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Telecommuting and Organizational Change Barbara M. Farwell and David C. Farwell University of Hawaii at Manoa, Dept. of Decision sciences, 2404 Maile Way, Honolulu. H196822, USA

Telecommuting, working at home through a data terminal /micro processor, is feasible with today's technology. However, it has profound consequences for individuals, organi- zations, and society, particularly in widespread application. This paper explores the major impacts of telecommuting and suggests further areas for research.

Keywords: Telecommunications, Organizational change, In- dividual Status, Individual Role, Management of socio-technological change, Information Systems, MIS management, Home as workplace, Telecom- muting

David C. Farwell is an assistant profes- sor of Decision Sciences, College of Business, University of Hawaii at Manoa. He began teaching three years ago on completion of a career with the United States Air Force. As Chief of Cost Analysis for Pacific Air Forces, he built a number of Decision Support Systems and has continued research in this area in academia. His experience of working at home on his microcom- puter, combined with spouse Barbara's experience as a writer, prompted re- search on this article.

Barbara M. Farwell is a free-lance writer. Educated in political science, she has spent the past thirteen years participating in communi ty politics. At present she is concentrating on her writing, which she does at home in a workspace shared with her spouse David's microcomlauter.

North-Holland Computer Networks 8 (1984) 169-173

1. Introduction

Organizational structure and technology are closely related [16]. Thus in an age when technol- ogy is rapidly changing concepts of work, organi- zational structure will face increasing pressures to adapt.

One such pressure will come from telecommut- ing, in which information generated on a computer will be fed via telephone to an office at some distance. This will allow information workers the option of working from home.

Telecommuting is not a futuristic notion; it is already here. Companies such as Control Data Corporation, Arthur D. Little, Continental Bank of Chicago, Blue Cross of South Carolina, Apple Computer of Cupertino, California, have small numbers of employees working at home on com- puter terminals [6,13,15,17].

Telecommuting has been made possible by ad- vances in communications systems; environmental pressures could make telecommuting desirable, and in the future, perhaps necessary. Individual ex- penses for automobile commuting, office clothing, day care, and housing in urban areas could be eased by working at home. This could bring re- duced strain on transportation systems, pollution from automobiles, and energy used to maintain huge office complexes [2-4,6,12,15].

Additionally, telework at home could be ideal for those who are physically handicapped or who for other reasons - temporary illness or injury, maternity leave - find it difficult to come to work in a central office [12,13,15].

But, the effects of telecommuting on organiza- tional structure will be profound. Sheldon Brucker has written: "The technology and economics al- lowing for this communication revolution are so favorable that the major problem may not be feasibility or mechanical practicality, but rather the ability of corporate and individual work tradi- tions and attitudes to adapt as quickly" [4, p. 24].

Adaptation, however, implies fitting the organi- zation to the technology. Given the radical nature of telecommuting, we believe it more appropriate to plan for the control of its negative impacts in order to enjoy its positive aspects.

0376-5075/84/$3.00 ~ 1984, Elsevier Science Publishers B.V. (North-Holland)

170 B.M. Farwell, D.C Farwell / Telecommuting

Telecommuting will affect individuals and their organizations as well as the larger society. The magnitude of change foreseen suggests that any widespread implementation be carefully consid- ered by managers, social scientists, systems analysts. In this paper we raise some issues sur- rounding telecommuting that we believe such deci- sion-makers and researchers must address.

2. Pressures

2.1. Individual

The immediate impact of telecommuting would fall on the employee. While there have always been people who worked at home (writers, for example), these have been the exceptions. Al- though prior to the Industrial Revolution people were likely to work at home in "cottage industries," the advent of centralized production took them to work elsewhere [3,12]. Telecommuting now propo- ses another revolution in how and where individu- als work.

For at home there is no boss, no discipline enforced by the mere act of traveling to work and sitting at a desk or terminal. There is, instead, considerable and perhaps unfamiliar autonomy, the distractions of home (domestic pets, children, mail, unfinished projects), and the danger of be- coming workaholic when the lines between home and work inevitably blur [3,6,12,13]. Working at home requires a great deal of self-control.

A more serious pressure is the isolation of the individual: "Work groups occupy central positions in organi- zational life. They are the basic components com- posing organizations and the contexts within which workers work. Work groups structure work and coordinate and control human and technological resources; work groups act as political entities; work groups also constrain workers and provide them with opportunities for meeting their needs. Consequently, work groups are asked to satisfy technological, political, and humane criteria simultaneously." [5, p. 250]

When an employee becomes a telecommuter, the work group no longer provides a daily link to organizational life. This can be disruptive to the employee in terms of friendship and contacts, as well as in loyalty to the organization [12,13].

