Alavi 2014

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Organic structure and organisational learning as the

main antecedents of workforce agility
a a a b
Somaieh Alavi , Dzuraidah Abd. Wahab , Norhamidi Muhamad & Behrooz Arbab Shirani
a
Department of Mechanical and Materials Engineering, Universiti Kebangsaan Malaysia,
Bangi, Malaysia
b
Department of Systems & Industrial Engineering, Isfahan University of Technology, Isfahan,
Iran
Published online: 02 Jun 2014.
To cite this article: Somaieh Alavi, Dzuraidah Abd. Wahab, Norhamidi Muhamad & Behrooz Arbab Shirani (2014): Organic
structure and organisational learning as the main antecedents of workforce agility, International Journal of Production
Research, DOI: 10.1080/00207543.2014.919420
To link to this article: http://dx.doi.org/10.1080/00207543.2014.919420
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International Journal of Production Research, 2014
http://dx.doi.org/10.1080/00207543.2014.919420
Organic structure and organisational learning as the main antecedents of workforce agility
Somaieh Alavia*, Dzuraidah Abd. Wahaba, Norhamidi Muhamada and Behrooz Arbab Shiranib
a
Department of Mechanical and Materials Engineering, Universiti Kebangsaan Malaysia, Bangi, Malaysia; bDepartment of
Systems & Industrial Engineering, Isfahan University of Technology, Isfahan, Iran
(Received 24 July 2011; accepted 22 April 2014)
Studies on agility in the workplace have focused excessively on technical factors, and little attention has been given to
the workforce. Most studies on workforce agility are conceptual and have a notable absence of quantitative modelling
and analysis. In the study, a theoretical model of the impact of two organisational characteristics, namely organisational
learning and an organic structure (with three dimensions, which are decentralisation of decision-making, low formalisa-
tion and a flat structure), on workforce agility was developed and empirically tested. Several small- and medium-sized
Downloaded by [University of West Florida] at 05:44 12 October 2014
enterprises in Iran were investigated. The structural equation modelling showed that organisational learning and only the
decentralisation of decision-making and a flat structure were positively and significantly correlated with workforce agil-
ity. The impact of the dimensions of an organic structure on organisational learning was also considered. Based on the
results, we proposed a process model on workforce agility.
Keywords: workforce agility; organic structure; decentralisation of decision-making; flat structure; low formalisation;
organisational learning
1. Introduction
One of the current challenges that firms in the manufacturing sector encounter with respect to remaining competitive
is the increasing rate of change within their surroundings (Ben-Menahem et al. 2013; Gunasekaran 2001; Iivari and
Iivari 2011; Ramesh and Devadasan 2007). Firms must continually respond to their dynamic and competitive environ-
ments to survive (Zhang 2011). In 1991, a group of researchers introduced the concept of agility in industries as a
means of responding to rapid environmental changes (Hormozi 2001). Kidd (1994) defined organisational agility as
the rapid and proactive adaption of organisational elements to uncertain and unexpected changes. Gunasekaran (1999)
defined agile manufacturing as the organisational ability and capability to survive and to prosper in a competitive
environment by rapidly responding to changes through the use of manufacturing and managerial methods. Agility is
thus a necessity rather than an objective or a strategy. Agility has two features, which are (a) responding to dynamics
and threats in the best possible way and in the shortest possible time (Rajan, Solairajan, and Jose 2012; Sherehiy
2008) and (b) identifying and capitalising on opportunities in the most effective and timely manner (Sharifi and
Zhang 1999).
Literature has indicated different viewpoints on the principles of agile manufacturing (Bessant et al. 2002; Dischler
2011; Gunasekaran 1999; Manthou, Vlachopoulou, and Gunasekaran 2001; Sharifi and Zhang 2001; Yusuf, Sarhadi, and
Gunasekaran 1999). People are one of the most common considerations of all agile manufacturing models, which indi-
cated the importance of workforce agility (Alavi and Abd Wahab 2013). However, little empirical research on the agile
workforce has been conducted (Kass, Probst, and LaSalle 2006; Sherehiy, Karwowski, and Layer 2007). The change in
the manufacturing paradigm from mass production to agile manufacturing (Lee, Ang, and Lee 2006) requires a new
business approach that can produce behavioural and attitudinal changes in the workforce.
Previous studies have greatly emphasised the role of technology in agile manufacturing over that of human
resources. These studies showed that agility could be achieved by using technology (Youndt et al. 1996).
However, recent studies have shown that workers, rather than technical factors, promote agility (Breu et al. 2001;
Sherehiy, Karwowski, and Layer 2007). Firms that want to become agile should not only focus on technology,
but should also train workers in the use of technology (Gunasekaran 1999). Thus, a firm cannot become agile
without properly addressing workforce agility in its agility programme or if the workers are not agile (Chonko
and Jones 2005).
*Corresponding author. Email: somayeh_alavi61@yahoo.com
© 2014 Taylor & Francis

2 S. Alavi et al.
2. Problem statement
The development of an agile workforce requires an understanding of the significance of organisational characteristics
(Sherehiy 2008). Managers who do not know how to encourage the development of an agile workforce are major
impediments to the success of programmes designed to achieve workforce agility (Alzoubi, Al-otoum, and Albatainh
2011; Glinska, Carr, and Halliday 2012; Sawhney and Piper 2008).
Identifying the most important practices for achieving workforce agility is needed. In the absence of precedents, the
means of achieving successful workforce agility remain ambiguous at a practical level (Qin and Nembhard 2010), which
reflects the dearth of practical research1 on this topic.
Thus, in this study, we discuss the antecedents of workforce agility from earlier relevant studies. We introduce sev-
eral primary antecedents of workforce agility as well. The impact of these antecedents on workforce agility is then
tested using structural equation modelling. Finally, the proposed process model on workforce agility is a useful roadmap
for managers to create agile people through organic structure and organisational learning.
3. Literature review
Workforce agility has been posited as important to the growth of businesses in competitive markets that face continuous
and unanticipated change (Gehani 1995). Breu et al. (2001) and Sherehiy (2008) have stated that a theory or accurate
definition of workforce agility has not been established. Generally, all definitions of workforce agility are related to how
employees handle and respond to change by adapting to changes and new conditions and using the capabilities of the
firm.
Workforce agility is not restricted to reactive behaviour, and can be proactive (Sherehiy 2008). An agile workforce
can create impact, and therefore, change the environment of a firm. Consequently, this agile workforce can use its
knowledge and skills to anticipate and to pre-empt the dynamics of the environment (Alavi and Abd Wahab 2013).
Proactiveness, learning, personal initiative, creativity, self-efficacy and innovativeness are intrinsic characteristics for
achieving agility (Sharp, Irani, and Desai 1999). Briefly, workforce agility has two important aspects (Chonko and Jones
2005):
(1) The workforce can react and adapt to change promptly and appropriately.
(2) The workforce is capable of taking advantage of changes to benefit the firm.
Studies on workforce agility can be classified into two main groups in terms of the research methodology employed.
The first group of studies has two common aspects. First, structural equation modelling is used as a statistical method
of research. Second, this group considers the effects of several practices on workforce agility, which are known as ‘pre-
dictors of workforce agility’ (see Table 1). Safari et al. (2013) and Charbonnier-Vorin (2011) showed that workforce
agility is an independent variable. By contrast, Sherehiy (2008) and Sumukadas and Sawhney (2004) considered work-
force agility to be a dependent variable. Workforce agility was considered as a mediator variable in other studies (Bosco
2007; Vazquez-Bustelo, Avella, and Fernandez 2007; Ye-zhuang, Fu-jiang, and Hai-feng 2006). Investigation was con-
ducted on the impact of some factors, such as turbulent environment and agility strategy on workforce agility on the
one hand, and the influence of workforce agility on several manufacturing outcomes on the other hand. These studies
indicated that workforce agility is a mediator between predictors and outcomes. Table 1 shows several dimensions or
scales for measuring workforce agility that were defined in this group of studies. The dimensions used to measure work-
force agility in Sherehiy (2008) have been adopted in the present study because these dimensions comprehensively
explain the concept of workforce agility. Table 2 details each dimension that Sherehiy (2008) introduced.
The second group of studies presented different methodologies to study workforce agility, such as fuzzy logic
(Kazan 2005; Tsourveloudis and Valavanis 2002; Vinodh, Madhyasta, and Praveen 2012; Vinodh and Prasanna 2011),
exploratory methodology (Breu et al. 2001; Chakraborty and Mandal 2011; Eshlaghy et al. 2010), descriptive statistics
(Sharp, Irani, and Desai 1999; Dischler 2011), mathematical modelling (Bokhorst, Slomp, and Molleman 2004; Dong
and Hou 2012; Gel, Hopp, and Van Oyen 2007) and discriminate analysis (Zhang and Sharifi 2007). Table 3 categorises
the organisational characteristics and workforce agility practices considered in this group of studies.
A few theoretical studies have been performed on workforce agility and its enablers (Table 3).
A review of the literature on workforce agility showed that two group activities could generally improve workforce
agility. These two group activities are those that improve knowledge and skills and those that encourage the application
of knowledge. These conclusions are consistent with those of Goldman, Nagel and Preiss (1995), that is, an agile and
competitive situation is created in the presence of a skilful, knowledgeable and experienced workforce, which give the
competitive edge of a company over others. To create such a workforce and to maintain agility, firms should invest in
International Journal of Production Research 3
Table 1. An overview of studies on workforce agility, its predictors and its measurement dimensions.
Reference Predictor of workforce Agility(WA)/Agile workforce (AW) WA/AW WA dimensions
Sherehiy (2008) DVa Proactivity;

