Concerned To Ensure Flexibility Of Labour Commerce Essay


This assignment is a part of course works for the module of Organizational behaviour which focuses on labour flexibility and its effects and consequences on an organization and employee itself. In this study report, we would concentrate on the group dynamics and organizational behaviour and human resource objectives to ensure the functional, distance, financial and numerical flexibility. This report stresses on today's employees, largely the younger group of employees and their style of working. To support the study and observations we would take a case of a very well known company and look at the traits of Human resource management as how it manages the flexibility of employees, and what are the challenges, constraints and comparative advantages amongst its competition

Introduction to Organizational Behaviour: Organization may be defined as social complex systems which adapt and cope up to survive and achieve end objectives and prosper. Organization from a management perspective is a planned, coordinated and purposeful action of human beings to construct or compile a common tangible or intangible product or service, with an actual purposeful structure with an objective to achieve its end goals and to create a value for its stakeholders, employees, its customers and for the community and organizational behaviour is a systematic study of a dynamics of employees or group of employees within an organization. Organizational behaviour is a study, an approach and field of management study which focuses on group dynamics, employee behaviour in an organization. Organizational behaviour is resistant to change due to human cognitive forces and defensive routines. It can be expressed as the product of confluence of several forces whose interaction and mutual adaption governs the evolution of organization over time.

Human resource management and Labour flexibility:

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Human resource management is defined as a planned approach to managing people efficiently and effectively for performance. It aims to establish a more open, flexible, and caring management style so that the employees and staff will be motivated, developed and managed in a way that they can and will give their best to support department's mission and organization's end objectives. It develops and brings out important values like teamwork, trust, care and development which helps the organization

Labour market flexibility is often portrayed as a key to the competitive success of the UK and US economies. Labour flexibility mainly relates to the peripheral group of employees (those who are not permanent group of employees). Since so many years now, the strategy for employment practice for Human resource people has been the quest for labour flexibility crucial for achieving the competitive success of an organization. Labour flexibility as very well explained by Atkinson (1984) in his model identified four types of job based flexibilities that an organization seeks from their employees or rather labour forces. The research made by him basically emphasized on how by increasing or decreasing the peripheral labour forces, an organization can adjust itself to the changes in demand. He pointed our four different flexibilities associated with organization and in context to labour. They are functional flexibility, financial flexibility, numerical flexibility and distancing flexibility. Thus labour flexibility is one of the prime objectives for a human resource manager to ensure that an organization is competitive and copes up with the demands, especially in this period of recession and cost cutting.

Why is it concern for human resource managers to ensure the labour flexibility??

Flexibility of employee skills, employee behaviours, and HR practices represent critical sub dimensions of HR flexibility and are related to superior firm performance. Results based on perceptual measures of HR flexibility and accounting measures of firm performance support this prediction. Whereas skill, behaviour, and HR practice flexibility are significantly associated with an index of firm financial performance, the authors find that only skill flexibility contributes to cost-efficiency. (Source: Temporal Flexibility: Management Strategies and Employee Preferences in the Retail Industry; by Stephen J. Deery, Journal of Industrial Relations, Vol. 36, No. 3, 332-352 (1994)). It is observed that there is strong relation between employee flexibility in an organization and employee's productivity for the organization. Thus it has become a critical step of strategy for human research personals while employing labour to offer optimum flexibility in terms of financial, numerical, and functional flexibility in an organization to attain the competitive edge and meet the demand and control its impact on an organizations performance. Let us take a look at what each type of flexibility means in brief.

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Functional Flexibility: Functional flexibility offers the flexibility to redeploy employees quickly to match the tasks required which can be achieved through use of workers core to the organization and through employing workers from external agencies such as subcontractors.

Numerical Flexibility: Numerical flexibility refers to company's ability to change the number of working hours of its employees in line with fluctuations with organizational demand for their labour which can be used by use of two peripheral groups. The first peripheral group which comprises of the fulltime employees and the other peripheral group which include part time employees on temporary basis rather than full time contracts.

