Flexibility in Firms - Coursework Example

Topic: Flexible Firm Lecturer: Presentation: Introduction The concept of flexibility has gained significance in the contemporary firms. Since the 1980s, firms have continuously focused on work re-organization to cope with the constantly changing operating environments and the dynamics of the labour market. Flexibility takes the form of a progressively segmented workforce whereby firms operate with diverse employees, such as part-time, contractual, temporary, outsourced and temporary employees among other non-standard workers. The growth of flexible firms has been facilitated by the many factors such as; technological advancement, increased supply of skilled labour, more women in the labour market, increased competition in the commodity market and financial re-organizations in the capital markets. In essence, firms can not be competitive without flexible human resource practices that allow the minimization of costs while maximizing output. However, the flexible practices have a downside especially for the employees since they lack the conventional employment benefits. This paper presents a critique of flexibility and the various strategies that flexible firms apply to maintain productivity. Flexible models have been discussed as well as how firms in the UK are re-organizing their work to integrate flexibility in their operations. Flexible Firm Flexibility is the capacity of firms to take advantage of the changes in the operating environment and exploit the opportunities that they present to maintain competitiveness in the market. Dyer (1998) observes that a flexible firm explores emerging opportunities and is strategically positioned by becoming prepared for upcoming challenges. In essence, it requires a firm to balance between discovering and exploiting new opportunities. By integrating the new discoveries in the firm’s operations, some convectional activities are eliminated from the organizational strategies. Cost effective techniques are applied in the production processes such as through division of labour and other flexible working practices. The non-standard employees are assigned work that arises in the business processes, but may not be necessary after such tasks are completed. The mainstream tasks are performed by permanent employees that are entitled to employment benefits. These strategies help the organization to minimize the costs of maintaining a large number of permanent employees, but as Purcell & Hutchinson (2007) argue, the periphery employees may be dissatisfied by lack of employee benefits despite the fact that they perform the same tasks with the permanent employees. Inventive approaches in the production processes are significant in the maintenance of competitiveness. Changing the production techniques that allow product differentiation to satisfy the demand for various market segments is a significant practice that allows the firm to adapt to the changing consumer demands (Rankin, 2008). This is accomplished through inventiveness in production technologies and application of flexible models such as functional flexibility whereby the employees are continuously trained to build their capacity to perform various tasks using the available technologies. Lawler (2008) argues that organizational learning is a significant strategy that allows employees to upgrade their skills whenever new production systems are introduced rather than incurring the expenses of engaging new employees. Numerical flexibility is also a flexible model which is concerned with the labour market whereby the firm is in a capacity to engage employees and downsize according to the market variations. The flexible model developed by Atkinson highlights the various ways in which the workplace demands may be satisfied through employee segmentation whereby a firm operates with mainstream and subsidiary employees (Blyton & Turnbull, 2004). The model is applied by many modern firms and has enabled the maintenance of work-life balance among employees, especially for women who are able to accomplish their family roles while working part time. Flexible working improves the morale of employees and is significant in the enhancement of employee retention. According to Oates (2007), financial flexibility is an important model that that enhances the firm’s capacity to apply the flexible and numerical models. It involves surveying the labour market and varying the cost of employment according to the demand and supply in the labour market. In other words, the firm does not apply a standard pay for the employees. For example, when the labour market has a high number of skilled workers seeking employment, the firm lowers the salary and vice versa. On the other hand, remuneration is based on the performance of individual employees. The model is criticized for causing dissatisfaction and decreased morale among employees especially due to the variations in their salaries. Flexible working practices provide opportunities for the surplus in the labour market. There are many skilled workers who can not find permanent employment due to many factors such as inability of firms to undertake the expenses associated with employee benefits, family and social responsibilities, parallel career paths and other commitments that do not allow full time employment. Firms engage such employees in non-standard work whereby they work as casual labourers who are employed to supplement the permanent