Agility strategy: Adaptability;
Product; Resilience
Cooperation;
Organisation;
People
Work organisation:
Job demand;
Job control;
Skill variety;
Job uncertainty;
Job complexity
Vazquez-Bustelo et al. (2007) Turbulent environment Mediator Motivation;
Teamwork;
Remuneration;
Training
Ye-zhuang, Fu-jiang, and Agility strategy Mediator Teamwork;

Hai-feng (2006) Participation in
management;
Multi-skilled
workers training;
Empowerment
Sumukadas and Sawhney (2004) DV Multiple tasks

Employee involvement:
Information sharing;
Training (multiple task skill, quality skill, group
skill, leadership skill, business skill, team skill);
Salary-skill-based pay;
Improvement incentives;
Non-monetary incentives;
Team-based production incentives;
Power sharing
a
Dependent variable.
the future by implementing continuous education and training programmes for their employees. Such an investment can
train people to become agile and capable of responding efficiently to changes. An agile workforce can offer immediate
solutions to unexpected changes. Moreover, current literature on workforce agility shows that the development of
employees in an agile enterprise requires new and flexible forms of work organisation. This support structure provides
the necessary conditions for people to use their knowledge (Chonko and Jones 2005). Therefore, organisational learning
and the three characteristics of an organic structure can be considered as primary elements for developing agile people.
Figure 1 shows the research conceptual model.
Table 3 lists a range of attributes that are associated with workforce agility. Most publications on agile manufactur-
ing have focused on a theoretical description of workforce agility, whereas an absence of empirical studies on how these
attributes affect the workforce is obvious. Thus, further research is needed to validate empirically the relationship
between these attributes and workforce agility (Sherehiy, Karwowski, and Layer 2007).
We focus on low formalisation, decentralisation of decision-making and a flat structure, which are the three primary
characteristics of an organisational structure that are related to workforce agility. Zhang and Sharifi (2007) identified a
structure with low formalisation as appropriate for promoting agile manufacturing. The authors, however, did not con-
sider how this structure relates to workforce agility. The impact of this structure on workforce agility has not been eval-
uated in publications on workforce agility. A decentralised structure has also been carefully considered in previous
studies on agile manufacturing. Agility models and frameworks (Gunasekaran 2001; Yusuf, Sarhadi, and Gunasekaran
4 S. Alavi et al.
Workforce Agility
Proactivity, Adaptability, Resiliency.
Organisational Learning
Commitment to learning, Shared vision, Open
mindedness, Knowledge sharing.
Organic Structure
Decentralisation of decision making,

Low formalisation,
Flat structure.
Figure 1. The research model.
1999; Zhang and Sharifi 2007) have been identified as primary enablers of workface agility. Some empirical studies on
agile manufacturing (Eshlaghy et al. 2010; Kuruppalil 2008) have considered decentralisation of decision-making, but
the effect of a decentralised structure on workforce agility has not been considered. This relationship has also not been
empirically validated. Eshlaghy et al. (2010) have identified a flat structure to be one of the enablers of workforce agil-
ity, which is comparable to low formalisation and decentralisation. However, no publication has related a flat structure
to workforce agility and has determined whether this structure can significantly affect workforce agility. Thus, the
impact of low vertical complexity on workforce agility remains to be explored.
Organisational learning (which consists of four dimensions, namely the commitment to learning, shared vision,
open-mindedness and knowledge sharing) is one of the best ways of creating a knowledge atmosphere through continu-
ous learning. Organisational learning has been identified as one of the best enablers of workforce agility (Yusuf, Sarhadi,
and Gunasekaran 1999), but its effect on workforce agility has not been empirically tested. Thus, this relationship is
investigated in this study.
An organic structure encourages learning and a rapid response to organisational changes. However, no direct empiri-
cal evidence relating the dimension of organic structure to organisational learning exists.
Tables 2 and 3 show other enablers of workforce agility that are directly or indirectly related to organisational learn-
ing, an organic structure, or to both factors. Some enablers result from the establishment of an organic structure and an
organisational learning. For instance, job satisfaction is considered to be an outcome of an organic structure (Dey 2013)
and organisational learning (Chiva and Alegre 2008).
The following sections discuss the dual concepts of organisational learning and an organic structure as well as their
elements and relationship to workforce agility.
4. Organic structure
The management style of an organisational structure depends on the situational constraints imposed by the environment
within which the company operates (Kinicki 2008). The terms ‘mechanistic’ and ‘organic’ describe the reaction of a
company to either a stable or turbulent external environment (Burns and Stalker 1961). Organic and mechanistic struc-
tures are on different ends of the spectrum, which ranges from flexibility in organic structure to rigidity in mechanistic
structure. The term organic structure is used to describe an organisational structure that is designed to promote flexibility
such that employees can initiate changes and adapt quickly to changing conditions (Amiri, Ramazan, and Omrani 2010;
Burns and Stalker 1961). Meanwhile, the term, mechanistic structure is used to describe an organisational structure that
is designed to induce employees to behave in predictable and accountable ways (Amiri, Ramazan, and Omrani 2010;
Burns and Stalker 1961; Lumpkin and Dess 1996). A mechanistic structure is suitable in a stable environment, whereas
an organic structure is suitable in a dynamic, complex and rapidly changing environment (Amiri, Ramazan, and Omrani
2010; Burns and Stalker 1961).
Table 2. An explanation of workforce agility dimensions proposed by Sherehiy (2008), used with permission.
Dimension Definition Description
Proactivity Initiation of the activities that have positive effect on changed Anticipation of problems related to change
environment Initiation of activities that lead to solution of the
change related problems and improvements in
work
Solution of change related problems
Adaptability Changing or modifying oneself or their behaviour to better fit Interpersonal and cultural adaptability
new environment Spontaneous collaboration
Learning new tasks and responsibilities
Resilience Efficient functioning under stress, despite changing Positive attitude to changes, to new ideas,
environment or when applied strategies and solutions have technology
failed Tolerance to and dealing with uncertain and
unexpected situation
Coping with stress
Researchers have different views on this subject, and thus, neither organic nor mechanistic structures have clearly
defined elements. Fredrickson (1986) identified the three characteristics of an organic structure, which are low formalisa-
tion, decentralisation of decision-making and a flat structure. Mechanistic structure is specified by high formalisation,
high centralisation and a hierarchical structure.
5. Workforce agility and organic structure

Changes in the internal structure of an organisation are highly important for developing an agile manufacturing environ-
ment. Gunasekaran (1999) considered a flexible or organic structure as necessary in creating a framework for agility
because this structure supports employees who are highly skilled, knowledgeable and motivated.
In this section, we discuss the relationship among the three dimensions of an organic structure and the three dimen-
sions of workforce agility, namely proactivity, adaptability and resiliency.
5.1 Workforce agility and low formalisation