Financial Flexibility: Financial Flexibility basically refers to pay flexibility, in which allows the pay to reflect the differences in supply and demand for different groups in labour market. This type of flexibility can be used to support functional and numerical flexibility.

Distancing Flexibility: Distancing flexibility refers to the organizations flexibility to replace permanent work contracts by replacing it with service contract by giving subcontracts to the external agencies and replacing contract of employment with the contract of service distancing the permanent workers from the organization.

Advantages and Disadvantages of Labour Flexibility:


Companies and firms become more competitive and efficient

Many employees will prefer flexible employment to suits their lifestyle

With increased labour productivity there could be an increase in output and exports. There could be a lower rate of natural unemployment and lower inflation.

Flexibility makes the economies more attractive to inward investment


Many low skilled workers will remain under skilled as due to flexibility patterns the part time and temporary staff may not get sufficient training from firms because they only have short term contracts.

Less job security and more stress which can lead to lower morale and less productivity of employees

There is a risk of "slash and burn" during an economic slowdown / recession as companies seek to cut their workforces aggressively during a downturn.

Let us now take an example of leading network system provider of world, CISCO SYSTEMS INC. which makes a constant effort and changes in managing changes vital for organization to keep itself to the peak of competition and maintain strong competitive advantage.





CISCO derived its name from the location of its origin SAN FRANCISCO. It was founded in year 1984, by group of alumni from Stanford University. Since then the engineers from Cisco have been leaders in development of internet protocol (IP) based networking service technologies.

Cisco is leader in designing and selling of hardware, software, networking and communication technologies and its products are distributed under five brands, namely Cisco, Linksys, WebEx, Iron Port, and Scientific Atlanta.

Cisco dominates the market for IP based networking equipment like routers, switches which can be and are use for direct data, voice and video traffic operations. Its other product comprise of remote access servers, internet conferencing systems, set-top boxes, IP telephony equipment, security systems and network services. Cisco sells its products mainly to the larger companies and enterprises and telecommunication service providers such as BT in U.K. but it also has a market in small businesses and consumers for which they design special range of products. This is functioned and channelled by its Consumer Business Group. In North America itself Cisco has sales of more than 50% of its overall sales.

Cisco enjoys a long history of creating market growth through investments. Direct investing and investment partnerships allow Cisco to gain visibility, knowledge and experience in new technologies and markets. Cisco actively invests in all major technology segments on a global basis. U.S. and global market investments are also critical to our strategy. As with acquisitions, all investment targets are thoroughly vetted for both their business and technology fit. (Source :)

To attract and retain the most talented people in the industry, human resource mangers listen carefully to what the employees say about the kind of workplace they want to have, and develop programs to fulfil those needs. This past year we devoted more time to better understanding the needs of the staff. We have improved upon our current employee programs, providing more flexibility in work arrangements, enhancing opportunities to balance work and home life, and emphasizing our employees' overall well-being.

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At Cisco, there is a positive correlation between flexibility in the workplace and employee productivity. Flexibility at Cisco is the ability to informally or formally adjust one's work schedule in a way that maximizes productivity, achieves business goals, and enables work and life integration. With its employees, Cisco focuses on results rather than physical presence in an office.

To maintain a strong competitive advantage, Cisco remains focused on attracting and retaining the most talented individuals in the industry. We know that our employees' lifestyles and needs change over time and that we must adapt to support them. We believe that there is a positive correlation between flexibility in the workplace and employee productivity.

Flexibility at CISCO is the ability to informally or formally adjust one's work schedule in a way that maximizes productivity, achieves business goals, and enables work and life integration. Flexibility focuses on results rather than physical presence in an office. Cisco's tools and culture enable great flexibility in when, where, and how people work. Establishing consistency and transparency is critical for the flexibility program.

At Cisco, about 90 percent of its U.S. employees regularly use flexible timings.

Technologies that support these work arrangements include:

High-speed Internet access at home, paid for by Cisco

Discounted routers for home offices

Hand-held devices and notebook computers instead of desktop computers.

We use our own technological developments to enhance our employees' work experience. Because our employees have access to information, regardless of where they are, they can feel confident about providing consistently strong service to our customers.

