Description
Case Studies on Flexible working as an effective tool of organizational productivity increasing: perspectives of property and staff in Alcatel-Lucent Pte. Ltd., Productivity has many benefits. At the national level, productivity growth raises living standards because more real income improves people's ability to purchase goods and services, enjoy leisure, improve housing and education and contribute to social and environmental programs.
CASE STUDIES ON FLEXIBLE WORKING AS AN EFFECTIVE TOOL OF ORGANIZATIONAL PRODUCTIVITY INCREASING: PERSPECTIVES OF PROPERTY AND STAFF IN ALCATEL-LUCENT PTE. LTD.
Abstract
Continuous information technology development changed traditional ways of management and business operations. Nowadays there is a high demand for new innovative business solutions and the ways of managing people that enables to fully elicit their potential. Physical boundaries are removed; work is becoming incredibly dispersed around the world enabling growth of 24/7 customer service, home banking, online shopping and other services that were seemed incredible just a few years ago. In this fast paced environment the companies are seeking for any possibility to increase their competitiveness. Implementing flexible working is considered by most of organizations as a tool to adapt to never-ending changes. This paper aims to test the hypothesis that flexible working increases organizational productivity from the perspective of the property as well as from the perspective of employees. In current work organizational productivity from the perspective of property is analyzed from economic standpoint when flexible working decreases operational and real estate costs per employee, thus, allowing saving and investing in other business areas that would increases profitability of the company. Productivity from staff perspective is measured by employee's satisfaction of his working environment, work-life balance, and increased efficiency through team collaboration, flexible hours and telecommuting. Methodology used is case study and literature review. Case study was performed on-site in Alcatel-Lucent in Singapore. It is limited to six months from planned full year of
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implementation project. Set of interviews with company managers was conducted to support the case results. The thesis suggests the hypothesis, according to the literature review and overview of some cases in different countries, that flexibility in property as well as in working mode increases productivity both in terms of real estate costs savings and in terms of employee's increased productivity due to better team collaboration in open space, flexible working hours, ability to choose preferred location for work, telecommuting that creates a positive work-life balance. The case study performed for this paper in AlcatelLucent Singapore shows that the aforementioned benefits are not there yet due to the project timeline but are highly anticipated by local and global management. Nevertheless, thorough assessment of business requirements and the needs of employees should be undertaken before deciding on flexible working. It is extremely crucial to secure efficient and open internal communication and employees' involvement in all stages of the project in order to achieve fast acceptance and adaptation to new environment. Based on the current example, future research suggests investigating in cultural aspect of global strategy deployment by corporate decision in different countries.
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Table of Contents
1. Introduction ................................................................................................................. 6 1.1. Background.............................................................................................................. 6 1.2. Research question and objectives ............................................................................... 8 1.3. Methodology and structure ........................................................................................ 9 1.4. Significance of study.................................................................................................10 1.5. Research limitations.................................................................................................10 2. Methodology: Literature review and Case study...........................................................11 2.1. Literature review .....................................................................................................11 2.2. Case study ...............................................................................................................11 3. Literature Review ........................................................................................................15 3.1. Flexible working, definition ......................................................................................15 3.2. Evolution of office design .........................................................................................15 3.3.Types of flexibility ....................................................................................................18 3.4. Flexible office vs. Conventional office ........................................................................20 3.5. Flexibility and productivity .......................................................................................21 3.6. Advantages and disadvantages of flexible working ......................................................23 3.7. Example: cases.........................................................................................................25 4. Case study: Alcatel-Lucent Pte. Ltd. ..............................................................................29 4.1. The company...........................................................................................................29 4.2. Flexible working implementation: Antwerp, Belgium ..................................................30 4.3. Office market in Singapore. Colliers International overview .........................................33 4.4. Dynamic workplace in Alcatel-Lucent Singapore .........................................................34 4.4.1. Objectives of the transition to flexible working.........................................................34 4.4.2. Office space utilization survey ................................................................................35 4.4.3. New office design and space planning......................................................................38 4.4.4. Benefits of flexible workplace environment for Alcatel-Lucent in other countries ........40 4.4.5. Project's timeline...................................................................................................41 4.4.6. Interview results ...................................................................................................42 5. Discussion and Conclusions .........................................................................................44 6. Future research ..........................................................................................................45 References Appendix
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1. Introduction
1.1. Background Continuous information technology development changed traditional ways of management and business operations. Nowadays there is a high demand for new innovative business solutions and the ways of managing people that enables to fully elicit their potential. Physical boundaries are removed; work is becoming incredibly dispersed around the world enabling growth of 24/7 customer service, home banking, online shopping and other services were seemed incredible just a few years ago. In this fast paced environment the companies are seeking for any possibility to increase their competitiveness. Implementing flexible working is considered by most of organizations as a tool to adapt to never-ending changes. As Skyrme (1994) notes flexible working emerged in the early 1980s as a strategic response to the needs of businesses. He identifies these needs or business drivers as drive for efficiency, drive for effectiveness, and drive to response social and demographic change. The base of the drive for efficiency is cost reduction, especially cutting overhead and property costs and simplification of business processes. Office occupancy cost is defined as "the average total cost of leasing approximately 10,000 sqft (929 sq m) of net usable office space in a modern, well-specified office building within a prime Central Business District location and occupancy costs per workstation are then calculated by dividing the net usable area by the number of planned workstations" (www.dtzreseacrh.com). According to the research by DTZ in 2004, property is the second highest business cost for companies after the salaries of employees. With time this cost is only increasing as the real estate continues to be a defining economic driver. Occupancy costs vary across the world. Steiner (2005, p.5) illustrates total office occupancy costs in 2004 in different parts of the world:
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As it is seen from the graph, in 2004 the highest property costs were incurred in Western Europe with top in London West End and Paris where office rents skyrocketing to US $16,682 and US $15,700 per workstation. Occupancy costs in Western Europe were followed by North America, Central and South America, Central and Eastern Europe and Asia Pacific. In 2004 Middle East recorded the lowest cost for office occupancy. It is predicted that the Middle East gap will be closing in the near future due to major multinational projects in construction pipeline. The second business driver is a drive for effectiveness that stands for better information sharing and service, i.e. customer and market orientation. The third driver discussed by Skyrme (1994) is a drive to response social and demographic changes which means the ability to widen the employment pool in relation to the demographic situation, ability to reach skilled staff wherever they are and the ability to accommodate variety and changes of lifestyles and personal values. Gibson (2003) discusses about the same driver for implementing new working strategy the ability of the workforce to be dispersed or in other words to be capable of working remotely. This is especially important while speaking about sales teams or service engineers whose efficiency depends rather on time spent outside of the office than inside. Hassanain (2006) explains the emergence of flexible working as a response of organizations to external and internal factors. External factors or changes, according to the author, are the ones that the company cannot control, for instance, technological advances, globalization, competition, regulation, deregulation and consumer behavior. Internal factors are defined as initiatives and proposals of the organization, for example, investment considerations and their impact in company's system and structure. Thus, it is again a response towards changes both external and internal, for the purpose of staying up-to-date and competitive. When discussing flexibility in terms of the property, Hassanain (2006) introduces the idea from the previous research done by Brittain et al. (2004) on design of flexible building services. He supports research results of Brittain et al. (2004) that the flexible building services "sustain the operational requirements of a building in a cost and time effective matter, while responding to the short-term changing requirements of the organization" (Hassanain, 2006, p.4). Hassanain (2006) complements the previous research by expanding the benefits of flexible building services to a reduced building
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capital costs over its remaining service life, increased staff productivity as a result of improved internal environment, energy-efficient environment that leads to a reduced environmental impact, shorter period of construction and lesser design efforts. He underlines that sustainable and more flexible property solutions are one of the key success drivers for the organizations to be competitive and dynamic in facing fast changing environment on time and in proper ways. It is, therefore, crucial to identify and analyze the factors affecting the development of flexible workplaces. Hassanain (2006) concludes that in order to reach maximum flexibility of the property and the workplace and, thus, stay competitive and in the forefront of innovation, every organization should secure close interaction between building planning, physical workplace layout, IT networking and service systems. Designers, developers, investors, facility managers and planners - all should unite their efforts and share the same objective.
1.2.
Research question and research objectives
Research area of the current work is to investigate in feasibility of flexible working as the way of increasing organizational productivity from the perspective of property and from the perspective of employees. Organizational productivity from the perspective of property is analyzed from economic standpoint when flexible working decreases operational and real estate costs per employee, thus, allowing saving and investing in other business areas that would increases profitability of the company. Productivity from staff perspective is measured by employee's satisfaction of his working environment, work-life balance, and increased efficiency through team collaboration, flexible hours and telecommuting. Thus, the research question of this work is whether flexible working increases organizational productivity in both ways: not only as a tool of cost cutting but also as a technique to improve the performance of employees? The objectives of this paper, therefore, are to investigate in advantages and disadvantages of flexible working, to analyze cases of flexible working implementation in different companies and countries and its results, to test the hypothesis by performing practical research of flexible concept deployment in Alcatel-Lucent in Singapore and develop recommendations for smoother transition to flexible working and, finally, to suggest the areas for future research.
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1.3.
Methodology and structure
I will present existing theories and practices of flexible working in literature review to analyze the roots of flexible working mode, its evolution in office design and types. I will also investigate in advantages and disadvantages of flexible working and describe a few cases to make the review more explanatory. Flexible working in this paper, apart from the literature review, is presented through the case. Alcatel-Lucent Pte. Ltd is one of the leading international telecom companies with its headquarters in Paris and offices all over the world. Flexible working was first introduced in 2009 in its office in Antwerp in Belgium after a survey that showed very low workplace occupancy percentage which raised concerns to corporate management on poor space utilization and, as consequence, high real estate costs. The case uses Antwerp office as an example of successful implementation of flexible working concept but the focus is on Alcatel-Lucent's head office is South and South East Asia - in Singapore, where by corporate policy it was decided to deploy flexible working from January 2011. The end of the flexible office implementation project is anticipated in the end of 2011 - beginning of 2012. The structure of the paper looks as following: in the literature review I will start with flexible working definition followed by the history of office design, types of flexibility, the difference of flexible office from conventional office, comparison of flexibility and productivity, advantages and disadvantages of flexible working and a case study definition. In the literature review part I will also provide examples or cases of flexible office deployment in other companies at different times that was discussed by previous researchers. The practical part consists of three parts: actual case study in Alcatel-Lucent Singapore, discussions and conclusions and suggestions for future research. My case study is comprised of basic concept of flexible working developed in Antwerp, Belgium, short overview of Singapore office market based on Colliers International figures, the introduction to dynamic workplace environment project in Alcatel-Lucent that is supported by office space utilization survey and new office design and space planning that is going to be undertaken in the company. I end practical part of my work by drawing benefits of flexible working for the local office and the project timeline. The final parts of this paper are discussion and conclusions and recommendations for future research.
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1.4.
Significance of study
Flexible working is the topic with vast application in many organizations in different countries. However, there is limited research conducted around this area. Not much of practical knowledge in implementing flexible working in companies is accessible. Also there is lack of research taking into consideration employees' attitudes towards the changes. This work will lit some light on these issues to all parties: researchers, managers and employees in the ways of effective transition to flexible working with least negative impact on employees. This thesis will also first suggest taking into consideration cultural aspects of working environment when deploying the global concept in different parts of the world.
1.5.
Research limitations
This research is geographically limited to Singapore even though the concept of flexible working can be applied in any other country. Therefore, local business and personal attributes must be taken into thorough consideration when deciding on the flexible mode of working. The research is limited to one case only and is not aimed to generalize the findings. The results are time-, country- and business-specific. According to Johansson (2003), generalization is usually made if the case is purposefully or analytically selected and is information-rich, critical, revelatory, unique or extreme. Current case is chosen and studied with an interest in the case as such and the purpose is rather on understanding the case than on drawing generalizations. Generalizations can be done by observing more cases with similar patterns in future investigations. Since my internship in Alcatel-Lucent Singapore was limited to six months from January to July 2011, later phases of the project implementation were analyzed according to brief email communication with real estate and general services manager and the prognosis made in the initial phase of the project.
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2. Methodology: Literature review and Case study
2.1. Literature review Reviewing the literature critically, as Saunders et al. (2007) put, provides the foundation on which the research is built. Its main purpose is to help writer "to develop a good understanding and insight into relevant previous research and the trends that have emerged" (Saunders et al., 2007, p. 57). There are two main reasons for reviewing the literature, according to Sharp et al. (2002). First, preliminary literature research helps generating and refining the research ideas. Second, critical review of the literature is necessary to discover the current state of the knowledge that exists within the area of research, its limitations and how own research ideas fit in that wider context. As Jankowicz (2005, p.161) pointed "there is little point in reinventing the wheel?the work that you do is not done in a vacuum, but builds on the ideas of other people who have studied the field before you. This requires you describe what has been published, and to marshal the information in a relevant and critical way". Therefore, it is crucial to assess existing literature to enhace the subject knowledge and clarify one's research question further. In literature review researchers apply different approaches. Deductive approach uses the litarature to help to identify theories and ideas that further will be tested using data. In inductive approach, on the contrary, the researcher does not start with known predetermined theories or frameworks, as they come as a result of the research itself. The literature review has a number of other objectives. Thus, besides aforementioned purposes that the literature review helps to refine further research questions and objectives and highlight overlooked issues in current state of knowledge, it also, according to Gall et al. (2002) discovers recommendations for future research, helps to avoid repeating previous research and to sample opinions in newspapers, magazines and journals to gain more insights into the aspects of own research that are considered newsworthy.
2.2. Case study: The case study methodology has been developed in social sciences and it was meant to "capture the complexity of a single case" (Johansson, 2003, p.2). Nowadays case studies are conducted not only in social sciences but also in practical fields such as business studies, social work, environmental studies, etc.
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Definition There are many definitions of what is a case study among researchers. To summarize common ideas of Yin (1994), Stake (1998), Stake (1995), Miles & Huberman (1994) and Gillham (2001) one can state that the case study should have a "case" which is the object of study. The case should be a complex functioning unit, be investigated in its natural context with a multitude of methods, and be contemporary (Johansson, 2003). One of the major characteristics of a case study methodology is that "different methods are combined with the purpose of illuminating a case from different angles: to triangulate by combining methodologies" (Johansson, 2003, p.3). The author also underlines that the development of case studies depends to a large extent from the "mastery of such combinations" and their historical component, i.e. case studies with a "stronger methodological influence from histrorical research (?) in which case study methodology and history combine" (Johansson, 2003, p.11). Nevertheless, various researchers emphasize different additional features of case study. Stake (1998) points out that crucial to case study research are not the methods of investigation, but that the object of study is a case. Yin (1994) places more emphasis on the method and the techniques that constitute a case study. Johansson (2003) argues that the concept of case is not well defined and still creates questions to the researchers. Ragin & Becker (1992) point that the case may be a relatively bounded object or a process; it may be theoretical, empirical, or both. A case is a phenomenon specific to time and space. Johansson (2003) distinguishes that the boundaries, and often even the focus of the case, change through the research process. Also, a case study focusing on a particular phenomenon might be read as an investigation of a different phenomenon. The author continues by defining how the case is usually selected. On one hand, the case can be chosen and studied with an intrinsic interest in the case as such. In this situation the researcher has no aim in generalizing the findings rather he or she focuses on understanding the case. If the findings are generalized, it is done by audiences through "naturalistic generalization" (Johansson, 2003). On the other hand, the case might be purposefully or analytically selected. A case may be purposefully selected in virtue of being, for instance, information-rich, critical, revelatory, unique, or extreme. If a case is purposefully selected, then there is an interest in generalizing the findings (Johansson, 2003).
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In fact, generalization is the most debatable issue in case study literature. Researchers have been discussing the question on how can generalizations be made from a single case. Johansson (2003) provides his view on this question by stating that "generalizations from cases are not statistical, they are analytical. They are based on reasoning" (Johansson, 2003, p.8). Reasoning can have three main principles: deductive, inductive and abductive. Generalizations, according to the author, can be made from a case using one or a combination of these principles. Then, Johansson (2003) describes each of these principles: 1. Generalization based on the deductive principle developed by Robert Yin: the procedure is similar to an experiment: a hypothesis is formulated, and testable consequences are derived by deduction. By comparing the expected findings, which are deduced from a theory and a case, with the empirical findings, it is possible to verify or falsify the theory. As a result it is possible to define the domain within which the theory is valid more exactly. Cases that are pivotal to the theory are selected. 2. Generalization through induction discussed widely in Barney Glaser & Anshelm Strauss (1967): inductive theory-generation, or conceptualization, which is based on data from within a case. The result is a theory normally consisting of a set of related concepts. 3. Generalization depends on the principle of abduction: according to the principle of deduction a conclusion is necessarily true from a case and a rule. If the premises are true, the conclusion is also true. Deduction proves that something must be true. By induction we can conclude from facts in a case a rule that actually is operative, and probably is operative, in similar cases. Abduction is the process of facing an unexpected fact, applying some rule (known already or created for the occasion), and, as a result, positing a case that may be. There are two types of abduction used in generalization. One is when a case is created (reconstructed) by a process of abductive reasoning from a few facts; for instance, historical data or clues. The other kind is a "naturalistic generalization" (Stake R. , 1995) that is operative when generalizations are made from known cases and applied to an actual problem situation by making appropriate comparisons.
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Modes of generalizations and reasoning within case study methodology are presented below1:
Mode of Procedure Hypothesis testing A theory (hypothesis) is tested in a case, and validated or falsified Theory generating A principle (theory) is generated from facts in the case Naturalistic generalization An actual problem situation is compared with known cases Synthesising a case The A case is synthesised from facts in the case and a principle (theory) Abductive (re)construction of a case From facts and a theory to a case Abductive Ability to act based on the conception of a case From cases to a case Inductive A theory (conceptualization) From facts in a case to theory Deductive The establishment of the domain of the theory From a hypothesis and facts to the validation of a theory reasoning Result Generalization
According to Johansson's (2003) modes of generalizations and reasoning within the methodology of case study, my research in Singapore fulfills hypothesis testing with deductive mode of reasoning, i.e. results are based on validation or falsification of the theories and opinions that already exist. I have used deductive approach while analyzing the literature for the current research.