Olson, Slater, and Hult (2005) identified the circumstances created by low formalisation that promote openness in the
system as a critical prerequisite for proactive behaviour. The formalisation of a structure forces employees to be mecha-
nistic in their work, interactions and in problem-solving (Burns and Stalker 1961). Written procedures and specific rules
are widely used in highly formalised organisations.
This condition eliminates discussions on how work should be performed and reduces alternatives to developing ‘cre-
ative solutions’. Employees are less likely to be proactive and creative problem solvers because of their limited interac-
tions (Devadasan, Goshteeswaran, and Gokulachandran 2005). The constraints on complying with specific ways of
working prevent employees from combining and using various sources of knowledge to develop new products or ser-
vices. However, employees are motivated to adopt creative work approaches, explore various sources and seek answers
to various questions in a less structured organisation. Employees are generally involved in meaningful work rather than
mechanically and obediently following a rigid set of rules. Thus, less formalised work approaches motivate employees
to be more proactive, and ultimately, firms benefit from employee initiatives to develop better and more innovative prod-
ucts (Chen, Huang, and Hsiao 2010). Although several elements of a formalised structure can restrict agile behaviour,
especially the initiation and presentation of new ideas, formalised rules and regulations can also motivate people to
accomplish new solutions and to implement new ideas (Henard and Szymanski 2001). Nicholas, Ledwith, and Perks
(2011) and Pertusa-Ortega, Zaragoza-S ez, and Claver-Cortés (2009) reached the same conclusion on how a formalised
structure affects the ability to innovate. Therefore, the level of formalisation in a structure should be sufficiently low
such that employees are motivated and committed to perform their duties without ambiguity.
6 S. Alavi et al.
Table 3. Management practices about workforce.
Management
practices Attributes Practical researches Theoretical researches
Organisational Empowerment (Eshlaghy et al. 2010), (Sharp, Irani, (Gunasekaran 1999),

structure and Desai 1999), (Vinodh, Madhyasta, (Zhang and Sharifi 2007)
and Praveen 2012)
Decentralisation in decision-making, (Eshlaghy et al. 2010), (Kuruppalil (Yusuf, Sarhadi, and
authority 2008), (Vinodh, Madhyasta, and Gunasekaran 1999),
Praveen 2012), (Vinodh and Prasanna (Gunasekaran 2001),
2011), (Dischler 2011) (Zhang and Sharifi 2007)
Flat structure (Eshlaghy et al. 2010), (Vinodh and
Prasanna 2011), (Vinodh, Madhyasta,
and Praveen 2012)
Formalisation (Zhang and Sharifi 2007)
Collaboration, (Gunasekaran 2001), (Eshlaghy et al. (Gunasekaran, Tirtiroglu, and

Communication, 2010), (Hopp and Oyen 2004), Wolstencroft 2002), (Kuruppalil
and team (Dischler 2011), (Vinodh and 2008), (Yusuf, Sarhadi, and
working Prasanna 2011), (Chakraborty and Gunasekaran 1999),
Mandal 2011) (Sharp, Irani, and Desai 1999),
(Gunasekaran 1999), (Breu et al.
2001)
Leadership support People awareness about (Kuruppalil 2008), (Vinodh and (Yusuf, Adeleye, and
organisational vision, opportunities, Prasanna 2011), (Vinodh, Madhyasta, Sivayoganathan 2003;
problems, frequent management and Praveen 2012) Zhang and Sharifi 2007)
employees meeting, and … Salary, (Yusuf, Sarhadi, and
Remuneration Gunasekaran 1999)
Non-monetary incentives, (Eshlaghy et al. 2010)
production incentive, welfare
Work outcome Job satisfaction (Eshlaghy et al. 2010)

Job commitment (Tsourveloudis and Valavanis 2002)
Job characteristics Job demand, Job complexity, Job (Zhang and Sharifi 2007)
uncertainty, Job rotation
Instruction/skill Training, Education, Continuous (Dyer and Shafer 2003), (Vinodh, (Plonka 1997), (Yusuf, Sarhadi, and
learning Madhyasta, and Praveen 2012), Gunasekaran 1999), (Gunasekaran
(Chakraborty and Mandal 2011), (Gel, 2001), (Gunasekaran, Tirtiroglu, and
Hopp, and Van Oyen 2007), (Kazan Wolstencroft 2002), (Yusuf, Sarhadi,
2005), (Dong and Hou 2012), and Gunasekaran 1999), (Trinh,
(Bokhorst, Slomp, and Molleman Molla, and Peszynski 2012)
2004)
Learning organisation/Organisational (Vinodh and Prasanna 2011), (Yusuf, Sarhadi, and
learning (Kazan 2005) Gunasekaran 1999)
Multiple skill, Skill variety, (Zhang and Sharifi 2007), (Yusuf, Sarhadi, and Gunasekaran
Multifunctional and multilingual (Tsourveloudis and Valavanis 2002), 1999), (Sharp, Irani, and
skill (Kuruppalil 2008), (Plonka 1997) Desai 1999), (Gunasekaran and
Yusuf 2002), (Gunasekaran 2001),
(Plonka 1997), (Trinh, Molla, and
Peszynski 2012)
Problem solving ability (Zhang and Sharifi 2007),
(Dischler 2011)
Knowledge Knowledge/Information sharing, (Gunasekaran 2001), (Vinodh and (Sharp, Irani, and Desai 1999)
Management and Free flow of information Prasanna 2011), (Vinodh, Madhyasta,
IT and Praveen 2012), (Dischler 2011)
Information system, Information (Vinodh, Madhyasta, and Praveen (Gunasekaran and Yusuf 2002),
technology 2012) (Breu et al. 2001)
Employees’ knowledge, Knowledge (Gunasekaran 1999), (Kazan 2005) (Gunasekaran and Yusuf 2002),
worker (Hopp and Oyen 2004)
Formalising an organisation can cause employees to become cynical, which negatively affects their workforce per-
formance and adaptive behaviour (Johari, Yahya, and Omar 2011). Formalising policies and procedures are often
assumed to reduce forcefulness and support adaptive, rather than proactive behaviour. Adherence to rigid rules and pro-
cedures increases the organisational inertia that constrains the workforce capacity to adapt to change (Naranjo Valencia,
Sanz-Valle, and Jiménez Jiménez 2010). Formalisation is designed to address routine and predictable problems, and pre-
vents easy acceptance of novelty or change. Formalisation at the same time encourages reliance on habit and reinforces
past behaviours (Martínez-León and Martínez-García 2011) because a job bounded by inflexible rules and procedures
provides workers with less freedom to perform their tasks and to adapt to new conditions (Johari, Yahya, and Omar
2011).
Highly formalised job duties tend to have more restricted patterns of interaction, whereas less formalised work pro-
cesses are more likely to encourage social interaction among organisational members. Thus, a deformalised structure
may stimulate proactivity and adaptability more than a formalised structure does. Therefore, we posit the hypothesis
given below.
H1a: Low formalisation positively affects workforce agility.

5.2 Workforce agility and decentralisation of decision-making

A decentralised rather than a centralised manufacturing firm is more likely to produce creative ideas because the delega-
tion of authority encourages employees to make decisions and generate ideas. Employees in a decentralised structure
have more opportunities to contribute and more flexibility to decide what tasks should be performed. Employees can
help enhance the problem-solving process with fresh ideas and proactively anticipate problems. Decentralisation of deci-
sion-making enhances the sense of ownership of employees, and thus, they will feel more committed to the successful
implementation of decisions (Sharpe 2013). By contrast, in a centralised structure, decisions, information and direction
flow top down, and these decisions must be followed by employees, who had no contribution to the decision-making.
Thus, employees feel no attachment to their work, and sense they are not valued as individuals (Chen, Huang, and
Hsiao 2010).
Therefore, we propose the hypothesis given below.
H1b: Decentralisation of decision-making positively affects workforce agility.
5.3 Workforce agility and a flat structure