Furthermore, an individual's work role and be- havior, as well as concept of self, are strongly linked to the organization. " T o a considerable extent, the satisfactions and rewards individuals and groups draw from organizations are tied to statuses and roles within established frameworks of organizational activities." [8, p. 513] Equity theory establishes that a person will create a per- sonal system of total compensation (concept of self worth) in relation to a visible other [1,17]. It would appear that the equity comparator "other" is missing for the telecommuting individual. This may directly affect packages of compensation. And, study of military bureaucracy and its promo- tion mechanisms indicates that the extent to which an individual contacts peers and superiors who affect advancement is a dominant influence in promotion [11]. The lack of physical face-to-face contact experienced by the telecommuter may dramatically affect long-term promotion oppor- tunity.

Because telecommuting changes and rearranges organizational frameworks, its effects on the indi- vidual are far-reaching. So, too, are its effects on organizations.

2.2. Organizational

With telecommuting, the frameworks of organi- zational activities will undergo radical change in terms of the workplace itself, and its management. Telecommuting in its fullest embraces not just the low-level "keypuncher," but middle-level, skilled, and professional employees. If these people work at home, a different set of frameworks is inter- rupted. "Studies of role making among managers . . . show how, relatively early, superiors develop closer ties with subgroups of their subordinates; some subordinates are on the team while others are not." [14, p. 303]

The destruction of work groups and subgroups may leave a manager with a sense of loss of control. Employees can no longer be actually seen. They must be dealt with individually, and from a distance.

On the logistical side, the employee in the office has access to supplies and equipment ranging from paper clips to files; these will need to be available at home. An employer may find it necessary to manage these supplies in a different manner than is now practiced. And, if telecommuting becomes

B.M. Farwell, D.C. Farwell / Telecommuting 171

widespread, companies might find themselves with expensive, surplus office equipment and space [2,121.

A more serious question is that of the security of equipment used at home. Who is liable if an expensive terminal is stolen from a home? Or broken? Who is responsible for insuring and main- taining this equipment? [13] An employee may be understandably reluctant to take responsibility for the safety of his terminal, or to undertake the expense of house modifications necessary to have a terminal at home. Just as important, security of phone lines from home to office will either limit the type of communication sent over those lines or require the added expense of enciphering.

A further cost to the corporation are individual computer terminals with the modems and software necessary to transmit information to the home office [6]. At a central office, equipment can be shared. At home, each employee needs individual equipment and if a home terminal breaks the employee must have access to replacement equip- ment if productivity is to be maintained.

Federal, state, and local zoning and work laws may all play a role in telecommuting as definitions of work change [15]. At present, some businesses are moving their regular employees into their homes to work. But in other cases, they are hiring part-t ime employees to do very specific data processing tasks. Some of these part-t ime em- ployees could become "electronic freelancers," without loyalty to any one company; might a telecomputer for Company A free-lance for Com- pany B on A's terminal? [12,13]

Unions and businesses must address the prob- lems of at home employees in terms of benefits, OSHA * requirements, insurance. If employees can be treated not as employees but independent con- tractors, simply selling their services, these workers will have no or few benefits although they may work for only one company and are independent only in the theoretical sense. A further concern to unions may be the return to "piecework" systems where employees will have no hourly wages [12,13,15]. There is, then, the possibility of tension between a company's desire to reduce labor costs and its responsibility to those employees and to society.

* Occupational Safety and Health Administration.

The issues raised here could mean not only problems for organizations; they also indicate problems of community concern.

2.3. Societal

Telecommuting holds implications for society as well as for the individual worker and the workplace. Social scientists have, for the past several decades, deplored the sense of anomie in American society. Telecommuting could increase alienation, as people isolated by work in their homes lose the network of relationships in their workplaces. The handicapped and disabled among them could be more easily forgotten by society [131.

And if a business wishes to hire low-skilled workers for data processing jobs at home, there will be one group that may not get hired. Those who live in high-risk crime areas are unlikely to become telecommuters with expensive equipment in their homes. If low-skill, entry jobs begin to go only to telecommuters in secure neighborhoods, many will be shut out of a job market which others of their economic class have thus far successfully penetrated.

In a long-range projection, we might foresee that many city centers, already aging and in finan- cial trouble, would not attract new businesses if decentralization due to telecommuting became widespread. With jobs in homes, people would have no reason to live in, or even to visit, down- town. Use of mass transit systems would drop, further endangering their economic survival. Sub- urbs might become mini-cities where businesses locate to accomodate their telecommuters [12].

