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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 4, NO 10
ORGANIZATIONAL FLEXIBILITY AND ITS IMPLICATIONS ON

EMPLOYEES PRODUCTIVITY
Charles Ramendran SPR*, Gopalan Raman, Ramesh Kumar Moona Haji Mohamed,
Prashanth Beleya & Suresh Nodeson
* Charles Ramendran SPR , Faculty of Business & Finance, UTAR.
* Gopalan Raman, Faculty of Business & Finance, UTAR.
* Ramesh Kumar Moona Haji Mohamed, Faculty of Business & Finance, UTAR.
* Prashanth Beleya, Faculty of Science, UTAR.
* Suresh Nodeson, Faculty of Business & Finance, UTAR.
Abstract
Organizational flexibility is looked attentively as a necessary response to worldwide and it has
widely associated with labor markets as well as to the enterprise level. The debate on flexibility
has been around for much longer than is sometimes thought, the differences being that it has
intensified in recent years. It has adopted several elements or features of labor market flexibility
reflected especially at the enterprise level such as numerical flexibility, wage flexibility,
functional flexibility and working time flexibility. However, employees differ in their
preferences and attitudes in face of the organizations flexibility which require be accompanied
by personal discipline in fulfilling the demands of organizations in the aspect of productivity
improvement. This paper is to investigate the implications of organizational flexibility in
focusing on functional flexibility and working time flexibility apart from numerical and wage
flexibility which geared to create the atmosphere appropriate to the cooperation sphere for
productivity gains.
KEYWORDS: Organization, employees, productivity, implications & flexibility
INTRODUCTION
In the past decades, employees from any sector or industry worked under fixed conditions
whereby these conditions were embraced and perceived as regularity, standardization and
uniformity (Karsten & Leopold, 2003). Today, working culture has undergone a lot of changes
since the days of the industrial revolution. Environmental forces has changed and modernized the
whole world into the new era which adaptation is needed for survival. It has been recognized that
organizational success depends on among other things an organization‘s ability to adapt to its
changing environment. During this period, many businesses were collapsed and went off from
business due to the dynamic effect of environment. However, those who are still surviving, they
are developed a considerable degree of adaptation in response to changing environment.
According to Haeckel (1999), explained how an organization can adapt or even create new
environments so as to generate new opportunities and anticipate situations in an ever-changing
environment. Wood, (1989) further added that organizations have increasingly sought to adopt
work structures which are characterized by their flexibility and adaptability involving re-
designing job around a functionally flexible worker (Katz 1985). As such adaptation could create
and introduce new industry to the world. ―One of the most popular changes has been the
implementation of working arrangements which provide flexibility in a number of areas such as
working time, place of work, task or job content and rewards.‖ (Papalexandris & Kramar,1997).
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―Organizational‖ means a social unit of people which are systematically structured and managed
to meet the objective and goals on a continuing basis. Their task, roles, responsibilities, duty and
authority are divided based on their specialty. ―Flexibility‖ means the capacity of freedom given
in a timeframe. Therefore, organizational flexibility can be defined as when, where and how
people work given the flexibility because it is an essential part of creating an effective
organization as well as meeting the organization goals and objective. According to Baltes, B.B.,
Briggs, and T.E.., Huff, J.W., Wright, J.A. and Neuman, G.A. (1999) as further elaborated that
the flexibility in working arrangements has positive effects on employability which included
productivity, job satisfaction and low absenteeism.
Organizational flexibility helps the organization to manage the company by recognizing and
understands the various types of flexibility. Teece, Pisano and Shuen (1997), have explained that
organization flexibility as a combination of repertoire of organization and managerial capabilities
that allow organizations to adapt quickly under environmental shifts. In the context of
organizations, several flexibilities have been highlighted such as operational flexibilities,
structural flexibility, functional flexibility and wages flexibility. Organizational flexibility relates
to the extent to which organizations may react to their internal and external forces.
Organizational reaction towards change conversant with the underlying problematic areas but
also the importance of organizational flexibility in driving the organization forward towards
sustainable effectiveness. Organizational flexibility enables the organization to exercise it
empowerment, decision-involvement, promote renewal process, innovation and employees
commitment. In recent uncertainty of global economy, organization has increasingly sought their
awareness to adopt with flexibility in decision making on manpower utilization. Flexibility as a
form of leadership progression does indeed break down silo models of management. If an
organization were to view itself as a static monolith, it usually ends any form of efficiency that
might be created. If you have an environment of trust and a well-internalized plan, you can shift
things around easily. That is a huge advantage over organizations that view structure as
something fixed until heaven and earth are moved to change it.
Organizational flexibility can be described when changes such as demand for the product
increase, will also increase production. When, where and how in flexibility are related because
‗when‘ described the flexible hours, part-time work, variable year employment, part year
employment and leave where as ‗how‘ can be described as job-sharing, phased retirement and
annualised hours. Lastly, ‗where‘ is also related to flexibility because it can be described as
working at home or working remotely.
Flexible human capital practices when adopted as a whole in a congruent cultural context
contribute to a work force that is more skilled, stable, and enthusiastic and free of distractions. In
view of this high performance of an employee becomes a must for an organization. Organization
aim in flexibility of change and its commitment to high performance work system will lead to
increase productivity of an employee and as a whole the organization productivity or
performance. But this achievement rely on conditions that employees can identify and recognize
the organization‘s goals and work hard to accomplish those goals. (Whitener, 2001). Changes
demand high performance and high performance determine the survival of organization (Walton,
1985; Wood & Albanese, 1995). The term of high performance work systems refers to how an

