Surveys on system development (SD) project performance suggest that while much improvement has been made in SD technology, the project success rate remains low. SD research based on the socio-technical perspective suggests that three sources of socio-technical change have a bearing on the performance of SD projects: business requirements, development technology, and development procedures. To enhance project effectiveness, SD teams need to be flexible in the face of the constant changes from business and technical environments where they operate. The construct, SD Team Flexibility, is used to describe an SD team's capability to respond to changes from socio-technical environment. In this study, we propose that the SDTF has profound impact on the effectiveness of SD project. Furthermore, drawn on social capital view, this study explores the factors explaining the variation of SDTF among SD teams. Finally, this study posits that the impact of SDTF on project performance is mediated by team efficacy. A model depicting the nomological relationships between the constructs is developed. Research methodology that this study is used will be described. This paper concludes with potential research and practical implications.