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Johansson, Rolf. Case study methodology. Stockholm: The Royal Institute of Technology, Sep. 2003, p.10 14
3. Literature Review
3.1. Flexible working, definition The literature that exists around the current research topic suggests various definitions of the term "flexible working". Experts in this area such as Arge, Steiner and Hassanain have researched the subject from different standpoints: flexibility in terms of flexible building design and physical office and flexibility in the sense of time flexibility and locational mobility. Thus, Arge (2005) defined flexibility as part of building adaptability, the function which enables to face changing user or owner needs by changing its property easily. Steiner's (2005) explanation of flexibility is very close to the one of Arge (2005). He defined flexibility as ability of the building to easily accommodate reorganization due to alterations and office renovations as well as business restructuring and introduction of new technology. The layout of the physical office is the main focus in the research of Steiner (2005). In my work I will use the definition provided by Hassanain (2006) that, from my point of view, covers the wider and more general concept of flexible working. Thus, flexible working in the context of this paper is used to reflect "the concept of the physical layout and functional opportunities of the workspace (and) the concept of organizational flexibility as it relates to where and when staff would work regardless of their employment contract" (Hassanain, 2006, p.4).
3.2. Evolution of office design Organizations gradually adopted new management practices that at the same time required new workplace design in order to better accommodate arising changes. The emergence of "mass office work environments" according to Salama (2004) began after the World War II. In the early 1950s people used the term "paper-factory offices" as a definition of office environments where mainly the routine paper-based work was undertaken. The design of such offices was very similar to that of real factories. Change of the existing factory design was made after the introduction of air conditioning in the end of 1950s in the US. It changed traditional office layout to more convenient and open design - open plan environment. Open plan environment or open plan office according to Hassanain (2006) is an office where the space is divided into relatively small cubicles/workstations by partitions and modular furniture. There are no full height walls, heavy furniture and massive doors that divide the space and separate the
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employees. This kind of office structure can be seen as flexible. As Hassanain (2006) puts, the open space concept was originally developed to make a better use of office space and enable better exchange of information. In 2004, according to the International Facility Management Association survey, 61 per cent of US workers were seated in openplan offices. European offices at the same time period after the World War II were "narrow in depth and cellular in plan, with small offices served off a central corridor" (Hassanain, 2006, p.3) Salama (2004) describes the European office design that was popular in post-war times "Burolandschaft" office that emerged in Germany. Its aim was to improvecommunication flows. New design of office was determined by the communication channels that were either paper-based or personal between individuals and groups. As a result of the new design all walls were removed and working environment became very open. Burolandschaft was introduced in the US in the early 1960s but with certain modifications. Meeting places were removed; clerical workers were placed in large open spaces while top management remained in private enclosed offices. By the mid-1960s Burolandschaft emerged into a new concept that was called "Action office" created by Herman Miller, one of the first office furniture companies in the US. The main idea of an Action office was that the furniture "should be a kit of parts that responds to the varied tasks of office work" (Salama, 2004, p.3). But both Burolandschaft and Action office concepts received wide criticism by space planning researchers and practitioners due to their overly deterministic assumptions and the fact that not all organizations were communication intensive and, thus, not all offices should have the same layouts. In the early 1970s, as a response to the criticism of previous concepts, another type of office design - the "Archetypal" office concept was introduced in North America. As Laing (1998) noted, this could be seen as the trade-off between individual and corporate aspirations. The difference of Archetypal office from Burolandschaft and its successor Action office was that the open spaces in the office were divided into group and personal zones, depending on the needs for communication between groups and individuals. This type
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of office design still remains in the organizations up until now where flexible work environment has not yet been introduced. In Europe, continuous developments in office design took place throughout 1970s and 1980s until the emergence of personal computers. Stone P. and Luchetti R. (1985) stress the importance of this revolution in information technology when the space and time in the office started to be perceived and used in different, more innovative ways. New office structures emerged to incorporate the changes and new vision of working environment. In the 1990s, as Harris (1998) noted, employees became more demanding to their working conditions. Natural light, proper ventilation and climate control were one of the specific preferences workers had. Organizations had to take it into consideration if they wished to retain their staff. Here, I think it is worth mentioning the "theory Z" or a Japanese management theory paradigm, discussed by Salama (2004) where an employee is placed in the center of organization when deciding on office design, i.e. an employee is highly involved in a decision-making concerning his workplace that, in turn, will have a positive effect on employee's psychological and behavoral patterns and, thus, increase productivity. At the same period of time in 1990s in Northern Europe a Combi office was introduced. Worthington, J. and Koya A. (1988) describe new office layout as offering high levels of personal enclosures at the building perimeter as well as enabling teaming and gathering in core areas. It can be seen as quite close from the design of archetypal office concept in North America. Graphical illustrations of the various office types provided by Salama (2004) can be found in appendix A. Duffy (1997) provides another classification of various types of office structure in current business environment. These types look like derivations of Salama's open plan office. Thus, he classifies workspace into four types: hive, when work is based mainly on individual processes; cell - is suited best when the high concentration is required and when autonomy increases; den - group work when interaction increases; club transactional knowledge when autonomy and interaction increase. He then discusses that usually in real working environment there is a mix of all four types of workspace depending on employee's role, industry, size of the company, corporate culture, location, etc. Graphical illustration can be found in appendix B.
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3.3. Types of flexibility Property and staff flexibility Gibson (2003) in her research elaborates on property and staff flexibility. She argues whether for one element to be flexible the other one necessarily needs to be flexible as well. Gibson (2003) identifies the components of staff flexibility as contractual, fixed and locational whereas property flexibility includes financial, physical and functional flexibility. Contractual flexibility as a part of staff flexibility allows staff to be employed on a range of contracts, i.e. fixed-term, short-term, outsourcing, etc. Time flexibility gives workers a possibility to perform their tasks at the most convenient time determined by both employee and employer. Locational flexibility determines the most appropriate location to work - from home, work office, cafe, airport, etc. In contrast to staff flexibility, financial flexibility as a component of property flexibility describes the ability of the property acquired on a short-term lease to vacate/dispose the space when needed. Physical flexibility allows the space to be easily modified according to the needs of workers, i.e. from open plan to cellular offices. Functional flexibility characterizes the space utilization to enable various business functions (building location, legal and planning constraints). The relationship between property and staff flexibility, according to the author, is not as direct as is sometimes assumed by practicing managers. However, there is a certain need for new workplace strategies due to increasing variety of ways of employing and managing the workforce. New workplace strategies shift from traditional office perception with assigned desks in specific location. These strategies acknowledge that the nature of activities should determine the best location and time for accomplishing the tasks. Gibson (2003) and Steiner (2005) share the same standpoint that changing work styles require more flexible arrangements to better respond the demands of knowledge-workers. Flexible structure means that employees are able to move easily within these arrangements depending on what kind of activities they are engaged with at a specific time. "A one dimensional-approach (all the space will be open plan) is inclined to fail to meet the range of needs any workforce is likely to have" (Gibson, 2003, p.7). Flexible working in terms of flexible hours It is not a secret that today organizations are looking for any possible way of increasing their competitiveness. One of the major roles is given to the development of workplace for organizational performance improvement. IT and telecommunication advances
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removed time and space barriers, making flexible offices, remote and teleworking possible. This gains special importance in the light of current global changes in nature of work. Steiner (2005) raises an issue of global "knowledge workers" in the corporate world that are "born out of the fast-paced IT sector, the principles of relying on the individual's power of ideas, thought leadership and information to make the right decisions that enhance competitive advantage are crossing over and being adopted by other industries" (Steiner, 2005, p.2). He states that the environment of knowledge workers is shaped by collaboration, i.e. formal and informal meetings and social interactions that are enhanced by technology. Steiner (2005) stresses on the point that these employees should be treated differently due to their work specificity and style. They need to have much more freedom in choosing the right time and place to work in order to maximize their productivity and healthy work-life balance. Since more and more organizations are becoming knowledge-intensive this assumption should be taken into thorough consideration. It comes as obvious necessity that the physical office must also follow the changing paths of work to respond to the needs of employees. Skyrme (1994) draws attention to the major strands of organizational strategy such as reducing overhead costs in parallel with increasing flexibility and responsiveness. Organizations show the tendency towards "flatter, less hierarchical structures; increasing use of contracting out and outsourcing of non-core activities; more use of alternatives to full-time salaried employment, such as contractors and temporary staff. Each of these strategies involves the deployment of human resources reducing their costs and improving their flexibility" (Skyrme, 1994, p.1). According to the author, the strategies of flexible work environment can help organizations to achieve benefits and create new opportunities. He also states that there are often hidden costs of inefficient office space utilization that leads to the need of core re-appraisal of working place in order to improve the corporate performance. This can be achieved through certain reforms in working place. One of such reforms is teleworking. Teleworking, as most researchers define, is the way of personal work organization when an employee can work from home and at times that suit his/her personal needs. Nowadays thanks to advances in IT many companies across the world successfully practice teleworking.
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Skyrme (1994) develops criteria as a recommendation for organizations to help to identify whether they need to make this shift towards flexible working. So, according to Skyrme (1994), the company is recommended to adopt flexible working concept if: more work is information based (ca 60 per cent); the lifetime of business processes is diminishing (requirements to meet daily business needs are changing that fosters changes in procedures and skills); work is becoming less structured (many activities and tasks depend on customers and co-workers demand, adaptive skills become more important than predetermined procedures); and there are more interdependencies between different work groups. Most of these trends require better access to information and to people with specific knowledge. The importance of physical location, therefore, is decreasing. As the author puts, "extension of an appropriate telecommunications and computer networking infrastructure into different work locations creates many kinds of flexible working opportunities" (Skyrme, 1994, p.4). Employees in flexible working environment can successfully work from customer sites and non-office locations such as home, hotel, cafe, etc. Also, there are teams, for example, dispersed engineering teams, sales team, remote back-office activities support team, and global project management/outsourcing team, whose work specificity do not require them being in the head office every day for the full working hours. Flexible working for them, thus, is a business need and the key to successful performance.
3.4. Flexible office vs. Conventional office Skyrme (1994) being one of the major researchers of flexible working and whose works were widely cited in academic publications, differentiates flexible and conventional office environments by workplace, time, communications, relationships, technology, security, management style and skills accordingly. So, main attributes of flexible working environment as compared to conventional office, include: 1. Workplace: is not fixed, employees are changing their work stations. Shared resources; storage arrangements for personal belongings are introduced. 2. Time: flexible hours of working, effective use of computer systems, need for time management and effective work coordination.
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3. Communications: effective information sharing despite of the work spot; requires more sophisticated message handling systems. Procedures within work teams need to be well developed and understood. 4. Relationships: due to the fast information flows and communication requirements organizations are moving towards more lean structure, the nature of peer-to-peer and employee-to-manager relationships change. Face-to-face meetings often are substituted by teleconferences or phone conferences. 5. Technology: flexible working, especially teleworking requires continuous changes in accordance with technology advances. 6. Security: security considerations take on special importance with shared desks or work being performed at home. With careful planning they are usually manageable. 7. Management Style: empowerment rather than control. 8. New Skills: with introduction of flexible working, new skills should be developed. These include handling new communications technology, work flow planning, and developing new social networks. New working practices have two main consequences, according to Gibson (2003): first, due to effective remote working (from any other location than office) real estate occupancy costs can be significantly reduced if the office space is reduced at the time; second, new working strategies require new design and office structure to adopt various ways of working. Traditional office, therefore, will have a different function that need tobe managed and maintained in a different way. Alternative workplace strategies are based on the ideas that there are three linked dimensions of an office: its location, internal space configuration and use and the way that space is assigned and managed. Recognizing place, space and use dimensions and the links between them in the organizations will help to build more effective workplace strategies taking into consideration needs of the employees. Gibson (2003) as well as Steiner (2005) and Skyrme (1994) underlines the importance of managers' understanding of "what staff actually do inside an office, and the nature of the work process in general, if they are to provide alternative workplaces" (Gibson, 2003, p.9).
3.5. Flexibility and Productivity Analyzing flexibility, one should take into consideration the productivity. Haynes (2007) reviews two contrasting approaches towards office productivity: employee or office
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occupier perspective (or enabling paradigm) and perspective of real estate and facilities department that is addressed as a "cost cutting" department (control paradigm). Control paradigm suggests improving productivity through greater efficiency, mostly by resource reduction - either financial or actual space reduction. Enabling paradigm views human asset and knowledge capital as the main tool of office productivity improvement. Here we can see clear link to theory "Z" where an employee is placed in the center of organization, earlier presented in discussion by Salama (2004). Haynes (2007) supports hypothesis that relatively small increases in employee's productivity can greatly outweight significant reductions in real estate costs. Thus, it is appropriate to control for real estate costs unless it does not restrict employee's ability to perform his/her tasks as productively as possible. Haynes (2007) suggests that people-centered approach is the most recommended and suitable for employees with varying job tasks and allows the establishment of the end-user/occupier's perspective. He concludes that the future of office productivity lies in establishing the links between "real estate and facilities performance and metrics and the organizational metrics" (Haynes B. , 2007, p.7). These links, according to the author, will become a base for integration between organizational demand and facilities and real estate solutions supply. Haynes (2008) argues that office productivity should include both the physical and the behavioral environment to better represent dynamic nature of office environment. He divides the office environment into 4 categories depending on the employees' work style: individual, group, concentrated or transactional knowledge work. Here, his suggestions are in line with ideas of Gibson (2003) and Steiner (2005) that the work should be organized and managed depending on the nature of the role and the task an employee has. Thus, individual process workers are largely required to be at their desk and have a low degree of interaction with their work colleagues whereas transactional knowledge workers have a high degree of flexibility in where they work and have a high degree of interaction with their work colleagues. Group process workers are largely required to be at their desks but they have a high degree of interaction with work colleagues while concentrated study workers have a high degree of flexibility in where they work and have a low degree of interaction with their work colleagues.
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Haynes (2008) concludes that more flexible shared areas should be taken into consideration as a way of reducing overall space requirements. Cost savings from reduced space could be further used to provide more comfortable and high quality office environment. However, the benefits of flexible working cannot be fully exercised without thorough understanding and analyses of the relationships and interdependencies of all the factors affecting flexible working as well as its advantages and disadvantages in particular organization.
3.6. Advantages and disadvantages of flexible working Skyrme (1994), as a strenuous supporter, accentuates on the benefits of flexible working. One of the most important benefits, according to Skyrme, is reduced labor costs when due to flexible working hours, open space and teleworking policies it is possible to envision sufficient office cost savings per employee. Increased productivity as a result of teleworking has also been reported as a major benefit since home premises sometimes can be the only suitable place for concentrated thinking and analyzing. More benefits of teleworking and flexible hours suggest better adaptation to lifestyle when people can adapt their working habits to suit their domestic circumstances and lifestyle needs. This is particularly attractive to parents with young children. Another benefit of flexible working is seen as organization flexibility where an office designed to flexible working standards is organization change proof, according to the author. In such environment people are free to move within the teams and change their location every hour, if wanted. The cost of an office move is less than one tenth of that of a conventional office. More benefits described by Skyrme are reduced employee turnover, access to new sources of labor, increased resilience to unexpected events, relocation cost savings such as people can change jobs without having to move home, new opportunities for disabled, improved effectiveness due to better optimization of working hours and conditions by employees, less travel hassle thanks to flexible hours and telecommuting and less environmental pollution, also due to telecommuting. However, there could be certain disadvantages of flexible working. They include miscommunication, misinterpretation or poor management while introducing the concept. Skyrme (1994) relates possible drawbacks of flexible working to the inhibitors of the concept. He divided them into 3 categories: technology and infrastructure,
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organizational and social (or domestic) inhibitors. Technological inhibitors include poor communication links, resistance to change, lack of integrated network and insufficient user support that would complicate smooth implementation of flexible working. Organizational inhibitors are identified as concerns of loss of control from middle management, union resistance, personnel policies, and health and safety issues at home. Social aspects of possible hardships while implementing flexible work environment include loss of personal space in office due to open space concept and free seating, concerns over visibility, staff's concerns about career prospects and relationships with peers and managers. Steiner (2005) generally shares the same view with Skyrme (1994) over the positive and negatives sides of flexible working. Thus, positive aspects he sees in overall work flexibility, i.e. ability to work from multiple locations; better work/life balance thanks to telecommuting policies as Skyrme (1994) has also mentioned and a better use and development of core products thanks to better team collaboration and easier information access. Challenges, as seen by Steiner (2005) are the office space which "lacks soul" due to high ratio of unassigned seats where everyone should follow the "clean desk" policy, i.e. storage of personal things is not allowed. When narrowing down to details of flexible office layout and policies, Steiner (2005) raises concerns over desk reservation policy that is required several days in advance which could be a bit troublesome for some employees as well as theoretically uncomfortable location of personal storage due to the "clean desk" policy. All these results the author has obtained from his case study in Sun Microsystems in Dubai on flexible working concept deployment that I will discuss later in this paper. Summing up the advantages and disadvantages, one can say that organizations that are thinking to implement flexible working environment should very carefully assess its business needs and the needs of employees in order to decide on transition. Strong leadership and employee participation are one of the key elements to successful transition to flexible working. The change to flexible working represents major reforms in working policies and organizational habits that require prior and ongoing communication with all stakeholders.
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3.7. Example: cases To support the advantages of flexible working by real life examples, Skyrme (1994) performed a case study in the companies such as Digital and IBM. Set of interviews with managers of Digital and IBM reported savings of 30-40 per cent in office space due to reduction of desks per employee. In the same companies, managers reported 40 per cent increase in employee's productivity such as longer hours of concentrated work and better outcomes thanks to teleworking as compared to an office environment with continuous interruptions. Another case study was done by Steiner (2005) in Sun Microsystems in Dubai the purpose of which was to form the guidelines for space planning taking into consideration major components of flexible working such as real estate costs, building attributes, space planning concepts, and technology and product innovations. Jon Steiner, the author of the article "The art of space management" (2005) has over twenty years of knowledge and expertise in workplace design, procurement and facilities management both in the UK and the Middle East. He is an executive director and a cofounder of CitySpace, leading regional authority on office interiors and work practice in Dubai that specializes in corporate workplace solutions with space planning and management competencies. In 2003 CitySpace was appointed by Sun Microsystems to undertake a pre-lease occupancy study and consultancy, concept design, space planning, detail design and project management. As a result of this collaboration set of guidelines for space optimization was developed - an iWork concept. The development of iWork concept was triggered by changes in global economy. Advances in technology changed the global economy from traditional 8 hours day to 24/7 making the separation of work, family and leisure time increasingly blurred. But working hours did not become longer, instead, new ways of working allowed people to fulfill their duties outside of the physical office; they can work virtually from any location: home, restaurant or while commuting. In space planning, flexibility is a major trend and a driving force. Nowadays corporations and designers speak more about the flexibility in group collaboration rather than individual. Offices are designed to encompass more shared spaces to enable efficient group work, such as conference rooms and smaller private rooms for group discussions.
