Mathematical Models for Predicting Organizational Flexibility of Construction Firms in Singapore

Abstract

The ability to predict and develop organizational flexibility is important for firms to survive and prosper in volatile business environments. The aim of this study is to investigate the constituents of and the constructs for predicting organizational flexibility. The specific objectives are to ascertain the relative importance of different constituents of flexibility and to construct and validate mathematical models to predict organizational flexibility of Singaporean construction firms. The research was conducted by a questionnaire survey and data were collected by face-to-face interviews with 41 construction industry experts. Three mathematical models were developed and validated by using the structural equation modeling (SEM) technique. The validation data consisted of ratings provided by four subject matter experts whose data were not used in the model development. The results show that the mathematical model for predicting strategic flexibility is able to predict to a good level of accuracy. The models show that the cost leadership initiative and supply chain capabilities of firms are the most important factors driving organizational flexibility. It is recommended that construction industry practitioners use the mathematical models that were developed to make a preliminary assessment on their firm’s flexibility potential.