Read the case study below and answer ALL the questions that follow. 

The Alternative Workplace: Changing Where and How People Work On September 20, 1994, some 32,000 AT&T employees stayed home. They weren’t sick or on strike. They were telecommuting. Employees ranging from the CEO to phone operators were part of an experiment that involved 100,000 people. It’s the purpose? To explore how far a vast organization could go in transforming the workplace by moving the work to the worker instead of the worker to work. Today AT&T is just one among many organizations pioneering the alternative workplace (AW)—the combination of non-traditional work practices, settings, and locations that are beginning to supplement traditional offices. 

This is not a fad. Although estimates vary widely, some 30 million to 40 million people in the United States are now either telecommuters or home-based workers. What motivates managers to examine how people spend their time at the office and where else they could work? The most obvious reason is cost reduction. Since 1991, AT&T has freed up some $550 million in cash flow—a 30% improvement—by eliminating offices people don’t need, consolidating others, and reducing related overhead costs. Through an AW program called the Mobility Initiative, IBM is saving more than $100 million annually in its North American sales and distribution unit alone. Another reason is the potential to increase productivity. Employees in the alternative workplace tend to devote less time and energy to typical office routines and more to customers. At IBM, a survey of employees in the Mobility Initiative revealed that 87% believe that their productivity and job effectiveness has increased significantly. The alternative workplace also can give companies an edge in vying for—and keeping—talented, highly motivated employees. American Express president and COO Kenneth I. Chenault says that AmEx’s AW initiatives help the company retain experienced employees who find the flexibility to work from home especially attractive. Finally, AW programs are beginning to offer opportunities to capture government incentives and avoid costly sanctions. Many communities are easing zoning rules to enable more residents to establish home offices. In addition, companies are meeting Clean Air Act requirements—and avoiding hefty fines—through regional workplace strategies with extensive AW components. 

Finally, tax codes may change to enable more employees to deduct home office costs. The potential benefits are clear. But at the same time, AW programs are not for everyone. Indeed, such programs can be difficult to adopt, even for those organizations most suited to them. Ingrained behaviors and practical hurdles are hard to overcome. And the challenges of managing both the cultural changes and the systems improvements required by an AW initiative are substantial. How should senior managers think about AW programs? What criteria determine whether the alternative workplace is right for a given organization? What are the most common pitfalls in implementation? The lessons learned by managers who have successfully launched such programs and by those who are struggling to do so suggest that the best place to start is with a clear understanding of the many forms an alternative workplace can take. A Spectrum of Options Different companies use different variations on the AW theme to tailor new work arrangements to their own needs. To one company, for example, establishing an alternative workplace may mean simply having some workers on different shifts or travel schedules share desks and office space. AT&T determined that for some groups of employees, up to six people could use the same desk and equipment formerly assigned to one. The company now has 14,000 employees in shared-desk arrangements. Replacing traditional private offices with open-plan space is another option. In such arrangements, a company typically provides team rooms and workstations in open areas. Free-address facilities are a variation of that format. As Jill M. James, director of AT&T’s Creative Workplace Solutions initiative, describes them, “You are assigned to one facility, but you can move around and choose a variety of work settings during the day. You don’t have to log in or put your name tag on a specific workspace. And everyone can find you because your phone, pager, and PC go with you.” Some companies have embraced the concept of “hoteling.” As in the other shared-office options, “hotel” workspaces are furnished, equipped, and supported with typical office services. Employees may have mobile cubbies, file cabinets, or lockers for personal storage; and a computer system routes phone calls and E-mail as necessary. But “hotel” workspaces are reserved by the hour, by the day, or by the week instead of being permanently assigned. In addition, a “concierge” may provide employees with travel and logistical support. At its most advanced, “hotel” workspace is customized with individuals’ personal photos and memorabilia, which are stored electronically, retrieved, and “placed” on occupants’ desktops just before they arrive, and then removed as soon as they leave. Satellite offices are another form of alternative workplace. Such offices break up large, centralized facilities into a network of smaller workplaces that can be located close to customers or to employees’ homes. 

Satellites can save a company up to 50% in real estate costs, diversify the risk of overconcentration in a single location, and broaden the pool of potential employees. Some are shells—sparsely furnished and equipped with only basic technology; others are fully equipped and serviced. Satellites are generally located in comparatively inexpensive cities and suburban areas. They often have simpler and less costly furnishings and fixtures than their downtown counterparts. Telecommuting is one of the most recognized forms of the alternative workplace. Telecommuting—that is, performing work electronically wherever the worker chooses—generally supplements the traditional workplace rather than replacing it. At IBM, however, telecommuters comprise an entire business unit. And at PeopleSoft, telecommuting is the dominant style of work throughout the entire company. General Dennis J. Reimer, the U.S. Army’s chief of staff, offers compelling insight into what an executive can do from a remote location. Reimer travels with a laptop and routinely communicates by E-mail with 350 general officers and 150 garrison commanders around the world. Using a Web-based network called America’s Army On-line, which also includes an intranet chat room similar to those offered through commercial providers, Reimer can raise issues with his officers and receive advice on key decisions, often within hours. “The network allows me to be productive and to maintain a pulse on what is happening whether I’m in Washington or overseas,” Reimer says. “It not only saves travel costs but also enables collaborative teamwork across organizational and geographic boundaries around the globe. Gradually, this is changing the culture from one in which ‘my information is power to one in which ‘sharing is power.’” 

The U.S. Army’s General Reimer rapidly receives online advice from officers around the globe. Home offices complete the spectrum of AW options. Companies vary widely in their approaches to home offices. Some simply allow certain employees to work at home at their own discretion and at their own expense. Others—such as AT&T, IBM, and Lucent Technologies—provide laptops, dedicated phone lines, software support, fax-printer units, helplines, and full technical backup at the nearest corporate facility. One major company goes still further by providing employees who work at home with a $1,000 allowance for furnishings and equipment to be used at their discretion. Most organizations find that a mix of AW options is better than a one-size-fits-all approach. Indeed, the very concept of the alternative workplace means tailoring the program to an organization’s specific needs. AT&T’s Creative Workplace Solutions strategy, for example, combines three options: shared offices, telecommuting, and virtual offices. These options can accommodate nearly all of AT&T’s office-based functions. Can you overcome the external barriers to an AW program? Even if the work is suited to an AW format and managers and employees alike are amenable to change, physical and logistical barriers may exist. If space is at a premium in employees’ homes—for example, if many employees live in small apartments—then an AW initiative that calls for people to work at home may not be feasible. This is a key consideration in U.S. cities and in most countries abroad. In Japan, for instance, there simply is no “swing” space in most employees’ homes that could be used as office space; to accommodate a home-office initiative there, employees would have to sacrifice living space. Conducting employee focus groups at the exploratory and planning stages of an AW initiative can uncover such concerns effectively. 

 

QUESTION 1 (20 Marks) In the context of the case study, appraise the significance of various forms of Alternative Workplace (AW) initiatives and outline ways that managers may use to determine whether the alternative workplace is suitable for the organization.

QUESTION 2 (20 Marks) With reference to the case study and relevant theory, examine the merits and demerits of using an alternative workplace program and advise modern-day managers on how to implement an alternative workplace program. Apply suitable examples to support your discussion.

Source: https://hbr.org/1998/05/the-alternative-workplace-changing-where-and-how-people-work