In the past, the long-ter m implications of tech- nological change on society have been overlooked. Action should be taken now to avoid this same error with telecommuting.

3. Solutions

How then can managers and employees within organizations cope with the radical changes of telecommuting?

The first task is to decide what jobs can be computerized, which of these could be accom- plished by telecommuting, which employees could

172 B.M. Farwell, D. C Farwell / Telecommuting

satisfactorily work at home, and how these employees will be managed.

Every organization must make its own determination of the first two factors based on many quantifiable criteria. The last two factors are not so easily quantified.

An individual chooses career and jobs that re- flect his or her own personality orientation. Fulfill- ment of individual needs can mean the difference between productivity and nonproductivity. Work- ing at home is not for everyone, even though he or she may be in a telecommuting-type job.

Productivity measurements must be redefined for telecommuting. While computer time can be logged through a terminal, productivity can also be measured in work produced, and in the quality, not quantity, of completed projects. (3,12,15)

The telecommuting worker may need more flexibility in job structure. Whereas in a central office workers may be in an assembly-line config- uration, in a decentralized system each employee may be more productive with an entire job to perform [3]. The teleworker also needs adequate support of office staff [15].

A further adjustment for telecommuters would be in the organization's reward system. Organiza- tions have systems of motivation and incentives for employees, because ". . . although systems based on self-control have been successful, incentives external to people must normally be present for willingness to perform to be assured." [7, p. 117] That is, even the motivated, highly-skilled worker at home needs incentives: freedom to do innova- tive work in addition to assigned tasks; autonomy to set his or her own working hours; assurance of being supported by managers back at the office.

The problem of isolation of the worker at home, both from the informal and formal organization of work, absolutely must be addressed. Of course, individuals have always had community and family associations to supplement work associations. But loss of a corporate relationship is serious. For this reason, telecommuting employees might be re- quired to come in to the office on a regular basis to meet their boss as well as those doing similar work [12]. Such meetings would remind the em- ployee of the corporate goals, of his or her belong- ing to a group with common interests, and would force interaction on work-related issues. These reg- ular meetings could encourage telecommuters to work together on problems and projects. They

would also assure employees that they are not "out-of-sight, out-of-mind."

Making these adjustments will not be easy. The most effective adjustments may come from joint efforts; that is, both managers and telecommuting employees can work out solutions to the problems touched on here. Such efforts, coupled with out- side consultant assistance if necessary, can help managers and employees reorganize the structural frameworks made obsolete by telecommuting. Hopefully this will lead not to competition for resources, but for cooperation in what will be most beneficial for the individual and the organization.

4. Conclusion

There are predictions that telecommuting, al- though sure to grow, will not involve more than 15-20% of American workers even by 1990 [6,12]. And for this to happen there must be growth in the information sector, growth in telecommunica- tions and microelectronics, growth in the use of personal computers, and outside pressures such as energy shortages [12]. But even if only 20% of the work force is working at home this involves a considerable number of people.

We have a tendency to get excited over new technology; we install it, then sit back to think what to do with it. Telecommuting - the whole concept of home as workplace - is as revolution- ary as the factory once was. This revolution "will shake the very foundation of how we manage, organize and evaluate work performance." [4, p. 23]

If we consider work design as ideological [9], as having impact on the very nature of human and organizational relationships, then it could be that we are ready for telecommuting only at the techno- logical level. "Social change . . . . is traditionally much slower than technological change." [13, p. 48]

We believe organizations will want to consider this new technology carefully. And, as with other changes," ... there is no reason for organizations to embark on all-or-nothing structural changes. They should build up a portfolio of activities which can be modified as opportunities and cir- cumstances dictate." [8, p. 513]

In the next few years, then, those who work on long-range plans for organizations must take tele-

B.M. Farwell, D.C. Farwell / Telecommuting 173

c o m m u t i n g i n t o c o n s i d e r a t i o n : n o t m e r e l y t h e

t e c h n i c a l a r r a n g e m e n t s b u t t h e o r g a n i z a t i o n a l , in-

d i v i d u a l a n d s o c i e t a l i m p l i c a t i o n s . T h e y m u s t w o r k

w i t h p e r s o n n e l a d m i n i s t r a t o r s , soc i a l s c i e n t i s t s , c i ty

p l a n n e r s , u n i o n l e a d e r s , a n d o t h e r m a n a g e r s to

d e v e l o p s t r a t e g i e s f o r c h a n g e . O t h e r w i s e w e all

m a y f i n d t h e n e w t e c h n o l o g i e s u s i n g us, i n s t e a d o f

w e u s i n g t h e m .

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