Several researchers assert that an organisational structure should be made as flat as possible in an agile organisation
because this structure is more conducive to the behaviours and values required for agility (Damanpour 1991). Forsgren,
Tregert, and Westerlund (2004) found a negative correlation between a hierarchal structure and initiative. A vertical
structure is more appropriate in stable situations that do not require as much creativity. A flat structure eliminates time-
consuming hierarchical referrals because problems can be proactively addressed. A flat structure provides all levels of
the organisation with the same opportunity to make decisions, which motivates the workforce to share new ideas and
opinions. This type of structure increases communication and cooperation between individuals, such that they can cope
with stress and exhibit resilient behaviour in difficult situations. Communication allows employees to learn new tasks
from one another, which is one characteristic of adaptive behaviour. Therefore, in the current study, we posit the hypoth-
esis given below.
H1c: A flat structure positively affects workforce agility.
6. Organisational learning
Increasing the learning capability and organisational knowledge of the workforce, which is an internal resource, is the
most appropriate method for survival and achieving long-term success (Alavi, Abd Wahab, and Norhamidi 2010).
Organisational learning is the method by which new knowledge is created and insights are gained through experi-
ences of people in a firm (Naranjo Valencia, Sanz-Valle, and Jiménez Jiménez 2010).
Organisational learning is composed of many complex elements. Sinkula (1994) considered organisational learning
to be a latent variable that can be measured by three metrics, namely shared vision, commitment to learning and open-
mindedness. Calantone, Cavusgil, and Zhao (2002) proposed an additional factor, which is knowledge sharing.
8 S. Alavi et al.
7. Workforce agility and organisational learning

Processes, procedures and programmes should be frequently changed in an agile manufacturing environment. The
degree of personal knowledge should be increased to transform a static organisation into an organisation involved in
learning (Qin and Nembhard 2010). Organisational learning is important to create an agile workforce because workforce
agility depends on the skills acquired from training and enhances workforce knowledge (Tsourveloudis and Valavanis
2002). Gunasekaran (2001) emphasised the significant role of training in developing workforce agility as an ongoing
learning process because employee learning never ceases. In the organisational learning process, training teaches
employees how to build skills. The result of this programme is flexibility and an improved ability among employees to
respond effectively to competitive challenges (Crocitto and Youssef 2003; Gunasekaran and Yusuf 2002).
No empirical studies have been conducted on the relationship between organisational learning and workforce agility.
However, several studies have discussed the relationship between organisational learning (entirely or in part) and the
aspects of workforce agility.
Gunasekaran (2001) asserted that workforce agility depends on the ability of the leader to create an agile vision and
mission for the organisation. An absence of a shared vision limits the ability to be proactive of individuals (Slater and
Narver 1995). Having a strong and clear vision equips the workforce to adapt and to learn tasks effectively. A clear
vision helps the members to focus on and to anticipate changes in the market, technology and environment
(Ussahawanitchakit 2008).
A learning environment within an organisation encourages people to be more open and innovative in seeking new
ideas. Employees become more proactive and develop flexible solutions to current and future problems (Gong, Huang,
and Farh 2009).
Organisations committed to learning develop employees and managers who can manage and cope with changes.
These individuals are more comfortable in performing new and proactive behaviours (Gunasekaran 2001). Learning new
things improves workforce adaptability, and enables employees to meet confidently unexpected challenges (Sherehiy
2008).
One aspect of organisational learning is knowledge sharing throughout the organisation. Knowledge sharing helps to
develop knowledgeable employees, who are crucial to the development of an agile organisation. The quality and scope
of this knowledge base affects workforce creativity and the awareness of the benefits of exchanging ideas.
The second hypothesis in this study concerns the effect of organisational learning as a second-order structure on
workforce agility.
H2: Organisational learning, which has four dimensions, namely commitment to learning, shared vision, open-mindedness, and
knowledge sharing, positively affects workforce agility.
8. Organic structure and organisational learning

An organic structure that encourages employees to learn through a flexible system creates a suitable environment for
organisational learning (Örtenblad 2004). A decentralised structure promotes organisational learning because the flow of
information is not controlled in such a system (Pertusa-Ortega, Zaragoza-S ez, and Claver-Cortés 2009). The same study
claims that the involvement of members in decision-making increases their motivation and commitment to continuous
learning (Pertusa-Ortega, Zaragoza-S ez, and Claver-Cortés 2009).
Communication is not hierarchical, but lateral in an organic structure, where employees can share information
(Claver-Cortes, Zaragoza-Saez, and Pertusa-Ortega 2007). Previous studies have provided evidence on the effects of for-
malisation on organisational learning. Outdated procedures and inflexible regulations have negatively affected the ability
of people to learn and to obtain new knowledge. Lundberg (1993) emphasised that a formal structure is a barrier to
organisational learning because employees are forced to replicate their previous behaviour. A less formal structure facili-
tates openness and variation.
However, several researchers have disproved the negative correlation between formalisation and organisational learn-
ing. For example, Dawes, Lee, and Midgley (2007) identified a positive impact of organisational learning on formalisa-
tion. The authors also emphasised that formalisation is important for transferring codified and explicit knowledge.
Similarly, Ahuja, Lampert, and Tandon (2008) validated the positive correlation between formalisation and external
knowledge transfer. A formal structure encourages a shared vision because the rules are limited (Örtenblad 2004).
Willem and Buelens (2009) considered that neither a strong formal structure nor its absence is helpful for knowledge
sharing. Instead, the formalisation of the structure should be moderated. However, the advantages offered by a non-
formalised structure for promoting organisational learning outweigh the disadvantages. Therefore, a positive correlation
is expected between the three dimensions of organic structure and organisational learning.
H3a: Low formalisation positively affects organisational learning, which has four dimensions, namely commitment to learning,
shared vision, open-mindedness and knowledge sharing.
H3b: Decentralisation of decision-making positively affects organisational learning, which has four dimensions, namely commit-
ment to learning, shared vision, open-mindedness and knowledge sharing.
H3c: A flat structure positively affects organisational learning, which has four dimensions, namely commitment to learning,
shared vision, open-mindedness and knowledge sharing.
9. Research methodology
9.1 Sample and data collection
The research population comprised data from small and medium-sized enterprises (SMEs), which were obtained from
the 2010 database of the Iranian Ministry of Industries. The target population was approximately 550 Iranian SMEs.
More than 80% of the manufacturing companies in Iran are SMEs.
Investigations and discussions with several CEOs and experts revealed that data should be gathered at the mid-level
instead of top-level management. Two primary problems can arise from collecting data from top managers. First, these
managers usually refuse to answer questionnaires because of their busy schedules. Second, mid-level managers are more
likely to have accurate information about tasks than CEOs. Middle managers have close relationships with employees
and therefore, are more aware of the needs and attitudes of employees than senior managers (Alavi, Abd Wahab, and
Norhamidi 2009; Herzig and Jimmieson 2006).
A pilot survey of 30 manufacturing firms in Iran was conducted to test instrument reliability and validity. The analy-
sis revealed that the instrument was highly reliable and valid. The reliability of the questions in the pilot test was mea-
sured by using Cronbach’s alpha. High Cronbach’s alpha values (>0.7) were achieved for all variables. Therefore, the
questionnaires on commitment to learning, shared vision, open-mindedness, knowledge sharing, decentralisation of deci-
sion-making, low formalisation, proactivity, adaptability and resiliency were reliable.
Two different types of validity (i.e. content and construct validity) were considered. Content validity was assessed
through expert judgment. The assessment of construct validity is discussed later. Data collection started immediately
after acceptable results were achieved in the pilot study.
Questionnaires in survey packets, along with a cover letter and relevant instructions, were distributed to 360 Iranian
SMEs.
After a few months, 174 questionnaires were returned, but only 161 questionnaires were used in the research study
because incomplete questionnaires were discarded. Table 4 shows the demographic information of the participating com-
panies and respondents.
9.2 Measures of research variables

All items (questions) were obtained from existing instruments to ensure content validity. Three sets of questionnaires
were developed in this study to measure the dimensions of the organisational structure, organisational learning and
workforce agility. All constructs were measured by using a five-point Likert scale, which ranged from 1 (strongly dis-
agree) to 5 (strongly agree).
Organic structure: Decentralisation of decision-making was measured by using a tool developed by Hage and Aiken
(1967), and the tool used to measure low formalisation was based on a tool developed by Cruz and Camps (2003). The
tool used to measure a flat structure in which the number of layers in the firm is identified was based on the work of
Stephens (Stephens 1990).
Organisational learning: Organisational learning has four dimensions, namely open-mindedness, shared vision, commit-
ment to learning and knowledge sharing. A five-item measurement tool by Calantone, Cavusgil, and Zhao (2002) was
used to assess knowledge sharing, while the questions for the other constructs were based on Baker and Sinkula (1999).
Workforce agility: Workforce agility has three dimensions, which are proactivity, adaptability and resiliency. These con-
structs were evaluated in this study by using questions designed by Sherehiy (2008) with the permission of the author.
The questionnaires that were used in this study are presented in the Appendix 1.
10 S. Alavi et al.
Table 4. Demographic information of sample.
Demographic information N %
Industry category Food manufacturing 31 19

