Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 2005 6
VIRTUAL WORKFORCES AND THE SHIFTING
FRONTIER OF CONTROL
KERRY BROWN,∗ SUSANNE ROYER,∗∗ JENNIFER WATERHOUSE∗
AND
STACY RIDGE∗
I
t is argued that adopting a networked organisational model improves organisational
performance and provides opportunities for innovation and creativity. The model is
premised on introducing a range of information and communication technology (ICT)
into the work environment. ICTs establish a fundamentally different interface between
workers and their tasks and also connect managers and workers in new ways that require
re-conceptualising of labour management relations. This process necessitates adapting existing organisational structures and systems to account for changes in the way work is
scheduled and organised and the way workers are managed. It is argued that organisations implementing such new organisational forms create non-traditional organisational
boundaries and fewer bureaucratic structures through forming networks. These network
arrangements may present an opportunity for shifting the labour management control
nexus.
INTRODUCTION
Industrial society is characterised by the rise of bureaucratic hierarchies and the
development of the managerial profession (Braverman 1974). Labour Process
Theory (LPT) emerged as a means of analysing labour management relations in
capitalist workplaces. Labour Process Theory suggests that the fundamental role
of management is the conversion of labour power into labour effort to support the
accumulation of capital (Braverman 1974). Labour effort is maximised through,
among other things, tight managerial control. The interdependence of labour and
management in negotiating effort and power relations thus results in a frontier of
control and conflict emerges when this frontier is crossed (Dufty & Fells 1989).
However, over time the traditional command and control mechanisms of managerial authority have undergone transition as organisational forms have altered
(Markus et al. 2000).
Within the new organisational environment of post-industrial society, it is
suggested that new organisational forms are replacing the traditional hierarchical style of management (Jackson & Stainsby 2000). Castells (2000) identifies
the organisational form in the ‘new economy’ as ‘information networking’. For
organisations, networked structures represent a possible new organisational form
that may be selected to adapt to meet the challenges of the new environment.
Networked organisational forms combine elements of team cooperation within
enterprises as well as across the borders of an enterprise. In this way, networks
∗ School
of Management, Queensland University of Technology, GPO Box 2434, Brisbane, QLD,
Australia ∗∗ International Management, Universitat Flensburg, Munketoft 3b, D-24937 Flensburg,
Germany.
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establish an organisational form that has the flexibility to transcend traditional
organisational boundaries and the rigidities of bureaucracy and avoid the adversarial relationships inherent in contractual market-based agreements.
Such networked arrangements rely on information and communication technology (ICT) as a means of linking functions and dispersed sectors (Castells 2000).
Relationships between relatively autonomous parties therefore exist within a ‘virtual reality’. Through the use of ICT, porous organisational boundaries and fewer
bureaucratic structures, networks may provide an opportunity for a shift in the
labour management control nexus. The networked organisational form is the
focus of this paper. The paper examines the potential dislocation of the labour
management control nexus within networked organisational structures using ICT
and posits the possibility of a self-directed and empowered workforce or the relocation of the locus of control with either new forms of managerial control or
with peers at the level of the team.
This research examines the implications and outcomes of adopting networked
organisational arrangements in relation to managing virtual workforces. In summary, two research questions are addressed: (i) are the new organisational forms
a challenge to managerial power; and (ii) do these developments actually change
the frontier of control?
A case study of a public sector organisation adopting a networked organisational model through a refined project management approach was undertaken to
examine managing and utilising virtual, networked workforces. The Department
of Main Roads, Queensland, Australia presents an ideal case for examining the
research question as the department is in the process of shifting from a traditional
hierarchy to a networked form.
This paper addresses the research questions through first presenting an
overview of the emergence of new organisational forms. Networks are then described and examined. The ways that ICT may be used within networks to coordinate activities are explored, leading to a discussion about how networked
organisational forms and ICT may act as a means to alter the locus of control.
The case study of the organisation is then introduced and consideration is given
as to whether the case demonstrates a shift from control to cooperation.
NEW ORGANISATIONAL FORMS: DEVELOPMENT AND UNDERLYING
FACTORS
Factors such as the globalisation of business activities and strongly rising fixed
costs have led many organisations to expand business activities beyond the traditional firm boundaries (Picot et al. 1998). Traditional organisational boundaries
have blurred and more hybrid organisational forms between market and hierarchy have come into existence to overcome entry barriers to new global markets, access market-specific knowledge and implement global economies of scale
(Camuffo 2002). Firms have also adapted their internal structures to include internal and external modularisation in many areas and project teams that work on
a geographically dispersed basis.