organization can adapt and convert its flexibility of change program into high achieving vision of
change with minimum resistance. The term high performance work systems refers to human
resource management approach that tries to elicit employee commitment to and involvement
with organizational goal.
Walton, (1985); Wood & Albanese, (1995) further mentioned that the manner in which
flexibility is implemented across the board determines how flexible human capital strategies
affect an organization‘s profitability, ability to grow, and market value. Among the visible
changes of flexibility include:
• Talented and focused employees who are on flexible schedules are more likely to be committed
to the organization‘s goals and deliver superior value to customers, who in turn, are more
inclined to be satisfied and loyal, generating strong sales.
• An organization utilizing flexible strategies is more efficient in the short run, and more
profitable. It is also better poised for long-term success, able to innovate and continually improve
processes while minimizing overhead.
• These organization‘s investments are in constructive, future-oriented assets–- human capital,

innovation, and customer relationships-–all leading indicators that stock analysts use to evaluate
stock price.
According to Skorstad and Ramsdal (2009), numerical flexibility refers to the ability to tailor the
size of the labour force to cope with fluctuations in demand. Working time flexibility refers to a
flexible working and flexi-time which allows employees to set and adapt their working hours to
cater to their external obligations such as child care. Wage flexibility refers to the use of systems
such as bonuses to allow payments to tally better with the shifts in demand and output and the
ability to adjust budgets rapidly according to need. Functional flexibility refers to the ability to
move employees around between jobs and functions.
The objective of the research is to explore on flexibility practices such as flexibility working
time and functional flexibility as significance to human resource management in emphasizing
employee‘s productivity. According to Gottlieb, Kelloway & Barham (1998), when the
individual outcomes are examined, research finding shows that attitudinal consequences such as
satisfaction, commitment, intent to turnover and strain over behaviours compare to performance.
Very few studies consider the motivation and coordination consequences (Levine & Moreland,
1998) on individual and group performance and often overlook cross-level effects of use on
groups (Bailey & Kurland, 2002). Cross-level effects are critical because use reduces face time
and has motivational and coordination consequences for co-workers.

