Journal of Organizational Behavior J. Organiz. Behav. 29, 995–1020 (2008) Published online in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/job.553
Balancing exploration and exploitation in alternative work arrangements: a multiple case study in the professional and management services industry JEAN-BAPTISTE LITRICO* AND MARY DEAN LEE Desautels Faculty of Management, McGill University, Montreal, Quebec, Canada
Summary
In this inductive study we investigate the local context surrounding professionals choosing to work on a reduced-load basis. We analyze qualitative data collected from key individuals (spouse, boss, co-worker, and HR manager) composing a network around several professionals working reduced load in the professional and management services industry. We describe the interactions in this network using the concepts of exploration and exploitation in four contexts (organization, workgroup, individual, and family). We also identify three emergent patterns of cross-level distribution of exploration and exploitation across contexts, labeled Solo Performance, Organic Fluid Adjustment, and Orchestrated Cooperation. Each of these patterns illuminates a specific form of interaction between the dynamics of exploration and exploitation across contexts. We examine the different outcomes of each pattern for the organization, the individual, and the family. Implications of the findings for theories of work-family interaction, organizational learning, and the organization of work in the professional and management services industry are discussed. Copyright # 2008 John Wiley & Sons, Ltd.
Introduction In the last decade organizations have increased employee accessibility to a wide variety of alternative work arrangements (AWAs) that give individuals greater flexibility to reconcile their work and personal lives (Bond, Galinsky, & Hill, 2002). These arrangements include reduced-load or part-time work, compressed work weeks, flex-time, flex-place, and flex-leaves. This trend has been driven by demographic changes in the work force, the increase in average work hours per week, and accumulating evidence that there are critical advantages that accrue to organizations when they offer family-friendly work environments and have employees who are able to achieve a reasonable work-life balance through offering a range of supports. For example, a recent review of the work-family literature (Eby, Casper, Lockwood, Bordeaux, & Brinley, 2005) found a number of empirical studies linking
* Correspondence to: Jean-Baptiste Litrico, Desautels Faculty of Management, McGill University, 1001 Sherbrooke Street West, Montreal, Quebec H3A 1G5, Canada. E-mail:
[email protected]
Copyright # 2008 John Wiley & Sons, Ltd.
Received 30 May 2007 Accepted 30 May 2007
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organizational support for work and family to employee outcomes such as higher job satisfaction and organizational commitment, as well as lower turnover rates. Although the professional and management services industry recognized early the importance of alternative work arrangements to retain its workforce (Hooks, 1996; Lee, Engler, & Wright, 2002a), recent research suggests considerable variability among firms in normalizing the use of such arrangements (Kossek & Lee, 2005). The professional literature reports a puzzling mix of pioneering successes along with persistent barriers met in efforts to integrate these new ways of working into the norms of professional practice, because of growing demands on professionals, and because of the difficulties in changing a professional culture equating commitment with long hours (Nancy, 2005; Susan & Thomas, 2002). The successful implementation of alternative work arrangements represents a vital challenge for professional services firms, and as such it provides a unique opportunity to study how professional firms engage in organizational learning around this issue. Indeed, from an organizational perspective, successfully managing alternative work arrangements requires balancing two forces that are opposite but complementary. On the one hand, to modify the work schedule and remuneration for some employees often implies some experimentation. For this reason, how a firm responds to requests for alternative work arrangements can be viewed as an example of how organizations react to new ideas and explore (Lee, MacDermid, & Buck, 2000). On the other hand, organizations strive to maintain efficiency and productivity from all their personnel, and the successful implementation of alternative work arrangements requires guaranteeing an adequate level of coherency with the rest of the organization and exploiting existing organizational routines and arrangements. Thus, alternative work arrangements exemplify the general challenge of balancing exploration of new opportunities and exploitation of established routines,1 two basic dynamics of organizational learning (March, 1991; Weick & Westley, 1996). The goal of this paper is to expand our understanding of the dynamics at work in the implementation of alternative work arrangements in the specific context of professional services firms, by examining how early reduced-load work arrangements were enacted in this industry. We look at a small number of cases through interviews with multiple stakeholders in order to gain a refined understanding of this complex phenomenon. Using the concepts of exploration and exploitation to probe the underlying dynamics of reduced-load work arrangements provides insight into the variation in organizational contexts and outcomes of this new way of working.
Theoretical Background Reduced-load work and work-life balance Several recent books and articles have examined reduced-load, or part-time, work among professionals and have found that positive outcomes can be realized by individuals and their families, as well as organizations (Barnett & Hall, 2001; Corwin, Lawrence, & Frost, 2001; Lee, MacDermid, Williams, Buck, & Leiba-O’Sullivan, 2002b; Meiksins & Whalley, 2002). Others have also been interested in job and workplace design or redesign strategies that facilitate employee personal needs being accommodated at the same time that organizational effectiveness is improved (Bailyn, Fletcher, & Kolb, 1997; Rapoport et al., 1996). However, few studies investigating experimentation with new ways 1 Note that these terms are used throughout this paper with a different connotation from common usage, where exploitation connotes abuse or unjust treatment and exploration means undertaking something new.
