What Makes Agility Fragile? A Dynamic Theory of Organizational Rigidity

We present a novel explanation of why organizations tend to lose their agility over time despite their efforts to foster worker initiative in adapting to local information. Worker initiative ensures efficiency but requires strong incentives. When incentives are relational and the firm faces shocks to its credibility, it may adopt standardized work processes that ignore local information but yield satisfactory (though suboptimal) performance. The adoption of such standardized processes helps the firm survive the current shock but inflicts inefficiencies in the future. Although the firm may recover, it becomes more vulnerable to future shocks, and consequently, more reliant on the standardized work procedures. This paper was accepted by Joshua Gans, business strategy.

• 저널Management Science · 69(6) · 3578–3601
• 토픽Business Strategy and Innovation · Strategy and Management
• DOI10.1287/mnsc.2022.4512
• 저자Jin Li, Arijit Mukherjee, Luís Vasconcelos