LITERATURE REVIEW
Organizational theory has long argued that formal structures and processes are always embedded
in—and their effectiveness conditioned by—a broader organizational context of culture and
leadership (Scott 2002). The postulate of a tradeoff between efficiency and flexibility is one of
the more enduring ideas in organizational theory. As such, managers must choose between
organization designs suited to routine, repetitive tasks and those suited to non-routine perhaps
innovative tasks. However, as competitive rivalry intensifies, a growing number of firms are
trying to improve simultaneously in efficiency- and flexibility-related dimensions (de Meyer et
al. 1989, Volberda 2006). Flexibility dimensions vary for different reasons. Yet, the ultimate
goal is to enhance the visibility of flexibility and adapt that notion as part of the everyday
process at the workplace. In the literature to date, three mechanisms have been identified that
facilitate this kind of ambidexterity. They can be arrayed from more microscopic to more
macroscopic in scale: enrichment, switching, and partitioning.
First, workers‘ routine production tasks can be enriched to include improvement as well as
efficiency goals. This further supported by Langer (1999) and Schon (1983) that the difference
between mindless and mindful performance of routine work. Second, work can be organized so
that people switch sequentially between the two types of tasks rather than attempting to do them
both simultaneously. Switching allows employees the freedom to move back and forth with ease
from a routine task that must be carried out according to standard procedures and also tasks that
could be innovated according their own recognition that requires such steps. As compared to
enrichment, switching allows greater focus and reduces the risk of confusion. The third way is
known as partitioning, which deepens skills and nurtures specialties among employees.
According to Lawrence and Lorsch (1997) an even more macroscopic scale if the organization
as a whole partitions itself to allow some subunits to specialize in routine tasks while other
subunits specialize in non-routine tasks. However, the focus is not to allow being in a unit for too
long. There would be flexibilities as and when required as employees would then shift to another
area coinciding with the parallel area of specialization.
DEFINITION PRODUCTIVITY
Productivity is defined as the amount of output produced with certain combinations of input
resources (capital, labor, etc.). Even tough there is a lot of research already done on productivity,
societies and organizations are all the time facing new challenges and opportunities because of
the dynamic environment and constant change.
EMPLOYEES PRODUCTIVITY
The relationship between employee productivity growth and overall economic growth would
seem to be obvious. Blinder (1997) define output growth is the sum of the growth of labor hours
plus labor productivity growth. According Bureau of Labor Statistics BLS (2010) productivity
measurement describe the relationship between real output and the labor time involved in its
production. They show the changes from period to period in the amount of goods and services
produced per hour and employee productivity is the most widely used yardstick of operational
efficiency. In other words, this does not imply that labor is the best input element for
productivity measurement but simply reflects the difficulty or impossibility of obtaining

numerical values for the other determinants of productivity. Thus many of the assignment on
productivity seem to assume that labor productivity or employee productivity is the
only suitable measure (Lowe,1987). There is one common method of measurement of average
labor productivity is a ratio of output per labor.
Average labor productivity = Q / L (2)

Where: Q = outputs, L = Labor employed. Source (Lowe, 1987, p105)
DEFINITION OF WORKING TIME FLEXIBILITY

Working time flexibility are defined as employer provided benefits that permit employees some
level of control over when and where they work outside of the standard workday (Hill et al.,
2001).
WORKING TIME FLEXIBILITY

Flexible working time model become more popular among the business due to the changes in
environment. Ulrich (1998) debates that in the new economy; winning will spring from
capabilities such as speed, responsiveness, agility learning capacity and employee competence.
In order to capitalize upon these core competences organizations need to ensure their dexterity
by ensuring work continues, even away from the traditional places of work, through establishing
trust and quality communications, focusing on product instead of process and careful negotiation
of objectives and workable agreements (Nilles, 1998). No more fixed space and time for any
organization to use their workforce to meet it‘s objective and goal in present time. The flexible
time has replaced the traditional way of working which is 9am-5pm, five days per week, and it is
no longer the dominant pattern if employment.
According to Peter Berg (2008), there are many of flexible work arrangements across
organization because the increasing changes between work and non-work roles. He has found
that the working time flexibility brings benefits to employers in coordinate labor demand and
labor supply more effectively as well as lowers the cost of overtime premium due to decreasing
total volume of working hours. In addition, flexibility allows savings in terms of layoff cost due
to the business cycle variation and the cost of training new employs. However, Peter Berg further
argued that there are also costs incurred for employers of the flexible working time arrangements
such as employment guarantees to attain the flexibility. Moreover, it is more time consuming in
coping of diverse work planning within and across work group.
One of the effects to employees is they can make their independent decision to depart from the
usual work time. It lets employees to regulate their stress and changes that are portion of non-
work responsibilities. Employees can use the sabbatical-type leaves in further of training and
development opportunities and lessen the hours in anticipation of retirement. Thus, working time
flexibility can be another ways to force redundancies and provide employment security to the
employees.
According to Ralph Kattenbach, Evangelia Demerouti, Friedhelm Nachreiner (2010), practicing

of working time flexibility is becoming more famous because of the respond of employers in the
market changes and it aids to use their labor for more efficiently. Besides, it may reduce the time