Textile products 13 8
Apparel manufacturing 11 7
Wood product manufacturing 8 5
Furniture products 10 6
Petroleum product manufacturing 29 18
Chemical manufacturing 21 13
Plastic and rubber products manufacturing 11 7
Fabricated Metal Products 11 7
Machinery manufacturing 8 5
Electronic products 3 2
Transportation equipment manufacturing 2 1
Others 3 2
Missing 0 0
Total 161
Years in current position <5 years 49 31

5–10 years 55 34
10–15 years 34 21
15–20 years 18 11
>20 years 3 2
Missing 2 1
Total 161
Years in current organisation <5 years 43 27

5–10 years 66 41
10–15 years 24 15
15–20 years 18 11
>20 years 5 3
Missing 5 3
Total 161
Education High school diploma 24 15

Bachelor’s degree 87 54
Master or PhD degree 35 21
Missing 15 9
Total 161
Gender Female 36 23
Male 122 76
Missing 3 2
Total 161
Age Under 20 0 0
20–29 31 19
30–39 50 31
40–49 44 28
50–59 18 11
60 and over 13 8
Missing 5 3
Total 161
Company size <20 5 3

20–50 persons 27 17
51–70 persons 43 27
71–100 persons 76 47
Missing 10 6
Total 161
10. Data analysis

Our model was assessed by using the structural equation modelling (SEM). SEM has two components, which are mea-
surement and structural equation models.
10.1 Measurement model

Before testing the measurement model, the AMOS 18 programme was used to perform a confirmatory factor analysis
(CFA) for all latent variables (i.e. decentralisation of decision-making, low formalisation, commitment to learning,
shared vision, open-mindedness, knowledge sharing, proactivity, adaptability and resiliency). The fit indices and factor
loadings of the hypothetical models (CFA) were determined to evaluate how well these models fit the data. Several pri-
mary and popular fit indices were used to evaluate the model fit. Table 5 shows the fit indices and their cut-off points.
The measurement model enables the researcher to test the reliability and validity of the observed variables used to
measure the latent variables. Moreover, ‘a measurement model that offers a poor fit to the data suggests that at least
some of the observed indicator variables are unreliable and precludes the researcher from moving on to analyse struc-
tural model’ (Ho 2006). The CFA results for each latent variable were used to drop items with low factor loadings
(<0.50) (Hair et al. 1998, 291). The CFA results for decentralisation of decision-making and low formalisation showed
that all factor loadings exceeded 0.5, and all fit indices were acceptable. However, CFA is not appropriate for measuring
the flatness of a structure because this tool can only measure one item. For all latent variables of the four dimensions of
organisational learning, several items had factor loadings of less than 0.5 and were then excluded from the model. How-
ever, most of the fit indices were acceptable, indicating a good fit with the measurement model. Two questions on
shared vision (i.e. SV4 and SV6), three questions on open-mindedness (i.e. OM1, OM2 and OM6), three questions on
commitment to learning (i.e. CL4, CL5 and CL6) and one question on knowledge sharing (i.e. KS4) were removed. To
improve the fit for organisational learning, several questions with low factor loadings were removed in proactivity (four
questions), adaptability (three questions) and resiliency (three questions) it.
After evaluating all latent variables as first-order constructs, organisational learning and workforce agility were eval-
uated as second-order constructs. Table 5 presents the goodness-of-fit indices for organisational learning and workforce
agility. CFA was used to test the research model that included all the variables in this study. The CFA results for the
research model are presented in Table 5 as well.
CFA for organisational learning: A high goodness-of-fit value was found for the model. The chi-square statistic (χ2)
showed that the desired level of significance was not obtained (χ2(61) = 90.299, p < 0.001) because the parameter was
highly sensitive to the sample size. However, the other indices were acceptable.
CFA for workforce agility: An acceptable value was found for workforce agility (χ2(296) = 449.175, p < 0.001). The other
fit indices were also acceptable.
CFA for the research model: The CFA for the research model (i.e., the measurement model) was investigated after con-
firming the CFA results for organisational learning and workforce agility. An acceptable value was found (χ2(976) =
1268.284, p < 0.001), and all indices exceeded the cut-off point (see Table 5).
The construct validity of the measurement model was also examined to evaluate the credibility of the results (Ho
2006). The construct is measured by investigating the relationship of the test to the other constructs, which are related
(convergent validity) and unrelated (discriminant validity). The convergent validity of the measurement model was
tested by calculating the AVE2 and the factor loadings after verifying the adequacy of each model. The discriminant
validity ensures that the different constructs are not too highly correlated. Therefore, the constructs have sufficient dis-
criminant validity if the calculated AVE exceeded the squared correlation among the constructs.
Table 5. Fit indices of measurement model for organisational learning, workforce agility, and research model.
Current fit indices
Fit indices Recommended value Organisational learning Workforce agility Research model
CMIN/DF ≤5 1.48 1.517 1.299

CFI ≥0.9 0.980 0.957 0.954
IFI ≥0.9 0.980 0.957 0.95
NFI ≥0.9 0.942 0.884 0.827
RMSEA ≥0.08 0.055 0.057 0.043
12 S. Alavi et al.
The AVEs of all of the constructs were above 0.5, which indicated that all constructs had convergent validity, as
illustrated in Table 6. All factor loadings were significant at the 0.001 level and greater than 0.5, and thereby confirmed
convergent validity.
We discussed the mean and standard deviation of the constructs in general, along with the correlations between con-
structs. A significant and positive correlation was found between the two constructs at the 0.01 level. Table 6 shows that
all of the constructs had discriminant validity, and presents information on the construct or composite reliability (CR). A
good CR was obtained. The reliability of the questionnaires was assessed and confirmed twice, namely once during the
pilot test and once after the data analysis in the measurement stage.
10.2 Structural model

Using the measurement model to test the reliability of the observed variables is necessary, but not sufficient. The struc-
tural model was used to test the hypotheses after a good fit was obtained using the measurement model. Figure 2 shows
that the model fits the data. The chi-square goodness-of-fit was χ2(340) = 637.057 at p < 0.001. The baseline comparison
fit indices (i.e. the normed, incremental and comparative indices) were above or close to 0.9. The root mean square error
of approximation was below 0.08.
Low formalisation did not strongly influence the workforce agility (γ13 = 0.065, p < 0.5). Therefore, H1a was rejected.
The results showed that decentralisation of decision-making strongly affected workforce agility (γ23 = 0.241, p < 0.05).
Therefore, H1b was accepted. A flat structure had a significant and positive effect on the workforce agility (γ33 = 0.229,
p < 0.01). Thus, H1c was accepted.
A positive and significant impact of organisational learning on workforce agility was also found (β23 = 0.393,
p < 0.001), which supported H2.
Table 7 shows that H3a was not validated because the path coefficient from low formalisation to organisational learn-
ing (γ12 = 0.13, p < 0.5) was not significant. However, decentralisation of decision-making greatly influenced organisa-
tional learning (γ22 = 0.448, p < 0.001), which supported H3b. Organisational learning was also affected by the flatness
of the structure, as predicted by H3c (γ32 = 0.276, p < 0.001).
The aspects of an organic structure explained 48% of the fluctuation observed for organisational learning. In addi-
tion, 58% of the variation in the workforce agility could be attributed to the dimensions of an organic structure and
organisational learning. This finding shows the importance of an organic structure and organisational learning for work-
force agility. Organisational learning affected workforce agility more than all the three aspects of an organic structure.
This result proved that organisational learning is important for improving workforce agility by enhancing skills and
knowledge.
11. Discussion and implication for managers