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The underlying idea behind the iWork was the understanding of the importance of people, collaboration, work process, corporate image, workplace, and cost vs. productivity in the organization. As the results of study, Steiner (2005) developed set of guidelines based on iWork that would contribute in more efficient space planning: Creation of flexible offices and zones - work station can be booked via online tool that also helps flexible workers locate co-workers and resources. Drop-in centers - unassigned workspaces, hotelling policy, i.e. anyone can take the work station without any pre-reservation. Very convenient for visitors and travelers. Assigned offices - traditional approach of "one individual, one office" for permanent-basis workers is still in use in some organizations. Group collaborative workspaces - informal group space and conference rooms with enhanced technology. Work from home - technology allows for working from home using distance collaboration tools and practices. From design perspective, the desired interior image of iWork system should respond to the following characteristics, according to Steiner's observations: it should be casual comfortable - dynamic - economical - efficient - functional - light - non-corporate savvy - simple forms - stimulating - timeless - understated. So, the main objective in design is, therefore, "to create a comfortable, convivial and visually interesting work environment through the imaginative use of functional planning, straightforward interior design and durable application of finishes with a focus on economy and functionality that has strong synergy with Sun's corporate image" (Steiner, 2005, p.13). Adapting iWork principles is aimed to create functionally efficient workplace that would increase productivity. There are benefits and challenges of an iWork that have already been mentioned in the previous parts of this paper such as working flexibility, better work and life balance, lack of soul due to high ratio of unassigned seats and are consistent with research of other authors. iWork had a wide scope of practical implications. Thus, by 2004, Sun Microsystems deployed over 70 flexible offices worldwide, supporting over half of more than 35,000 employees, 2,000 employees as a 100 per cent telecommuters while 5,000 using drop-in
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centers from time to time. Steiner (2005) presents the following figures in support of iWork concept: iWork solutions helped the company saving 11.4 per cent of seats, operating costs were cut by US $71 million in 2002, and estimated to be US $180 millionas the program spreads globally, with a further US $2.8 million has been saved in power. iWork concept was also deployed by the CitySpace itself, "allowing over 100 employees to access a secure hot-desk environment, and to leverage available workstations and conference rooms via Java smart-cards. The new office, in which less than 5 per cent of employees have fixed desks or offices, also features a Java laboratory and interactive demonstration environment for partners and customers" (Steiner, 2005, p.13). Next study was conducted by DEGW in 2004 (Laing A. , 2004) on the physical workplace. 20 leading European facility executives, representing about 250,000 employees were interviewed in order to identify key elements determining the future workplace. The answers were summarized in four groups: working environment, individual workstations, group workspace and technology. Working environment group revealed the fact that 50 per cent of all staff is expected to work remotely. It is estimated that 45 per cent of all staff will work from home at least one day a week, and that a third of all staff will not have their own allocated workspace (as they will be hoteling or freeaddressing in the workplace). Individual workstations: the size of individual workstations is expected to shrink along with the overall amount of space dedicated to individual work; they are expected to decrease in size. Group workspace: as individual space decreases, there will be a corresponding increase in the amount of collaborative and group spaces, which will account for up to 40 per cent of all workspace. Finally, technology: technology will be used increasingly to support collaborative and distributed work. Tools will include collaborative software for virtual teamwork and software for remote access of corporate data networks. These results are highly consistent with another survey carried out by the British Council for Offices the same year on the topic of office design. Workplace and the way the office space is used were also presented in four categories depending on the importance of various factors while deciding on office design. First and the most important factor identified by the managers is people. People are the most valuable asset of the organizations and are the key driving force for all aspects of office design. Salama's (2004) theory "Z", Skyrme's (1994) business change drivers and Gibson's (2003) people-centered approach are echoing here.
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Second element is location. Office location will remain important in the future, but specification and design will become a lot more important. Management and work-styles: management styles are required to adapt to the changing environment and take into consideration the knowledge workers, in other words, traditional benchmarks such as organization charts, job titles, seniority and cost per employee will no longer define the workplace design. The last group is technology. Technology is seen as an enabler not a driver of change. Barber et al. (2005) in their article "Global workplace trends: a North American and European comparison" discuss the results of a global trend survey that was conducted during two years among 127 senior level real estate and facilities executives from North America and Europe. The respondents group included executives in big corporations and multinationals in such areas as law, government, pharmaceuticals, insurance, business consultancy, consumer product, energy, etc. The survey was completed in 2004. The results report a five-year vision for the workplace, discovering trends in space utilization and workplace design. Findings compare trends in North America with trends explored in Europe in the areas of information technology, new work styles emergence such as telecommuting, collaboration and work-at-home, and the impact of all these on workplace design. Key findings in both continents report the vision that work will become more collaborative (both face-to face and virtually); the size of allocated workplace will become smaller than it is today due to advancements in IT and hotelling and free-address modes of working, in which staff are not assigned a permanent office or desk, trend is also towards sharing a workplace; the number of employees spending at least one day working from home or those who permanently work from home will increase due to, again, development of IT; the workplace will be re-designed to support collaboration rather than individual work activity. As it is seen, the results are very close to those reported by DEGW survey. Barber et al. (2005) conclude that on the verge of these radical changes in working environment, the big responsibility and pressure is put on real estate executives to successfully implement the new working strategies. The upcoming change will be determined not only by challenges in real estate costs but also by the nature of work, technology advances and employees' demands that will require new working style. This point of view supports Steiner's (2005) proposition that the knowledge-workers
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possess more specific working style and their work nature requires more flexible approach that should be taken into detailed consideration by managers. Summing up the literature review, it becomes clear that most of researchers are in favor of flexible modes of working and flexible office design as they see it as natural response of organizations to global changes in IT and shifting business styles. Gibson (2003) and Haynes (2007) see positive effects on both cost savings and employees' productivity. This triggered the hypothesis of my work - to answer the question whether flexible working in reality increases organizational productivity in both ways: not only as a tool of cost cutting but also as a technique to improve the performance of employees. I will try to provide practical evidence to this question by the case study I conducted in Alcatel-Lucent in Singapore.
4. Case Study: Alcatel-Lucent Pte. Ltd.
4.1. The company This is a practical part of current paper where I am going to analyze flexible working implementation project in Alcatel-Lucent Pte. Ltd. in its regional headquarters in Singapore. Alcatel-Lucent is a global telecom company, leading in mobile, fixed, IP and optics technologies, and a pioneer in applications and services which includes Bell Labs, one of the world's foremost centers of research and innovation in communication technology2. Alcatel-Lucent was created in 2006 as a result of merger of Lucent Technologies (USA) and Alcatel (France). It has operations in more than 130 countries in Americas, Europe, Middle East and Africa and Asia Pacific with headquarters in Paris. In 2009 the company started its global project of flexible working implementation. Antwerp (Belgium) was a pioneering office where also the concept was born and it spread all over European and American offices. Singapore is company's headquarters in South and South East Asian region and its turn to become flex came in the beginning of 2011. My internship was initially in procurement department of the company which is very closely linked to the real estate and general services (REGS) department. I volunteered in flexible office implementation project and took responsibilities over concepts and policies creation and web
2
www.alcatel-lucent.com 29
communication management. I have chosen the company by its global profile, multitasking role as shared intern between the two departments and, the most importantly, by the pioneering for the region and very up-to-date project within the field of my interest. I say "up-to-date" because flexible working implementation in Singapore given its extremely high population density (7126 people/sq km in 20103) which makes it the second most densely populated independent country in the world 4, and skyrocketing office rents5 would bring significant savings to the company as compared to other offices in other countries. Therefore, the project was treated with high relevance and importance. In this part, first, I will introduce the basics for flexible working transition as they were communicated in Antwerp office. Then, I will draw a general overview of Singaporean office real estate situation according to Colliers International. Finally, I will present the case in Singapore.
4.2.
Flexible working implementation: Antwerp, Belgium
In 2009 Alcatel-Lucent's Antwerp (Belgium) office started practicing flexible working environment. It became a big success, so that other European offices of the company including the head office in Paris made this transition from traditional office concept to a flexible or dynamic one. Recently the concept has also been deployed in North America. South and South East Asian (SSEA) regional company's headquarter in Singapore has been discussing flexible working concept since 2009 as well but has finalized its needs and decided on shift just in January 2011. So, I had a unique possibility to be at the forefront of the huge project labeled "Dynamic Workplace Environment" first intended to be implemented in Singapore for the whole SSEA region. Drawing back to Antwerp office in 2005 when the project "Alcatel-on-the-move" was just started, let us discuss the reasons behind the transition to a flexible working. The idea was stipulated by continuous organizational changes and the business processes when multiple projects were undertaken in parallel and in different lifecycle phases. They resulted in 150-200 per cent churn. The office was lacking flexibility when it could quickly respond to changes and facilitate the information flow. There was a need for a more flexible structure of organization that would be:
3 4 5
www.singstat.gov.sg www.wikipedia.org www.colliers.com/singapore 30
Functionally driven; Would enable project teamwork; Maximum flexible; Would have transparent communication technology; Would have high quality office space; A future proof of IT infrastructure. Another pre-condition for the decision of "going flex" was the result of an office/workplace occupancy survey. This survey aimed to determine the efficiency of space utilization by counting how many employees are present at the office building and at their workplaces in the mornings and afternoons during the week. The results were rather surprising. Whereas the presence in the building showed on average 60-80 percent, the working place occupancy resulted only in 30-60 per cent of the full working day. Why did that happen? The absence of the employees in the office or at their workplaces is determined by various factors. They can be classified as long-term and short-term absences. Long-term absences can be impacted by part time work, holidays, sick-leaves, external trainings, home working, working at other sites, external meetings, etc. Shorter absences can be characterized by discussions with colleagues, coffee breaks, copying, etc. Here are the results of the Antwerp office survey that shows the percentage of employees present in the building and at their workplaces during the week. Population sampled 550 sample workplaces.
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100.0% 90.0% 80.0% 70.0% % workers in the office 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 9:00 AM 9:30 10:00 10:30 11:00 11:30 11:50 1:30 AM AM AM AM AM AM PM 2:00 PM 2:30 PM 3:00 PM 3:30 PM 4:00 PM 4:30 PM
Monday Tuesday Wednesday Thursday Friday
100.0% 90.0% 80.0%
% of workplaces occupied at the same time
Monday Tuesday Wednesday Thursday Friday
70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 9:00 AM 9:30 10:00 10:30 11:00 11:30 11:50 1:30 AM AM AM AM AM AM PM 2:00 PM 2:30 PM 3:00 PM 3:30 PM 4:00 PM 4:30 PM
So, as it is clearly seen, a big portion of employees did not really spend their entire working hours by their desks. This survey raised concerns whether the office space is efficiently allocated and utilized. Aforementioned reasons encouraged the company to revise its real estate policies and eventually decide on flexible working concept deployment. Alcatel-Lucent's corporate real estate in cooperation with other business units in Antwerp and in head office in Paris has decided on main principles of flexible working: 1. Management leads by example - Everybody participates.
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2. Assign workspace to groups instead of individuals: to practice open-plan concept and to promote team collaborations. Underlying concept for open-plan is full sharing using team bases: team members are together when in the office, team zones contain all necessary elements to support various activities, and teams share all information and space. Culture of openness, sharing and knowledge building is widely practiced. 3. Desk sharing: there is no assigned desk for everybody, team members share their desks. Clean desk policy must apply: clean-up of desk when half a day or not at working place. No storage of personal and/or group information at workplaces or in consultation rooms place must be available for others when not used.
Guaranteed availability, 100 per cent participation. 4. Desks reservation through the corporate reservation system for everyone. 5. Open-up offices allowing natural sunlight & window view thus contribute to CO2 emission reduction. 6. Maximize availability of meeting space by keeping current meeting rooms and transforming close offices into additional meeting rooms and phone booths. 7. Implement telecommuting policies. 8. Reduce operating costs by optimization of space. 9. Flexibility to cope with constant reorganization to ever changing business. Thus avoid constant moves and rearrangements due to organizational and hierarchy changes. Appendix D shows flexible seating variations in Alcatel-Lucent's office in Antwerp.
4.3.
Office market in Singapore. Colliers International overview6
The average monthly gross rents of office space in Singapore surged by up to 31.4 per cent in 2010, according to Colliers International report. This came on the back of two successive quarters of strong showings in rental growth, led by office premises in the CBD - in Raffles Place/New Downtown micro-market. Hot on the heels of the impressive 10.9 per cent QoQ (quarter-on-quarter) hike in 3 quarter (Q) 2010, the average monthly gross rents of Grade A office space in CBD - the Raffles Place/New Downtown - micro-market soared by 11.5 per cent QoQ in 4Q 2010 to
Singapore, the knowledge report: 4Q 2010 Property market overview. Colliers International, p.5-7
6
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end the year at $9.00 per sq ft. Despite recovering by a substantial 31.1 per cent in 2010, the average monthly gross rents of office space in this micro-market is still some 50 per cent below the previous peak of $17.89 per sq ft recorded in 3Q 2008. In other parts of the country, the average monthly gross rents of office space climbed by up to 8.6 per cent QoQ in 4Q 2010 and 27 per cent for the whole of 2010. Fuelling the spike in rents was the active leasing activity seen, particularly for the 2 nd half of 2010. Amid soaring business confidence, firms such as financial institutions, insurance firms and professional services companies took advantage of the availability of large contiguous space offered by new office developments, or in older buildings where firms have relocated to newer outfits, to consolidate and expand their operations ahead of a pick-up in rents. Alcatel-Lucent, thus, moved from more expensive business district in Commonwealth lane to premises in Chai Chee Technopark, big and old industrial area clustering all major telecom companies' headquarters in South and South East Asian region in the Eastern part of Singapore with significantly low office rents. Prognosis for 2011 Underpinned by 2011's services-led economic growth, office rents are expected to ride out the large influx of supply and continue to trend up, although the pace of growth should ease to between 15 per cent and 20 per cent for the whole of 2011. The buoyant demand for strata office properties fuelled a rise in the average capital values of Grade A office space in the CBD (Raffles Place/New Downtown) micro-market by 8.1 per cent QoQ in 4Q 2010 to $2,088 per sq ft, their strongest growth since the market turned around in 1Q 2010. Appendix C shows average capital values for grade A office space in CBD and average monthly gross rents of office space in 2010.
4.4.
Dynamic Workplace in Alcatel-Lucent Singapore
4.4.1. Objectives of the transition to flexible working Objective of the transition to flexible working in Alcatel-Lucent Singapore was to improve team collaboration, knowledge sharing and secure more efficient utilization of the working space. Alcatel-Lucent Singapore office is located in the east side of the country - in Chai Chee Technopark, the cluster of telecom companies. Previously, the office was located on the
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west of the country - on 6 Commonwealth lane. For the reasons of real estate cost reductions the office moved to a current industrial area. Alcatel-Lucent is occupying two floors, floor 4 and 6, in the building D in Chai Chee Technopark.
4.4.2. Office space utilization survey In Singapore office, decision of going flex was strategically determined by senior Asia Pacific region (APAC) leadership. As the APAC management board put on the conference dedicated to a new shift, flexible or dynamic workplace concept aims "to break down the old ways of working and rejuvenate the real estate spaces to support new styles of working in a highly flexible, Web 2.0 world, to provide flexibility to employees, to optimize space utilization, to increase office space efficiencies and to drive operating cost reduction"7. Three main reasons were highlighted for Asian turn of flexible working as creation of more effective structure that would accelerate the effect of market strategies, increase of transparency and improvement of cost savings. Similar to Antwerp office surveys were conducted in Singapore's office. First workplace occupancy survey was performed during the period of Sep. 20 - Oct. 15, 2010 and the second one - Mar. 21 through Apr. 15, 2011. Both surveys were conducted in two sessions: 10am & 3pm. The workplaces occupancy was divided into five categories depending on presence of an employee: wholly occupied work station during the time of sessions conducted, occupied morning only, afternoon only, out of office, or vacant/reserved (incl. staff on maternity leave, short term assignments, etc.). Results are illustrated below.
1st survey (Oct. 2010) - office space utilization Average utilization rate over 20 days:
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Occupancy Rate (average)
wholly occupied morning only afternoon only out of office
vacant/reserved 9% out of office 33%
vacant/reserved wholly occupied 39%
afternoon only 9%
morning only 10%
As the diagram above shows, wholly occupied during the sessions' time and over 20 days were only 39 per cent of workstations on average in Alcatel-Lucent Singapore office in October 2010. Out of office were 33 per cent, 10 per cent of employees were present in the mornings only and 9 per cent - in the afternoons only. The reasons of such a situation were not investigated in details but, however, there are several assumptions of employees being away from the office. These reasons may include holidays, sick-leaves, maternity leaves, business trips especially given the fact that most of the managers in Alcatel-Lucent Singapore office are regional managers, nature of work and role, i.e. sales department versus finance or HR, part-time work, working from home, training, etc. Usage of closed rooms + workstations:
45% 41% 40% 35% 30% 25% 20% 15% 10% 5% 0% whole day morning only afternoon only out of office vacant/reserved 9% 10% 11% 9% 3% 11% 38% 35% 32% room workstation
As it is seen, from the 1st survey, only 41 per cent of closed room (office) occupiers were present the whole day (it is assumed "the whole day" when a person was by his/her desk during both check sessions) in the office and only 38 per cent of workstation (cubicle) employees.
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2nd survey (Mar. 2011) - office space utilization:
morning only 8%
afternoon only 12% out of office 30%
wholly occupied morning only afternoon only out of office vacant/reserved
wholly occupied 42%
vacant/reserved 8%
2nd survey was conducted in March-April 2011 and I participated in it myself. Procedures and methodology were the same as in the survey in October 2010. As it is shown, there was no a big difference from the previous survey. There were only 42 per cent wholly occupied workstations during both check times. Out of office were 30 per cent of employees and the difference between the average percentage of morning and afternoon workers was only 2 and 3 per cent. These results show certain consistency in the way people actually work in Singapore office. They are not tied to their desks; they are flexible and spending half of their working time out of the office. Use of closed rooms + workstations:
45% 40% 35% 30% 25% 20% 15% 8% 10% 5% 0% wholly occupied morning only afternoon only out of office vacant/reserved 7% 9% 5% 8% 12% 30% 38% room workstation 42%
40%
So, results of 2nd survey were very similar to the previous one. Wholly occupied were only 38 per cent of closed rooms and 42 per cent of cubicles during the period of survey. These results supported the corporate decision for flexible working.