required in monitoring and controlling of employees. For the employees, it has widened their
individualization of lifestyles and thus need more time in planning to balance and structured job
tasks and non-work activities. It also allows regulation of time according to their pace and it
tends to have a better usage of one‘s peak time. On the other hand, practicing flexibility can also
caused inconvenience among the employees as communication and cooperation weakened
especially within those who are interdependent.
The needs of flexible working time (FWT) have increase significantly due to multiple reasons.
Dual-income households due to economic expansion along with higher inflation rate has
warranted for work time flexibility especially for female workers. In view of this, working time
flexibility is a critical issue pertaining to work-family balance. According to (Felstead et al.
2002) flexibility working time practices are those that provide some degree of responsiveness
and adaptability that helps employees to reconcile the two spheres, earner and career. The dual
needs of employees and employers do not mean it is an automatic acceptance but it is merely a
desire especially the employees desires. However (Kattenbach et al. 2010) argued that the
flexibility on behalf of the employer does not mean flexibility on behalf of the employee and
vice versa, it can even counteract each other. Employer‘s objective is to achieve the organization
goal by maximum utilization of its workforce and its efficiency.
The game has been changed which organizations acquire new ways of managing employees to
combat fierceness of competition. Manager‘s rephrase the employment term‘s so called
traditional way of working to retain their high skills employees who might lose to the
competitors. Vana et al (2008) has found that employees in managerial, technical/professional,
and clerical occupations are more likely to take up conventional work-hour arrangements.
Further supported by Hamermesh (1996), the most skilled or highly educated employees can
successfully access flexible working schedules and arrange flexible working arrangements
through their position or leverage. Hence, traditional ways of working is a constraint for
employees‘ capabilities which they have to work in fixed environment. It might freeze
employees‘ abilities to exploit more chances in their daily life. Flexible working time has broken
all the constraints and creates new pathways for employees to sharpen their skills and talent.
According to Burns (1979), the working schedule becomes more flexible, the level of space-time
autonomy increases and daily activity prism also change in position. Further added by
Hagerstrand (1970) and other researchers supported that activities which are fixed in space and
time, such as work determine the opportunities to conduct other flexible activities. It gives
enormous chances to an employee to exploit new things that might benefits and improve
productivity efficiency.
DEFINITION OF FUNCTIONAL FLEXIBILTY

Functional flexibility refers to the extent which employees can be transferred to different
activities and tasks within the firm. It also is a positive way for skills development as it making
optimum use of the employee‘s capacity to perform different tasks. According to Goudswaard &
Nanteuil (2000), functional flexibility can be the idea that workers should be trained to have a
range of skills so that they can do other jobs as well as their own when necessary. Functional
flexibility is an employer and employee collaboration approach. It refers to efficiency and
effectiveness commitment in achieving the organization desire. (Cavagnoli 2008) further define

functional flexibility as firm ability to efficiency utilizes labor resources in various tasks and
types of jobs by providing safe and challenging environment.
FUNCTIONAL FLEXIBILITY
Flexible organizations today would need to consist of workers who are able to move from one
task to another as needed while maintaining or much better, improving overall organizational
efficiencies and effectiveness. The survival of organizations no longer depends on workers who
do the same, well-defined tasks with prominent distinctions between the roles of one worker to
the other are required (Martin & Healy, 2009).
With organization emphasizing on labor resources, employees can mould and further enhance
their knowledge and skills in ensuring that they are prepared to face current and future
challenges. Facing new challenges with enhancement of functional flexibility and the acceptance
of the functional flexibility can be argued, as (Cordey & etc 1993) have made an argument that
whether or not positive or negative outcomes arise, there seems little doubt that changes to
traditional jobs and skill paths effected by the moves toward greater functional flexibility can be
perceived as threatening by employees especially baby boomers and generation X, despite the
assurance by the management.
According to Terry Desombre, Clare Kelliherw, Fraser Macfarlane and Mustafa Ozbilginz
(2006), functional flexibility is where staff is redeployed across tasks to accommodate variations
in demand. Functional flexibility has been advocated as a mechanism for improving efficiency
and service quality, especially appropriate to service environments. Furthermore, functional
flexibility can lead to significant improvements in productivity, as traditional production
methods are replaced by multi-skilled employees undertaking more varied forms of work. In
essence, greater efficiency in the management of labor is achieved by the reduction of ‗idle time‘
and by the resulting intensification of work.
NUMERICAL FLEXIBILITY
This study examines some ways by which employers are going to reorganize the workforce to
become more flexible and what the effect of restructuring the workforce. The method used is a
core-peripheral model. Based on the analysis, Kalleberg (2003) suggests that standard and non-
standard employment have different relations and occupation serves the effects of inequality in
the organizations. From this article, we can conclude that the researcher have used two types of
flexibility and various variables to test the employees on flexible firms and different labour
market segmentation. Functional flexibility and numerical flexibility serves different purposes
for different scenarios. Nonstandard work arrangements and standard work arrangement has its
advantage where standard worker are more committed to their job and nonstandard work
arrangements where employees are able to do different task in various organizations.
The purpose of this study is to define and measure numerical and functional flexibility at the firm
level and also to determine the impact of each of these factors on work performance, cost and