Copyright # 2008 John Wiley & Sons, Ltd.
J. Organiz. Behav. 29, 995–1020 (2008) DOI: 10.1002/job
BALANCING EXPLORATION AND EXPLOITATION IN AWAs
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of working explicitly address the question of the relationship between work and family or the question of how alternative work arrangements have an impact on work-life balance. The underlying assumption is that work-family conflict exists and that reduced-load work can help reduce the conflict and lead to better work-life balance (Lee, MacDermid, & Buck, 2002b). Yet several recent reviews have identified the shortcomings of traditional theoretical formulations around the relationships between work and family (e.g., spillover, compensation, and segmentation) and the limitations of the work-family conflict construct (Eby et al., 2005; MacDermid, 2005). Researchers have called for more explorations of ‘‘how’’ work and family interact and investigation of positive as well as negative influences between the two (Frone, 2003). They also suggest integrating perspectives from various levels of analysis (organizational, individual, and cultural) to uncover the complex relationships linking work and family (Kossek & Lambert, 2005; MacDermid, 2005; McComb, Woodward Barringer, & Bourne, 2004). Rothbard (2001) has concluded that we need new conceptual tools to move the research agenda forward on how to achieve a greater work-life balance.
Organizational learning and exploration/exploitation One possible framework that is relevant for use in examining the complex mechanisms linking work and family and promoting positive relations between the two is organizational learning. Students of organizations have distinguished exploration of new opportunities and exploitation of past successes as two opposite but complementary forces of organizational learning. Exploitation of established routines without creative disruptions prevents renewal of ideas and paradigms and ultimately leads to suboptimal stagnation. Conversely, continuous exploration of new opportunities without rationalization, development, and refinement prevents efficiency gains (March, 1991). Alternative work arrangements can be viewed as a manifestation of organizational learning, with individuals and organizations both being able to benefit from shared experience (Lee et al., 2000). At the nexus of individual particularities and organizational policies and requirements, such arrangements naturally call attention to multi-level mechanisms. Because they are the result of an individual negotiation with an organization, alternative work arrangements capture the dynamics of exploration and exploitation both at the individual level and at the organizational level of career management. In a previous study of reduced-load arrangements, Lee, MacDermid, and Buck (2000) used an organizational learning perspective, employing exploration and exploitation constructs to describe various organizational approaches to reduced-load arrangements. They defined three types of approach, denoting three paradigms of organizational learning: accommodation, elaboration, and transformation. The three paradigms ‘‘can be viewed as representing firms arrayed along a continuum between exploitation and exploration’’ (p. 1220). The accommodation firms treat individuals seeking reduced-load work as exceptions and focus on the exploitation of already existing routines. Firms in this group are reluctant to implement new policies on reduced-load or to modify actual policies. While they do agree to create reduced-load positions, they are very careful not to create a precedent, and they tend to accommodate only star performers or long-time employees whose experience is highly valued. The elaboration firms try to combine openness to new, exploratory workload arrangements with programs and policies which institutionalize and formalize the organization’s response to such initiatives. Finally, the transformation firms are characterized by the greatest openness to explore new arrangements, without necessarily having formal, centralized guidelines. Requests are most likely handled at a local level in a constant forward movement of experimentation and adaptation. This application of organizational learning theory and the dynamics of exploration and exploitation has shed some light on differences in organizational response to employee requests for reduced-load work arrangements. However, recent research has discussed on a theoretical basis how work-group Copyright # 2008 John Wiley & Sons, Ltd.
J. Organiz. Behav. 29, 995–1020 (2008) DOI: 10.1002/job
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level dynamics may mediate the effect of organizational-level variables on individual work arrangements (Lawrence & Corwin, 2003; McComb et al., 2004). For example, Lawrence and Corwin (2003: 929) have argued that ‘‘the pattern of interactions and relationships that characterize the local work context’’ can have a strong influence on the legitimacy of part-time work arrangements, above and beyond more macro factors. Consequently, researchers have called for a more detailed description of the context surrounding part-time work, because of this potential mediating role of contextual variables. In this paper our goal is to provide such a detailed description of the local work context of several reduced-load arrangements, by examining the way such arrangements are viewed and lived not only by the individual professionals but also by other stakeholders around them, at work and at home, who are affected by the new arrangement. We use the concepts of exploration and exploitation as a new conceptual lens to describe how people adapt alternative work arrangements across different domains. The assumption motivating this research is that a more focused, in-depth examination of individual cases could possibly reveal more about the interplay between work and family than a same-level or quantitative analysis.