Transaction cost research (Williamson 1991) has analysed the appropriateness
of such different organisational forms and modes of governance. The pursuit
of efficiency outcomes are presented as a reason for the formation of alliances,
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outsourcing and contracting. At the same time, the costs and benefits of hierarchy
are recognised as useful prescriptions for resolving various organisational design
problems (Teece 1984). Transaction cost economics considers hybrid organisational forms between market and hierarchy to be efficient in different situations.
Justification for the selection of hybrid forms includes transactions characterised by high uncertainty or complexity and high specificity and strategic relevance. These factors force firms to work together with partners in different
organisational forms. Hybrid forms also enable partners to exchange information efficiently by being able to overcome problems with information complexity
(Arrow 1971), sticky information (Hippel 1994) and information spillovers (Picot
et al. 2002: 191). Cooperative forms, including hybrids, are viewed as capable of
reducing risk and uncertainty, overcoming knowledge, capital and capacity constraints and managing information exchange problems in an increasingly dynamic
and complex business environment.
Cooperative forms can be simple licensing agreements, joint ventures, different
kinds of (mutual) capital investments, long-term contracts with suppliers with a
dual sourcing option as well as franchise organisations or dynamic networks (for an
overview see Picot et al. 2002: 189–212). Networks, described in the next section,
therefore represent a new organisational structure that can be selected to address
the changing business environment.
NETWORKED ORGANISATIONAL FORMS AND PROJECT MANAGEMENT
Networked organisational forms are characterised by independent people and
groups acting as independent nodes, linking across traditional firm boundaries.
Such networked organisational forms usually have multiple leaders and voluntary
links as well as a variety of interacting levels (Lipnack & Stamps 1994). Hierarchical elements are exchanged for cooperative structures to achieve a common
goal. These new features influence the relationship between the organisational
members. Networked organisational structures are an option for smaller firms
to retain ‘the entrepreneurial spirit’ of smaller units while realising economies of
scale. Networks are also an organisational alternative for larger firms that want to
achieve the same but from the opposite position, that is, to become more flexible
and achieve entrepreneurial spirit without losing scale and scope advantages.
The term networked organisational structure, therefore, can be considered as
a general term used for organisations that react to environmental challenges by
creating more flexible organisational structures containing linked teams and individuals who interact with each other on different levels to achieve set objectives
together. Networks form through the different constellations of teams and individuals working together within the firm and across traditional firm boundaries.
Networked organisational structures are cooperative forms inside and/or between
relatively autonomous organisational units or firms that are bound in a net of relationships (Sydow 2003: 1).
A less permanent and more role-specific arrangement relating to networks is
the project management approach which seeks to achieve the goals of a networked
organisation by transcending organisational boundaries and linking together dispersed internal and external units and people. The aim of project management is
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to bring together experts in different fields to achieve the successful completion of
a particular project. This approach requires parties to form ‘self-managing, fluid
teams’ requiring a different cultural and managerial orientation to that found in
hierarchical, bureaucratic organisations (Lewis et al. 2002). Both networks and
project management are made possible through ICT and become ‘virtual’ in that
teams and individuals work together across space and time as well as organisational
boundaries.
INFORMATION AND COMMUNICATION TECHNOLOGY
Information and communication technology plays a major role in the context of
the changing environment and changing organisational structures. The infrastructure of the twenty-first century implies sophisticated communication, transportation, and computing technologies (Lynch et al. 2000), enabling the efficient
coordination of extensive activities.
Within networked organisational forms, studies tend to focus on the technological aspects of virtual networks by examining the utilisation of ICT and the
interface between ICT and its users (Wilson 1999). To adopt a networked organisational model, it is necessary to exploit technologies in the area of ICT to
provide the framework and interconnectedness that mediate traditional organisational structures (Herndon 1997). ICTs thus play a dominant role in the success
of networked organisations in providing the basis for these organisational forms.
The new technologies such as video conferences, email functionalities, workflow
management or groupware make these new organisational forms possible.