innovation as well as the relationship between all these variables (Arvanitis, 2003). Research was
conducted using questionnaire and questionnaires were received from a grand total of 1667 firms
where there is 285 cases was unusable due to the inconsistent of answers. In conclusion, the
result reported that companies that pursue functional flexibility seldom hire temporary workers.
Hiring more part time worker can lead to reduction in labour cost but this does not mean the
work productivity will increase. This is because temporary staffs are less qualified than
permanent staff.
WAGES FLEXIBILITY
Peeters and Den Reijer (2011) discussed on wage coordination among European Union countries
done by policy makers which are geared towards aligning wage growth with labour productivity
growth at the national levels. The authors studied on the contribution of productivity to wages,
taking into consideration the non-linear wage equation resulting from a wage bargaining model,
and the rigidities of wages. It was found that low productivity, price inflation and reductions in
unemployment put an upward pressure on wage growth. To steer and influence wages, policy
makers can effectively use the replacement rate. Although the national authorities have a say in
government wages and social security benefits, wages in the private sectors is a bargaining
process between employers and labourers or labour unions where the government has limited
interference. Each country should be responsible for the specific policies it chooses to implement
with certain conditions to foster competitiveness. Traditional theories assume that economy is
able to correct by itself in cycles and thus, wages drop in the events excess labour. However, the
authors supported that the Keynesian theory is applicable to the current state of flexible wage
setting particularly in developed economies with strong labour unions.
The authors quipped that with wage flexibility, positive inflation and low unemployment tend to
push up wages. Performance-based system and new bonus systems are created through wage
flexibility hence, the better the performance, the better the reward. Workers should have an equal
stake in the profit-sharing plan in regards of their skills to increase their retention prospects.
Employers would need to be readily willing to pay higher remuneration or prices during tight
labour market conditions, high consumer prices, and replacement rates.
EFFECTS OF WORKING TIME FLEXIBITY ON PRODUCTIVITY

Many scholars have examined the effects of flexible work arrangements on organizational
productivity, using various indicators of job performance as well as records of absenteeism and
tardiness. The available evidence regarding the effects of flexible work arrangements on
productivity is quite mixed as argued by Gottlieb et al., (1998). Research studies are different
from reported negligible effects of flexitime on productivity to founded varied reports that
organizations examined increased in productivity. There are many studies have reported
productivity and performance improvements with telecommuting (Bernardino, 1996). Pratt
(1999) argued that an employee's productivity was the same or higher when they teleworked.
There are several studies have also investigated the effects of compressed work weeks on
organizational productivity. According to Barling, Gallagher, (1996) some studies have noted
increases in performance; the more common observation has been no change in productivity.

There was a study on 1996 by Glass & Estes. Glass & Estes found that mothers who were
allowed to work at home following childbirth displayed lower turnover and higher levels of
productivity. There was some studies have presented evidence for improved productivity directly
relating to the existence of family-friendly policy (Shepard et al, 1996; Friedman, 1989), and
others have found links between job satisfaction and satisfaction with work-family balance (Ezra
& Deckman, 1996). Shumate & Fulk (2004) findings suggest that there is a great risk for lowered
productivity associated with work-at-home arrangements due to parents‘ difficulty in dividing
their time between work and family when working from home. Additionally research finds that
employees in effective and flexible workplaces are more likely to be engaged in helping their
organizations succeed, more likely to be satisfied with their jobs, more likely to stay with their
employer and more likely to be in better mental health. In other words, workplace flexibility is a
way to define how, when and where work gets done, and how careers are organized (Galinsky,
2008).
EFFECTS OF FUNCTIONAL FLEXIBILTY ON PRODUCTIVITY

