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The Changing Nature of Organizations, Work, and Workplace
Last updated: 12-15-2010
Imagine you went to sleep and woke up to a work day in 1960. How different is your work life today, compared to what it was 40 years ago? Clearly, there would not be a Starbucks on every corner or a cell phone in every pocket—but what else has changed and why?
In today's world, the structure, content, and process of work have changed. Work is now:
- more cognitively complex
- more team-based and collaborative
- more dependent on social skills
- more dependent on technological competence
- more time pressured
- more mobile and less dependent on geography.
In today's world, you will also be working for an organization that is likely to be very different due to competitive pressures and technological breakthroughs. Organizations today are:
- leaner and more agile
- more focused on identifying value from the customer perspective
- more tuned to dynamic competitive requirements and strategy
- less hierarchical in structure and decision authority
- less likely to provide lifelong careers and job security
- continually reorganizing to maintain or gain competitive advantage.
This Resource Page explores the changing nature of organizations and work, the drivers behind the changes, and the consequences for workers and the workplace.
A. The Key Drivers for Changing Nature of Work
Although many factors ultimately contribute to the changing patterns of work, organizational theorists point to two key drivers:
- Increasing pressures on organizations to be more competitive, agile, and customer focused—to be a "lean enterprise."
- Communication and information technology breakthroughs, especially mobile technologies and the Internet that enable work to be separated from time and space.
Changes in Organizational Focus: What does it Mean to be Lean?
The Lean Enterprise model was introduced to the world by Toyota in the 1970s. Since then, it has fueled changes in organizations across the globe, particularly—but not exclusively—in manufacturing and product development.
The key principles of Lean Enterprise (or "lean thinking", as it is sometimes called) are:
- Define value from the customer's perspective.
- Identify internal activities and processes that add value for the customer and identify linkages between them (the "value chain").
- Eliminate non-value added activities (or "waste") across the organization.
- Reduce waste and inefficiencies in support (e.g., overhead) functions.
The lean enterprise principles enabled many organizations to respond more rapidly to the marketplace by reducing cycle time, developing mass customization processes, and supporting continual change and innovation.
Creating the Lean Machine: Changes in Organizational Structure and Relationships
Adopting lean principles and lean thinking has led to numerous changes in organizational structure to improve the efficiency of internal processes, with a goal of eliminating waste and defining customer value.
These changes have been supported and enabled by transformations in information and communications technology, especially the Internet and mobile computing and communication devices.
Key organizational changes include:
- Reduced hierarchical structure—Hierarchies are cumbersome and cannot respond quickly to changing market demands, such as pressures for reduced cycle time and continuous innovation. Hierarchies are being replaced by cross unit organizational groupings with fewer layers and more decentralized decision making.
- Blurred boundaries—As organizations become more laterally structured, boundaries begin to breakdown as different parts of the organization need to work more effectively together. Boundaries between departments as well as between job categories (manager, professional, technical) become looser and there is a greater need for task and knowledge sharing.
- Teams as basic building blocks—The move toward a team-based organizational structure results from pressures to make rapid decisions, to reduce inefficiencies, and to continually improve work processes.
- New management perspective—Workers are no longer managed to comply with rules and orders, but rather to be committed to organizational goals and mission. The blurring of boundaries also affects organizational roles. As employees gain more decision authority and latitude, managers become more social supporters and coaches rather than commanders.
- Continuous change—Organizations are expected to continue the cycles of reflection and reorganization. However, changes may be both large and small and are likely to be interspersed with periods of stability. Kling and Zmuidzinas identify three types of change—"metamorphosis" (far reaching, fundamental change), "migration" (shifts toward a new form), and "elaboration" (changes that enhance some aspect of work).
B. How Work is Changing for Individuals and Groups
Over the past two decades, a new pattern of work is emerging as the knowledge economy realizes the full potential of both new technologies and new organizational models. The changes fall into the following domains:
- Cognitive competence
- Social and interactive competence
- The new "psychological contract" between employees and employers
- Changes in process and place
Although these domains are discussed separately, they overlap. We briefly discuss the overlaps, where they exist, and point to the benefits and concerns the new work patterns present for workers and managers.