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4.4.3. New office design and space planning As it has been shown, both surveys indicate very low utilization percentage that leads to inefficient use of the office space. As a result, it was seen as necessary to deploy new office plan that could better allocate usable space and motivate people to work more flexibly and more efficiently. It is also worth mentioning high operating costs of occupying a total of 5922 sqm with average annual operating cost of more than 2 million euros8. It was suggested to terminate operations on the 4th floor and to move the entire office to a single 6th floor, thus, cutting the number of workplaces from current 458 to 254. Real estate and General services team (REGS) developed a plan of a new office layout that is presented in the table below:
ClosedRoom 40 41 81 Current Layout Plan Workstation 196 181 377 Total Seats 236 222 458 PROPOSEDLAYOUTPLAN ClosedRoom Workstation Total Seats 0 0 0 4 250 254 4 250 254
Level 4 Level 6 TOTAL
Conference rooms Training Room 25pax 15pax 12pax 8pax6 pax4 pax2 pax1 pax
CURRENT PLAN 1 1 0 6 3 0 0 0 0
PROPOSEDPLAN 0 2260632 6
Methodology of deciding on whether an employee is given a designated workstation, 100 per cent home-based or teleworking was developed according to the survey results and nature of work of employees. If an employee during both surveys and during other working time was present at his workstation for more than 15 days, then he/she will get a designated seat. If during the 15 days an employee was continuously out of the workstation and if his/her work does not require being at the desk all the time and all days in a week, then an employee can be 100 per cent home-based. And, finally, if a worker spends between 1 to 4 days at the office and other time elsewhere, then he/she is recommended to telecommute.
Due to internal policy regulations in Alcatel-Lucent Pte. Ltd., it is not allowed to present actual numbers of cost savings.
8
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So, according to survey, from total 457 employees in Alcatel-Lucent Singapore, 112 was recommended to be home-based, 107 - to have assigned seats and 238 to have seats that require prior reservation or just a drop-in/hotelling seats. The designated seats would be mainly kept after HR, Finance, some back office engineering teams and real estate department. This allocation of designated/hotelling seats was determined by the analyses of various working styles. Working styles are different, e.g. the working style of an IT engineer is different from that of a manager in: the amount of time spent sitting in one place versus being away from the desk or offsite; the type of equipment required, e.g. a specialized PC versus a regular laptop; the sort of spaces needed, e.g. a manager may need quiet space for confidential work whilst a project manager will need more collaborative spaces to interact with colleagues. Every employee's working style is tied to the role he/she works in - it ranges from being unsuited to sharing space, to being more able to share spaces. The key conclusion in this analysis was the principle that most roles do not require the same seat to be assigned for exclusive use every day though a minority genuinely do. The new office plan would also focus on creation of more conference rooms & phone booths with various range of seating capacities to cater for all; phone booths are commonly used for private calls but may as well be used as a project team hubs for short discussions; more window views for employees as this would open an access to a daylight for most of the employees; new workstations - reduced partition height to 1200mm; enabling team collaboration, better communication flows and information sharing; clean desk policy implemented - no metal cabinets, no pedestal & no overhead, guaranteed availability to a new user; new lockers for personal belongings, backpack, laptop etc., no storage at the desk; IT Hardware and Software - Networks. Thus, Singapore Alcatel-Lucent office will move to a more flexible/dynamic environment. Flexible working aims to provide the right work places to support the way people actually work. By working dynamically, and moving away from the "One Size Fits All" approach that the company used to have, new flexible concept will enable creation
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of a greater level of facilities to enjoy within the space that the company already have. Working dynamically is about using space differently.
4.4.4. Benefits of flexible workplace environment for Alcatel-Lucent in other countries All these mentioned upcoming reforms in Alcatel-Lucent Singapore were triggered by benefits of flexible working experienced in other countries where flexible working has previously been deployed, such as Belgium, Hungary, Italy and the United States. Appendix E shows the pictures of a new working environment after the shift to dynamic working in these countries as well as proposed plan of a new office design in Singapore. So, the benefits reported910 by Alcatel-Lucent offices in these countries are: 1. Work-life harmony It is especially vital to those with family and children. Telecommuting policies allow people to choose the best way of balancing their work and private lives by working more flexibly and from different locations, for instance, from home. 2. Behaviors Employees are flexible to choose where to work from that best suits their needs. Flexible working also helps to avoid the silo effect ("lack of communication and common goals between departments in an organization"11). It also promotes collaborations, teamwork, fosters creativity and increase productivity. 3. Costs Flexible or dynamic working optimizes space utilization, increases office space efficiencies. It reduces unnecessary costs of empty desks to business units and improves the company's competitiveness. At last, it drives operating cost reduction by approximately 30 per cent a year. As it is seen, these benefits reported by managers and employees in Alcatel-Lucent offices that went flex worldwide are exactly in line with research of scholars in this area. Skyrme (1994), Gibson (2003), Steiner (2005), Hassanain (2006) and Haynes (2007, 2008) in their works all have indicated better work-life balance, location and time
Huygebaert, Chris. Flexible workspace concepts: how to improve flexibility, efficiency and communication. Corporate real estate program management, flexible workspace solutions. Antwerp: Alcatel-Lucent, internal presentation slides, 2010 10 Huygebaert, Chris. Alcatel-Lucent: the dynamic workspace. Our enterprise 2.0. workspace strategy. Antwerp: Alcatel-Lucent, internal presentation slides, 2009 11 Wikipedia.org
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flexibility, improved information sharing and team collaboration as well as significant real estate and employee's cost reduction as major benefits of flexible working.
4.4.5. Project's timeline The timeline of the project development and final transition to a dynamic workplace in Alcatel-Lucent Singapore is shown below. PHASED Implementation Timeline: Phase 1 (October 2010-end of April 2011) Space utilization surveys Storage utilization survey Formation of steering committee Real estate business case approval Review of flex implementation across other Alcatel-Lucent sites Formation of a concept draft, tools and policies Flex office champions and focus groups engagement Phase 2 (May-beginning of June 2011) Re-engagement of steering committee Communication to business units managers and supervisors Completion of preliminary design layout plan E-Auction for major contractors completed and all the necessary documentation ready Phase 3 (June 2011-mid July 2011) Further refinement of designs layout plan based on the feedback/inputs - rectify issues and requirements (4-6 weeks) Obtain steering committee approval on detailed implementation Communication-Deployment Phase 4 (Mid July-end of September 2011) Dynamic workplace renovation Phase 5 (October-November 2011) Go-live Phase 6 (December 2011-January 2012) Terminate level 4 lease
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I was a member of a REGS team from the start of the flex office implementation project after its approval in January 2011 up until the phase 3 - detailed implementation guidelines and communication. My internship in the company was terminated in the end of June 2011 and after that I have been following the process remotely. At the moment the project is delayed due to the extensive renovation works on the level 6 and tearing down the level 4. It is expected to move to the next phase by the end of October 2011.
4.4.6. Interview results During my practice in Alcatel-Lucent in Singapore, I conducted set of interviews with managers and employees in the company about flexible transition project and changes it brings. These discussions helped to create a general picture of awareness and perception of the transition by different people in organization as well as it helped to understand the challenges it raised. The answers also assist in analyzing of how well the internal communication was handled during the project planning and execution. I interviewed seven persons in the company: two regional directors, three line managers from different departments, one HR assistant and one organizational administrator. All these persons have different levels of involvement in the current project. They also have different professional background, years of experience in Alcatel-Lucent; they are holding different responsibilities and even belong to different age groups. Interview sessions were conducted during three weeks between May 10 and June 8, 2011 depending on availability of respondents in the morning time, i.e. from 9-11.30 am. Prior to the meeting, the questions were sent via email to the interviewee, so that the interviewee could have some time to review them and prepare for the personal meeting. Every interview with discussions generally lasted for approximately 40-60 minutes. The answers were written down by me. After 1-2 days from an interview, summary of the answers were sent to interviewees for approval. General picture drawn from the answers shows that the people managing the change indicated that the decision was "top-down", i.e. the corporate policy of Alcatel-Lucent expanded to SSEA region and the transition was inevitable. They generally felt positive about the coming changes. Benefits indicated were cash flow improvements, lease situations (termination the 4th floor lease, benefit in the situation of "adding-in" people, i.e. no need of building in more workplaces as the space would be flexible), bounding with a family thanks to telecommuting policies, less traffic on rush hours, etc. However,
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the top management in Singapore does not see a very high relevance of the flexible working in terms of telecommuting policies. They explain it by the size of the island: Singapore is very small, so the need for telecommuting from the angle of saving the time on the route to and from work is negligible. Disadvantages of dynamic working from the management point of view are: possible struggles in people management, they indicated that it is always a challenge for the supervisor to implement/adopt/monitor new management style. Another drawback seen is visibility when it comes to telecommuting - "far from eyes, far from heart" as regional director of Real Estate and General Services puts, i.e. lack of trust in employees when they are working from other premises than the office. Other negative impacts of flexible working highlighted by the managers were lose bounding with colleagues/team members, no direct control/monitoring. Other employees apart from REGS and Procurement were generally unaware of the coming changes. During the interview some of them requested an introduction to the topic to be able to answer the question. Almost all of them had a very fragmentary knowledge about the coming changes. They heard different talks in the organization and were unable to provide full and comprehensive view of the situation and clearly express their opinion. Generally, they felt negative about the changes and the main reason of the transition they saw in management that only wants to cut operation costs. Business operations manager with nine years of experience in the company, raised concerns on whether he will be able to concentrate well and stay focused in new environment regardless whether at home or in the office since his job requires long hours of uninterrupted work; whether teleworking will make peer to peer networking harder given that people do not see peers on a personal basis and whether the supervisors will get used to not having employees physically around and maintain the correct expectation and trust. Other interviewees indicated dissatisfaction due to the fact of losing dedicated seats and own pedestals and shelves as well as the fact that they will have to share the space which was perceived as causing disturbances. Telecommuting was also perceived ambiguously: some stated that it would be highly desirable to work from home while the others, on the contrary, felt that home atmosphere will not support concentrated work. While talking about differences and similarities in deploying the concept in different parts of the world, regional procurement director with twelve years of experience in
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different multinational companies, underlines that it is similar in the sense that "people are not used to changes, they do not like it, especially when it comes to work space changes. In the office there is a "traditional" way of thinking: every employee needs to be supervised, micro managed and monitored. Asian concept is more like if you are not here then you are not working. I believe that we need to adapt to new concepts and use different management styles". These results coupling with purpose of flexible working concept deployment in AlcatelLucent in Singapore led to conclusions about the project awareness among employees and its feasibility that I will discuss next.
5. Discussion and conclusions
The case study in Alcatel-Lucent, in the offices where flexible working has already been exercised for some time now, has indicated the hypothesis that flexibility in property as well as in working mode increases productivity both in terms of costs and from employee's perspective. Singapore's office is still on the move; real benefits from flexible working implementation will be possible to discuss after some time. In current work organizational productivity from the perspective of property has been analyzed from economic standpoint when flexible working decreases operational and real estate costs per employee, thus, allowing saving and investing in other business areas that would increases profitability of the company. Productivity from staff perspective has been measured by employee's satisfaction of his working environment, work-life balance, and increased efficiency through team collaboration, flexible hours and telecommuting. However, there are several issues that should be taken into consideration by managers while implementing flexible working. First, it is crucial to analyze the current state of the company, to assess its real business needs as well as the needs of employees to decide on the change. Here, enablers and inhibitors of flexible working should be carefully identified. Thus, the results of my case study in Singapore revealed that there are more enablers as well as inhibitors than the ones described earlier by Skyrme (1994). Through my observations in the company and thanks to the interview results, I would add lean organization structure, efficient internal communication and knowledge intense work, effective networking with colleagues and mutual trust between all levels as enablers of flexible working. Inhibitors, above the ones discussed by Skyrme (1994) are: poor communication flows, employees'
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unawareness and reduced participation that triggers mistrust, pure economic reasons as only cost reduction for the transition to flexible working and too lengthy project implementation. These factors can undermine success of the whole project. Second, interview results show that internal communication has been managed quite poorly in the early stages of the project. Management having this "top-down" decision imposed by European headquarters did not feel the necessity to share all information with employees and is making them to face the situation ex post with no chances to influence and customize to local needs. It creates an ambiguity in perception of changes. This, in turn, can lead to prolonged acceptance of new environment, i.e. people might resist to new changes being set apart during their implementation. However, from my observation of working environment in Singapore, this situation is very unlikely to lead to any significant problems in the company due to, from my point of view, the cultural element. In Asian business environment it is unlikely to experience subordinate-manager open opposition; it is not a custom to think that an ordinary employee is capable of changing the way he/she works. That is why the decisions, even the ones with direct impacts on the workers are taken independently by the management and then communicated with employees as inevitable upcoming changes. This last observation leads to prospective area of research that could be of high interest for the researchers of not only flexible working but of any business and cultural studies as well as for managers of multinational companies willing to deploy a global strategy in their offices worldwide.
6. Future research
This thesis suggests researching the cultural element in deployment of global strategies. Thus, it would be useful for theory to investigate in such questions as: does the cultural element matter for top-down decisions? Should the concept in different hemispheres be treated and executed in the same manner? For instance, the case of this work is the office in Singapore in South East Asia which has entirely different history, economic, social and demographic situation than Antwerp, Belgium, where flexible working practice was first exercised. Singapore is very young, much more vibrant country with faster economic cycles than Belgium. This, partly, can be the reason of difference in people as employees and their needs. One can also reflect on difference in cultures and how this affects business decisions and relations.
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Another suggestion for the future research that has earlier been mentioned in this work is investigating in more cases of flexible working implementation projects, preferably in different countries and various companies that could enable generalization and development of theory and guidelines of flexible working concept deployment.
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Bibliography
Arge, K. (2005). Adaptable office buildings: theory and practice. Facilities , 23 (3/4), 119- 127. Barney Glaser & Anshelm Strauss. (1967). The Discovery of grounded Theory: strategies for qualitative research. Chicago: Aldine. Charles C. Ragin & Howard S. Becker. (1992). What is a case? Exploring the foundations of social inquiry. Cambridge University. Cambridge: Cambridge University press. Christine Barber, Andrew Laing and Marilyn Simeone. (2005). Global workplace trends: A North American and European comparison. Journal of Corporate Real Estate , 7 (3), 210- 221. Duffy, F. (1997). The new office. Conran Octopus. Gall, M.D., Borg, W.R. and Gall, J.P. (2002). Educational research: an introduction (7th ed.). New York: Longman. Gibson, V. (2003). Flexible working needs flexible space? Towards an alternative workplace strategy. Journal of Property Investment and Finance , 21 (1), 12-22. Gillham, B. (2001). Case study research methods. London, New York: Continuum. Ginzburg, C. (1989). Clues: roots of an evidential paradigm. Baltimore: John Hopkins University Press. Harris, R. (1998). Real Estate and the Future. Re-inventing the workplace. Institute of advanced architectural studies, University of York. York: Institute of advanced architectural studies, University of York. Hassanain, M. A. (2006). Factors affecting the development of flexible workplace facilities. Journal of Corporate Real Estate , 8 (4), 213-220. Haynes. (2008). Impact of workplace connectivity on office productivity. Journal of Corporate Real Estate , 10 (4), 286-302. Haynes, B. (2007). Office environments that enable human contribution. Sheffield Hallam University, Built environment division, Faculty of Development and Society. Jankowicz, A. (2005). Business research projects (4th ed.). London: Thomson Learning. Johansson, R. (2003). Case Study Methodology. Methodologies in Housing , (pp. 1-14). Stockholm. Laing, A. (1998). New Patterns of Work: The Design of the Office. Re-inventing the workplace. Institute of advanced architectural studies, University York. York: Institute of advanced architectural studies, University of York. Laing, A. (2004). The future of the workplace is now. Survey conducted by DEGW on behalf of Knoll. DEGW. Miles & Huberman . (1994). Qualitative data analysis. Thousand Oaks: Sage publications. Patton, M. Q. (1990). Qualitative evaluation and research methods. Thousand Oaks: Sage publications. Salama, D. A. (2004). The changing patterns of work environments in a global society: toward an employeecentered framework for workplace design. College of Environmental Design King Fahd University of Petroleum and Minerals. Dhahran, Saudi Arabia: College of Environmental Design King Fahd University of Petroleum and Minerals. Saunders, M., Lewis, P. and Thornhill, A. (2007). Research methods for business students (4th ed.). London: Pearson Education. Schön, D. A. (1991). The reflective practitioner: how professionals think in action. Aldershot: Arena. Sharp, J.A., Peters, J. and Howard, K. (2002). The management of a student research project (3rd ed.). Aldershot: Gower. (2011). Singapore in figures 2011. Singapore: Singapore Department of Statistics . (2010). Singapore, the knowledge report: 4Q 2010 Property Market Overview. Colliers International. Skyrme, D. (1994). Flexible working: building a lean and responsive organization. Long range planning , 27 (5), 98-110. Stake. (1998). Strategies of qualitative inquiry. In N.Denzin and Y.Lincoln (eds.). Thousand Oaks: Sage Publications. Stake, R. (1995). The art of case study research. Thousand Oaks: Sage Publications. Steiner, J. (2005). The art of space management. Planning flexible workspaces for people. Journal of Facilities Management , 4 (1), 6-22. 47
Stone P. and Luchetti R. (1985). Your office is where you are. Harvard Business Review , 63 (2), 13-19. Vos and Dewulf. (1999). Searching for data: a method to evaluate the effects of working in an innovative office. Delft University. Delft: Delft University press. Worthington, J. and Koya A. (1988). Fitting out the workspace. London, UK: The architectural press. Yin, R. (1994). Case study research: Design and Methods. Thousand Oaks: Sage Publications. Internet Resources: www.alcatel-lucent.com www.asid.org www.bco.org.uk www.colliers.com/singapore www.dtzresearch.com www.singstat.gov.sg www.wbdg.org www.wikipedia.org
Appendix
1. Appendix A: Salama (2004), the evolution of workplace design: from Burolandscaft to cellular office structure:
2. Appendix B: Duffy (1997): Den, Club, Hive and Cell office types:
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3. Appendix C: Average capital values for grade A office space in CBD and average monthly gross rents of office space in 2010:
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4. Appendix D: Flexible workplace variations in Alcatel-Lucent Antwerp:
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5. Appendix E: New working environment after the shift to dynamic working. Antwerp, Belgium:
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Bratislava, Hungary:
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Rome, Italy:
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USA:
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Singapore (plan):
6. Appendix F: Interview questions Face-to-face interview was conducted with Alcatel-Lucent Singapore office employees during the period May 10 - June 8, 2011 on the topic of flexible office concept deployment project. The respondents were divided into two categories:
managers/supervisors and ordinary employees. Depending on the category, questions asked vary. The summary of the most common questions asked in both groups are presented below. Questions: Please, state your full name, occupation, age and number of years you have worked in Alcatel-Lucent Singapore. 1. What do you know about Flex Office implementation project in Alcatel-Lucent Singapore? How do you imagine Flex Office will look like? 2. What is the purpose of this implementation from your point of view? 3. What do you personally feel about it? 4. Do you think it is necessary to deploy Flex Office concept? 5. Do you think it will it affect your work? If yes, how?
