p1│11813 ORGANIZATIONAL AGILITY: WHAT IT IS, WHAT IT IS NOT, AND WHY IT MATTERS p2│11813 ORGANIZATIONAL AGILITY: WHAT IT IS, WHAT IT IS NOT, AND WHY IT MATTERS

Organizational agility—defined loosely as a combination of flexibility, nimbleness, and speed— is increasingly regarded as a source of competitive advantage in today’s fiercely competitive and fast changing markets. We aim to tighten and explicate a conceptualization of organizational agility that clarifies what it is and what it is not. We theorize that agility is a bi-dimensional concept that involves a change in (a) magnitude of variety (i.e., flexibility) and/or (b) rate of variety generation (i.e., speed) in a firm’s product and service offerings for sensing and responding to environmental changes. We posit three strategic movements that reveal distinct avenues for competitive advantage based on a firm’s agility: (1) focusing on flexibility or speed as dominant objectives, (2) oscillating between flexibility and speed constrained by tradeoff frontiers, or (3) breaking through tradeoff frontiers to simultaneously increase flexibility and speed. We discuss limitations and boundary conditions of our thinking, offer a typology of agile organizations for further theoretical and empirical development, and observe a need for better operationalization of the agility construct.