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© Oxford University Press Southern Africa, 2008. All rights reserved.
Chapter 5
Managing flexible patterns of work
for competitive advantage
© Oxford University Press Southern Africa, 2008. All rights reserved.
© Oxford University Press Southern Africa, 2008. All rights reserved.
Learning outcomes
After reading this chapter you should be able to:
• define the concept of flexibility
• distinguish between the different types of
flexibility
• list ten organisational/management practices
organisations can use to determine whether
they are ready for flex work
• discuss the flexible firm model
• discuss the changing dynamics of the
workplace and its impact on new forms of
flexibility
© Oxford University Press Southern Africa, 2008. All rights reserved.
Chapter Content
• Opening case: Managing diversity for competitive
advantage at Deloitte & Touche
• Introduction
• Concept of flexibility
• Types of flexible patterns of work (advantages and
disadvantages)
• Organisational readiness
• Flexible firm model
• Changing dynamics of the workplace
• Impact of new forms of flexibility
© Oxford University Press Southern Africa, 2008. All rights reserved.
What is flexibility?
• ability of the organisation to adapt the size,
composition, responsiveness and cost of the
people inputs required to achieve
organisational objectives
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Flexibility
• Functional flexibility = management's ability
to deploy and redeploy particular sections of
the workforce on a wide range of tasks, in
response to market demand, as and when
required
• Numerical flexibility = quantitative approach
to the utilisation of the workforce
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Flexibility
• Work-time flexibility or internal numerical
flexibility = further process of adjusting the
'quantity and timing of labour input without
modifying the number of employees'
• Job sharing = where one job (often full-time)
is split between two (or more) employees
© Oxford University Press Southern Africa, 2008. All rights reserved.
Flexibility
• Distancing = relates to the outsourcing of
activities that may include core and non-core
activities
• Financial flexibility = a compensation
system designed to facilitate the development
of flexible patterns of work, in particular
numerical and functional flexibility
© Oxford University Press Southern Africa, 2008. All rights reserved.
Flexibility
• Procedural flexibility = the central tenet in
the development of flexible patterns of work,
particularly in the highly regulated labour
markets
• Regulatory flexibility = a process to
encourage and facilitate the establishment,
development or relocation of enterprises
through the relaxation, amendment or
exempting of public policy
© Oxford University Press Southern Africa, 2008. All rights reserved.
Flexibility
• Mobility/location flexibility = involves a
change in the nature of work, or a career
change with the same employer
• Cognitive flexibility = the mental frame of
reference required to effectively perform in
the job and the level of cognitive skill required
• Organisational flexibility = a structural
response to the development of flexible
patterns of work
© Oxford University Press Southern Africa, 2008. All rights reserved.
Organisational readiness for flex work
• policy - Are there specific policy and strategy
statements approved and communicated by top
management that endorse flex work as a component
of the employment relationship?
• employee commitment - How deeply are employees
committed to the success of the organisation's mission
and high achievement in their own jobs?
• management commitment - Do the actions of
management as well as their communications to
employees reinforce management's support for flex
work?
© Oxford University Press Southern Africa, 2008. All rights reserved.
Organisational readiness for flex work
• workforce planning - How good is the
organisation at forecasting projects, deadlines,
production quotas and workloads, at scheduling
workforce needs and at allocating resources?
• technology - Are information technology and
communication systems in place to support flex
work in smooth, efficient, consistent ways?
• training and orientation - How effective are
training content and delivery mechanisms for
meeting the ongoing needs of flex workers?
© Oxford University Press Southern Africa, 2008. All rights reserved.
Organisational readiness for flex work
• teamwork - To what extent is work done in teams,
and is there sufficient coordination to ensure
coverage and to compensate for having team
members on different schedules?
• performance management - Are there methods
for performance measurement, employee
appraisal, and staff development that are
equivalent, if not identical for flex workers and
others?
© Oxford University Press Southern Africa, 2008. All rights reserved.
Organisational readiness for flex work
• decision making - Who holds decision rights and
makes key decisions in the course of everyday
work?
