Impact of interconnectedness of organizations on agility: a multi-theoretical perspective

Abstract

This paper conceptually explores the impact on the strategic agility of an organization due to it being a part of an inter-connected network of organizations. Organizations need to be strategically agile to respond to the challenges posed by dynamic environments. Existing literature has highlighted that today’s organizations are more interconnected with each other than ever before in history. Also researchers are unanimous in their opinion that today’s organizations face increased environmental dynamism. However, literature has not explored the relationship between organizational agility and inter-connectedness of organizations in a network. The focus of this paper is to bridge this gap by conceptually exploring whether an organization that becomes part of a network has the freedom and flexibility to evolve its own strategies, have an independent (of the network) understanding of the environmental changes, and even move from one network to another easily and without friction. The paper is based on network theory, resource dependent view and transaction cost theory.