Alternative work arrangements in the professional and management services industry The professional and management services industry is a particularly interesting context to investigate the dynamics at work in alternative work arrangements for several reasons. First, it is characterized by a strong client focus, which is often interpreted as a potential hurdle to the successful implementation of alternative work arrangements. The problems encountered by professional services firms (PSFs) in the management of alternative work arrangements will arguably be representative of issues associated with professional services or client projects more generally. Second, in professional services firms, as in other knowledge intensive industries, personnel are recognized as the most important strategic asset (Nancy, 2005). The competition for intellectual capital is fierce among professional services firms, and issues of work-life balance are becoming key to retaining talent. Finally, and most importantly, the specific structure and culture of professional services firms suggest contradictory factors impacting the adoption of alternative work arrangements. On the one hand, professionals in partnership firms often work on time-bounded projects and enjoy a larger amount of autonomy and independence than employees of traditional bureaucracies (Greenwood, Hinings, & Brown, 1990). Furthermore, it is common practice to use teams on large projects and to assign professionals to multiple projects according to expertise needed and to calculate by percentages the contribution of individual team members. These characteristics of the way work is organized and structured in PSFs would seem to make alternative work arrangements at least theoretically easier to implement. Yet on the other hand, the strong normative culture in professional firms of doing whatever it takes to meet client needs and the implications for many aspects of the work and personal lives of professionals, has been well documented (Covaleski, Dirsmith, Heian, & Samuel, 1998; Donnelly, 2006). Professional and management services firms are often described as having a strong tradition of ‘‘total commitment to work’’ and ‘‘long hours.’’ The emergence of reduced-load arrangements among professionals potentially threatens this industry culture. As Lee, Engler, and Wright (2002a: 174) stated, reduced-load arrangements ‘‘challenge existing assumptions about what it means to be a professional, that is, having a strong commitment to a ‘‘calling’’, for example, working long hours, going beyond the call of duty to serve client needs.’’ A fine-grained investigation of how reduced-load arrangements are enacted in professional management service firms is likely to advance our understanding of whether and how professionals manage to resolve this tension between professional identity and work-life balance. Copyright # 2008 John Wiley & Sons, Ltd.
J. Organiz. Behav. 29, 995–1020 (2008) DOI: 10.1002/job
BALANCING EXPLORATION AND EXPLOITATION IN AWAs
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Methods In this section we start by describing the sample of firms and individual professionals studied and how they were selected. We then explain the strategies used to reduce and code the data and conduct data analysis.
Firm sample The data for this paper were gathered from 1996 to 1998 for a large study of 87 professionals in 43 firms voluntarily working on reduced load for family and/or lifestyle reasons (Lee et al., 2000). The original 43 firms represented a wide range of industries, including financial, manufacturing, pharmaceuticals, telecommunications, natural resources, hotel and food, consumer goods, etc. A special effort was made to include cases from the professional and management services sector as well, because an earlier pilot study focused on reduced-load work among doctors, lawyers, and accountants had indicated that professional services firms were experiencing pressure to offer alternative work arrangements as a result of the changing demographics of the work force (the pilot study sample included two of the ‘‘Big Five’’2 largest professional services firms worldwide). Consequently, two different ‘‘Big Five’’ firms were included in the sample of firms in the large study, plus one additional smaller PSF. This paper is based on the sub-sample of three PSFs in the large study. The data were collected at a time when alternative work arrangements were just beginning to be implemented in PSFs. The professionals interviewed can be viewed as pioneers. For the most part, they had no role models to observe, no previous examples to refer to, and they had to negotiate their arrangements individually. The crafting of individual arrangements itself was clearly a manifestation of exploration. This makes those cases more relevant to study the dynamics of exploration and exploitation. Among the three firms participating in this study, two (named here as firms A and B) were, as mentioned, among the world’s largest (‘‘Big Five’’). In 1997 firm A had recently implemented a formal reduced-load policy as part of an overall strategy to promote the advancement of women—to increase the percentage of female partners world-wide and to stem the tide of increasing voluntary turnover at the senior manager level. At that time firm A was not a leader in the implementation of alternative work arrangements, but neither was it a laggard. One of the other top five firms that had participated in the pilot study above was the first among the ‘‘Big Five’’ to offer formal reduced-load work arrangements several years earlier. Firm B was among the last two of the ‘‘Big Five’’ to implement formal, official policies or programs for reduced-load work. Although official policy is important to report, it must be noted here that often policy follows practice, and that sometimes practice is not reflected in policy. In fact in firm A, only two of the four cases studied were initiated after the formal policies were introduced. The other two were negotiated on an individual basis between the accountant/consultant and his or her Partner. The negotiation of agreeable terms relative to per cent of load reduction (e.g., 60 vs. 80 per cent) and concomitant changes in workload and tasks, effects on benefits (e.g., firm contributing to medical insurance as if individual still full-time vs. proportional decrease in firm contribution), effects on bonuses or other performancebased compensation, promotion opportunities, scheduling of work time in the office, were highly variable and generally fluid by mutual agreement and according to changing individual and firm requirements at any given point in time. Even after formal, standardized policy was implemented, the 2
The (then) Big Five were: Arthur Andersen, Price Waterhouse, KPMG, Ernst & Young, and Deloitte Touche.