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6. What benefits do you see in this reform? 7. What disadvantages you can think of? 8. Do you think it will bring a significant cost reduction to the company? 9. If you had a chance to influence the management decision, would you allow this transition to take place? Which other ways of managing the situation of inefficient space utilization can you suggest? 10. Do you feel comfortable with this coming change? 11. Speaking about telecommuting concept as part of Flex Office implementation, would you personally be willing to telecommute? 100 per cent or as a part-time? Do you think it is a good alternative for optimizing space and, thus, cutting costs? 12. What type of office seating would you prefer? Does it matter to you? 13. Flex Office concept is already a main stream for office space optimization in Europe; do you think it will spread widely in Asia region as well? If yes, when this concept will take over majority of countries (please, give your estimate in years, months)? If no, please, explain why you think so.
Thank you very much for your participation!
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doc_718747289.docx
Case Studies on Flexible working as an effective tool of organizational productivity increasing: perspectives of property and staff in Alcatel-Lucent Pte. Ltd., Productivity has many benefits. At the national level, productivity growth raises living standards because more real income improves people's ability to purchase goods and services, enjoy leisure, improve housing and education and contribute to social and environmental programs.
CASE STUDIES ON FLEXIBLE WORKING AS AN EFFECTIVE TOOL OF ORGANIZATIONAL PRODUCTIVITY INCREASING: PERSPECTIVES OF PROPERTY AND STAFF IN ALCATEL-LUCENT PTE. LTD.
Abstract
Continuous information technology development changed traditional ways of management and business operations. Nowadays there is a high demand for new innovative business solutions and the ways of managing people that enables to fully elicit their potential. Physical boundaries are removed; work is becoming incredibly dispersed around the world enabling growth of 24/7 customer service, home banking, online shopping and other services that were seemed incredible just a few years ago. In this fast paced environment the companies are seeking for any possibility to increase their competitiveness. Implementing flexible working is considered by most of organizations as a tool to adapt to never-ending changes. This paper aims to test the hypothesis that flexible working increases organizational productivity from the perspective of the property as well as from the perspective of employees. In current work organizational productivity from the perspective of property is analyzed from economic standpoint when flexible working decreases operational and real estate costs per employee, thus, allowing saving and investing in other business areas that would increases profitability of the company. Productivity from staff perspective is measured by employee's satisfaction of his working environment, work-life balance, and increased efficiency through team collaboration, flexible hours and telecommuting. Methodology used is case study and literature review. Case study was performed on-site in Alcatel-Lucent in Singapore. It is limited to six months from planned full year of
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implementation project. Set of interviews with company managers was conducted to support the case results. The thesis suggests the hypothesis, according to the literature review and overview of some cases in different countries, that flexibility in property as well as in working mode increases productivity both in terms of real estate costs savings and in terms of employee's increased productivity due to better team collaboration in open space, flexible working hours, ability to choose preferred location for work, telecommuting that creates a positive work-life balance. The case study performed for this paper in AlcatelLucent Singapore shows that the aforementioned benefits are not there yet due to the project timeline but are highly anticipated by local and global management. Nevertheless, thorough assessment of business requirements and the needs of employees should be undertaken before deciding on flexible working. It is extremely crucial to secure efficient and open internal communication and employees' involvement in all stages of the project in order to achieve fast acceptance and adaptation to new environment. Based on the current example, future research suggests investigating in cultural aspect of global strategy deployment by corporate decision in different countries.
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Table of Contents
1. Introduction ................................................................................................................. 6 1.1. Background.............................................................................................................. 6 1.2. Research question and objectives ............................................................................... 8 1.3. Methodology and structure ........................................................................................ 9 1.4. Significance of study.................................................................................................10 1.5. Research limitations.................................................................................................10 2. Methodology: Literature review and Case study...........................................................11 2.1. Literature review .....................................................................................................11 2.2. Case study ...............................................................................................................11 3. Literature Review ........................................................................................................15 3.1. Flexible working, definition ......................................................................................15 3.2. Evolution of office design .........................................................................................15 3.3.Types of flexibility ....................................................................................................18 3.4. Flexible office vs. Conventional office ........................................................................20 3.5. Flexibility and productivity .......................................................................................21 3.6. Advantages and disadvantages of flexible working ......................................................23 3.7. Example: cases.........................................................................................................25 4. Case study: Alcatel-Lucent Pte. Ltd. ..............................................................................29 4.1. The company...........................................................................................................29 4.2. Flexible working implementation: Antwerp, Belgium ..................................................30 4.3. Office market in Singapore. Colliers International overview .........................................33 4.4. Dynamic workplace in Alcatel-Lucent Singapore .........................................................34 4.4.1. Objectives of the transition to flexible working.........................................................34 4.4.2. Office space utilization survey ................................................................................35 4.4.3. New office design and space planning......................................................................38 4.4.4. Benefits of flexible workplace environment for Alcatel-Lucent in other countries ........40 4.4.5. Project's timeline...................................................................................................41 4.4.6. Interview results ...................................................................................................42 5. Discussion and Conclusions .........................................................................................44 6. Future research ..........................................................................................................45 References Appendix
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1. Introduction
1.1. Background Continuous information technology development changed traditional ways of management and business operations. Nowadays there is a high demand for new innovative business solutions and the ways of managing people that enables to fully elicit their potential. Physical boundaries are removed; work is becoming incredibly dispersed around the world enabling growth of 24/7 customer service, home banking, online shopping and other services were seemed incredible just a few years ago. In this fast paced environment the companies are seeking for any possibility to increase their competitiveness. Implementing flexible working is considered by most of organizations as a tool to adapt to never-ending changes. As Skyrme (1994) notes flexible working emerged in the early 1980s as a strategic response to the needs of businesses. He identifies these needs or business drivers as drive for efficiency, drive for effectiveness, and drive to response social and demographic change. The base of the drive for efficiency is cost reduction, especially cutting overhead and property costs and simplification of business processes. Office occupancy cost is defined as "the average total cost of leasing approximately 10,000 sqft (929 sq m) of net usable office space in a modern, well-specified office building within a prime Central Business District location and occupancy costs per workstation are then calculated by dividing the net usable area by the number of planned workstations" (www.dtzreseacrh.com). According to the research by DTZ in 2004, property is the second highest business cost for companies after the salaries of employees. With time this cost is only increasing as the real estate continues to be a defining economic driver. Occupancy costs vary across the world. Steiner (2005, p.5) illustrates total office occupancy costs in 2004 in different parts of the world:
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As it is seen from the graph, in 2004 the highest property costs were incurred in Western Europe with top in London West End and Paris where office rents skyrocketing to US $16,682 and US $15,700 per workstation. Occupancy costs in Western Europe were followed by North America, Central and South America, Central and Eastern Europe and Asia Pacific. In 2004 Middle East recorded the lowest cost for office occupancy. It is predicted that the Middle East gap will be closing in the near future due to major multinational projects in construction pipeline. The second business driver is a drive for effectiveness that stands for better information sharing and service, i.e. customer and market orientation. The third driver discussed by Skyrme (1994) is a drive to response social and demographic changes which means the ability to widen the employment pool in relation to the demographic situation, ability to reach skilled staff wherever they are and the ability to accommodate variety and changes of lifestyles and personal values. Gibson (2003) discusses about the same driver for implementing new working strategy the ability of the workforce to be dispersed or in other words to be capable of working remotely. This is especially important while speaking about sales teams or service engineers whose efficiency depends rather on time spent outside of the office than inside. Hassanain (2006) explains the emergence of flexible working as a response of organizations to external and internal factors. External factors or changes, according to the author, are the ones that the company cannot control, for instance, technological advances, globalization, competition, regulation, deregulation and consumer behavior. Internal factors are defined as initiatives and proposals of the organization, for example, investment considerations and their impact in company's system and structure. Thus, it is again a response towards changes both external and internal, for the purpose of staying up-to-date and competitive. When discussing flexibility in terms of the property, Hassanain (2006) introduces the idea from the previous research done by Brittain et al. (2004) on design of flexible building services. He supports research results of Brittain et al. (2004) that the flexible building services "sustain the operational requirements of a building in a cost and time effective matter, while responding to the short-term changing requirements of the organization" (Hassanain, 2006, p.4). Hassanain (2006) complements the previous research by expanding the benefits of flexible building services to a reduced building
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capital costs over its remaining service life, increased staff productivity as a result of improved internal environment, energy-efficient environment that leads to a reduced environmental impact, shorter period of construction and lesser design efforts. He underlines that sustainable and more flexible property solutions are one of the key success drivers for the organizations to be competitive and dynamic in facing fast changing environment on time and in proper ways. It is, therefore, crucial to identify and analyze the factors affecting the development of flexible workplaces. Hassanain (2006) concludes that in order to reach maximum flexibility of the property and the workplace and, thus, stay competitive and in the forefront of innovation, every organization should secure close interaction between building planning, physical workplace layout, IT networking and service systems. Designers, developers, investors, facility managers and planners - all should unite their efforts and share the same objective.
1.2.
Research question and research objectives
Research area of the current work is to investigate in feasibility of flexible working as the way of increasing organizational productivity from the perspective of property and from the perspective of employees. Organizational productivity from the perspective of property is analyzed from economic standpoint when flexible working decreases operational and real estate costs per employee, thus, allowing saving and investing in other business areas that would increases profitability of the company. Productivity from staff perspective is measured by employee's satisfaction of his working environment, work-life balance, and increased efficiency through team collaboration, flexible hours and telecommuting. Thus, the research question of this work is whether flexible working increases organizational productivity in both ways: not only as a tool of cost cutting but also as a technique to improve the performance of employees? The objectives of this paper, therefore, are to investigate in advantages and disadvantages of flexible working, to analyze cases of flexible working implementation in different companies and countries and its results, to test the hypothesis by performing practical research of flexible concept deployment in Alcatel-Lucent in Singapore and develop recommendations for smoother transition to flexible working and, finally, to suggest the areas for future research.
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1.3.
Methodology and structure
I will present existing theories and practices of flexible working in literature review to analyze the roots of flexible working mode, its evolution in office design and types. I will also investigate in advantages and disadvantages of flexible working and describe a few cases to make the review more explanatory. Flexible working in this paper, apart from the literature review, is presented through the case. Alcatel-Lucent Pte. Ltd is one of the leading international telecom companies with its headquarters in Paris and offices all over the world. Flexible working was first introduced in 2009 in its office in Antwerp in Belgium after a survey that showed very low workplace occupancy percentage which raised concerns to corporate management on poor space utilization and, as consequence, high real estate costs. The case uses Antwerp office as an example of successful implementation of flexible working concept but the focus is on Alcatel-Lucent's head office is South and South East Asia - in Singapore, where by corporate policy it was decided to deploy flexible working from January 2011. The end of the flexible office implementation project is anticipated in the end of 2011 - beginning of 2012. The structure of the paper looks as following: in the literature review I will start with flexible working definition followed by the history of office design, types of flexibility, the difference of flexible office from conventional office, comparison of flexibility and productivity, advantages and disadvantages of flexible working and a case study definition. In the literature review part I will also provide examples or cases of flexible office deployment in other companies at different times that was discussed by previous researchers. The practical part consists of three parts: actual case study in Alcatel-Lucent Singapore, discussions and conclusions and suggestions for future research. My case study is comprised of basic concept of flexible working developed in Antwerp, Belgium, short overview of Singapore office market based on Colliers International figures, the introduction to dynamic workplace environment project in Alcatel-Lucent that is supported by office space utilization survey and new office design and space planning that is going to be undertaken in the company. I end practical part of my work by drawing benefits of flexible working for the local office and the project timeline. The final parts of this paper are discussion and conclusions and recommendations for future research.
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1.4.
Significance of study
Flexible working is the topic with vast application in many organizations in different countries. However, there is limited research conducted around this area. Not much of practical knowledge in implementing flexible working in companies is accessible. Also there is lack of research taking into consideration employees' attitudes towards the changes. This work will lit some light on these issues to all parties: researchers, managers and employees in the ways of effective transition to flexible working with least negative impact on employees. This thesis will also first suggest taking into consideration cultural aspects of working environment when deploying the global concept in different parts of the world.
1.5.
Research limitations
This research is geographically limited to Singapore even though the concept of flexible working can be applied in any other country. Therefore, local business and personal attributes must be taken into thorough consideration when deciding on the flexible mode of working. The research is limited to one case only and is not aimed to generalize the findings. The results are time-, country- and business-specific. According to Johansson (2003), generalization is usually made if the case is purposefully or analytically selected and is information-rich, critical, revelatory, unique or extreme. Current case is chosen and studied with an interest in the case as such and the purpose is rather on understanding the case than on drawing generalizations. Generalizations can be done by observing more cases with similar patterns in future investigations. Since my internship in Alcatel-Lucent Singapore was limited to six months from January to July 2011, later phases of the project implementation were analyzed according to brief email communication with real estate and general services manager and the prognosis made in the initial phase of the project.
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2. Methodology: Literature review and Case study
2.1. Literature review Reviewing the literature critically, as Saunders et al. (2007) put, provides the foundation on which the research is built. Its main purpose is to help writer "to develop a good understanding and insight into relevant previous research and the trends that have emerged" (Saunders et al., 2007, p. 57). There are two main reasons for reviewing the literature, according to Sharp et al. (2002). First, preliminary literature research helps generating and refining the research ideas. Second, critical review of the literature is necessary to discover the current state of the knowledge that exists within the area of research, its limitations and how own research ideas fit in that wider context. As Jankowicz (2005, p.161) pointed "there is little point in reinventing the wheel?the work that you do is not done in a vacuum, but builds on the ideas of other people who have studied the field before you. This requires you describe what has been published, and to marshal the information in a relevant and critical way". Therefore, it is crucial to assess existing literature to enhace the subject knowledge and clarify one's research question further. In literature review researchers apply different approaches. Deductive approach uses the litarature to help to identify theories and ideas that further will be tested using data. In inductive approach, on the contrary, the researcher does not start with known predetermined theories or frameworks, as they come as a result of the research itself. The literature review has a number of other objectives. Thus, besides aforementioned purposes that the literature review helps to refine further research questions and objectives and highlight overlooked issues in current state of knowledge, it also, according to Gall et al. (2002) discovers recommendations for future research, helps to avoid repeating previous research and to sample opinions in newspapers, magazines and journals to gain more insights into the aspects of own research that are considered newsworthy.
2.2. Case study: The case study methodology has been developed in social sciences and it was meant to "capture the complexity of a single case" (Johansson, 2003, p.2). Nowadays case studies are conducted not only in social sciences but also in practical fields such as business studies, social work, environmental studies, etc.
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Definition There are many definitions of what is a case study among researchers. To summarize common ideas of Yin (1994), Stake (1998), Stake (1995), Miles & Huberman (1994) and Gillham (2001) one can state that the case study should have a "case" which is the object of study. The case should be a complex functioning unit, be investigated in its natural context with a multitude of methods, and be contemporary (Johansson, 2003). One of the major characteristics of a case study methodology is that "different methods are combined with the purpose of illuminating a case from different angles: to triangulate by combining methodologies" (Johansson, 2003, p.3). The author also underlines that the development of case studies depends to a large extent from the "mastery of such combinations" and their historical component, i.e. case studies with a "stronger methodological influence from histrorical research (?) in which case study methodology and history combine" (Johansson, 2003, p.11). Nevertheless, various researchers emphasize different additional features of case study. Stake (1998) points out that crucial to case study research are not the methods of investigation, but that the object of study is a case. Yin (1994) places more emphasis on the method and the techniques that constitute a case study. Johansson (2003) argues that the concept of case is not well defined and still creates questions to the researchers. Ragin & Becker (1992) point that the case may be a relatively bounded object or a process; it may be theoretical, empirical, or both. A case is a phenomenon specific to time and space. Johansson (2003) distinguishes that the boundaries, and often even the focus of the case, change through the research process. Also, a case study focusing on a particular phenomenon might be read as an investigation of a different phenomenon. The author continues by defining how the case is usually selected. On one hand, the case can be chosen and studied with an intrinsic interest in the case as such. In this situation the researcher has no aim in generalizing the findings rather he or she focuses on understanding the case. If the findings are generalized, it is done by audiences through "naturalistic generalization" (Johansson, 2003). On the other hand, the case might be purposefully or analytically selected. A case may be purposefully selected in virtue of being, for instance, information-rich, critical, revelatory, unique, or extreme. If a case is purposefully selected, then there is an interest in generalizing the findings (Johansson, 2003).
