The International Journal of Human Resource Management 9:3 June 1998

Organizational flexibility in cross-national

perspective: an introduction

Ali Dastmalchian and Paul Blyton

'Flexibility', comments Legge, 'is now part of management's rhetoric' (1995: 155,
original emphasis). Indeed, flexibility has come to represent one of the most commonly
used terms in the human resource lexicon. The securing of greater flexibility has been
identified by commentators such as Guest (1987) and Storey (1989) as a central
component of human resource management. This endowing of flexibility with major
significance is in spite of (or quite possibly because of) a marked conceptual
imprecision over the term, as well as other, now well-rehearsed, problems, not least that
some 'sources' of flexibility self-evidently stand in contradiction to one another (Blyton
and Morris, 1992), and the absence of consistent empirical data supporting the growth
of flexibility (Legge, 1995: 148; Pollert, 1988).
A major source of these conceptual and empirical problems is the way that
'flexibility' has been used as a short-hand for a wide variety of actual and potential
developments. This short-hand comprises two main aspects. On the one hand, there has
been a macro-level focus on whether or not capitalism is moving (has moved?) into a
new era of production, based not on standardized mass-production, but on 'flexible
specialization' (Piore and Sabel, 1984). On the other hand, there has been a pronounced
focus on micro-level, workforce issues, such as the broadening of job boundaries and
the establishment of more precarious employment contracts. What has been less evident
in this picture, however, is a closer attention to the intermediate, organizational level,
and those aspects of organizational structure and process where flexibility may be seen
potentially to represent an equally, if not more, significant factor than in relation to
workforce characteristics.
This acknowledging of the potential importance of flexibility in the way organiza-
tions are structured and function is not new, but represents a restating of a long-standing
theme within organizational enquiry. This has been reflected in key research questions,
for example: how organizations deal with uncertainty (Duncan, 1972; Lawrence and
Lorsch, 1967); how they adapt to changes in their environment (Thompson, 1967); how
more organic forms of organizations function and adapt, compared to more mechanistic
ones (Bums and Stalker, 1961); and how the degree of formalization in organizations
affects their ability to change and adapt (Hall, 1991). In important part, what these and
similar areas are commonly addressing are the ways that organizations operate (or fail
to operate) flexibly. Or, to put it more accurately, how organizations handle the tension
between operating, on the one hand, with a degree of stability, regularity and continuity
and, on the other, with a capacity to change, adjust and adapt: in other words, how
organizations maintain 'tight-loose' structures (Daft, 1995: 67; Legge, 1985: 139;
Quinn, 1988) and manage the 'constructive tension' between preservation and change
(Volberda, 1996: 360).

