Organizational flexibility in Korean companies: rules and procedures on managerial discretion and employee behaviour

Abstract

This paper examines organizational flexibility in Korea by concentrating on the rules and procedures on managerial and employee behaviours (safeguard and control rules), and their association with size, ownership, strategy and performance. The data reported were collected from forty-five organizations in South Korea. The results showed that flexibility in terms of low control rules (rules on employees) relates to innovation strategies, and lack of flexibility (high control rules) relates to cost-reduction strategies. The results also show that in Korea, a 'fit' between this aspect of organizational flexibility and strategy had a positive impact on organizational performance. Rules on managerial behaviour (safeguard rules) were strongly related to family or individual ownership in the Korean context. The implications of 'congruence' between organizational strategy and presence/absence of flexibility for employee behaviour are discussed.