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In fact, generalization is the most debatable issue in case study literature. Researchers have been discussing the question on how can generalizations be made from a single case. Johansson (2003) provides his view on this question by stating that "generalizations from cases are not statistical, they are analytical. They are based on reasoning" (Johansson, 2003, p.8). Reasoning can have three main principles: deductive, inductive and abductive. Generalizations, according to the author, can be made from a case using one or a combination of these principles. Then, Johansson (2003) describes each of these principles: 1. Generalization based on the deductive principle developed by Robert Yin: the procedure is similar to an experiment: a hypothesis is formulated, and testable consequences are derived by deduction. By comparing the expected findings, which are deduced from a theory and a case, with the empirical findings, it is possible to verify or falsify the theory. As a result it is possible to define the domain within which the theory is valid more exactly. Cases that are pivotal to the theory are selected. 2. Generalization through induction discussed widely in Barney Glaser & Anshelm Strauss (1967): inductive theory-generation, or conceptualization, which is based on data from within a case. The result is a theory normally consisting of a set of related concepts. 3. Generalization depends on the principle of abduction: according to the principle of deduction a conclusion is necessarily true from a case and a rule. If the premises are true, the conclusion is also true. Deduction proves that something must be true. By induction we can conclude from facts in a case a rule that actually is operative, and probably is operative, in similar cases. Abduction is the process of facing an unexpected fact, applying some rule (known already or created for the occasion), and, as a result, positing a case that may be. There are two types of abduction used in generalization. One is when a case is created (reconstructed) by a process of abductive reasoning from a few facts; for instance, historical data or clues. The other kind is a "naturalistic generalization" (Stake R. , 1995) that is operative when generalizations are made from known cases and applied to an actual problem situation by making appropriate comparisons.
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Modes of generalizations and reasoning within case study methodology are presented below1:
Mode of Procedure Hypothesis testing A theory (hypothesis) is tested in a case, and validated or falsified Theory generating A principle (theory) is generated from facts in the case Naturalistic generalization An actual problem situation is compared with known cases Synthesising a case The A case is synthesised from facts in the case and a principle (theory) Abductive (re)construction of a case From facts and a theory to a case Abductive Ability to act based on the conception of a case From cases to a case Inductive A theory (conceptualization) From facts in a case to theory Deductive The establishment of the domain of the theory From a hypothesis and facts to the validation of a theory reasoning Result Generalization
According to Johansson's (2003) modes of generalizations and reasoning within the methodology of case study, my research in Singapore fulfills hypothesis testing with deductive mode of reasoning, i.e. results are based on validation or falsification of the theories and opinions that already exist. I have used deductive approach while analyzing the literature for the current research.
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Johansson, Rolf. Case study methodology. Stockholm: The Royal Institute of Technology, Sep. 2003, p.10 14
3. Literature Review
3.1. Flexible working, definition The literature that exists around the current research topic suggests various definitions of the term "flexible working". Experts in this area such as Arge, Steiner and Hassanain have researched the subject from different standpoints: flexibility in terms of flexible building design and physical office and flexibility in the sense of time flexibility and locational mobility. Thus, Arge (2005) defined flexibility as part of building adaptability, the function which enables to face changing user or owner needs by changing its property easily. Steiner's (2005) explanation of flexibility is very close to the one of Arge (2005). He defined flexibility as ability of the building to easily accommodate reorganization due to alterations and office renovations as well as business restructuring and introduction of new technology. The layout of the physical office is the main focus in the research of Steiner (2005). In my work I will use the definition provided by Hassanain (2006) that, from my point of view, covers the wider and more general concept of flexible working. Thus, flexible working in the context of this paper is used to reflect "the concept of the physical layout and functional opportunities of the workspace (and) the concept of organizational flexibility as it relates to where and when staff would work regardless of their employment contract" (Hassanain, 2006, p.4).
3.2. Evolution of office design Organizations gradually adopted new management practices that at the same time required new workplace design in order to better accommodate arising changes. The emergence of "mass office work environments" according to Salama (2004) began after the World War II. In the early 1950s people used the term "paper-factory offices" as a definition of office environments where mainly the routine paper-based work was undertaken. The design of such offices was very similar to that of real factories. Change of the existing factory design was made after the introduction of air conditioning in the end of 1950s in the US. It changed traditional office layout to more convenient and open design - open plan environment. Open plan environment or open plan office according to Hassanain (2006) is an office where the space is divided into relatively small cubicles/workstations by partitions and modular furniture. There are no full height walls, heavy furniture and massive doors that divide the space and separate the
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employees. This kind of office structure can be seen as flexible. As Hassanain (2006) puts, the open space concept was originally developed to make a better use of office space and enable better exchange of information. In 2004, according to the International Facility Management Association survey, 61 per cent of US workers were seated in openplan offices. European offices at the same time period after the World War II were "narrow in depth and cellular in plan, with small offices served off a central corridor" (Hassanain, 2006, p.3) Salama (2004) describes the European office design that was popular in post-war times "Burolandschaft" office that emerged in Germany. Its aim was to improvecommunication flows. New design of office was determined by the communication channels that were either paper-based or personal between individuals and groups. As a result of the new design all walls were removed and working environment became very open. Burolandschaft was introduced in the US in the early 1960s but with certain modifications. Meeting places were removed; clerical workers were placed in large open spaces while top management remained in private enclosed offices. By the mid-1960s Burolandschaft emerged into a new concept that was called "Action office" created by Herman Miller, one of the first office furniture companies in the US. The main idea of an Action office was that the furniture "should be a kit of parts that responds to the varied tasks of office work" (Salama, 2004, p.3). But both Burolandschaft and Action office concepts received wide criticism by space planning researchers and practitioners due to their overly deterministic assumptions and the fact that not all organizations were communication intensive and, thus, not all offices should have the same layouts. In the early 1970s, as a response to the criticism of previous concepts, another type of office design - the "Archetypal" office concept was introduced in North America. As Laing (1998) noted, this could be seen as the trade-off between individual and corporate aspirations. The difference of Archetypal office from Burolandschaft and its successor Action office was that the open spaces in the office were divided into group and personal zones, depending on the needs for communication between groups and individuals. This type
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of office design still remains in the organizations up until now where flexible work environment has not yet been introduced. In Europe, continuous developments in office design took place throughout 1970s and 1980s until the emergence of personal computers. Stone P. and Luchetti R. (1985) stress the importance of this revolution in information technology when the space and time in the office started to be perceived and used in different, more innovative ways. New office structures emerged to incorporate the changes and new vision of working environment. In the 1990s, as Harris (1998) noted, employees became more demanding to their working conditions. Natural light, proper ventilation and climate control were one of the specific preferences workers had. Organizations had to take it into consideration if they wished to retain their staff. Here, I think it is worth mentioning the "theory Z" or a Japanese management theory paradigm, discussed by Salama (2004) where an employee is placed in the center of organization when deciding on office design, i.e. an employee is highly involved in a decision-making concerning his workplace that, in turn, will have a positive effect on employee's psychological and behavoral patterns and, thus, increase productivity. At the same period of time in 1990s in Northern Europe a Combi office was introduced. Worthington, J. and Koya A. (1988) describe new office layout as offering high levels of personal enclosures at the building perimeter as well as enabling teaming and gathering in core areas. It can be seen as quite close from the design of archetypal office concept in North America. Graphical illustrations of the various office types provided by Salama (2004) can be found in appendix A. Duffy (1997) provides another classification of various types of office structure in current business environment. These types look like derivations of Salama's open plan office. Thus, he classifies workspace into four types: hive, when work is based mainly on individual processes; cell - is suited best when the high concentration is required and when autonomy increases; den - group work when interaction increases; club transactional knowledge when autonomy and interaction increase. He then discusses that usually in real working environment there is a mix of all four types of workspace depending on employee's role, industry, size of the company, corporate culture, location, etc. Graphical illustration can be found in appendix B.
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3.3. Types of flexibility Property and staff flexibility Gibson (2003) in her research elaborates on property and staff flexibility. She argues whether for one element to be flexible the other one necessarily needs to be flexible as well. Gibson (2003) identifies the components of staff flexibility as contractual, fixed and locational whereas property flexibility includes financial, physical and functional flexibility. Contractual flexibility as a part of staff flexibility allows staff to be employed on a range of contracts, i.e. fixed-term, short-term, outsourcing, etc. Time flexibility gives workers a possibility to perform their tasks at the most convenient time determined by both employee and employer. Locational flexibility determines the most appropriate location to work - from home, work office, cafe, airport, etc. In contrast to staff flexibility, financial flexibility as a component of property flexibility describes the ability of the property acquired on a short-term lease to vacate/dispose the space when needed. Physical flexibility allows the space to be easily modified according to the needs of workers, i.e. from open plan to cellular offices. Functional flexibility characterizes the space utilization to enable various business functions (building location, legal and planning constraints). The relationship between property and staff flexibility, according to the author, is not as direct as is sometimes assumed by practicing managers. However, there is a certain need for new workplace strategies due to increasing variety of ways of employing and managing the workforce. New workplace strategies shift from traditional office perception with assigned desks in specific location. These strategies acknowledge that the nature of activities should determine the best location and time for accomplishing the tasks. Gibson (2003) and Steiner (2005) share the same standpoint that changing work styles require more flexible arrangements to better respond the demands of knowledge-workers. Flexible structure means that employees are able to move easily within these arrangements depending on what kind of activities they are engaged with at a specific time. "A one dimensional-approach (all the space will be open plan) is inclined to fail to meet the range of needs any workforce is likely to have" (Gibson, 2003, p.7). Flexible working in terms of flexible hours It is not a secret that today organizations are looking for any possible way of increasing their competitiveness. One of the major roles is given to the development of workplace for organizational performance improvement. IT and telecommunication advances
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removed time and space barriers, making flexible offices, remote and teleworking possible. This gains special importance in the light of current global changes in nature of work. Steiner (2005) raises an issue of global "knowledge workers" in the corporate world that are "born out of the fast-paced IT sector, the principles of relying on the individual's power of ideas, thought leadership and information to make the right decisions that enhance competitive advantage are crossing over and being adopted by other industries" (Steiner, 2005, p.2). He states that the environment of knowledge workers is shaped by collaboration, i.e. formal and informal meetings and social interactions that are enhanced by technology. Steiner (2005) stresses on the point that these employees should be treated differently due to their work specificity and style. They need to have much more freedom in choosing the right time and place to work in order to maximize their productivity and healthy work-life balance. Since more and more organizations are becoming knowledge-intensive this assumption should be taken into thorough consideration. It comes as obvious necessity that the physical office must also follow the changing paths of work to respond to the needs of employees. Skyrme (1994) draws attention to the major strands of organizational strategy such as reducing overhead costs in parallel with increasing flexibility and responsiveness. Organizations show the tendency towards "flatter, less hierarchical structures; increasing use of contracting out and outsourcing of non-core activities; more use of alternatives to full-time salaried employment, such as contractors and temporary staff. Each of these strategies involves the deployment of human resources reducing their costs and improving their flexibility" (Skyrme, 1994, p.1). According to the author, the strategies of flexible work environment can help organizations to achieve benefits and create new opportunities. He also states that there are often hidden costs of inefficient office space utilization that leads to the need of core re-appraisal of working place in order to improve the corporate performance. This can be achieved through certain reforms in working place. One of such reforms is teleworking. Teleworking, as most researchers define, is the way of personal work organization when an employee can work from home and at times that suit his/her personal needs. Nowadays thanks to advances in IT many companies across the world successfully practice teleworking.
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Skyrme (1994) develops criteria as a recommendation for organizations to help to identify whether they need to make this shift towards flexible working. So, according to Skyrme (1994), the company is recommended to adopt flexible working concept if: more work is information based (ca 60 per cent); the lifetime of business processes is diminishing (requirements to meet daily business needs are changing that fosters changes in procedures and skills); work is becoming less structured (many activities and tasks depend on customers and co-workers demand, adaptive skills become more important than predetermined procedures); and there are more interdependencies between different work groups. Most of these trends require better access to information and to people with specific knowledge. The importance of physical location, therefore, is decreasing. As the author puts, "extension of an appropriate telecommunications and computer networking infrastructure into different work locations creates many kinds of flexible working opportunities" (Skyrme, 1994, p.4). Employees in flexible working environment can successfully work from customer sites and non-office locations such as home, hotel, cafe, etc. Also, there are teams, for example, dispersed engineering teams, sales team, remote back-office activities support team, and global project management/outsourcing team, whose work specificity do not require them being in the head office every day for the full working hours. Flexible working for them, thus, is a business need and the key to successful performance.
3.4. Flexible office vs. Conventional office Skyrme (1994) being one of the major researchers of flexible working and whose works were widely cited in academic publications, differentiates flexible and conventional office environments by workplace, time, communications, relationships, technology, security, management style and skills accordingly. So, main attributes of flexible working environment as compared to conventional office, include: 1. Workplace: is not fixed, employees are changing their work stations. Shared resources; storage arrangements for personal belongings are introduced. 2. Time: flexible hours of working, effective use of computer systems, need for time management and effective work coordination.
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3. Communications: effective information sharing despite of the work spot; requires more sophisticated message handling systems. Procedures within work teams need to be well developed and understood. 4. Relationships: due to the fast information flows and communication requirements organizations are moving towards more lean structure, the nature of peer-to-peer and employee-to-manager relationships change. Face-to-face meetings often are substituted by teleconferences or phone conferences. 5. Technology: flexible working, especially teleworking requires continuous changes in accordance with technology advances. 6. Security: security considerations take on special importance with shared desks or work being performed at home. With careful planning they are usually manageable. 7. Management Style: empowerment rather than control. 8. New Skills: with introduction of flexible working, new skills should be developed. These include handling new communications technology, work flow planning, and developing new social networks. New working practices have two main consequences, according to Gibson (2003): first, due to effective remote working (from any other location than office) real estate occupancy costs can be significantly reduced if the office space is reduced at the time; second, new working strategies require new design and office structure to adopt various ways of working. Traditional office, therefore, will have a different function that need tobe managed and maintained in a different way. Alternative workplace strategies are based on the ideas that there are three linked dimensions of an office: its location, internal space configuration and use and the way that space is assigned and managed. Recognizing place, space and use dimensions and the links between them in the organizations will help to build more effective workplace strategies taking into consideration needs of the employees. Gibson (2003) as well as Steiner (2005) and Skyrme (1994) underlines the importance of managers' understanding of "what staff actually do inside an office, and the nature of the work process in general, if they are to provide alternative workplaces" (Gibson, 2003, p.9).
3.5. Flexibility and Productivity Analyzing flexibility, one should take into consideration the productivity. Haynes (2007) reviews two contrasting approaches towards office productivity: employee or office
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occupier perspective (or enabling paradigm) and perspective of real estate and facilities department that is addressed as a "cost cutting" department (control paradigm). Control paradigm suggests improving productivity through greater efficiency, mostly by resource reduction - either financial or actual space reduction. Enabling paradigm views human asset and knowledge capital as the main tool of office productivity improvement. Here we can see clear link to theory "Z" where an employee is placed in the center of organization, earlier presented in discussion by Salama (2004). Haynes (2007) supports hypothesis that relatively small increases in employee's productivity can greatly outweight significant reductions in real estate costs. Thus, it is appropriate to control for real estate costs unless it does not restrict employee's ability to perform his/her tasks as productively as possible. Haynes (2007) suggests that people-centered approach is the most recommended and suitable for employees with varying job tasks and allows the establishment of the end-user/occupier's perspective. He concludes that the future of office productivity lies in establishing the links between "real estate and facilities performance and metrics and the organizational metrics" (Haynes B. , 2007, p.7). These links, according to the author, will become a base for integration between organizational demand and facilities and real estate solutions supply. Haynes (2008) argues that office productivity should include both the physical and the behavioral environment to better represent dynamic nature of office environment. He divides the office environment into 4 categories depending on the employees' work style: individual, group, concentrated or transactional knowledge work. Here, his suggestions are in line with ideas of Gibson (2003) and Steiner (2005) that the work should be organized and managed depending on the nature of the role and the task an employee has. Thus, individual process workers are largely required to be at their desk and have a low degree of interaction with their work colleagues whereas transactional knowledge workers have a high degree of flexibility in where they work and have a high degree of interaction with their work colleagues. Group process workers are largely required to be at their desks but they have a high degree of interaction with work colleagues while concentrated study workers have a high degree of flexibility in where they work and have a low degree of interaction with their work colleagues.
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Haynes (2008) concludes that more flexible shared areas should be taken into consideration as a way of reducing overall space requirements. Cost savings from reduced space could be further used to provide more comfortable and high quality office environment. However, the benefits of flexible working cannot be fully exercised without thorough understanding and analyses of the relationships and interdependencies of all the factors affecting flexible working as well as its advantages and disadvantages in particular organization.
3.6. Advantages and disadvantages of flexible working Skyrme (1994), as a strenuous supporter, accentuates on the benefits of flexible working. One of the most important benefits, according to Skyrme, is reduced labor costs when due to flexible working hours, open space and teleworking policies it is possible to envision sufficient office cost savings per employee. Increased productivity as a result of teleworking has also been reported as a major benefit since home premises sometimes can be the only suitable place for concentrated thinking and analyzing. More benefits of teleworking and flexible hours suggest better adaptation to lifestyle when people can adapt their working habits to suit their domestic circumstances and lifestyle needs. This is particularly attractive to parents with young children. Another benefit of flexible working is seen as organization flexibility where an office designed to flexible working standards is organization change proof, according to the author. In such environment people are free to move within the teams and change their location every hour, if wanted. The cost of an office move is less than one tenth of that of a conventional office. More benefits described by Skyrme are reduced employee turnover, access to new sources of labor, increased resilience to unexpected events, relocation cost savings such as people can change jobs without having to move home, new opportunities for disabled, improved effectiveness due to better optimization of working hours and conditions by employees, less travel hassle thanks to flexible hours and telecommuting and less environmental pollution, also due to telecommuting. However, there could be certain disadvantages of flexible working. They include miscommunication, misinterpretation or poor management while introducing the concept. Skyrme (1994) relates possible drawbacks of flexible working to the inhibitors of the concept. He divided them into 3 categories: technology and infrastructure,
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organizational and social (or domestic) inhibitors. Technological inhibitors include poor communication links, resistance to change, lack of integrated network and insufficient user support that would complicate smooth implementation of flexible working. Organizational inhibitors are identified as concerns of loss of control from middle management, union resistance, personnel policies, and health and safety issues at home. Social aspects of possible hardships while implementing flexible work environment include loss of personal space in office due to open space concept and free seating, concerns over visibility, staff's concerns about career prospects and relationships with peers and managers. Steiner (2005) generally shares the same view with Skyrme (1994) over the positive and negatives sides of flexible working. Thus, positive aspects he sees in overall work flexibility, i.e. ability to work from multiple locations; better work/life balance thanks to telecommuting policies as Skyrme (1994) has also mentioned and a better use and development of core products thanks to better team collaboration and easier information access. Challenges, as seen by Steiner (2005) are the office space which "lacks soul" due to high ratio of unassigned seats where everyone should follow the "clean desk" policy, i.e. storage of personal things is not allowed. When narrowing down to details of flexible office layout and policies, Steiner (2005) raises concerns over desk reservation policy that is required several days in advance which could be a bit troublesome for some employees as well as theoretically uncomfortable location of personal storage due to the "clean desk" policy. All these results the author has obtained from his case study in Sun Microsystems in Dubai on flexible working concept deployment that I will discuss later in this paper. Summing up the advantages and disadvantages, one can say that organizations that are thinking to implement flexible working environment should very carefully assess its business needs and the needs of employees in order to decide on transition. Strong leadership and employee participation are one of the key elements to successful transition to flexible working. The change to flexible working represents major reforms in working policies and organizational habits that require prior and ongoing communication with all stakeholders.