Cognitive workers are expected to be more functionally and cognitively fluid and able to work across many kinds of tasks and situations. The broader span of work, brought about by changes in organizational structure, also creates new demands, including:
- Increased complexity of work—Workers need to know more, not only to do their jobs and tasks, but also to work effectively with others on teams. Many knowledge-based tasks require sound analytical and judgment skills to carry out work that is more novel, extemporaneous, and context based, with few rules and structured ways of working. Although demand for high cognitive skills are especially prominent in professional, technical, and managerial jobs, even administrative tasks require more independent decision making and operational decision making.
- Continuous competency development—Not only do workers need to keep their technology skills up to date, they need to be continuous learners in their knowledge fields and to also be more conversant with business strategy. Time to read and attend training classes is no longer a perquisite of only a few, it is essential for all workers.
- Different ways of thinking—Rosabeth Kantor argues that cross-functional and cross boundary teams require "kaleidoscope thinking," the ability to see alternative angles and perspectives and to create new patterns of thinking that propel innovation. Workers also need to be able to synthesize disparate ideas in order to make the cognitive leaps that underlie innovation.
Cognitive Overload: The Cost of Complexity
Vastly increased access to information has made work both easier and more difficult. The ease comes from ability to rapidly locate and download information from diverse web sites. The difficulty comes with the need to consume and make sense of new information in a timely fashion. Information overload, coupled with time pressures and increased work complexity, lead to what psychologists call "cognitive overload syndrome (COS)." Symptoms of COS include stress, inability to concentrate, multitasking, task switching, and a tendency to focus on what is easy to do quickly rather than what is important.
Social and Interactive Competence
In a 2001 report on the changing nature of work, the National Research Council called attention to the importance of relational and interactive aspects of work. As collaboration and collective activity become more prevalent, workers need well-developed social skills—what the report calls "emotional labor."
Good social skills are necessary for:
- Team work and collaboration—Conflict resolution and negotiation skills are essential to collaborative work. Conflicts often occur about group goals, work methods, assignments, workloads, and recognition. Team members with good conflict and negotiation skills are better equipped to deal openly with problems, to listen and understand different perspectives, and to resolve issues in mutually beneficial ways.
- Relationship development and networking—Sharing important information, fulfilling promises, willingness to be influenced, and listening are building blocks of reciprocity and the development of trust. When workers trust one another, they are more committed to attaining mutual goals, more likely to help one another through difficulties, and more willing to share and develop new ideas.
- Learning and growth—Many organizations strive to be learning centers—to create conditions in which employees learn not only through formal training but through relationships with coworkers. Learning relationships build on joint problem solving, insight sharing, learning from mistakes, and working closely together to aid transmission of tacit knowledge. Learning also develops from mentoring relationships between newcomers and those with experience and organizational know-how.
The Costs of Collaborative Environments
In a collaborative work setting, the fate of individuals is inextricably bound to collective success. Dependence on others for one's own success is often uncomfortable. As Susan Mohrman and Susan Cohen write in a chapter from The Changing Nature of Work:
"We have been socialized to value individual responsibility and individual achievement, and feel discomfort with the thought of relying on others."
Comments about the fear of not having individual efforts recognized are common in the literature on team work.
Collaboration and relationship development also take time and effort. Understanding coworkers' perspectives and "thought worlds" requires time spent listening, integrating, and synthesizing. For those workers recognized as both knowledgeable and approachable, the demands of interaction may be especially high.
C. The New Psychological Contract
As work changes, so does the nature of the relationships between employees and employers. In the new work context, the informal, "psychological contract" between workers and employers—what each expects of the other—focuses on competency development, continuous training, and work/life balance. In contrast, the old psychological contract was all about job security and steady advancement within the firm. As already discussed, few workers expect, or desire, lifelong employment in a single firm.
As job security declines, many management scientists see clouds on the horizon, including:
- Corporate indifference—Shoshana Zuboff and James Maxmin, in The Support Economy, describe a new individualism among U.S. workers. These new individuals are invested in "psychological self determination." They desire participation, expression, identity, and quality of life—all values which are espoused by organizations, but largely ignored in practice as organizations continue to focus on reducing fixed labor costs.
- Reduced loyalty and commitment—With little expectation for advancement, workers feel less committed to organizational goals and more committed to their own learning and development. The knowledge and technological skills that employees bring with them to the workplace are transportable and are not lost when a new job is taken.