The results showed that organisational learning and the dual dimensions of an organic structure (i.e. a flat structure and
decentralisation of decision-making) enhance workforce agility. Organisational learning provided a suitable environment
to learn new skills and to promote knowledge. Organisational learning is also affected by the characteristics of the
organic structure. A flat structure encourages workforce agility via the interaction of the members of the organisation
because of decreased organisational hierarchy. Decentralisation of decision-making provides greater autonomy and shar-
ing of responsibilities at various levels of the organisation. Thus, the workforce learns new knowledge and tasks and is
motivated to respond to circumstances proactively instead of merely adapting to changes or exhibiting resiliency. The
details of the hypotheses and several implications for manufacturing managers are discussed below.
11.1 Implication of H1
An insignificant correlation between low formalisation and workforce agility (H1a) was found despite the expected con-
straints on workforce agility because of a highly formal structure that imposed procedures, limitations and curtailed the
ability of the workforce to interact. This finding indicated that structural rigidity in managing the workforce has minor
effect on structural factors that encourage or limit workforce agility. A nonlinear relationship may exist between formali-
sation and workforce agility. Although several elements of a formal structure could restrict agile behaviour, especially
the initiation and presentation of new ideas, the formality of rules and regulations may motivate agile people to offer
new solutions and implement new ideas (Henard and Szymanski 2001). Nicholas, Ledwith, and Perks (2011) and
Pertusa-Ortega, Zaragoza-S ez, and Claver-Cortés (2009) arrived at the same conclusion regarding how a formal struc-
ture affects the ability to innovate.
Table 6. Correlation matrix, Mean, standard deviation, reliability and validity.
Construct
Reliability
Correlation Items Factor loading (λ***) AVE (CR)
Low 1 LF1, LF2, LF3, LF4 0.88, 0.89, 0.89, 0.55 0.75 0.94
formalisation
Decentralisation 0.48** 1 DM1, DM2, DM3, DM4 0.94, 0.93, 0.52, 0.91 0.76 0.97
Flat 0.6** 0.23** 1 – – – –
Commitment to 0.52** 0.27** 0.39** 1 CL, CL1, CL2, CL3 0.85, 0.91, 0.88, 0.84 0.68 0.91
learning
Open 0.55** 0.28** 0.46** 0.7** 1 OM, OM3, OM4, OM5 0.91,0.87,0.83,0.82 0.67 0.88
mindedness
Shared vision 0.55** 0.29** 0.45** 0.72** 0.6 1 SV,SV1,SV2,SV3,SV5 0.92, 0.87, 0.75, 0.84, 0.77 0.71 0.89
Knowledge 0.38** 0.19* 0.31** 0.48** 0.57** 0.48** 1 KS,KS1,KS2,KS3 0.64, 0.82, 0.8, 0.76 0.66 0.84
sharing
Proactivity 0.41** 0.31** 0.38** 0.42** 0.33** 0.43** 0.24** 1 PC, PC1, PC2, PC4, PC5 0.68, 0.85, 0.91, 0.92, 0.95 0.84 0.95
PC6,PC8,PC9,PC11 0.76, 0.9, 0.73, 0.72
Adaptability 0.63** 0.51** 0.46** 0.46** 0.5** 0.54** 0.27** 0.57** 1 AP,AP1,AP2,AP3,AP4 0.93, 0.87, 0.72, 0.75, 0.76 0.83 0.93
AP5, AP6, AP12, AP14 0.79, 0.77, 0.87, 0.87
Resilience 0.43** 0.34** 0.27** 036** 0.25** 0.43** 0.22** 0.55** 0.65** 1 RS, RS1, RS2, RS3, RS4 0.78, 0.57, 0.75, 0.75, 0.66 0.82 0.91
RS7, RS8, RS9, RS10, RS12 0.82, 0.68, 0.72, 0.79, 0.83
Mean 2.9 3.3 3.1 3.6 3.1 3.5 3.4 3.7 3.4 3.8
S.D 0.92 0.92 0.93 0.77 0.53 0.93 1 0.87 0.9 0.89
*Correlation is significant at the 0.05 level (2-tailed).

**Correlation is significant at the 0.01 level (2-tailed).
***All factor loadings are significant at the 0.001 level.
13
14
CL1
0.91 LF1
0.89 0.91
CL2 Commitment
to learning
0.84 (CL) Low 0.86 LF2
CL3 formalization
*** 0.93
0.075 0.85 0.13
SV1 LF3
0.91
0.87
0.06
SV2 0.73 Shared vision
0.92***
LF4
0.84
SV3 (SV)
Organizational DM1
0.77
learning ***
0.45 0.94
SV5
*** 0.93 DM2
0.91 Decentralization
OM3 0.82 0.28*** of decision 0.52
0.39***
0.83 Open making DM3
OM4 0.92
mindedness
0.83 0.267**
(OP)
***
OM5 0.64 DM4
KS1 Flat structure

0.82
0.8 Knowledge
KS2 0.219**
sharing
0.76
(KS)
KS3
Workforce agility
S. Alavi et al.
***
***
0.93 ***
0.67 0.77
Adaptability (AP) Resiliency (RS)

Proactivity(PC)
0.87 0.73 0.75 0.76 0.79 0.77 0.88 0.5 0.75 0.87 0.84
0.87 0.91 0.92 0.95 0.76 0.9 0.73 0.72 0.88 0.75 0.66 0.68 0.72 0.79
PC1 PC2 PC4 PC5 PC6 PC8 PC9 PC11 AP1 AP2 AP3 AP4 AP5 AP6 AP12 AP14 RS1 RS2 RS3 RS4 RS7 RS8 RS9 RS10 RS12
** Significant at 0.01 level, *** Significant at 0.001 level
Figure 2. Analysis of the research model.

Table 7. Result of structural model.
Hypothesis Standardised coefficient T value Result
H1a Low formalisation → workforce agility (γ13) 0.06 0.964 Not Supported
H1b Decentralisation → workforce agility (γ23) 0.267** 2.452 Supported
H1c Flat structure → workforce agility (γ33) 0.219** 2.866 Supported
H2 Organisational learning → workforce agility (β23) 0.393*** 3.97 Supported
H3a Low formalisation → organisational learning (γ12) 0.13 1.828 Not supported
H3b Decentralisation → organisational learning (γ22) 0.45*** 4.19 Supported
H3c Flat structure → organisational learning (γ32) 0.28*** 3.416 Supported
R2organisational learning = 48%, R2workforce agility = 58%,
NFI = 0.901, IFI = 0.954, CFI = 0.953, RMSEA = 0.042
**Significant at p < 0.01.

***Significant at p < 0.001.
The distinction between the existence of rules and their degree of enforcement and the absence of rules for agile
behaviour suggested an approach similar to the concept of flexible formalisation, as introduced by Martínez-León and
Martínez-García (2011), and permissive formalisation, as introduced by Adler and Borys (1996). These authors found
the middle ground, that is, organisations should view formalisation with flexibility instead of accepting formalisation as
completely rigid. The authors considered that a formal structure could serve as a guide. An organisation should have the
capability to change, enlarge and improve as it moves between bureaucratic and flexible structures. In this manner, the
organisation benefits from the best of both worlds.
The significant positive correlation between the decentralisation of decision-making and workforce agility (H1b)
showed that the decreasing levels of centralisation of decision-making led to agility rather than strict regimented behav-
iour. When decision-making is moved away from central control, the company may benefit from a more proactive,
adaptable and resilient workforce. First, decreased centralisation motivates the workforce to share and merge their views
to develop new ways and means to perform tasks. These conditions encourage organisational members to be more crea-
tive and proactive. Second, in a less centralised environment, the workforce feels more capable to adapt to changes and
more prepared to accept new challenges. Third, less centralisation produces a more favourable environment for learning
new tasks (characterising adaptive behaviour), which can be beneficial for making excellent decisions. Fourth, the lim-
ited involvement of the workforce in decision-making often results in decisions that are less comprehensive, and thus
reduce the acceptance of new changes and increase the tendency toward resilient behaviour.
The results showed that the management in manufacturing organisations should share the responsibility of making
decisions with the workforce and periodically modify the decentralised structure.
A flat structure improves agility in the attitudes and behaviours of workers (H1c). Shortening communication chan-
nels enables people to recognise changes in their environment immediately. Therefore, employees have sufficient time to
adapt to new circumstances and to respond quickly. Therefore, managers should remove some of the organisational lay-
ers.
The second hypothesis (H2) on the positive effect of organisational learning on workforce agility was accepted. The
positive effect of organisational learning on the three dimensions of workforce agility can be attributed to several fac-
tors. First, organisational learning promotes a general atmosphere of knowledge to encourage the development of a
well-informed agile workforce that leads to proactive behaviour. Second, organisational learning results in the acquisi-
tion of knowledge and learning skills, and thereby enhances strategic flexibility and the ability to adapt and to respond
to changes in the market and work environments. Third, a more knowledgeable workforce can better appreciate its job
requirements and is more willing to accept changes that accompany new situations. An understanding of various job
responsibilities enables a worker to deal with work pressure and changes more effectively. Thus, organisational learning
affects resiliency. Managers should create an organisational learning culture by establishing the four dimensions (i.e.
commitment to learning, open-mindedness, shared vision and knowledge sharing) in their company to encourage agile
behaviour.
16
A
Initiate the workforce agility program
Note
Use of the suggested workforce agility
questionnaire is proposed to compare the
workforce` behavior with proactivity,
adaptability and resiliency as the three main
attitudes of an agile workforce. Does the top
To what degree are Describe the importance management agree
authority and Low of decentralisation in to distribute
Workforce able to responsibility for decision- decision making for decision making
respond to the Yes Your workforce is agile. making distributed in the creating agile people to authority to the
uncertain environment Continue and promote the top management. Delay
organisation. lower levels?
easily and also convert your actions to preserve
threats into agility. No
opportunities.
Perform any needed