0958-5192 © Routledge 1998

438 Ali Dastmalchian and Paul Blyton

At the same time, despite its significance for organizational theory, the term
'flexibility' itself rarely figured directly in landmark theoretical and empirical research
prior to the 1980s. For example, the word 'flexibility' is not listed in the indexes of
major publications such as Thompson (1967) and Lawrence and Lorsch (1967);
preference is given instead to words such as 'adaptability' and 'change'. Indeed, this is
even evident in more recent major works in organizational studies (e.g. Clegg et al.,
1996). In general, however, organizational scholars have come to focus more on the
concept of fiexibility in more recent research, and a momentum has built up for
examining both the complexity of this concept overall (e.g. Aaker and Mascarenhas,
1984; Frazelle, 1986; Weick, 1982), and in particular in relation to how organizations
cope with the turbulence of 'hypercompetitive' environments (e.g. Grant, 1996;
Volberda, 1996). For example, Volberda (1996) suggests that, fi-om the organizational
standpoint, flexibility can be operational, structural or strategic in nature, each of
which might arise in response to either internal or extemal pressures. In this sense,
organizations can have a 'mix' of fiexibility features or forms (Grant, 1996) that reflect
the ways organizations seek to cope with hypercompetition in the environment.
Surprisingly, much of the fiexibility 'debate' which has taken place since the early
1980s has ignored this extant body of organizational ideas, concentrating instead on
elements of labour recruitment, deployment and reward that have most in common with
theories of labour market segmentation (Doeringer and Piore, 1971) and refiect
particularly the interests of industrial relations researchers and commentators, as well as
the widespread political debate over the pros and cons of 'flexible' labour markets. Yet,
there is considerable merit in seeking to tie this industrial relations focus on flexible
employment and work practices more closely to the broader questions of how
organizations secure flexible or adaptive capacity within different areas of their
operating environments (product and labour markets, technological and spatial
environments, and so on). This integrating of issues relating to workforce flexibility and
to other organizational characteristics represents a major focus of this present collection
of papers. Written by academics who variously specialize in organizational analysis,
human resource management, industrial relations, or organizational sociology, a
common objective is to examine the relationships between organizational rules and
organizational flexibility.
Traditionally, formalization and the existence of rules governing organizational
actions have been interpreted as creating inflexibility. This is evident in the rigidity and
inflexibility typically associated with bureaucratic structures (Pugh and Hickson, 1976)
or bureaucratic control systems (Ouchi, 1980). Bureaucratic forms of organization
respond to change by creating and adhering to agreed upon rules and procedures,
leaving little or no discretion for post-holders to exercise choice over the required
response. Contrasting systems, where no rules and procedures define the ways in which
people in organizations are required to respond to novel or changed circumstances, and
where decisions are taken ad hoc in the light of the circumstances of the particular case,
may be seen to be the ultimate in flexibility; the absence of rules gives post-holders
complete discretion to adapt decisions to particular sets of circumstances. Such an
organizational system has been referred to in the literature as an adhocracy (Mintzberg,
1991), or a learning organization (Senge, 1993).
Most organizations of course fall between these two extremes, maintaining sets of
established rules, procedures and understandings, while also requiring employees in
many positions to exercise some discretion in making decisions and deciding
 Organizational flexibility in cross-national perspective 439

appropriate courses of action. In this way, the presence or absence of different degrees
of rules governing the behaviour and choices of people at different levels in
organizations, and the extent to which reliance on rules is increasing or decreasing, may
act as useful measures of whether organizations are operating with a greater or lesser
degree of flexibility. The extent to which flexibility at the organizational level is
achieved may be viewed in terms of whether, as a result of the rules: (a) the
organization is responsive to the environment; and (b) the organizational decision
makers and members have the capacity and capability for change (Volberda, 1996;
Weick, 1982).
It is these ideas on the role that rules and regulations can play in relation to fiexibility
that is one of the integrating features of the following papers. The articles in this special
issue are part of a larger study of organizational fiexibility in which organizational
aspects and human resource practices are examined in a number of different countries.
The original ideas were developed in Canada (Dastmalchian and Blyton, 1993), and
were empirically investigated using the same concepts and methodology, in organiza-
tions from similar industries, in Canada, Hong Kong, Korea, Australia and Malaysia.'
This approach involved using common conceptual and methodological frameworks, and
inviting a network of academic colleagues from different countries to join as co-
investigators. Such an approach has proved valuable in the past (e.g. IDE, 1981) though
practical difficulties of co-ordinating and financing such projects have generally limited
their popularity. However, this approach is also the one adopted in more recent
international research programmes such as the large-scale GLOBE project on leadership
and culture (House et al., 1997).^
The present collection of articles also offers a bridge over other gaps in the extant
knowledge of flexibility. First, the discussion over flexibility has been dominated, on
the one hand, by studies and analysis of single countries (particularly the UK). Where
a more comparative approach has been taken this has tended to be very broad brush
(see, for example, Brunhes, 1989; Treu, 1992), leading to broad bipolar categorizations
of flexibility, such as 'offensive' and 'defensive' (Boyer, 1988), 'long' and 'short' term
(Rojot, 1989), or 'precarious' and 'non-precarious' (Rodgers, 1989) forms of flexibility.
Where more detailed comparative studies have been undertaken (for example, Blyton
and Martinez Lucio, 1995), these broad categorizations have been shown to be gross
oversimplifications of actual developments. Further, these comparative studies have
overwhelmingly focused on Europe, and to a lesser extent on North America (e.g.
Holmes 1991; Laflamme et al., 1989), with little attention directly focused on other
regions of the world, such as east Asia or Australasia.
In addition, discussion of flexibility has focused, disproportionately, on manufactur-
ing work processes (for example, in discussions of multi-skilling and the broadening of
job boundaries). The present cross-national study focuses primarily on organizations
from non-manufacturing sectors notably: hotels and hospitality; banks, insurance and
financial services; hospitals; professional services; and retail and wholesale
operations.
Thus, utilizing common sampling frameworks and research questions, the different
articles focus on two key aspects of organizational rules. The rules are categorized into
'control' rules (those mles which managers have at their disposal in order to govern
employee behaviour), and what Ng and Dastmalchian (in this volume pp. 9-20) term
'safeguard' rules (rules relating to the behaviour of the management, for example the
requirement for employee complaints to be heard within a grievance procedure). Thus,
440 Ali Dastmalchian and Paul Blyton

