sustain as well as attain a competitive advantage in the dynamic business environment (Wufka & Ralph, 2015).

The dynamic forces that are present in today's global market require organizations to be more agile in their approach. It has been claimed by scholars and researchers like Beech (2017), that the dynamic capabilities approach can be utilized by the firms to sustain and attain competitive advantage. The term dynamic in this context has referred to the capacity of the organizations in regard to new competencies which would be helpful for them in establishing their congruence with the evolving business environment. By adopting the principles of agility, the organization attains the ability to adapt to both the internal resources present in the organization and the behavior of the external market effectively. Change agility has been considered as the new and evolving paradigm in the domain of change management. Change agility has been considered as the path towards adapting changes and responding to changes in ways that can drive the outcomes of the workforce and businesses. As a result, it has been considered critical for businesses to adapt to changes in order to thrive through them (Harsch & Festing, 2020).

Embracing Business Agility

As it has been discussed earlier business agility refers to the capacity of the organization to adapt to the changes and make a fast movement regarding their operations to thrive the organization through those changes (Žitkienė & Deksnys, 2018). To further add to this, Panda and Rath (2018) claim that rapid challenges and changes that organizations face in ever-changing business environments and market conditions demand the implementation of an agile business model in an organizational culture that is also agile. The organizations can benefit in terms of attaining competitive advantages while meeting the customer needs more responsively. The contemporary changing business environment requires organizational agility to be incorporated within the organizational strategy to develop successful and effective organizational agile initiatives (Liu et al., 2018).

Having said that there are several reasons which make agility an essential part of an enterprise. Making a transition to an agile culture allows the business to gain significant values where changes can be adapted across various dimensions of the organization. While the organization is taken through its transition towards agility the results are measured through different metric categories. Organizational agility improves the experience of the customers. The ever-changing customer demands are met by the organizations by transitioning into an agile culture. This has directly resulted in improving the experiences of the customers. The changes mainly occur due to a shift in the priorities when the customers are being made the main focus of the organization rather than the competition resulting in a tremendous boost in the sale. A team that is agile also attracts the satisfaction of the customers. When the customers get their services or demand products at a higher standard, it increases the rate of the customers and also the productivity (Jesse, 2018).

Another way in which organizational agility contributes to the success of the organization is by enhancing the engagement among the employees. The teams and employees are empowered in an agile organization. Ravichandran (2018) provides that in such organisations the agile culture is predominantly concerned with pushing the process of decision-making to create a work environment based on collaboration. Such a culture attracts new talents to the organization while the employees who are already existing are rewarded. Autonomy of the employees and efficiency in work are supported by agility contributing to greater productivity in the organization (Pulakos et al., 2019). One of the examples of how agility contributes towards employee engagement in the organization can be experienced in the case of PayPal. PayPal is a global leader in the domain of payment applications. The organization had initiated its transition towards achieving business agility back in the year 2013. It was done by employing teams of over 40 offices across the globe. Though the organization operated with multiple products there has been no hierarchy in terms of products as such and no leadership in common. As a result, it has been found that despite the hard work put in by the employees, the values delivered to the customers were significantly less. The issues experienced by PayPal involved a lack of focus on the project, the management of dependencies not being up to the mark, and more than one project being left unattended (Hiller & Ozgen, 2023).

To respond to these challenges PayPal considered bringing the team closer as its initial agile transformation initiative. This was being done with the intention of understanding the customers and their problems. Along with that PayPal induced a clear ownership of the products which allowed the organization to structure the efforts towards agile transformation and also organize the product portfolio of the company. Along with that PayPal introduced KPIs so as to measure the project of agile transformation in PayPal as a whole (Hiller & Ozgen, 2023). Organizational agility is also known for its ability to bring about enhanced flexibility in the operation of the team. In an organization that is agile, the focus of the teams is on new priorities to the face of the challenges and changes. With operating infrastructure being implemented already in place for the agile organization, the process of adapting to the changes becomes more direct and immediate. Simply put, such organizations have already developed their adaptability to changes and can implement required measures immediately with efficiency. Such an agile mindset for the organizations is conducive to catering to the changing needs of the customers. The resultant outcome is reflected in boosts in sales and organizational success along with customer satisfaction (Pulakos et al., 2019).

Resilience Through Organizational Agility

Along with enhancing flexibility in the organization and ensuring customer satisfaction, the most important contribution of organizational agility is reflected in its ability to enhance the efficiency of operations. Performance-related operation varies from one department to the other. With organizational agility being implemented in the organization, the departments of the organization collaborate among themselves to improve the efficiency of operation. Agility also allows him organization in overcoming the barriers, lines of reporting, and political sensitivities. The basic purpose of imposing organizational agility is to provide a structure to the organization as an initiative of a collaborative network developed across cross-functional teams. Agility equips the teams with skills so that changes can be adapted and goals are achieved by the organization (Margherita et al., 2021).