• communication & information dissemination How effective are the means, media and frequency
of communication of everyday business information
and are those processes robust enough to keep flex
workers in the loop?
© Oxford University Press Southern Africa, 2008. All rights reserved.
Flexibility and organisational design
• increasing use of multiple forms of flexible patterns
of work, to facilitate more timely responses to the
competitive forces of the market
• required the parallel development of organisational
structures to facilitate these
• provides management with the template to adjust
and utilise the available human resources in a
flexible manner in response to changing demands
• flexible firm model/core-periphery model
Flexible firm model
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Flexible firm model
• provides competitive advantage through the
restructuring of the employment relationship
• based on a break with unitary and hierarchical
labour markets and organisation of internal means
of allocating labour, in order to create a core
workforce and a cluster of peripheral employment
relations
• redefines the organisation into two broad segments:
– core
– periphery
© Oxford University Press Southern Africa, 2008. All rights reserved.
Flexible firm model
core
made up of a permanent, highlyskilled group of employees with
internal career
peripheral
workforce
associated with organisation's
development of qualitative/numerical
flexibility (undertaking of important,
but not vital day-to-day activities )
• development of the flexible firm model reactive to the
demands of the market, rather than a new-found
strategic view of management towards the
organisation of its human resources
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Flexible firm model
• implies a distinctive strategy on the part of
management in developing more efficient and
effective labour utilisation
• criticised for its promotion of variation in terms and
conditions of employment within organisations
• provide a framework for analysis, insight and
explanation with respect to the development of new
patterns of work
© Oxford University Press Southern Africa, 2008. All rights reserved.
Changing dynamics of flexibility
• new workers - the changing dynamics of the flexible
core worker
– need to attract, retain and develop key employees for the
core activities and develop a stable supply of workers for
the periphery
– new 'core' workers in the emerging 'knowledge' economy
increasingly own the means of production - knowledge which attracts large rewards
– ‘gold collar workers’
• understand what motivates them
• think differently, behave differently and have needs
differently to the traditional employee
• self-focused and less interested in the traditional
benefits of employment (job security and working
conditions)
• manage their own careers
© Oxford University Press Southern Africa, 2008. All rights reserved.
Changing dynamics of flexibility
• new organisations - the changing dynamics of the flexible
organisation
– organisational design
– accepting and accommodating the movement of human
resources into and out of the firm
– providers of new information
– encouraging 'core' staff to leave to develop themselves
and allow new talent into the core organisation
developing a hybrid of the core-periphery model
– management of 'distributed knowledge systems' or
networks
– team-based workforce
– management's ability to derive competitive advantage
from continually developing and exploiting both its
knowledge stock and knowledge flows
© Oxford University Press Southern Africa, 2008. All rights reserved.
Changing dynamics of flexibility
• new perspectives - flexible workers need flexible
managers
– role and development of management is overlooked
– new capabilities can only be developed where
management understands this and has the skills and
knowledge to create such an environment
– employer of choice
– management acts as the catalyst in the through flow of
staff to enable the organisation to continually regenerate
its knowledge base
– invest resources in employees to ensure they continue to
develop their knowledge, skills and ability to ensure the
organisation develops sustained competitive advantage
through their human resources
Advantages and disadvantages of
flexible patterns of work
Employer’s perspective:
•
Advantages
Disadvantages
•
•
•
•
enable employers to match organisational
resources more closely with customer/product
demand
reduce fixed costs
aid recruitment & retention
increase productivity
reduce absence & turnover
•
•
•
•
•
increased training costs
higher direct costs
a more complex administration
communication difficulties
management of the flexible workforce
Advantages and disadvantages of
flexible patterns of work
Employee’s perspective:
Advantages
Disadvantages
•
•
•
•
the ability to combine work with outside interests
greater job satisfaction
improved motivation
less tiredness
•
•
•
•
•
•
unequal treatment in terms of pay & benefits
reduced career opportunities
limited training opportunities
the 'psychological contract' is challenged
increased job insecurity
increased stress