while 'control' rules constrain employee behaviour, 'safeguard' rules act as a constraint
on managerial behaviour. An appendix to this introduction gives details of the common
variables used to measure these two aspects of rules.
In their paper, Ng and Dastmalchian examine the relationships between these two
types of rules and some commonly associated factors that relate to the extent of
formalization in organizations (e.g. organizational size, public sector ownership,
innovativeness). Using data from ninety-two Canadian organizations they found that
size and the extent of unionization relate only to the presence of safeguard rules (i.e.
those governing management behaviour), whereas the degree of innovativeness of an
organization is associated with fewer rules being imposed on employee behaviour.
Their study shows that 'numerical' and 'distancing' fiexibility strategies are unrelated to
rules, while 'functional' flexibility has a positive association with both safeguard and
control rules. These findings indicate that the conceptualization of flexibility in the form
of functional and numerical flexibility strategies (Atkinson, 1984), and other related
approaches in the flexibility debate (Blyton and Morris, 1991), may not have taken into
account the role that different rules can play in understanding the dynamics of
flexibility in organizations.
Reed and Blunsdon, pp. 21-41, outline a conceptual model for flexibility based on
two dimensions of 'goal directedness' and 'formalization'. Using data from fifty
Australian organizations, they test the utility of their framework within the broader
context of examining the implications of rules for organizational flexibility. Their
analysis identifies two forms of flexibility: strategic and reactive flexibility. The former
refers to high goal directedness and low formalization; while the latter is characterized
by low goal directedness and low formalization. In their article. Reed and Blunsdon
concentrate particularly on 'strategic' flexibility, and use correspondence analysis
(Greenacre, 1993) to explore their data. They argue that strategic flexibility is related to
the existence of strategic human resource management, the development of higher trust
relations, and commitment to training and development of staff. They also emphasize
the length of time it takes to develop such a culture, and that treating 'strategic'
flexibility as a short-term mechanism would be counter-productive.
Sangho Lee studied forty organizations in South Korea. In his article, pp.42-57, he
examines the impact of national culture on the interpretation and use of rules in
organizations. Using the 'control' and 'safeguard' rules distinction, the study shows that
a matching of the extent of control rules (those on employee behaviour) and company
strategy is positively associated with the performance of the organization. That is, those
organizations which principally operate a strategy based on innovation work perform
best where employees enjoy a lower level of rules governing behaviours, whereas
organizations whose strategies are based more on cost reduction tend to be more
successful where employee behaviour is governed more closely by rules and
procedures. This finding is consistent with the message from the Australian study, in
which the use of flexibility is also shown to be closely associated with the overall
strategy of the organization. The Korean paper also shows that family or individual
ownership was strongly and negatively related to safeguard rules (rules on managerial
discretion), as well as to company performance (profitability). Overall, Sangho Lee's
evidence shows that the nature of ownership in the Korean context exerts a major
impact on the relationships between rules, flexibility and performance.
Irene Chow examined the relationships between 'control' and 'safeguard' rules and
human resource practices and performance in twenty-seven organizations in Hong
 Organizational flexibility in cross-national perspective 441