Medium activity (e.g. suggestion Yes
system) to delegate the
No decision making
authority in the
Inform the top manager of the organisation.
importance of workforce agility and its
requirements, namely, organic
structure and organizational learning. High
Try to preserve these
structural characteristics.
Does the firm have Yes

Try to convince the top
different hierarchical management to create a flat
Management has
interest to initiate No Postpone the levels? structure by eliminating non-
the workforce program. essential levels of management.
agility program.
No
Keep organisational structure as
flat as possible until promotion
to a higher level is viewed as a
Yes motivating factor for the
workforces.
S. Alavi et al.
Access the required Note

information about Does the organizational structure have the
organisational characteristics of an organic structure such as
structure and follow decentralisation in decision making, low complexity
the bottom steps and flexible formalisation? Yes
simultaneously. After consulting with top
management revise rules and
Does the firm have make them flexible.
different rules and
standards?
No Keep rules flexible and review

them periodically to preserve
their flexibility-.
B
Figure 3. A proposed process model on workforce agility.

B C
Ask the manager to establish the

Continued… No conditions that encourage people
Investigate the status of to share their knowledge such as
organisational learning in the giving rewards for knowledge
firm and perform the steps Is knowledge
sharing, using information
below simultaneously. distributed between
people? technology and team work.
Try to keep this position and

improve the conditions for
Yes
sharing more knowledge to
Prepare the condition Yes No Is the top Yes Emphasize learning as a value promote the level of people and
Are the workers
for the workforce to management and encourage people to practice organisational knowledge.
committed to
become multi-skilled. learning? committed to continuous learning.
learning?
How has the level of workforce` responsiveness to the environment been

No changed?
Describe the importance of

people knowledge to become
agile. Medium
Low High
Postpone the Prepare a proposal to

No program to find revise the weakness in Restart the
Use any opportunities to share establishing organic
Are your people the reason (s). program after 6 to
organisational vision. structure and
aware of the 12 months to
organisational organizational learning and promote the level
vision? then submit it to the of workforce
management and continue agility in the plant.
the process after receiving
Yes The organisation's success in his/her approval.
sharing its vision. Do the same
as before for new designed
No Explain to the top management

the necessity for an environment
Is organisation open of open mindedness toward
to new ideas and workforce agility especially

new methods? their proactive behavior.
Yes Encourage people (through

monetary and non-monetary
incentives) to present new ideas
and easily forget the old
C methods.
Figure 3. (Continued).
17
18 S. Alavi et al.
This empirical research demonstrated that low formalisation had an insignificant effect on organisational learning (H3a).
This result contradicts several findings that showed the absence or limited presence of organisational learning in a highly
formal organisation. Thus, a single linear model cannot adequately describe the complex effect of low formalisation on
organisational learning, although this model can explain the significance of the dual aspects of formalisation. The pres-
ence of a set of rules and regulations can increase knowledge because a formal structure implies compliance with the
best practices, thereby identifying problems and clarifying the vision of the firm vision and the attendance of workers in
regular workshops, which constitute learning. However, knowledge sharing is an aspect of organisational learning that
requires a low level of formalisation with reduced boundaries and increased interaction among members.
This finding suggested that manufacturing managers should develop a flexible formal structure. That is, the structure
must have a certain degree of standardisation for the learning process while being flexible in sharing and using acquired
skills and techniques. This structure should use rigid rules and orderly programmes to convey the manufacturing vision
to employees. At the same time, the structure should be flexible in interpreting and sharing the vision of the workforce.
The significant positive correlation between decentralisation and organisational learning (H3b) showed that providing
company members with more autonomy in certain decision-making processes promotes learning and generates
knowledge.
The results support H3c in which low-level organisational hierarchy improves organisational learning. Communica-
tion is more extensive within a flat structure than a hierarchical structure. Knowledge sharing can be enhanced by
removing organisational layers. In addition, face-to-face communication between managers and employees facilitates
sharing of the manufacturing vision. However, one of the weaknesses of a flat structure is that the motivation to learn is
absent because of the limited growth opportunities to reach higher levels. Considering this weakness, manufacturing
managers should decrease the number of organisational layers and offer other types of rewards and job opportunities.
After obtaining the statistical results, a supporting model is suggested (see Figure 3) as a guide to implement the
proposed conceptual model. According to the statistical results, low formalisation has no significant effect on workforce
agility. By contrast, this result was obtained because the effect of low formalisation on manufacturing flexibility was not
linear. Hence, this item should be considered in the process model, but in the form of flexible formalisation.
12. Conclusion
One of the most important factors in manufacturing agility is the workforce. The agile workforce can be reconfigured
quickly in response to changing conditions through adaptive and proactive behaviour. Agility is based on knowledge
levels, willingness to learn and on various organisational support activities that should be forthcoming if the organisation
aspires to be agile.
This study attempted to provide empirical evidence to enable SME managers to understand and to identify the
relationship among organisational learning, organic structure and workforce agility. The hypotheses testing revealed
organisational learning and the dual dimensions of the organic structure, namely flat structure and decentralised deci-
sion-making, are capable of complementing the enhancement of workforce agility. Organisational learning provides a
suitable environment for learning new skills and for promoting knowledge, which are affected by the characteristics of
the organic structure. Moreover, a flat structure could encourage workforce agility because of the interaction between
organisational members via reduced organisational hierarchy, whereas decentralised decision-making will provide greater
autonomy and sharing of responsibilities at various levels of the organisation. The relationship between low formalisa-
tion and workforce agility is positive, but not significant. The infrastructure aspects will not only force the workforce to
learn new knowledge and tasks, but also to motivate them to respond to circumstances proactively instead of merely
adapting to changes or show resilient behaviour. Although such practices were accepted by scholars, their effects on
workforce agility have not been tested in a real manufacturing firm. Finally, based on statistical findings, a process
model on workforce agility was suggested. The proposed model simplified the implementation of workforce agility pro-
grammes and led participants towards workforce agility.
The resource-based view (RBV) of the organisation supported our study. RBV provided a theoretical foundation to
understand the role of employee knowledge in organisations. According to this theory, valuable and rare organisation
resources can be difficult to replicate, and therefore lead to sustained advantages in organisational performance. RBV
emphasised the link between the strategy, internal resources and performance of an organisation. Moreover, this study is
in accordance with the social exchange theory. When we applied this theory on the relationship between employee and
organisation, we can conclude that positive work perceptions led to the tendency of the employee to do something in
return to preserve the positive relationship with the organisation. The study demonstrated the applicability of the social
exchange theory in the field of workforce agility. For example, when managers distribute the decision-making power,
the workforce tends to show agile behaviour.
13. Limitations and future work

