Patterns of Reorganisation and Human Resource Management
In the last decade waves of organisational changes have gone through a lot of enterprises. These changes can be caused by strategies such as globalisation, product innovation, process innovation, integration of new technologies, increased flexibility of working hours or rewards, and investments in research and human capital. Two main questions will be discussed in the paper: How do organisations change and how is their human resource management related to organisational change?
1) Do strategies change or do enterprises repeat the same strategies? If strategies change, we will have to think about whether organisational changes follow the latest management fashion (Kieser 1996). If however the same strategies are repeatedly conducted, change can no longer be interpreted as a single shift in the organisation of work but must be understood as a continuously evolving process.
2) The changing organisation can further be related to strategic human resource management. Which enterprises allow flexible working time and pay, offer low wages or do invest in training their staff?
3. Theoretical Orientation
My research is based on the actual constraint that what matters is not only having an employment or not but also very much about who is occupied, how they are occupied and in particular how the changing context imposes the qualificational demand of workforce. Im interested in the flexibilisation of working time, pay and contracts and in training features. All these issues are very important to employees and also to employers. From a more educational or vocational view, we would ask what qualifications people need in conducting their duties. Human resources have two main purposes within an economic organisation: firstly they have to keep the usual business going and secondly they have to ensure new business and further work. The qualificational demands of the companies give us information about what competencies they are looking for. The explicit qualificational demand can be seen as a valuable indicator if used in recruitment. It indicates advantages and disadvantages in the labour market. However, using the explicit qualificational demand of organisations formulated in advertisements or named in questionnaires lacks a verifying component. Therefore I shall take a closer look at organisational change and how it affects the change of working patterns.
Thinking about organisations as a system an impact of change on theory can be seen. A system might change in a process of irritation, bifurcation and centrifugation (Laszlo 1992). Change in that case is an emergent product. It cannot be given a direction. But it can include a very dramatic shift into a new organisational culture or structure. The emergent phenomenon is more or less unexpected. Also very strong strategic measures can stay without any effects on organisational change. This is in contrast to the functional strategic thinking of managers and some researchers (Gomez & Zimmermann 1992, Hendry 1995). Business strategies are always taken with a purpose (Kreikebaum 1993). They are implemented with the purpose of change. In particular change which allows efficacy and growth should take place. Going a step further as Chandler did (1988), we will not simply ask if strategy affects structure or vice versa. I would like us to challenge the very concept of causality.
Thus I agree with Araujo & Easton (1996) who assume that we can't find causal effects in organisations. They propose to talk about patterns instead. Patterns emerge out of consistency. Consistency can be the result of market exchange relationships, institutional relationships, network structures, cognitive practices, cultural practices, political processes and economic or technological processes (c.f. Araujo & Easton 1996). The very idea of patterns comes close to the systemic view. Schreyögg & Noss (1994) also assume there to be a shift in management from a "structural solution" to a "personnel solution". That means a shift from control to self organizing, from hierarchy to heterarchy and from change by reorganisation to a continuous change by learning. The model of patterns represents complexity of organisational change including the various interdependencies between strategic measures and human resource management.
To answer these questions I will rely on a representative empirical study in Swiss small, medium and large firms of the secondary and tertiary sector conducted in 1998 by the Swiss Institute for Business Cycle Research and the Sociological Institute of the University of Zurich. In this study 6000 personnel managers were asked to complete questionnaires, of which 2124 usable ones were returned. In addition, a comparative qualitative study was conducted which focused on the change of work (Hansen 1999b). The variables used indicate if a specific strategy had been implemented or not at a time indicated. Further information of this project you can find on the web at http://socio.ch/work/home.htm.
The most important business-strategies of the last 8 years were (see table above):
The four main strategies, introduction of office-information technology, introduction of technical-information technology, reorganisation and increasing flexibility of working time and pay are mainly implemented at one step. To need more steps for change might be an indicator of bad implementation, because most enterprises manage this in one go. Looking at mean and standard deviation we see exactly how often a special type of measure is taken. For example 1551 firms conducted 2185 reorganisations, which gives us a mean of 2,26 (2=one intervention) with a standard deviation of 0.76. For the other strategies please have a look at the table below. We find that training of employees is a strategy which is repeatedly taken. Continuous learning is the most important for employees. If it takes place inside the organisation it indicates the post-modern management strategy of a learning organisation, which makes change a process of continuous learning.
