Organizational design based on Holacracy as a source of competitive advantage

Abstract

This study aimed to investigate the extent to which an agile and flat organizational design based on Holacracy can bring a company a competitive advantage in the market. Holacracy design is considered to be a Dynamic Capability. The research was conducted as a case study of a flatly organized company operating in the field of designing and supplying technologies for industrial automation in the Czech Republic. Interviews with company executives and questionnaires were used to gather their opinions on the company's ability to have a competitive advantage. The questionnaire included a guiding question and four statements about their truthfulness on a 5-point Likert scale. The first group of statements assessed the extent of the company's ability to exploit market opportunities. This ability was rated as average to slightly above average. The second group of statements assessed the extent of the company's ability to neutralize competitive threats. Here, a rather average to slightly below-average level was found. This research found that the innovative Holacracy design may not be able to create a competitive advantage if a company operates in a highly competitive and price-sensitive industry. Companies' efforts to achieve above-average performance thus remain primarily a matter of appropriate pricing, well-managed costs, and the ability to differentiate more than dynamic or agile organizational capabilities. The limitations of this research were mainly the small number of similarly organized companies operating in the same industry and the small base of companies of similar size and structure.