Kong. In this article, pp. 58-69 Chow shows that, within the context of Hong Kong,
size of the company had the most significant influence on the existence of rules,
particularly relating to employee behaviour (control rules). The absence of any strong
association between rules (or the lack of rules, i.e. flexibility) and performance or
innovativeness of the companies studied was interpreted by Chow in three different
ways. First, she argues, similarly to the Korean and Australian papers, that the rules and
flexibility discussion has to take into account the strategic dimension of human resource
flexibility. In other words, unless the use of rules is tied into a longer-term strategic
focus of the organization, the impact on performance may not be realized. Second, the
author argues that in Chinese organizations, particularly in Chinese family-owned
businesses, control processes are less programmatic, less obvious and more person-
alized (see Redding, 1990). Third, the author refers to the variations in perceptions of
the existence of rules between core and non-core personnel as a way of explaining the
absence of relationships between rules and performance.
The final paper in this collection, pp.70-79 is a research note in which the same
framework was applied to a sample of Malaysian organizations. Norma Mansor and
Muhammad Asri Mohd Ali examined the impact of rules on employee behaviour
(control rules) and on managerial discretion (safeguard rules) in thirty-five Malaysian
organizations. Consistent with the other papers in this special issue they included
contextual variables (e.g. size and ownership), as well as strategy and performance
variables in their study. The results of their exploratory study indicate that flexibility (as
it related to the absence of rules) had a positive impact on company performance only
in the case of rules governing employee behaviour, rather than management.
It should be noted that, although all the studies reported here shared a common
conceptual and theoretical framework and followed a common methodological
approach, different authors also enjoyed the freedom to develop unique and different
aspects of flexibility as it related to their own interests, and to the specific country/
culture they were studying. The paper by Reed and Blunsdon from Australia goes
furthest in this regard, as the authors incorporated aspects of the common approach into
an existing project on organizational flexibility.
Overall, this collection of papers addresses the issue of organizational fiexibility from
a broader perspective, not only reflecting a broadening of the notion of flexibility itself
(i.e. by incorporating views from organization theory, strategic management and human
resource management areas), but also incorporating the different ways in which the
concept of fiexibility is viewed in five countries (Canada, South Korea, Australia, Hong
Kong and Malaysia). The different papers demonstrate that in order to better understand
flexibility, studies need to take into account not only the organizational processes and
outcomes associated with the implementation of flexible strategies, but also the cultural
and country-specific differences in the ways in which the notion of flexibility is viewed.
In this process, we have developed a framework whereby 'rules' can be examined in
terms of theiir hmpaet on both employees and managerial flexibility and discretion. The
results of the papers reported here show that, both from the organizational culture and
strategic viewpoints, as well as from the point of view of the culture and norms of a
given country, the extent of flexibility for managers and for non-managerial employees
have quite different implications for the organization. Also, the extent to which such
approaches to flexibility are congruent with the overall strategy and the direction of the
organization are important factors that will ultimately determine the overall result of the
flexible HR approaches in organizations. More generally, the different papers highlight
442 Ali Dastmalchian and Paul Blyton
the value of reappraising notions such as flexibility in the light of different
organizational and national level characteristics.

Ali Dastmalchian
University of Lethbridge
Paul Blyton
Cardiff Business School
University of Wales
Acknowledgements
In the course of this research project financial assistance was gratefully received from:
Social Sciences and Humanities Research Council of Canada, Strategic Grants Division
(# 804-92-0031); Canadian High Commission; International Council for Canadian
Studies; Centre for Asia Pacific Initiatives of University of Victoria; and the British
Council.