Outsourcing is the rarest practice taken. That is because it is due to the exportation rate of a firm. If a firm exports most of its products and even opens up new foreign markets, outsourcing occurs in conjunction with this. In industrial sociology we often see the metal and machine industry as a trendsetter and use it as a predictor for change (Manz 1991, Hansen & Wüst 1995). But we have to be careful with that, especially in the case of outsourcing. It is the most important strategy for the machine industry, but it is not at all for most other industry. If outsourcing takes place, it could also explain the decreasing demand of low skilled employees, low skilled work gets exported outside western Europe. But this fact cannot be the only explanation for the decrease in low skilled work (Hansen 1998). We can find two more reasons in the introduction of information technology and the reorganisation of work.
Mean 1= no intervention, 2= one intervention, 3= two interventions
However, the demand for skilled labour, especially inside the service sector, is increasing. That might be for two reasons: the introduction of office-information technology and reorganisation. On one hand employees have to be able to use information technology. On the other hand the new organisation of work changes the content and variety of tasks to be fulfilled. Therefore executives are asking for more flexibility and extra functional qualifications (Meierhans 1998). At the same time 18,4% of firms have decreased the number of managers and more responsibility has been given to the employees within 74,2% of organisations. Also participation and autonomy at the workplace have increased (55,9% and 54,2%).
The practical implementation of strategies can also tell us about changing work roles, skill requirements and employment. As many enterprises are no longer sited at a single home base, changing organisations involves work in different countries being connected through the global organisation. Results shows that a certified training becomes an important job opener (Hansen 1999a). Furthermore a wide range of competencies is asked by the firms. Multiskilled people should improve a company's capacity to respond to fluctuation in demand. Therefore high flexibility in fulfilling different working roles or in working hours is also needed. A structural change in the nature of work is standing behind this current phenomenon. Work organisations are moving from control to autonomy. Scientific management has lost its efficacy in practice. Instead of external control upon the workforce the management uses self-control of the employees (c.f. Voß & Pongratz 1999). With the autonomy given by the management comes the expectation of high loyalty towards the firm. Inside the organisation a general structural change of leading and working might also take place. The change from scientific management to self organizing: from the principal of control to the principal of autonomy.
Maybe Schreyögg & Noss (1994) are right that at least in some firms a shift from structural to personnel management is taking place. It is not yet clear, though, if we can talk about a new general management shift away from scientific management. Empirically we find different kinds of management styles side by side. New post-modern management techniques do evolve but at the same time the very old tradition of steering and control is also practised (Hansen 1999b). This very fact makes it difficult to define one type of perfect qualificational profile. The qualificational demands of the workforce is highly related to the organisational change taking place.
Finally, the interrelationships between these strategies warrant some analysis. Firstly we can admit that most are highly significantly related to each other (see next table).
The strongest correlation of .521 exists between technical-information technology and office-information technology. That means that the introduction of IT is part of a general IT-strategy. A firm might have a specific technical standard which correlate in different units of the enterprise. IT do correlate very much with human resource management such as investment in training of the employees (.335 or .369) and lower wage costs (.269 and .324). Both do higher correlate with the introduction of office-IT than technical-IT.
Outsourcing seem to be a strategy which is only weakly related to other strategies. The only high correlation of .426 is between outsourcing to foreign countries and outsourcing inside the country. If a firm practises outsourcing, it probably applies the main strategy, which is a concentration on its core competences.
As assumed reorganisation correlates highly with human resource management and also with the introduction of office-IT (.356). Last fact was also found in qualitative research: IT introduction and reorganisation were often used together in business reengineering process (Hansen 1999). If reorganisation is not connected to any IT measures it is more like restruc-turing the organisation e.g. decreasing hierarchy. A changing organisation not only changes its work organisation, it also changes its human resource management. Human resource managementstrategies occur in conjunction with strategies of organisational change. We find that reorganisation correlates with training of employees (.442), with lower wage costs (.411) and flexibility of working time and pay (.331). The changes of work should therefore always be discussed in addition to the actual organisational changes that have taken place.
We have identified the most important business strategies which were conducted in the nineties. Which was introduction of information technology, training of employees, reorganisation and increasing flexibility of working time and pay. Organisational changes occur in conjunction with new strategies in human resource management.
We cannot really tell which strategies affect each other. But we can prove that they are significantly correlated. At this point we should also come back to the very idea of patterns. The consistence of strategies indicates patterns of organisational change. Even without a causal direction, which would have enable us to make predictions of future qualificational demands, we might use this result to build up scenarios. Scenarios can always be useful in decision-making and socio-political policies. If we gain the ability to build up scenarios we could specify work changes for different industries, small, medium and big size companies or various inter-organisational relations. To get more detail informations about these specific changes further analyses is needed and planned. Also it would be appreciable to use the same concept in organisational research in different countries so that cross comparing of results gets possible.