The limitations of this study provide many possibilities for future empirical research. Although organic structure and
organisational learning were incorporated into our conceptual framework, the method to implement these features was
not the focus of this research. Second, other methodologies, such as system dynamics, may be adopted to evaluate the
causal relation among variables. Finally, nonlinear relationships may exist between low formalisation and organisational
learning and between low formalisation and workforce agility. Therefore, the effect of low formalisation on organisa-
tional learning and workforce agility should be examined more carefully in future studies.
Notes
1. Here, we refer to practical or experimental research that P
is based on real organisations and actual data.
ð squared standardzied loadingsÞ
2. Average Variance Extracted, AVE ¼ P P :
ð squared standardzied loadingsÞ þ ð indicator measurement errorsÞ
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Appendix 1
Organic structure
Decentralisation of decision-making
DM1 – Management in this organisation does not seek inputs and feedbacks from employees in the process of making important
decisions (R [The score of the question should be reversed]).
DM2 – Management in this organisation does not solicit inputs and feedbacks from employees especially on decisions that affect
employees’ services and well-being (R).
DM3 – Employees in this organisation are not encouraged to involve in decision-making (R).
DM4 – Employees in this organisation are not given the opportunities to involve in decision-making (R).
Low Formalisation
LF1 – The jobs in the organisation are described in writing in great detail (R).
LF2 – The organisation takes a great interest and dedicates resources and effort to ensure the workers strictly follow the norms
(R).
LF3 – The workers are allowed no freedom to do their work in any way other than how they have been told to do it (R).
LF4 – There are clearly established procedures for decision-making, which must be followed strictly (R).
Flat
How many vertical levels separate the chief executive from those employees working on output in the deepest single division.
Organisational learning
Commitment to learning
CL1 – managers basically agree that our business unit`s ability to learn is the key to our competitive advantage.
CL2 – The basic values of this business unit include learning as key to improvement.
CL3 – The sense around here is that employee learning is an investment, not an expense.
CL4 – Learning in my organisation is seen as a key commodity necessary to guarantee organisational survival.
CL5 – Our culture is one that does not make employee learning a top priority (R).
CL6 – The collective wisdom in this enterprise is that once we quit learning, we endanger our future.
Shared vision
SV1 – There is a well-expressed concept of who we are and where we are going as a business unit.
SV2 – There is a total agreement on our business unit vision across all levels, functions and divisions.
SV3 – All employees are committed to the goals of this business unit.
SV4 – Employees view themselves as partners in charting the direction of the business unit.
SV5 – The top leadership believes in sharing its vision for the business unit with the lower levels.
SV6 – We do not have a well-defined vision for the entire business unit (R).
Open Mindedness
OM1 – We are not afraid to reflect critically on the shared assumption we have about the way we do business.
OM2 – Managers in this business unit do not want their ‘view of the world’ to be questioned (R).
OM3 – Our business unit places a high value on open-mindedness.
OM4 – Managers encourage employees to think outside of the box.
OM5 – An emphasis on constant innovation is not a part of our corporate culture (R).
OM6 – Original ideas are highly valued in this organisation.
Knowledge sharing
KS1 – There is a good deal of organisational conversation that keeps alive the lessons learned from history.
KS2 – We always analyse unsuccessful organisational endeavours and communicate the lessons learned widely.
KS3 – We have specific mechanisms for sharing lessons learned in organisational activities from department to department (unit
to unit, team to team).
KS4 – Top management repeatedly emphasises the importance of knowledge sharing in our company.
KS5 – We put little effort in sharing lessons and experiences.
Workforce agility
Proactivity
PC1 – I am able to predict the problems that might occur in my work.

PC2 – I am able to solve new and complex problems at work.
PC3 – I address difficulties in my tasks before they become major problems.
PC4 – I look for the opportunities to make improvements at work.
PC5 – When I see something that I do not like, I am trying to fix it.
PC6 – I am trying to find out more effective ways to perform my job.
PC7 – I design new procedures or processes for my work area.
PC8 – I let time take care of things that I have to do.
PC9 – At work, I stick to what I am told or required to do.
PC10 – I am trying to think ‘outside the box’ in order to solve problems.
PC11 – I find new ways to obtain or utilise resources when resources are insufficient to do my job.
Adaptability
How easy or difficult is it for you to handle the following situations?
AP1-Adapt my behaviour to show respect for others’ customs and values.
AP2 – Change my behaviour to work more effectively with other people.
AP3 – Accept critical feedback.
AP4 – Communicate well with people of different backgrounds.
How quickly or slowly do you learn new knowledge or skills needed in following situations?
AP5 – Use new equipment at work.
AP6 – Keep up-to-date at work.
AP7 – Use new work methods.
AP8 – Perform new tasks at work.
How easy or difficult is it for you to handle the following situations?
AP9 – Adjust to the requirements of new equipment.
AP10 – Adjust to working with teams that have different customs.
AP11 – Work on multiple projects at the same time.
AP12 – Adjust to new work procedures.
AP13 – Have good relationships with people from different departments.
How quickly or slowly do you adjust to following situations?
AP14 – Switch from one project to another.
AP15 – Change your way of doing things to suit co-workers who have different ways of performing a job.
AP16 – Change plans when the necessary supplies or equipment are suddenly unavailable.
Resiliency
RS1 – I am reluctant to accommodate and incorporate changes into my work (R).
RS2 – The changes at work frustrate me (R).
RS3 – I like to change old way of doing things.
RS4 – I am able to perform my job without knowing the total picture.
RS5 – I am tolerant to situations where things seems confusing.
RS6 – I am able to work out what to do when work instructions are unclear.
RS7 – I remain calm and composed when faced with difficult circumstances.
RS8 – I am able to perform my job efficiently in difficult or stressful situations.
RS9 – I am able to work well when faced with a demanding workload or schedule.
RS10 – When a difficult situation occurs, I complain about it (R).
RS11 – When a difficult situation occurs, I react by trying to manage the problem.
RS12 – I drop everything and take an alternate course of action to deal with an urgent problem.

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© 2014 Taylor & Francis

Reference Predictor of workforce Agility(WA)/Agile workforce (AW) WA/AW WA dimensions

Sherehiy (2008) DVa Proactivity;

Ye-zhuang, Fu-jiang, and Agility strategy Mediator Teamwork;

Sumukadas and Sawhney (2004) DV Multiple tasks

Proactivity, Adaptability, Resiliency.

Decentralisation of decision making,

Figure 1. The research model.

Dimension Deﬁnition Description

Coping with stress

5. Workforce agility and organic structure

5.1 Workforce agility and low formalisation

Table 3. Management practices about workforce.

Organisational Empowerment (Eshlaghy et al. 2010), (Sharp, Irani, (Gunasekaran 1999),

Collaboration, (Gunasekaran 2001), (Eshlaghy et al. (Gunasekaran, Tirtiroglu, and

Work outcome Job satisfaction (Eshlaghy et al. 2010)

H1a: Low formalisation positively affects workforce agility.

5.2 Workforce agility and decentralisation of decision-making

H1b: Decentralisation of decision-making positively affects workforce agility.

5.3 Workforce agility and a ﬂat structure

H1c: A ﬂat structure positively affects workforce agility.

7. Workforce agility and organisational learning

8. Organic structure and organisational learning

9.2 Measures of research variables

Table 4. Demographic information of sample.

Industry category Food manufacturing 31 19

Years in current position <5 years 49 31

Years in current organisation <5 years 43 27

Education High school diploma 24 15

Company size <20 5 3

10. Data analysis

10.1 Measurement model

CMIN/DF ≤5 1.48 1.517 1.299

10.2 Structural model

11. Discussion and implication for managers

Table 6. Correlation matrix, Mean, standard deviation, reliability and validity.

*Correlation is signiﬁcant at the 0.05 level (2-tailed).

KS1 Flat structure

Adaptability (AP) Resiliency (RS)

** Significant at 0.01 level, *** Significant at 0.001 level

Figure 2. Analysis of the research model.

Table 7. Result of structural model.

Hypothesis Standardised coefﬁcient T value Result

**Signiﬁcant at p < 0.01.

Perform any needed

Does the firm have Yes

Access the required Note

No Keep rules flexible and review

Figure 3. A proposed process model on workforce agility.

Ask the manager to establish the

Try to keep this position and

How has the level of workforce` responsiveness to the environment been

Describe the importance of

Postpone the Prepare a proposal to

No Explain to the top management

to new ideas and workforce agility especially

Significant at 0.01 level, * Significant at 0.001 level