Appendix: description of the measures used for 'control' and 'safeguard' rules in
this project

Control rules (rules on employee behaviour)

1 RULE BOOK Is there a rules book or some other document telling people about the
organization's rules? (l=no; 2=yes; variable name: RULEBK)
2 PENALTY FOR RULE VIOLATION Even if employees are found in violation of
company procedures, the company rarely imposes penalties. (Scale: 1 = strongly agree;
5=strongly disagree; variable name: PENALT)
3 SPECIFITY OF RULES How specifically are the employees expected to follow the
rules communicated by variety of methods? (Scale: 1= extremely loosely; 5=very
specifically; variable name: SPECIFIC)
4 RULES ON LATENESS Nothing is said if employees come to work late. (Scale:
1= strongly agree; 7=strongly disagree; variable name: LATE)
5 RULES ON COFFEE BREAKS In our organization the time for coffee break is
strictly regulated. (Scale: strongly agree=7; strongly disagree=l; variable name:
COFFEE)
6 OPERATING PROCEDURES Employees are to follow strict operating procedures
at all time. (Scale: strongly agree=7; strongly disagree=l; variable name: STRICT)
7 FREEDOM TO MAKE OWN RULES Most people here make their own rules on the
job. (Scale: strongly agree=l; strongly disagree=7; variable name: RULES)
8 USING JUDGEMENT Employees are often left to their own judgement in handling
various problems. (Scale: strongly agree=l; strongly disagree=7; variable name-
JUDGE)
9 MONITORING Managers spend a majority of their time seeing that employees
adhere to organizational rules and procedures. (Scale: strongly agree=7; strongly
disagree=l; variable name: ADHERE).

Safeguard rules (rules for management discretion)

1 GRIEVANCE PROCEDURE Does your organization have a written grievance
procedure? (Yes=2, no=l; variable name: GRIEVE)
2 DISMISSAL APPEAL Does your organization have written appeal procedures
against employee dismissal? (Yes=2, no=l; variable name: APEALD)
 Organizational flexibility in cross-national perspective 443

3 PROMOTION POLICY Are there written policies or procedures with regards to the
promotion of employees? (Yes=2, n o = l ; variable name: PRPOLICY)
4 PROMOTION APPEAL Does your organization have a written appeal procedure
against promotion decisions? (Yes=2, n o = l ; variable name: APEALPRO)
5 WORK SCHEDULES Do you have written work schedules in this organization?
(Yes=2, n o = l ; variable name: WORKH)
6 JOB DESCRIPTIONS Do people normally receive a written job description here?
(Yes=2, n o = l ; variable name: JOBDLN)
7 APPROVAL Management approval in writing is required for front-line supervisors
in personnel matters. (Yes=2, n o = l ; variable name: APPROP)
8 INTERVIEWING Does your organization have a standardized interviewing proce-
dure? (Yes=2, n o = l ; variable name: INTERVU)
9 WRITTEN RECRUITMENT POLICY Do you have a written policy on recruit-
ment? (Yes=2, n o = l ; variable name: RECRUI)
10 RECRUITMENT POLICY APPLICATION Does the recruitment policy affect all
jobs? (Scale: only senior positions=l; all jobs=5; variable name: RECPOL).

Notes
1 A small scale study was also conducted in Singapore. The coordination was done by the Canadian
group, and four research symposia were conducted: 1992 and 1993 (Canada), 1994 (Malaysia),
and 1996 (Hong Kong) in order to facilitate coordination of the projects.
2 The GLOBE project (Global Leadership and Organizational Behaviour Effectiveness) has been
organized and coordinated by Professor Robert House from The Wharton School, University of
Pennsylvania since 1994. It involves over 100 researchers from about sixty countries, and is
concemed with the unique approach to studying the relationship between national culture and
leadership. The same methodological approach is followed by all the participating researchers.

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