Valuation of Flexibility Initiatives: A Conceptual Framework

The need for flexibility in organizations has been espoused by many researchers and professionals. Despite the felt need and real-life practice of diverse shades of flexibility, its valuation has not been adequately addressed. Though the flexibility initiatives help in fulfillment of strategic goals, these require capability development and thereby cost inputs for their realization. The benefits of flexibility define its worth, which in relation to the associated cost gives its value or affordability. Initially, the chapter gives an overview of different types of flexibility initiatives with real-life case examples. This chapter provides a conceptual framework for valuation of flexibility initiatives in terms of fulfillment of needs leading to benefits and the requirements of capability building for implementing these initiatives requiring cost inputs. The framework is illustrated by few examples such as variable capacity, multiskilling, and flexi-time/flexi-place. It compares the flexibility initiatives using interpretive ranking process (IRP) and Total Interpretive Structural Modelling (TISM).