Organizational Size, Flexibility, and Performance: A System Dynamics Approach

Whether organizational size has effects on flexibility has long been an issue of discussion and debate in the field of organization studies. In addition, whether organizations with a greater degree of flexibility will perform better in a rapidly changing environment has also been widely discussed in the literature of organizational change. This study intends to illuminate the interwoven nature and reciprocal relationships among organizational size, flexibility, and performance by building a dynamic model to examine the contradictory findings in existing theories. The results of analyzing the behaviors of the model suggest that organizational flexibility is a construct of multiple attributions that has been overlooked in different studies. As a result, only if we can clarify the meaning of flexibility, can we then resolve the arguments regarding whether large or small organizations are more flexible, and whether flexible organizations tend to outperform less flexible ones.