- Increased time burdens—Years of downsizing and outsourcing have produced what Lesie Perlow calls a "time famine"—the feeling of having too much to do and too little time to do it. In order to keep up with workloads, many workers are spending longer hours at work, according to reports by the Bureau of Labor Statistics and the Center for Workforce Development.
- Flexible work arrangements do not keep up with employee preferences—The Work Trends 2000 report found that 74% of workers were not allowed flexible hours and work arrangements (such as telecommuting). Those with flex hours have limited freedom regarding when and where to work. The vast majority of workers have to commit to a specific day to work at home or a specific day to take off if they work four10-hour days.
D. The Changing Workplace
The changing workplace is driven by the organizational issues described above and enabled by technologies that support mobility and easy access to information. These pressures and opportunities, however, have not resulted in a specific new workplace model. Many models and ideas exist concurrently, with designs depending upon the organization, its work practices, culture, and customers. Table 1 highlights key drivers, solutions, and potential issues raised by the solution.
Table 1. Drivers, Solutions, and Issues for the Changing Workplace
|Drivers||Workplace and technology solutions||Issues and concerns|
|Increased use of teams and cross unit work; more pressure for communication and information flow||
|Greater use of dispersed work groups—often global||
|Continual reorganization and restructuring||
|Reduced costs/more efficient space use||
|Improved quality of work life and attraction of new workers||
Denver Federal Center, Denver, Colorado. Owner: U.S. General Services Administration (GSA)
Photo 1. The new daylit entry space in the GSA building at the Denver Federal Center creates not only a positive impression, but also a central social space where associates frequently encounter one another on their way to different areas in the building.
The Denver workplace project was responding initially to GSA's "Worldclass Workplace for a Worldclass Workforce" program to provide better work environments for associates and to ultimately attract and retain new workers. However, as the project developed, the GSA Public Buildings Service (PBS) team grew more interested in using the workplace as a catalyst for social change and the development of work relationships with the ultimate goal of improving responsiveness to customers.
- Improve internal working relationships, especially cross-group communication and collaboration
- Reduce workplace stress and increase the overall quality of life for GSA associates
- Use the workplace as way to show that PBS is a thought leader, not a follower, in workplace design
- Open spaces at central notes for spontaneous interaction
- More meeting spaces of a greater variety
- A centrally located café for meetings and lunch
- A new daylit entry space
- A "de-stress" space with pool table, ping pong, exercise room and lounge furnishings (all paid for by the staff through fundraising efforts)
Photo 2 (Left) The de-stress space (known as "The Pit") supports group social occasions, exercise, and pool playing during breaks. The furnishings and equipment in "The Pit" were provided through fundraising efforts by the staff.
Photo 3 (Right) The skylight café, located right off of the entryway, is used for informal meetings as well as lunchtime gatherings.
Outcomes for the Denver Project
A research program is currently underway to assess changes in social networks and communication behaviors, workplace stress, and workplace quality. Preliminary findings show that:
- Compared to other GSA workplaces, the new Denver workplace scored higher on a number of social outcomes as measured by a web-based survey administered by the University of California, Center for the Built Environment.
- A preliminary social network analysis conducted by researchers at the Pacific Northwest National Laboratory show that face-to-face interactions are significantly higher than virtual communications among associates in the space. The social network survey will be administered again when the final phase of the workplace renovation is completed.
Workplace stress research is currently underway. Physicians and psychologists at the National Institutes of Health are using innovative technologies to monitor stress over a 24-hour period and are also using behavioral sampling to gather periodic data on mood, activity, and location.
Cisco Systems, Connected Workplace Proof of Concept, San Jose, CA
Photo 4. The Connected Workplace enables Cisco employees to work alone or in small groups at workstations or in informal work areas.
(Copyright by Cisco Systems)
Like many other organizations today, Cisco came to the conclusion that their workplace environment was at odds with the way they worked. People were seldom at their desks. Meeting spaces were in short supply. Communication was ever more variable-face-to-face, instant messaging, desktop video, phone, e-mail. And work hours shifted dramatically as the need to work globally increased. With these changes in mind, Cisco created the "Connected Workplace." It is currently in the Proof of Concept phase with a new demonstration office space on their campus in San Jose.
