coupling

Coupling refers to the joining together and complementarity of the elements, or variables, of an economic system, such as a firm.

Tight coupling --
A system that is ""tightly coupled"" has both the highest possible performance from a given set of resources but also is the most susceptible to disruption because effective change is extremely difficult, because every variable has such a ""tight"" relationship to every other variable.

Loose coupling --
A ""loosely coupled"" system is not nearly as optimized in its effective use of resources as a tightly coupled systems, but it is much easier to change one or more elements without bringing the whole system of interrelationships to a point of failure, thus the whole system does not need to be restructured to make a change in one part of it.

Strategy implications --
Strategy requires to know when and where to loosely and tightly couple in order to produce, sustain, and renew a competitive advantage. If the firm's competition is tightly coupled, and the environment is relatively stable, the firm must either innovate in a manner to destabilize the environment, thus gaining competitive advantage, or optimize to match the competitive prowess of the industry. Rapidly changing environments require a more loosely coupled organization that has the flexibility to rapidly adjust to threats and opportunities. Of course, this flexibility, if not properly managed, also leaves the firm susceptible to a firm that tightly couples, becoming highly efficient and more competitive. This is where the concept of coherence comes into play -- success involves a strategy and organization that are coherent with the environment.