Tools for Increasing Flexibility at Cisco:

In 2006, Cisco developed a Flexibility Toolkit to provide managers and employees with a framework for discussing business priorities and goals while incorporating flexibility into work arrangements.

Other tools available to our employees and their managers:

Managers have access to new education programs, featuring video-on-demand information to help answer their questions about how to manage remote workers on their teams.

Employees can now apply to work remotely through an online application process that prompts them to formulate a business case and anticipate the effects of their move on their team and customer relations.

Managers and employees each have their own versions of Flexibility Toolkits; the one for managers includes checklists, tips for handling difficult situations, and a worksheet to document the agreed work arrangements, while the one for employees includes best practices for remaining in touch with co-workers.

Managers and employees can determine best practices for flexibility arrangements for their teams.

Cisco is receiving positive feedback for our efforts in the area of workplace flexibility. Fortune magazine recognized us as number 25 on their list of the 100 Best Places to Work in America, noting our commitment to listening to our employees. In addition to Fortune magazine, Workspan magazine and Financial Times listed Cisco in their 100 Best Places to Work and Best Workplaces for Commuters lists, respectively.

As a leading global company, Cisco recognizes that diversity of thought is a business imperative. By attracting, hiring, developing, and retaining the best talent, Cisco is able to explore new ideas, promote better decision making, and create a workforce that mirrors our customers and the world at large.

In FY2007, we will be introducing the Flexibility Toolkit to each department throughout the company. Our focus is on supporting managers and capturing data about employees' flexible arrangements. The ability to achieve companywide goals while allowing for a more flexible arrangement and healthy work-life balance is a critical element of the Cisco culture. To maintain a strong competitive advantage, Cisco remains focused on attracting and retaining the most talented individuals in the industry. We know that our employees' lifestyles and needs change over time and that we must adapt to support them. We believe that there is a positive correlation between flexibility in the workplace and employee productivity.

Benefits to Employees: Because of the company's commitment to technology, many employees are able to do their work from virtually any location. Employees leverage that flexibility to balance the needs of their family and personal commitments. The company doesn't so much require a set schedule for workers as it does the completion of work objectives as set forth by leadership. Under that system, as long as those objectives are met within appropriate time frames, employees are free to work when and where they like. In one company trial, teleworking participants reported they gained an average of 30 minutes per day based on no commute time. Workers also reported being able to stay at home and tend to sick family members while still fulfilling work obligations.

Benefits to Employer: Cisco is able to take in significant cost savings by having workers available through teleworking. In 2003, it realized $195 million dollars in increased employee productivity. Essentially, by allowing employees to be working -- whether at home or while on the road -- as opposed to commuting, they are more focused and dedicated to completing the task at hand. In addition to reducing Cisco's operational costs, the company's telecommuting policies and procedures allow the company uninterrupted access to mission-critical information and resources in the event of a natural disaster or homeland security threat.  In cases of severe inclement weather such as ice storms, employees are able to work from home with peace of mind. Cisco also sees its endorsement of telecommuting as supportive of President Bush's goal of national broadband availability by 2007. The company's turnover rate averages about 3% per year. As a result of its experience with teleworking, Cisco has begun to redesign its workplaces and workspaces in a popular, cost-effective manner.

 The challenge for Cisco was being able to better utilize its global work force in 97 countries around the world. Many of those employees travel as part of their work.

Solution by Management at Cisco:

As a result, company leaders felt a need to enable employees to work "any place, any time." Cisco was also looking for a way to realize real estate savings despite locations in many high rent districts worldwide. Thu s Cisco has now made the work culture very flexible and it benefits the company itself.


After a detailed study on CISCO systems Inc. as an organizations and its employee management it can be concluded for a modern day industry and companies like Cisco it is always important to keep the flexible work culture going. Not only it benefits the organization in terms of employee productivity and enhanced sales but also increases the job satisfaction and job security among the employees of the company. Thus Labour flexibility can be used by managers of human resource as a tool of organisational management when there are mutual benefits resulting from it.