- Encourage collaboration
- Reduce real estate costs
- Reduce infrastructure costs
- Accommodate different work styles
Photo 5. A long table next to the window serves as a work setting for both a small group and individuals working on their laptops.
(Copyright by Cisco Systems)
A flexible, collaborative workspace could improve productivity and increase employee satisfaction while reducing real estate space and costs by increasing user density (from "Cisco Connected Workplace Enhances Work Experience and Cuts Costs," www.cisco.com).
- Unassigned workspaces
- Increased number and variety of meeting spaces, from enclosed conference rooms and informal areas with comfortable chairs to a centrally located café
- Small individual workstations
- Highly mobile furnishings and space dividers
- Lockers for personal items
- Increased density; the space used for the POC would normally hold 88 employees compared to the 140 actually assigned to the workplace
- High visibility throughout the space
- High daylight and views to the surrounding outdoor landscape
Photo 6. A wireless Bluetooth headset, coupled with Cisco-developed software, enables workers to use their laptops to send and receive phone calls while they are working in ad hoc spaces in the Connected Workplace.
- Wireless infrastructure and wireless LANS
- Laptops and docking stations
- Cisco work support software for individuals and groups
- Cisco IP Communications Technology, including software that enables calls over PCs using wired or wireless headsets
- Mobile video conferencing tools and software for web meetings
- Interactive white boards
- Instant messaging, e-mail and voice mail
- Tools for enabling workers to quickly locate each other in different areas of the building
Although project evaluation is still underway, preliminary results show:
- Employees expressed generally high levels of satisfaction with the technologies, light, openness, and increased opportunity for collaboration
- Those who typically spent the most time at their desks were more challenged by the mobility
- Cost savings of 37% to 60% across categories such as rent, construction, furniture, cabling, and workplace services.
Building / Space Types
Accessible, Aesthetics, Cost-Effective, Functional / Operational, Productive, Productive—Integrate Technological Tools, Productive—Assure Reliable Systems and Spaces, Productive—Design for the Changing Workplace, Secure / Safe, Sustainable
- "A Few Thoughts on Cognitive Overload" by D. Kirsh. Intellectia, 1(30): 19-51, 2000.
- The Changing Nature of Work by A. Howard, Ed. San Francisco, CA: Jossey-Bass, 1995.
- The Changing Nature of Work: Implications for Occupational Analysis by National Research Council, Committee on Techniques for Enhancement of Human Performance: Occupational Analysis. Washington, DC: National Academy Press, 2001.
- Cisco Connected Workplace Enhances Work Experience and Cuts Costs by Cisco Systems, 2003. Available: www.cisco.com.
- Cisco IT Case Study/Real Estate/Cisco Connected Workplace Available: www.cisco.com.
- The Machine that Changed the World by J.P. Womack, D.T. Jones, and D. Roos. Old Tappan, N.J.: Macmillan, 1990.
- "The New Workforce Meets the Changing Workplace" by R. M. Ranter. In The Nature of Work: Sociological Perspectives. K.Erikson and S.P. Vallas (Eds). New Haven and London: Yale University Press, 1990.
- The Support Economy by S. Zuboff and J. Maxmin. New York: Penguin Group, Viking Press, 2002.
- "Technology, Ideology, and Social Transformation: The Case of Computerization and Work Organization" by R. Kling, and M. Zmuidzinas. Revue Internationale de Sociologie, 2-3: 28-56, 1994.
- The Time Bind by A. Hochschild. New York: Metropolitan Books, 1977.
- "The Time Famine: Toward a Sociology of Work Time" by L. Perlow. Administrative Science Quarterly, 44: 57-81, 1999.
- Tomorrow's Organization by S.A. Mohrman, J.A. Gailbraith, E.E. Lawler III, and Associates. San Francisco: Jossey-Bass, 1998.
- The Toyota Way by J. Liker. New York: McGraw-Hill, 2003.
- When People Get Out of the Box by S.A. Mohrman and S. G. Cohen. In The Changing Nature of Work. A. Howard (Ed). San Francisco, CA: Jossey-Bass, 1995.
- Work Trends, 2000. Nothing but Net: American Workers and the Information Economy by John J. Heldrich Center for Workforce Development, Rutgers University and Center for Survey Research and Analysis, University of Connecticut.