workers, part time employees whose services are needed only at a particular time in the organization, and temporary employees who either work part time or full time but whose benefits are different from the permanent employees (Prowse, 1990). They apply in the industries that experience seasonal variations in product demand, such as in the tourism and fresh produce firms that have low and high seasons in the business cycle. Non-standard work also applies where the employer firm is not the actual firm where the employees work. For example, many banks in the UK operate with hired security personnel. The security companies are the direct employers but the employees work in the banks. Under such flexible arrangements, the banks avoid the costs associated with directly employing security personnel, such as health insurance, retirement schemes and paid leave among other benefits. The firms may also make arrangements with professionals for on-call services to avoid employing permanent technicians for services such as computer repair, electrical and building repairs among other occasional services (Hollinshead et al. 2003). In the UK, firms have begun re-organizing work with a view of maximizing employee performance through employee oriented strategies. Grimsby Institute of Further and Higher Education is one of the organizations that have adopted flexible working practices that enhance satisfaction among the workers. The workers are involved in decision making and are also presented with opportunities for dialogue with the management to enhance problem solving in the organization. Scotia Chiropractic is also applying flexible practices such as training of front office managers as well as constant pilot programs to assess the applicability of flexible working practices. Inventive strategies have led to the use of personal alarms especially for the female employees who work on night shifts or late in the evening (Clake, 2007). Flexible working such as part time employment, working from home has been facilitated by inventions in ICT. Companies such as Telergos in England, PricewaterhouseCoopers and Delloite are some of the UK companies that have engaged employees who work from home. Hot-desking is also another work re-organization strategy that aims at reducing the office space required for business operations whereby different workers use the same desk to conduct their activities. IBM is one of the organizations that have adopted this strategy (Paula et al. 2008). Many other firms in the UK have restructured their work to accommodate flexible practices that allow them to maximize production while maintaining low overhead costs. Since the recession, many firms have re-organized their work such as employing workers on part time basis as well as other arrangements such as unpaid leaves and term-time jobs that allow the permanent employees to return to work when the operations get back to normal. This has allowed firms to maintain experienced workers that would otherwise have been lost through the downsizing that followed the global economic crisis. Job sharing is also among the flexible practices in the recent re-organization whereby employees share common responsibilities on a particular organizational task. The freedom for employees to choose their working hours is a significant step towards accomplishing a work-life balance (Rose, 2008). Conclusion Flexibility in firms is significant in the maintenance of competence especially through maintaining employee satisfaction. It allows an organization to adapt to the changes in the operating environment. The flexible models allow cost effectiveness and efficiency in production as well as employee satisfaction, which is significant in retaining skilled workers. Financial flexibility facilitates the accomplishment of the functional and numerical models, which are important for the success of a firm. UK firms are continuously adopting flexible practices that include; working from home, part time employment and hot-desking, which helps to reduce overhead costs associated with office spaces. In general, flexibility in organizations is a core success strategy although there are a few negative aspects that demoralize the employees especially in regard to the terms of employment for non-standard work. References Blyton, P. & Turnbull, P. 2004. The Dynamics of Employee Relations, Houndmills: Palgrave   Clake. R. 2007. “How to make flexible working work”. People Management, Vol. 13, 1, pp 48-49.  Dyer, S. 1998. “Flexibility models: a critical analysis” International Journal of Manpower, Vol. 19, 4 pp 223-233. Hollinshead, G., Nicholls, P. and Tailby, S. 2003. Employee Relations 2nd ed., Financial Times, Pitman Publishing Lawler, E. E. 2008. “Why are we losing all our good people?” Harvard Business Review. Vol. 86, 6, pp.41-46. Oates, A. 2007. “Making good time”. People Management. Vol 13, 21 pp 40-43.  Paula, M., Kerriann, D. & Sandra, B. 2008. “Industrial Relations Journal”, Vol. 39, 3 pp. 229 247. Prowse, P. 1990. “Assessing the Flexible Firm Assessing the Flexible Firm”. Personnel Review, Vol. 19, 6 pp 13-17 Purcell, J. & Hutchinson, S. 2007. Rewarding work: the vital role of managers. London: Chartered Institute of Personnel and Development Rankin, N. 2008. “The drivers of staff retention and employee engagement”. IRS Employment Review. Vol. 901, 1 pp 13-18. Rose E. 2008. Employment Relations in the UK, London, Prentice Hall, Financial Times Read More