According to Michie and Sheehan, (2005) functional flexibility is the ability of firms to vary the
type of labor they use without resorting to the external labor market, and accomplished primarily
by having a labor force that is able to carry out a wide range of tasks such as the ability to move
workers from one task to another. It is also intended to develop a workforce that may deal
effectively with exceptional situations which require creativity and initiative (Huang and Cullen,
2001).
Research results on functional flexibility; generally agree on its positive relation with
performance. For example, Bhattacharya et al. (2005) identified that the two main components of
functional flexibility (namely, skill and behaviour flexibility) were positively associated with
return on sales, operating profit per employee, and sales per employee. Furthermore, they found
that skill flexibility was significantly related to cost-efficiency, although no significant effects
were found for behavior flexibility. Additionally, Michie and Sheehan-Quinn‘s (2001) study of
publicly quoted UK manufacturing and service-sector organizations detected that increased
functional flexibility was significantly positively correlated with organizational innovation and
perceived financial performance. Research results of Lepak et al. (2003) were also consistent
with this idea, as they found that extensive reliance on employment systems based on functional
flexibility was beneficial for firm performance. Edward M. Shepard et al. (2008) study also
shows that, flexible work hours potentially influence productivity through effects on absenteeism
and turnover, organizational attachment, job attitudes, work-related stress, and other areas. It
seems functional flexibility have a more positive relation with performance in firms high in
technological intensity (Lepak et al., 2003), and in firms pursuing a quality or innovation
strategy (Michie and Sheehan, 2005). Additionally, its combination with high performance work
systems seems also to improve financial performance and innovation (Michie and Sheehan,
2001).
EFFECTS OF NUMERICAL FLEXIBILTY ON PRODUCTIVITY
Numerical flexibility was also one of the flexibility that can be used in an organization. There are
two types of numerical flexibility which are external and internal numerical flexibility. External
numerical flexibility can be described as the amount of labour took depends on the needs of the
organization. Most of them are temporary workers or part-timers where they will be hired in

accordance to organizations needs. On the other side, internal numerical flexibility can be
defined as employees have the flexibility to work on the hours they feel comfortable. These
employees may be working in the firm but they act as a temporary worker where they time
flexibility or flexible working shifts.
The negative impact of external numerical flexibility is that since employees are given the
flexibility, they may over use the flexibility given. Therefore, they take things for granted. Some
may even take advantage of this to do moon walking and this may caused the company to be in
trouble in terms of company‘s policy exposed. Employers may have to supervise or monitored
their performance and may cause minor conflict between them due to lack of trust and
confidence in employees. Whereas, the negative impact about internal numerical flexibility is
that employees unable to commit to the organization as they are only part of the organization if
there were needed during the period of time. Thus, it is difficult for the employees to commit to
the organization because they are not attached with the organization.
EFFECTS OF WAGE FLEXIBILTY ON PRODUCTIVITY

In wage flexibility, its wages level depends on the supply and demand of labour. If the supply of
worker is more than the demand, hence the wages level will be lower. Their wages paid might
also depend on the incentive scheme use by the respective organization. The measurement
standards of the incentive schemes are not standardize. Employees don‘t have a fixed rate of
incentive that enables them to have an overview of their wages. They unable to estimate how
much effort they need to put in order to get the desired work performance. Thus, employees
might be de-motivated will in turns lead to lower work productivity. Besides, when the
employees‘ salary is based on team based incentive, even though one of the members in the team
do not put any effort in carry out the required task, but, he still can get the incentive. Thus an
inequality of distribution of wages may arise. This will lead to dissatisfaction among employees
as they will feel de-motivated. Besides, wages flexibility might also bring impact such as wage
level that provide by employer might not consistent with the desired work productivity provided
by employees. Sometimes the work productivity that provide by the employees might not match
with the wage level. In addition, they is also a probability that employers will take advantage on
young employees by giving a lower pay because they are not as qualified as senior workers and
the limit of experience they have.