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3.7. Example: cases To support the advantages of flexible working by real life examples, Skyrme (1994) performed a case study in the companies such as Digital and IBM. Set of interviews with managers of Digital and IBM reported savings of 30-40 per cent in office space due to reduction of desks per employee. In the same companies, managers reported 40 per cent increase in employee's productivity such as longer hours of concentrated work and better outcomes thanks to teleworking as compared to an office environment with continuous interruptions. Another case study was done by Steiner (2005) in Sun Microsystems in Dubai the purpose of which was to form the guidelines for space planning taking into consideration major components of flexible working such as real estate costs, building attributes, space planning concepts, and technology and product innovations. Jon Steiner, the author of the article "The art of space management" (2005) has over twenty years of knowledge and expertise in workplace design, procurement and facilities management both in the UK and the Middle East. He is an executive director and a cofounder of CitySpace, leading regional authority on office interiors and work practice in Dubai that specializes in corporate workplace solutions with space planning and management competencies. In 2003 CitySpace was appointed by Sun Microsystems to undertake a pre-lease occupancy study and consultancy, concept design, space planning, detail design and project management. As a result of this collaboration set of guidelines for space optimization was developed - an iWork concept. The development of iWork concept was triggered by changes in global economy. Advances in technology changed the global economy from traditional 8 hours day to 24/7 making the separation of work, family and leisure time increasingly blurred. But working hours did not become longer, instead, new ways of working allowed people to fulfill their duties outside of the physical office; they can work virtually from any location: home, restaurant or while commuting. In space planning, flexibility is a major trend and a driving force. Nowadays corporations and designers speak more about the flexibility in group collaboration rather than individual. Offices are designed to encompass more shared spaces to enable efficient group work, such as conference rooms and smaller private rooms for group discussions.
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The underlying idea behind the iWork was the understanding of the importance of people, collaboration, work process, corporate image, workplace, and cost vs. productivity in the organization. As the results of study, Steiner (2005) developed set of guidelines based on iWork that would contribute in more efficient space planning: Creation of flexible offices and zones - work station can be booked via online tool that also helps flexible workers locate co-workers and resources. Drop-in centers - unassigned workspaces, hotelling policy, i.e. anyone can take the work station without any pre-reservation. Very convenient for visitors and travelers. Assigned offices - traditional approach of "one individual, one office" for permanent-basis workers is still in use in some organizations. Group collaborative workspaces - informal group space and conference rooms with enhanced technology. Work from home - technology allows for working from home using distance collaboration tools and practices. From design perspective, the desired interior image of iWork system should respond to the following characteristics, according to Steiner's observations: it should be casual comfortable - dynamic - economical - efficient - functional - light - non-corporate savvy - simple forms - stimulating - timeless - understated. So, the main objective in design is, therefore, "to create a comfortable, convivial and visually interesting work environment through the imaginative use of functional planning, straightforward interior design and durable application of finishes with a focus on economy and functionality that has strong synergy with Sun's corporate image" (Steiner, 2005, p.13). Adapting iWork principles is aimed to create functionally efficient workplace that would increase productivity. There are benefits and challenges of an iWork that have already been mentioned in the previous parts of this paper such as working flexibility, better work and life balance, lack of soul due to high ratio of unassigned seats and are consistent with research of other authors. iWork had a wide scope of practical implications. Thus, by 2004, Sun Microsystems deployed over 70 flexible offices worldwide, supporting over half of more than 35,000 employees, 2,000 employees as a 100 per cent telecommuters while 5,000 using drop-in
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centers from time to time. Steiner (2005) presents the following figures in support of iWork concept: iWork solutions helped the company saving 11.4 per cent of seats, operating costs were cut by US $71 million in 2002, and estimated to be US $180 millionas the program spreads globally, with a further US $2.8 million has been saved in power. iWork concept was also deployed by the CitySpace itself, "allowing over 100 employees to access a secure hot-desk environment, and to leverage available workstations and conference rooms via Java smart-cards. The new office, in which less than 5 per cent of employees have fixed desks or offices, also features a Java laboratory and interactive demonstration environment for partners and customers" (Steiner, 2005, p.13). Next study was conducted by DEGW in 2004 (Laing A. , 2004) on the physical workplace. 20 leading European facility executives, representing about 250,000 employees were interviewed in order to identify key elements determining the future workplace. The answers were summarized in four groups: working environment, individual workstations, group workspace and technology. Working environment group revealed the fact that 50 per cent of all staff is expected to work remotely. It is estimated that 45 per cent of all staff will work from home at least one day a week, and that a third of all staff will not have their own allocated workspace (as they will be hoteling or freeaddressing in the workplace). Individual workstations: the size of individual workstations is expected to shrink along with the overall amount of space dedicated to individual work; they are expected to decrease in size. Group workspace: as individual space decreases, there will be a corresponding increase in the amount of collaborative and group spaces, which will account for up to 40 per cent of all workspace. Finally, technology: technology will be used increasingly to support collaborative and distributed work. Tools will include collaborative software for virtual teamwork and software for remote access of corporate data networks. These results are highly consistent with another survey carried out by the British Council for Offices the same year on the topic of office design. Workplace and the way the office space is used were also presented in four categories depending on the importance of various factors while deciding on office design. First and the most important factor identified by the managers is people. People are the most valuable asset of the organizations and are the key driving force for all aspects of office design. Salama's (2004) theory "Z", Skyrme's (1994) business change drivers and Gibson's (2003) people-centered approach are echoing here.
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Second element is location. Office location will remain important in the future, but specification and design will become a lot more important. Management and work-styles: management styles are required to adapt to the changing environment and take into consideration the knowledge workers, in other words, traditional benchmarks such as organization charts, job titles, seniority and cost per employee will no longer define the workplace design. The last group is technology. Technology is seen as an enabler not a driver of change. Barber et al. (2005) in their article "Global workplace trends: a North American and European comparison" discuss the results of a global trend survey that was conducted during two years among 127 senior level real estate and facilities executives from North America and Europe. The respondents group included executives in big corporations and multinationals in such areas as law, government, pharmaceuticals, insurance, business consultancy, consumer product, energy, etc. The survey was completed in 2004. The results report a five-year vision for the workplace, discovering trends in space utilization and workplace design. Findings compare trends in North America with trends explored in Europe in the areas of information technology, new work styles emergence such as telecommuting, collaboration and work-at-home, and the impact of all these on workplace design. Key findings in both continents report the vision that work will become more collaborative (both face-to face and virtually); the size of allocated workplace will become smaller than it is today due to advancements in IT and hotelling and free-address modes of working, in which staff are not assigned a permanent office or desk, trend is also towards sharing a workplace; the number of employees spending at least one day working from home or those who permanently work from home will increase due to, again, development of IT; the workplace will be re-designed to support collaboration rather than individual work activity. As it is seen, the results are very close to those reported by DEGW survey. Barber et al. (2005) conclude that on the verge of these radical changes in working environment, the big responsibility and pressure is put on real estate executives to successfully implement the new working strategies. The upcoming change will be determined not only by challenges in real estate costs but also by the nature of work, technology advances and employees' demands that will require new working style. This point of view supports Steiner's (2005) proposition that the knowledge-workers
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possess more specific working style and their work nature requires more flexible approach that should be taken into detailed consideration by managers. Summing up the literature review, it becomes clear that most of researchers are in favor of flexible modes of working and flexible office design as they see it as natural response of organizations to global changes in IT and shifting business styles. Gibson (2003) and Haynes (2007) see positive effects on both cost savings and employees' productivity. This triggered the hypothesis of my work - to answer the question whether flexible working in reality increases organizational productivity in both ways: not only as a tool of cost cutting but also as a technique to improve the performance of employees. I will try to provide practical evidence to this question by the case study I conducted in Alcatel-Lucent in Singapore.
4. Case Study: Alcatel-Lucent Pte. Ltd.
4.1. The company This is a practical part of current paper where I am going to analyze flexible working implementation project in Alcatel-Lucent Pte. Ltd. in its regional headquarters in Singapore. Alcatel-Lucent is a global telecom company, leading in mobile, fixed, IP and optics technologies, and a pioneer in applications and services which includes Bell Labs, one of the world's foremost centers of research and innovation in communication technology2. Alcatel-Lucent was created in 2006 as a result of merger of Lucent Technologies (USA) and Alcatel (France). It has operations in more than 130 countries in Americas, Europe, Middle East and Africa and Asia Pacific with headquarters in Paris. In 2009 the company started its global project of flexible working implementation. Antwerp (Belgium) was a pioneering office where also the concept was born and it spread all over European and American offices. Singapore is company's headquarters in South and South East Asian region and its turn to become flex came in the beginning of 2011. My internship was initially in procurement department of the company which is very closely linked to the real estate and general services (REGS) department. I volunteered in flexible office implementation project and took responsibilities over concepts and policies creation and web
2
www.alcatel-lucent.com 29
communication management. I have chosen the company by its global profile, multitasking role as shared intern between the two departments and, the most importantly, by the pioneering for the region and very up-to-date project within the field of my interest. I say "up-to-date" because flexible working implementation in Singapore given its extremely high population density (7126 people/sq km in 20103) which makes it the second most densely populated independent country in the world 4, and skyrocketing office rents5 would bring significant savings to the company as compared to other offices in other countries. Therefore, the project was treated with high relevance and importance. In this part, first, I will introduce the basics for flexible working transition as they were communicated in Antwerp office. Then, I will draw a general overview of Singaporean office real estate situation according to Colliers International. Finally, I will present the case in Singapore.
4.2.
Flexible working implementation: Antwerp, Belgium
In 2009 Alcatel-Lucent's Antwerp (Belgium) office started practicing flexible working environment. It became a big success, so that other European offices of the company including the head office in Paris made this transition from traditional office concept to a flexible or dynamic one. Recently the concept has also been deployed in North America. South and South East Asian (SSEA) regional company's headquarter in Singapore has been discussing flexible working concept since 2009 as well but has finalized its needs and decided on shift just in January 2011. So, I had a unique possibility to be at the forefront of the huge project labeled "Dynamic Workplace Environment" first intended to be implemented in Singapore for the whole SSEA region. Drawing back to Antwerp office in 2005 when the project "Alcatel-on-the-move" was just started, let us discuss the reasons behind the transition to a flexible working. The idea was stipulated by continuous organizational changes and the business processes when multiple projects were undertaken in parallel and in different lifecycle phases. They resulted in 150-200 per cent churn. The office was lacking flexibility when it could quickly respond to changes and facilitate the information flow. There was a need for a more flexible structure of organization that would be:
3 4 5
www.singstat.gov.sg www.wikipedia.org www.colliers.com/singapore 30
Functionally driven; Would enable project teamwork; Maximum flexible; Would have transparent communication technology; Would have high quality office space; A future proof of IT infrastructure. Another pre-condition for the decision of "going flex" was the result of an office/workplace occupancy survey. This survey aimed to determine the efficiency of space utilization by counting how many employees are present at the office building and at their workplaces in the mornings and afternoons during the week. The results were rather surprising. Whereas the presence in the building showed on average 60-80 percent, the working place occupancy resulted only in 30-60 per cent of the full working day. Why did that happen? The absence of the employees in the office or at their workplaces is determined by various factors. They can be classified as long-term and short-term absences. Long-term absences can be impacted by part time work, holidays, sick-leaves, external trainings, home working, working at other sites, external meetings, etc. Shorter absences can be characterized by discussions with colleagues, coffee breaks, copying, etc. Here are the results of the Antwerp office survey that shows the percentage of employees present in the building and at their workplaces during the week. Population sampled 550 sample workplaces.
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100.0% 90.0% 80.0% 70.0% % workers in the office 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 9:00 AM 9:30 10:00 10:30 11:00 11:30 11:50 1:30 AM AM AM AM AM AM PM 2:00 PM 2:30 PM 3:00 PM 3:30 PM 4:00 PM 4:30 PM
Monday Tuesday Wednesday Thursday Friday
100.0% 90.0% 80.0%
% of workplaces occupied at the same time
Monday Tuesday Wednesday Thursday Friday
70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 9:00 AM 9:30 10:00 10:30 11:00 11:30 11:50 1:30 AM AM AM AM AM AM PM 2:00 PM 2:30 PM 3:00 PM 3:30 PM 4:00 PM 4:30 PM
So, as it is clearly seen, a big portion of employees did not really spend their entire working hours by their desks. This survey raised concerns whether the office space is efficiently allocated and utilized. Aforementioned reasons encouraged the company to revise its real estate policies and eventually decide on flexible working concept deployment. Alcatel-Lucent's corporate real estate in cooperation with other business units in Antwerp and in head office in Paris has decided on main principles of flexible working: 1. Management leads by example - Everybody participates.
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2. Assign workspace to groups instead of individuals: to practice open-plan concept and to promote team collaborations. Underlying concept for open-plan is full sharing using team bases: team members are together when in the office, team zones contain all necessary elements to support various activities, and teams share all information and space. Culture of openness, sharing and knowledge building is widely practiced. 3. Desk sharing: there is no assigned desk for everybody, team members share their desks. Clean desk policy must apply: clean-up of desk when half a day or not at working place. No storage of personal and/or group information at workplaces or in consultation rooms place must be available for others when not used.
Guaranteed availability, 100 per cent participation. 4. Desks reservation through the corporate reservation system for everyone. 5. Open-up offices allowing natural sunlight & window view thus contribute to CO2 emission reduction. 6. Maximize availability of meeting space by keeping current meeting rooms and transforming close offices into additional meeting rooms and phone booths. 7. Implement telecommuting policies. 8. Reduce operating costs by optimization of space. 9. Flexibility to cope with constant reorganization to ever changing business. Thus avoid constant moves and rearrangements due to organizational and hierarchy changes. Appendix D shows flexible seating variations in Alcatel-Lucent's office in Antwerp.
4.3.
Office market in Singapore. Colliers International overview6
The average monthly gross rents of office space in Singapore surged by up to 31.4 per cent in 2010, according to Colliers International report. This came on the back of two successive quarters of strong showings in rental growth, led by office premises in the CBD - in Raffles Place/New Downtown micro-market. Hot on the heels of the impressive 10.9 per cent QoQ (quarter-on-quarter) hike in 3 quarter (Q) 2010, the average monthly gross rents of Grade A office space in CBD - the Raffles Place/New Downtown - micro-market soared by 11.5 per cent QoQ in 4Q 2010 to
Singapore, the knowledge report: 4Q 2010 Property market overview. Colliers International, p.5-7
6
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end the year at $9.00 per sq ft. Despite recovering by a substantial 31.1 per cent in 2010, the average monthly gross rents of office space in this micro-market is still some 50 per cent below the previous peak of $17.89 per sq ft recorded in 3Q 2008. In other parts of the country, the average monthly gross rents of office space climbed by up to 8.6 per cent QoQ in 4Q 2010 and 27 per cent for the whole of 2010. Fuelling the spike in rents was the active leasing activity seen, particularly for the 2 nd half of 2010. Amid soaring business confidence, firms such as financial institutions, insurance firms and professional services companies took advantage of the availability of large contiguous space offered by new office developments, or in older buildings where firms have relocated to newer outfits, to consolidate and expand their operations ahead of a pick-up in rents. Alcatel-Lucent, thus, moved from more expensive business district in Commonwealth lane to premises in Chai Chee Technopark, big and old industrial area clustering all major telecom companies' headquarters in South and South East Asian region in the Eastern part of Singapore with significantly low office rents. Prognosis for 2011 Underpinned by 2011's services-led economic growth, office rents are expected to ride out the large influx of supply and continue to trend up, although the pace of growth should ease to between 15 per cent and 20 per cent for the whole of 2011. The buoyant demand for strata office properties fuelled a rise in the average capital values of Grade A office space in the CBD (Raffles Place/New Downtown) micro-market by 8.1 per cent QoQ in 4Q 2010 to $2,088 per sq ft, their strongest growth since the market turned around in 1Q 2010. Appendix C shows average capital values for grade A office space in CBD and average monthly gross rents of office space in 2010.
4.4.
Dynamic Workplace in Alcatel-Lucent Singapore
4.4.1. Objectives of the transition to flexible working Objective of the transition to flexible working in Alcatel-Lucent Singapore was to improve team collaboration, knowledge sharing and secure more efficient utilization of the working space. Alcatel-Lucent Singapore office is located in the east side of the country - in Chai Chee Technopark, the cluster of telecom companies. Previously, the office was located on the
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west of the country - on 6 Commonwealth lane. For the reasons of real estate cost reductions the office moved to a current industrial area. Alcatel-Lucent is occupying two floors, floor 4 and 6, in the building D in Chai Chee Technopark.
4.4.2. Office space utilization survey In Singapore office, decision of going flex was strategically determined by senior Asia Pacific region (APAC) leadership. As the APAC management board put on the conference dedicated to a new shift, flexible or dynamic workplace concept aims "to break down the old ways of working and rejuvenate the real estate spaces to support new styles of working in a highly flexible, Web 2.0 world, to provide flexibility to employees, to optimize space utilization, to increase office space efficiencies and to drive operating cost reduction"7. Three main reasons were highlighted for Asian turn of flexible working as creation of more effective structure that would accelerate the effect of market strategies, increase of transparency and improvement of cost savings. Similar to Antwerp office surveys were conducted in Singapore's office. First workplace occupancy survey was performed during the period of Sep. 20 - Oct. 15, 2010 and the second one - Mar. 21 through Apr. 15, 2011. Both surveys were conducted in two sessions: 10am & 3pm. The workplaces occupancy was divided into five categories depending on presence of an employee: wholly occupied work station during the time of sessions conducted, occupied morning only, afternoon only, out of office, or vacant/reserved (incl. staff on maternity leave, short term assignments, etc.). Results are illustrated below.