Organizational agility contributes to developing higher resilience within the team. The agile approach prepares the organization to cope with sudden changes and adaption in reaction to those changes. An agile environment in a dynamic organizational culture allows the leaders to take proactive measures to redirect the teams in the direction of the problem and evoke a solution. This ensures that the process of dealing with the changes is made more swift and easier. The mindset of the team members to adopt agility ensures that they respond to the changes in customer demand or the market effectively. For that, the teams that are agile are not dependent on the decisions of the higher authority to execute regular work rather are strong, empowered, and autonomous to respond to the dynamic needs of the market (Beech & MacIntosh, 2017).

In conclusion, it can be suggested that the contemporary dynamic market demands agility from organizations to cope with the changes and align the teams and their members in accordance with it. As it has been discussed, the process theory of change suggests agility in an organization emerges as a result of a dialectic interplay that happens between the needs of the organization to respond to and recognize the changes. The impact of organizational agility is not only felt on the operational level but also towards customer satisfaction, organizational resilience, team collaboration, and employee engagement. The changes in customers and market demands have been on an exponential rise which hints towards the need for organizations to become agile. The transition towards agility for any organization irrespective of the scale is dependent on the dialectic relationship between the organizational response to changes and its responsibility towards change management. Agility in an organization is directly related to organizational success and the contemporary dynamic environment requires the organizations to adapt swiftly to attain competitive advantage. The swift transition is made towards an agile culture and more competitive advantage the organizations have in their market. 

References

Beech, N., & MacIntosh, R. (2017).  Managing change: Enquiry and action . Cambridge University Press. https://books.google.com/books?hl=en&lr=&id=_hssDwAAQBAJ&oi=fnd&pg=PT17&dq=Beech+and+MacIntosh%27s+(2017)+Managing+Change+Enquiry+and+Action+&ots=4Cm4O0lWvP&sig=PF4SO7OgrGxVjdDpxg4EeVJl4Q4

Harsch, K., & Festing, M. (2020). Dynamic talent management capabilities and organizational agility—A qualitative exploration.  Human Resource Management ,  59 (1), 43-61. https://onlinelibrary.wiley.com/doi/abs/10.1002/hrm.21972

Hiller, N. J., & Ozgen, S. (2023). Organizational agility and organizational effectiveness. In Senior leadership teams and the agile organization (pp. 24-43). Routledge.

Jesse, N. (2018). Organizational evolution-how digital disruption enforces organizational agility.  IFAC-PapersOnLine ,  51 (30), 486-491. https://www.sciencedirect.com/science/article/pii/S2405896318329835

Liu, S., Chan, F. T., Yang, J., & Niu, B. (2018). Understanding the effect of cloud computing on organizational agility: An empirical examination.  International Journal of Information Management ,  43 , 98-111. https://www.sciencedirect.com/science/article/pii/S0268401217307090

Margherita, A., Sharifi, H., & Caforio, A. (2021). A conceptual framework of strategy, action and performance dimensions of organisational agility development.  Technology Analysis & Strategic Management ,  33 (7), 829-842. https://www.tandfonline.com/doi/abs/10.1080/09537325.2020.1849611

Panda, S., & Rath, S. K. (2018). Strategic IT-business alignment and organizational agility: from a developing country perspective.  Journal of Asia Business Studies ,  12 (4), 422-440. https://www.emerald.com/insight/content/doi/10.1108/JABS-10-2016-0132/full/html

Pulakos, E. D., Kantrowitz, T., & Schneider, B. (2019). What leads to organizational agility: It’s not what you think.  Consulting Psychology Journal: Practice and Research ,  71 (4), 305. https://psycnet.apa.org/record/2019-79823-002

Ravichandran, T. (2018). Exploring the relationships between IT competence, innovation capacity and organizational agility.  The Journal of Strategic Information Systems ,  27 (1), 22-42. https://www.sciencedirect.com/science/article/pii/S0963868717302494

Tallon, P. P., Queiroz, M., Coltman, T., & Sharma, R. (2019). Information technology and the search for organizational agility: A systematic review with future research possibilities.  The Journal of Strategic Information Systems ,  28 (2), 218-237. https://www.sciencedirect.com/science/article/pii/S0963868717302160

Yusuf, M., Surya, B., Menne, F., Ruslan, M., Suriani, S., & Iskandar, I. (2023). Business agility and competitive advantage of SMEs in Makassar City, Indonesia. Sustainability, 15 (1), 627. https://doi.org/10.3390/su15010627

Wufka, M., & Ralph, P. (2015, August). Explaining agility with a process theory of change. In  2015 Agile Conference  (pp. 60-64). IEEE. https://ieeexplore.ieee.org/abstract/document/7284598/

ŽitkienÄ—, R., & Deksnys, M. (2018). Organizational agility conceptual model.  Montenegrin Journal of Economics ,  14 (2), 115-129. https://pdfs.semanticscholar.org/0f03/618903ec310672f7561e6896fa5113532b3b.pdf

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