Copyright # 2008 John Wiley & Sons, Ltd.
J. Organiz. Behav. 29, 995–1020 (2008) DOI: 10.1002/job
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individual reduced-load work arrangements studied in firm A were clearly highly dependent on local office Partner and HR support. Two of the cases were in one large metropolitan area and the other two were in another part of the country in another metropolitan area. In 1997 firm B was a reluctant player in the area of promoting work and family benefits or in instituting formal policies or procedures that might increase women’s advancement potential. There was no formal, standardized policy specific to reduced-load work arrangements. Reduced-load work in the three cases in firm B were individually negotiated on an ad hoc basis, one in an office of a mediumsized city, and two in different offices in a large metropolitan area. Firm C was a small, private professional services (actuarial) firm, and in 1997 it had no formal policies or programs aimed at helping employees reconcile work and family commitments. However, it prided itself on being responsive to professionals’ requests for different ways of working (e.g., telecommuting, reduced-load work to pursue an advanced educational degree, etc.), as there was intense competition in the industry and in the specific geographical locale for the ‘‘best and the brightest,’’ and senior management as well as HR leadership recognized the critical importance of recruitment and retention of professionals. There was no expectation that formal policies would be needed, but that firm C would continue to accommodate individual requests as needed.
Individual sample A total of eight individual cases of reduced-load work were studied in the three firms described above. These target participants were recruited as part of the larger study, using personal contacts with human resources and work-life program administrators and cold calls to employers. Of the professionals approached, 100 per cent agreed to participate. As the study was conceived as theory generation rather than hypothesis testing, we sought a heterogeneous sample, using a theoretical sampling approach with specific criteria guiding inclusion of participants in a variety of types of jobs, sectors, and family situations and facing a variety of challenges and achieving different levels of success with the reducedload arrangements. Table 1 provides an overview of the eight cases, including information on individual and work characteristics. The distinction made between professionals and managers was simply whether the participant was responsible for the work of others. The most common impetus for pursuit of reducedload work among the eight cases was the birth of children and associated difficulties reconciling career and family given the long hours and demanding workload typical of professionals in this industry. In one case, the individual pursued reduced-load work as part of a plan of gradual retirement.
Data collection This research project was designed to provide a rich and detailed understanding of how reduced-load arrangements are enacted and implemented, in organizations and in the personal lives of professionals. Data were collected using in-depth qualitative interviews of multiple stakeholders in each reduced-load arrangement in order to better capture a phenomenon that is complex in nature and that can be perceived very differently by different stakeholders. For each of the eight cases, five individuals were interviewed: the individual professional on reduced load, the spouse or partner, the professional’s senior manager, one co-worker of similar hierarchical level, and the human resource representative of the local office. This set of five interviews for each case provides multiple perspectives on each work arrangement. Research has shown that professional services firms often use forms of control that combine formal and informal mechanisms, and that extend far into the personal life of professionals Copyright # 2008 John Wiley & Sons, Ltd.
J. Organiz. Behav. 29, 995–1020 (2008) DOI: 10.1002/job
Copyright # 2008 John Wiley & Sons, Ltd.
A
A A A B B B C
Teresa Lois Karen Sam Irene Helen Diane
F F F M F F F
M
Work arrangement
Senior Principal, Manager (1) Consulting Director, Finance Manager (3) Senior Manager Professional Senior Manager Professional Partner, Consulting Manager (11) Partner Manager (2) Partner Manager (10) Senior Manager, Manager (3) Actuary 16 11 .75 34 10 19 12
17 8 2 .75 1 3 12 9
1.5 55 60 55 40 67 43 55
80 30 50 24 20 55 38 40
50
75 80 60 50 80 80 80
80
1 1 0 0 0 1 1
0
2 (7) 1 (2) 2 (6) 0 1 (0.1) 2 (10) 3 (2)
2 (4)
Number Professional Number of of children Weekly Weekly or manager Years (age of promotions hours hours with Years (number of subordinates) firm on RL before RL after RL % RL while on RL youngest)
Job characteristic
Firm Gender Job title and area
Michael
ID
Case
Table 1. Individual case characteristics
Contract