1st survey (Oct. 2010) - office space utilization Average utilization rate over 20 days:
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Occupancy Rate (average)
wholly occupied morning only afternoon only out of office
vacant/reserved 9% out of office 33%
vacant/reserved wholly occupied 39%
afternoon only 9%
morning only 10%
As the diagram above shows, wholly occupied during the sessions' time and over 20 days were only 39 per cent of workstations on average in Alcatel-Lucent Singapore office in October 2010. Out of office were 33 per cent, 10 per cent of employees were present in the mornings only and 9 per cent - in the afternoons only. The reasons of such a situation were not investigated in details but, however, there are several assumptions of employees being away from the office. These reasons may include holidays, sick-leaves, maternity leaves, business trips especially given the fact that most of the managers in Alcatel-Lucent Singapore office are regional managers, nature of work and role, i.e. sales department versus finance or HR, part-time work, working from home, training, etc. Usage of closed rooms + workstations:
45% 41% 40% 35% 30% 25% 20% 15% 10% 5% 0% whole day morning only afternoon only out of office vacant/reserved 9% 10% 11% 9% 3% 11% 38% 35% 32% room workstation
As it is seen, from the 1st survey, only 41 per cent of closed room (office) occupiers were present the whole day (it is assumed "the whole day" when a person was by his/her desk during both check sessions) in the office and only 38 per cent of workstation (cubicle) employees.
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2nd survey (Mar. 2011) - office space utilization:
morning only 8%
afternoon only 12% out of office 30%
wholly occupied morning only afternoon only out of office vacant/reserved
wholly occupied 42%
vacant/reserved 8%
2nd survey was conducted in March-April 2011 and I participated in it myself. Procedures and methodology were the same as in the survey in October 2010. As it is shown, there was no a big difference from the previous survey. There were only 42 per cent wholly occupied workstations during both check times. Out of office were 30 per cent of employees and the difference between the average percentage of morning and afternoon workers was only 2 and 3 per cent. These results show certain consistency in the way people actually work in Singapore office. They are not tied to their desks; they are flexible and spending half of their working time out of the office. Use of closed rooms + workstations:
45% 40% 35% 30% 25% 20% 15% 8% 10% 5% 0% wholly occupied morning only afternoon only out of office vacant/reserved 7% 9% 5% 8% 12% 30% 38% room workstation 42%
40%
So, results of 2nd survey were very similar to the previous one. Wholly occupied were only 38 per cent of closed rooms and 42 per cent of cubicles during the period of survey. These results supported the corporate decision for flexible working.
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4.4.3. New office design and space planning As it has been shown, both surveys indicate very low utilization percentage that leads to inefficient use of the office space. As a result, it was seen as necessary to deploy new office plan that could better allocate usable space and motivate people to work more flexibly and more efficiently. It is also worth mentioning high operating costs of occupying a total of 5922 sqm with average annual operating cost of more than 2 million euros8. It was suggested to terminate operations on the 4th floor and to move the entire office to a single 6th floor, thus, cutting the number of workplaces from current 458 to 254. Real estate and General services team (REGS) developed a plan of a new office layout that is presented in the table below:
ClosedRoom 40 41 81 Current Layout Plan Workstation 196 181 377 Total Seats 236 222 458 PROPOSEDLAYOUTPLAN ClosedRoom Workstation Total Seats 0 0 0 4 250 254 4 250 254
Level 4 Level 6 TOTAL
Conference rooms Training Room 25pax 15pax 12pax 8pax6 pax4 pax2 pax1 pax
CURRENT PLAN 1 1 0 6 3 0 0 0 0
PROPOSEDPLAN 0 2260632 6
Methodology of deciding on whether an employee is given a designated workstation, 100 per cent home-based or teleworking was developed according to the survey results and nature of work of employees. If an employee during both surveys and during other working time was present at his workstation for more than 15 days, then he/she will get a designated seat. If during the 15 days an employee was continuously out of the workstation and if his/her work does not require being at the desk all the time and all days in a week, then an employee can be 100 per cent home-based. And, finally, if a worker spends between 1 to 4 days at the office and other time elsewhere, then he/she is recommended to telecommute.
Due to internal policy regulations in Alcatel-Lucent Pte. Ltd., it is not allowed to present actual numbers of cost savings.
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So, according to survey, from total 457 employees in Alcatel-Lucent Singapore, 112 was recommended to be home-based, 107 - to have assigned seats and 238 to have seats that require prior reservation or just a drop-in/hotelling seats. The designated seats would be mainly kept after HR, Finance, some back office engineering teams and real estate department. This allocation of designated/hotelling seats was determined by the analyses of various working styles. Working styles are different, e.g. the working style of an IT engineer is different from that of a manager in: the amount of time spent sitting in one place versus being away from the desk or offsite; the type of equipment required, e.g. a specialized PC versus a regular laptop; the sort of spaces needed, e.g. a manager may need quiet space for confidential work whilst a project manager will need more collaborative spaces to interact with colleagues. Every employee's working style is tied to the role he/she works in - it ranges from being unsuited to sharing space, to being more able to share spaces. The key conclusion in this analysis was the principle that most roles do not require the same seat to be assigned for exclusive use every day though a minority genuinely do. The new office plan would also focus on creation of more conference rooms & phone booths with various range of seating capacities to cater for all; phone booths are commonly used for private calls but may as well be used as a project team hubs for short discussions; more window views for employees as this would open an access to a daylight for most of the employees; new workstations - reduced partition height to 1200mm; enabling team collaboration, better communication flows and information sharing; clean desk policy implemented - no metal cabinets, no pedestal & no overhead, guaranteed availability to a new user; new lockers for personal belongings, backpack, laptop etc., no storage at the desk; IT Hardware and Software - Networks. Thus, Singapore Alcatel-Lucent office will move to a more flexible/dynamic environment. Flexible working aims to provide the right work places to support the way people actually work. By working dynamically, and moving away from the "One Size Fits All" approach that the company used to have, new flexible concept will enable creation
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of a greater level of facilities to enjoy within the space that the company already have. Working dynamically is about using space differently.
4.4.4. Benefits of flexible workplace environment for Alcatel-Lucent in other countries All these mentioned upcoming reforms in Alcatel-Lucent Singapore were triggered by benefits of flexible working experienced in other countries where flexible working has previously been deployed, such as Belgium, Hungary, Italy and the United States. Appendix E shows the pictures of a new working environment after the shift to dynamic working in these countries as well as proposed plan of a new office design in Singapore. So, the benefits reported910 by Alcatel-Lucent offices in these countries are: 1. Work-life harmony It is especially vital to those with family and children. Telecommuting policies allow people to choose the best way of balancing their work and private lives by working more flexibly and from different locations, for instance, from home. 2. Behaviors Employees are flexible to choose where to work from that best suits their needs. Flexible working also helps to avoid the silo effect ("lack of communication and common goals between departments in an organization"11). It also promotes collaborations, teamwork, fosters creativity and increase productivity. 3. Costs Flexible or dynamic working optimizes space utilization, increases office space efficiencies. It reduces unnecessary costs of empty desks to business units and improves the company's competitiveness. At last, it drives operating cost reduction by approximately 30 per cent a year. As it is seen, these benefits reported by managers and employees in Alcatel-Lucent offices that went flex worldwide are exactly in line with research of scholars in this area. Skyrme (1994), Gibson (2003), Steiner (2005), Hassanain (2006) and Haynes (2007, 2008) in their works all have indicated better work-life balance, location and time
Huygebaert, Chris. Flexible workspace concepts: how to improve flexibility, efficiency and communication. Corporate real estate program management, flexible workspace solutions. Antwerp: Alcatel-Lucent, internal presentation slides, 2010 10 Huygebaert, Chris. Alcatel-Lucent: the dynamic workspace. Our enterprise 2.0. workspace strategy. Antwerp: Alcatel-Lucent, internal presentation slides, 2009 11 Wikipedia.org
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flexibility, improved information sharing and team collaboration as well as significant real estate and employee's cost reduction as major benefits of flexible working.
4.4.5. Project's timeline The timeline of the project development and final transition to a dynamic workplace in Alcatel-Lucent Singapore is shown below. PHASED Implementation Timeline: Phase 1 (October 2010-end of April 2011) Space utilization surveys Storage utilization survey Formation of steering committee Real estate business case approval Review of flex implementation across other Alcatel-Lucent sites Formation of a concept draft, tools and policies Flex office champions and focus groups engagement Phase 2 (May-beginning of June 2011) Re-engagement of steering committee Communication to business units managers and supervisors Completion of preliminary design layout plan E-Auction for major contractors completed and all the necessary documentation ready Phase 3 (June 2011-mid July 2011) Further refinement of designs layout plan based on the feedback/inputs - rectify issues and requirements (4-6 weeks) Obtain steering committee approval on detailed implementation Communication-Deployment Phase 4 (Mid July-end of September 2011) Dynamic workplace renovation Phase 5 (October-November 2011) Go-live Phase 6 (December 2011-January 2012) Terminate level 4 lease
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I was a member of a REGS team from the start of the flex office implementation project after its approval in January 2011 up until the phase 3 - detailed implementation guidelines and communication. My internship in the company was terminated in the end of June 2011 and after that I have been following the process remotely. At the moment the project is delayed due to the extensive renovation works on the level 6 and tearing down the level 4. It is expected to move to the next phase by the end of October 2011.
4.4.6. Interview results During my practice in Alcatel-Lucent in Singapore, I conducted set of interviews with managers and employees in the company about flexible transition project and changes it brings. These discussions helped to create a general picture of awareness and perception of the transition by different people in organization as well as it helped to understand the challenges it raised. The answers also assist in analyzing of how well the internal communication was handled during the project planning and execution. I interviewed seven persons in the company: two regional directors, three line managers from different departments, one HR assistant and one organizational administrator. All these persons have different levels of involvement in the current project. They also have different professional background, years of experience in Alcatel-Lucent; they are holding different responsibilities and even belong to different age groups. Interview sessions were conducted during three weeks between May 10 and June 8, 2011 depending on availability of respondents in the morning time, i.e. from 9-11.30 am. Prior to the meeting, the questions were sent via email to the interviewee, so that the interviewee could have some time to review them and prepare for the personal meeting. Every interview with discussions generally lasted for approximately 40-60 minutes. The answers were written down by me. After 1-2 days from an interview, summary of the answers were sent to interviewees for approval. General picture drawn from the answers shows that the people managing the change indicated that the decision was "top-down", i.e. the corporate policy of Alcatel-Lucent expanded to SSEA region and the transition was inevitable. They generally felt positive about the coming changes. Benefits indicated were cash flow improvements, lease situations (termination the 4th floor lease, benefit in the situation of "adding-in" people, i.e. no need of building in more workplaces as the space would be flexible), bounding with a family thanks to telecommuting policies, less traffic on rush hours, etc. However,
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the top management in Singapore does not see a very high relevance of the flexible working in terms of telecommuting policies. They explain it by the size of the island: Singapore is very small, so the need for telecommuting from the angle of saving the time on the route to and from work is negligible. Disadvantages of dynamic working from the management point of view are: possible struggles in people management, they indicated that it is always a challenge for the supervisor to implement/adopt/monitor new management style. Another drawback seen is visibility when it comes to telecommuting - "far from eyes, far from heart" as regional director of Real Estate and General Services puts, i.e. lack of trust in employees when they are working from other premises than the office. Other negative impacts of flexible working highlighted by the managers were lose bounding with colleagues/team members, no direct control/monitoring. Other employees apart from REGS and Procurement were generally unaware of the coming changes. During the interview some of them requested an introduction to the topic to be able to answer the question. Almost all of them had a very fragmentary knowledge about the coming changes. They heard different talks in the organization and were unable to provide full and comprehensive view of the situation and clearly express their opinion. Generally, they felt negative about the changes and the main reason of the transition they saw in management that only wants to cut operation costs. Business operations manager with nine years of experience in the company, raised concerns on whether he will be able to concentrate well and stay focused in new environment regardless whether at home or in the office since his job requires long hours of uninterrupted work; whether teleworking will make peer to peer networking harder given that people do not see peers on a personal basis and whether the supervisors will get used to not having employees physically around and maintain the correct expectation and trust. Other interviewees indicated dissatisfaction due to the fact of losing dedicated seats and own pedestals and shelves as well as the fact that they will have to share the space which was perceived as causing disturbances. Telecommuting was also perceived ambiguously: some stated that it would be highly desirable to work from home while the others, on the contrary, felt that home atmosphere will not support concentrated work. While talking about differences and similarities in deploying the concept in different parts of the world, regional procurement director with twelve years of experience in
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different multinational companies, underlines that it is similar in the sense that "people are not used to changes, they do not like it, especially when it comes to work space changes. In the office there is a "traditional" way of thinking: every employee needs to be supervised, micro managed and monitored. Asian concept is more like if you are not here then you are not working. I believe that we need to adapt to new concepts and use different management styles". These results coupling with purpose of flexible working concept deployment in AlcatelLucent in Singapore led to conclusions about the project awareness among employees and its feasibility that I will discuss next.
5. Discussion and conclusions
The case study in Alcatel-Lucent, in the offices where flexible working has already been exercised for some time now, has indicated the hypothesis that flexibility in property as well as in working mode increases productivity both in terms of costs and from employee's perspective. Singapore's office is still on the move; real benefits from flexible working implementation will be possible to discuss after some time. In current work organizational productivity from the perspective of property has been analyzed from economic standpoint when flexible working decreases operational and real estate costs per employee, thus, allowing saving and investing in other business areas that would increases profitability of the company. Productivity from staff perspective has been measured by employee's satisfaction of his working environment, work-life balance, and increased efficiency through team collaboration, flexible hours and telecommuting. However, there are several issues that should be taken into consideration by managers while implementing flexible working. First, it is crucial to analyze the current state of the company, to assess its real business needs as well as the needs of employees to decide on the change. Here, enablers and inhibitors of flexible working should be carefully identified. Thus, the results of my case study in Singapore revealed that there are more enablers as well as inhibitors than the ones described earlier by Skyrme (1994). Through my observations in the company and thanks to the interview results, I would add lean organization structure, efficient internal communication and knowledge intense work, effective networking with colleagues and mutual trust between all levels as enablers of flexible working. Inhibitors, above the ones discussed by Skyrme (1994) are: poor communication flows, employees'
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unawareness and reduced participation that triggers mistrust, pure economic reasons as only cost reduction for the transition to flexible working and too lengthy project implementation. These factors can undermine success of the whole project. Second, interview results show that internal communication has been managed quite poorly in the early stages of the project. Management having this "top-down" decision imposed by European headquarters did not feel the necessity to share all information with employees and is making them to face the situation ex post with no chances to influence and customize to local needs. It creates an ambiguity in perception of changes. This, in turn, can lead to prolonged acceptance of new environment, i.e. people might resist to new changes being set apart during their implementation. However, from my observation of working environment in Singapore, this situation is very unlikely to lead to any significant problems in the company due to, from my point of view, the cultural element. In Asian business environment it is unlikely to experience subordinate-manager open opposition; it is not a custom to think that an ordinary employee is capable of changing the way he/she works. That is why the decisions, even the ones with direct impacts on the workers are taken independently by the management and then communicated with employees as inevitable upcoming changes. This last observation leads to prospective area of research that could be of high interest for the researchers of not only flexible working but of any business and cultural studies as well as for managers of multinational companies willing to deploy a global strategy in their offices worldwide.
6. Future research
This thesis suggests researching the cultural element in deployment of global strategies. Thus, it would be useful for theory to investigate in such questions as: does the cultural element matter for top-down decisions? Should the concept in different hemispheres be treated and executed in the same manner? For instance, the case of this work is the office in Singapore in South East Asia which has entirely different history, economic, social and demographic situation than Antwerp, Belgium, where flexible working practice was first exercised. Singapore is very young, much more vibrant country with faster economic cycles than Belgium. This, partly, can be the reason of difference in people as employees and their needs. One can also reflect on difference in cultures and how this affects business decisions and relations.
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Another suggestion for the future research that has earlier been mentioned in this work is investigating in more cases of flexible working implementation projects, preferably in different countries and various companies that could enable generalization and development of theory and guidelines of flexible working concept deployment.
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Appendix
1. Appendix A: Salama (2004), the evolution of workplace design: from Burolandscaft to cellular office structure:
2. Appendix B: Duffy (1997): Den, Club, Hive and Cell office types:
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3. Appendix C: Average capital values for grade A office space in CBD and average monthly gross rents of office space in 2010:
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4. Appendix D: Flexible workplace variations in Alcatel-Lucent Antwerp:
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5. Appendix E: New working environment after the shift to dynamic working. Antwerp, Belgium:
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Bratislava, Hungary:
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Rome, Italy:
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USA:
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Singapore (plan):
6. Appendix F: Interview questions Face-to-face interview was conducted with Alcatel-Lucent Singapore office employees during the period May 10 - June 8, 2011 on the topic of flexible office concept deployment project. The respondents were divided into two categories:
managers/supervisors and ordinary employees. Depending on the category, questions asked vary. The summary of the most common questions asked in both groups are presented below. Questions: Please, state your full name, occupation, age and number of years you have worked in Alcatel-Lucent Singapore. 1. What do you know about Flex Office implementation project in Alcatel-Lucent Singapore? How do you imagine Flex Office will look like? 2. What is the purpose of this implementation from your point of view? 3. What do you personally feel about it? 4. Do you think it is necessary to deploy Flex Office concept? 5. Do you think it will it affect your work? If yes, how?
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6. What benefits do you see in this reform? 7. What disadvantages you can think of? 8. Do you think it will bring a significant cost reduction to the company? 9. If you had a chance to influence the management decision, would you allow this transition to take place? Which other ways of managing the situation of inefficient space utilization can you suggest? 10. Do you feel comfortable with this coming change? 11. Speaking about telecommuting concept as part of Flex Office implementation, would you personally be willing to telecommute? 100 per cent or as a part-time? Do you think it is a good alternative for optimizing space and, thus, cutting costs? 12. What type of office seating would you prefer? Does it matter to you? 13. Flex Office concept is already a main stream for office space optimization in Europe; do you think it will spread widely in Asia region as well? If yes, when this concept will take over majority of countries (please, give your estimate in years, months)? If no, please, explain why you think so.
Thank you very much for your participation!
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