PROPOSED CONCEPTUAL FRAMEWORK
Wages Numerical
Flexibility Flexibility
Functional Work time

Flexibility Flexibility
Employee Productivity
MANAGERIAL IMPLICATIONS
This study has provided new insights for practical implication of organizational flexibility in
focusing on functional flexibility and working time flexibility from the productivity perspective
and has contributed to the most important area of business management.
Furthermore, several study‘s findings suggest to managers that investment in functional

flexibility and working time flexibility increased firm financial performance and productivity.
This study makes sense in functional flexibility and working time flexibility is a source of
competitive advantage in terms that firms become more productive because their managers
emphasize the importance of flexibility. The relationships between these two forms of flexibility
are important to understand the interaction between the dynamic control capacity of management
and the responsiveness of the organization.
Functional flexibility and working time flexibility has powerful impacts on productivity in terms
of engagement, turnover, and financial results. Access to flexibility results in reduced
absenteeism and higher employee retention, reduced cycle times, and enhanced customer service,
and contributes to greater customer retention and higher profits. Day, Gary, Minichiello, Victor,
Madison, and Jeanne (2006) further supported that poor employee‘s morale had negatively
impact on turnover and retention rate. The flexible work arrangements was positively related to
job satisfaction but negatively related to turnover intention. From the perspective of
organizational flexibility, this study have illustrated the importance of adopting a broader view
of the scope of organizational flexibility in the context of how employee performed once they

adapt to the organizational flexibility. Organizations are beginning to overhaul methods

traditionally used to stimulate employees at work. Unlike employee-oriented flexibility
arrangements, the main reason employers take up flexibility arrangements is because of direct
cost benefits companies‘ gain from its use. Brewster et al. (1994) argue that the main reasons for
employers to take up flexibility arrangements are to reduce costs and improve effectiveness, to
match work provision closely to work demand, to put greater focus on work rather than job,
establish clearer performance targets, and to undertake closer more realistic performance
monitoring etc. Meeting customers‘ needs is another reason why employers would take up
employer-oriented working time arrangements. In other words, the main goal of implementing
various employer-oriented working time flexibility policies is to increase profit, though not
necessarily neglecting the productivity aspect.
The following firm experienced significant turnover-related savings after they adopted flexible
human capital cultures and practices:
Ernst & Young is one of the largest professional services firms in the world and considered one
of the Big Four auditors, along with PricewaterhouseCoopers, Deloitte and KPMG. The firm
supports its people by offering extensive flexible working programmes and informal
arrangements to promote flexibility at work (Ernst & Young, 2012). Ernst & Young estimates
saving $17 million in turnover-related costs during 2007 and 2008, with flexible work
arrangements and a culture that made simultaneous work and personal success possible. It
improved retention of employees, particularly women (65% of the people who used the flexible
work arrangements had earlier considered leaving), and improved client satisfaction. The
management at Ernst & Young mentioned practices that recognize both the value and the needs
of employees enable companies to grow in terms of profits and revenues and to sustain that
growth over longer periods of time, because they provide that critical fundamental element: ―the
right people on the bus and in the right seats.
Flexibility helps reduce costs associated with turnover, labor and legal fees (FlexPaths, 2004). A
research done by FlexPaths, a firm delivering innovative software solutions and services that
initiate, enhance or advance a flexible culture, suggested that employees having conflict between
their work and family responsibilities were more likely to consider leaving their jobs. Hence,
with the presence of flexibility, the relationship between the firm and its people were not
compromised instead, it will be better in the sense that both sides benefited from the flexibility.
Every strategy has its own advantages and disadvantages. According to C. Kelliher and D.
Anderson (2008) research on the opportunities for advancement, it was found that flexible
working, regardless of opportunities or career for the future, will bring less positive effects
toward workers. This is because of flexi worker will less be seen in the company compared with
fixed time worker. Based on the survey, 64% of flexi worker justify that, until certain extent,
they have to push themselves involving in high profile project in order to get known by others in
the company. Therefore, it has indirectly contributed significant impact on employee‘s
performance by giving alarm to the management of their existence.

RECOMMENDATIONS
i. Other than outsourcing and subcontracting, strategic alliances and joint ventures will help
facilitate change in organizations. Decisions should be made based on the situation at
hand and the actions toward the attainment of organizational goals should be tailored to
thrive at current market conditions.
ii. Allow employees to receive the necessary training and give them the opportunity to learn,
as well as the time to absorb the knowledge for any tasks, procedures or equipment
handling that is projected to need extra manpower during uncertainties.
iii. Employers should view organizational flexibility as a way to optimize and improve
organizational operations and productivity leading to goal realization; employees should
view it as a way to have a work/life balance and as a source of motivation to be
enthusiastic about their daily regular work.
iv. Clear communication is vital in letting workers know how flexibility will help them as
well as how their flexibility practices will help the organization. Describe to them in a
bigger picture which allows them to see the potential benefits that will come their way
through flexibility. Let them be exposed to the success stories of flexible working
through the testimonies of current flexible workers.
v. Ease the accessibility towards flexibility. Make the entire process hassle-free. Let
employees know that they are entitled for which respective mode or type of flexibility.
As important as training is for job tasks and equipment handling, training and induction
should also be conducted at the early stages of flexibility implementation. This is to
disseminate vital information on the options of flexibility provided by the organization as
well as the terms and conditions. This will reduce the probability of conflict and
misunderstandings among all parties involved.
vi. Information and communication technologies (ICT), have improves employees lifestyle
in which they could arrange their balanced work life in more effective ways. It is further
mentioned by Handy and Mokhtarian (1996), Mokhtarian and Salomon (1997) Kwan
(2002), Couclelis (2003) Graaff and Rietveld (2007), Schwanen and Kwan (2008) that
the widespread adoption of ICT together with an increase in the flexibility of work
arrangements, people now schedule their work activities in a more flexible ways.
According to Valendue and Vendramin (2001), ICT supports and fosters the
implementation of flexible work form and increase their efficiency. Existence of I phone,
I pad, Galaxy tab, laptops, and innovation devices are assisting human capital to optimize
their work efficiency. Schwanen and Kwan (2008) explained that, activities that could
have been carried out online are believed to be less fixed in space and time those aided by
the internet are flexible in time.

CONCLUSION
In line with flexibility, a form of stability needs to be essentially present as well. This is because
changes that takes place in any organizations in terms of their tasks, structures, procedures,
processes, systems and culture has to be gradually and steadily incorporated into employees so
that they would not experience any shock or surprises but confidence and eagerness instead,
when new tasks are handed to them. However, this may not be easy as it seems to be as
competitive pressures may prompt organizations to carry out changes without them reflecting on
the ability or capacity of employees as well as the consequences first, when it comes to post-
flexibility. Hence, employees may not be adequately trained which leads to low morale, fatigue,
stress, and job burnout.
Ultimately, organizational flexibility has its own share of advantages and disadvantages but in
these changing times, the benefits of flexibility seem to be much more prominent that it
outweighs the drawbacks. This paper is able to discover this prominence not only through the
reviewing of the many sources that have been presented in this research by various authors, but
also through the understanding that globalization and diversity, the most common yet
significantly important terms of our time, goes hand-in-hand with flexibility. Indeed, the gradual
shift towards flexibility is evident and is constantly and continually shaping the nature of
relationship among employer and employees.

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ijcrb.webs.

com FEBRUARY 2013

ORGANIZATIONAL FLEXIBILITY AND ITS IMPLICATIONS ON

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• These organization‘s investments are in constructive, future-oriented assets–- human capital,

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Average labor productivity = Q / L (2)

DEFINITION OF WORKING TIME FLEXIBILITY

WORKING TIME FLEXIBILITY

According to Ralph Kattenbach, Evangelia Demerouti, Friedhelm Nachreiner (2010), practicing

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DEFINITION OF FUNCTIONAL FLEXIBILTY

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EFFECTS OF WORKING TIME FLEXIBITY ON PRODUCTIVITY

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EFFECTS OF FUNCTIONAL FLEXIBILTY ON PRODUCTIVITY

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EFFECTS OF WAGE FLEXIBILTY ON PRODUCTIVITY

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PROPOSED CONCEPTUAL FRAMEWORK

Functional Work time

Furthermore, several study‘s findings suggest to managers that investment in functional

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adapt to the organizational flexibility. Organizations are beginning to overhaul methods

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Whitener, E. M. (2001). Do ―high commitment‖ human resource practices affect employee

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