Two other significant aspects of virtual network organisational forms relate
first to identifying the characteristics of these emerging work arrangements and
second the way in which labour is deployed to undertake tasks in the virtual
workplace (Markus et al. 2000). Networked forms may, for example, comprise
temporary contracted teams that work across organisations (Markus et al. 2000)
or groups such as those formed to deal with intractable social issues such as poverty
(Provan & Millward 1995), and these forms of organisation cut across traditional
management and labour utilisation techniques. The second aspect considers how
traditional management approaches may need to change to respond to these different organisational forms. Within networked organisational forms, new forms
of division of labour may thus become possible and success in shifting the frontier
of control appears achievable.
THE FRONTIER OF CONTROL IN NETWORKED ORGANISATIONS
Within networked organisations, aspects such as team orientation, project management and managing dispersed employees gain importance. New forms of the
division of labour lead to a movement away from a firm orientation towards achieving the goals of a specific project. This can be considered as a cognitive, rather
than technical, division of labour and forms a development away from a technically oriented logic of the division of labour to forms of competency-oriented
and qualifications-oriented divisions of labour (Moaty & Mouhoud 1994). Relevant dimensions to be analysed are team-based organisational forms as well as the
virtualisation of workplaces.
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In examining the social construction of virtual workplaces, the traditional forms
of control through formalised rules and close supervision are no longer tenable
and new norms relying on output rather than input-based criteria need to be implemented (Panteli & Dibben 2001). These new organisational forms may have
the potential to disrupt the cycle of control-resistance by workers and management postulated by labour process theorists (e.g. Braverman 1974). However,
May (2002) contends that, unless intellectual property relations are codified to
acknowledge the contribution of labour, there is little prospect of breaking the
management domination of labour.
A crucial success factor in overcoming the control–conflict–resistance cycle
within a network organisational form therefore becomes the ability to cooperate
(Waterhouse et al. 2002). If cooperation is a ‘higher order’ mode of work organisation in networked arrangements, then this requires a different conceptualisation
of labour management relations. Traditional models of labour management relations have been premised on a notion of conflict as underpinning the employment
relationship with a specific focus on conflict at work (Godard & Delaney, 2000).
To manage this conflict, managerial practice has focused on maintaining authority to control the workforce. As organisations have changed form, mechanisms
for control of labour management relations may also change. Due to a propensity
for cultural manipulation and an inability to garner the benefits of team synergies,
self-managed teams may, however, deliver a greater degree of control rather than
achieve cooperation (Korac-Kakabadse et al. 1999).
Cooperation in the form of personal relationships between the often dispersed
employees in virtual teams and between different virtual teams in a network grows
over time and is considered the essence of successful networked organisations
(Sydow 2003). Managerial dilemmas often arise because the structure makes it
difficult to have ad hoc meetings and more preparation and planning activities are
necessary in this area (e.g. video conferences have to be prepared and technically
scheduled in advance). Figure 1 summarises the outlined determinants of networked organisations and identifies the three main features of such organisations.
COOPERATION, CO-OPTATION AND CONTROL
Many approaches and existing examples in business show that research is fairly
advanced with regard to success factors relating to the implementation and continued use of ICT (Konrad & Deckop 2001). This situation is somewhat different
in relation to the success factors of the division of labour leading to the ability to
cooperate (Markus et al. 2000). The ability to address issues surrounding the division of labour appears to be a central determinant in achieving cooperation within
new organisational forms such as networks that utilise ICT. Moreover, cooperation relies on bringing together complex relationships across cultural, technical
and structural frameworks.
Organisational cultures characterised by rigid bureaucratic reporting lines,
minimal interdepartmental interaction, and little tradition of change experience
significant obstacles in adapting to a project management, cross functional structure (Brown 1999). This research finding suggests that the instigation of structures
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Figure 1
315
Relevant determinants of networked organisations.
Cooperation
Division of Labour
(e.g. new forms of team
organisation)
Information and Communication Technology
(e.g. workflow system, groupware approaches)
and behaviour necessary to achieve cooperation is more difficult within such organisations and there may be a tendency to maintain the management locus of
control.
In the networked organisation management is still necessary, but their role in
controlling the labour process changes, because new forms of labour division need
coordination, rather than control, to be successful. Managerial strategies and imperatives, however, require a new kind of thinking and action. Instead of accurate
planning, project goals and visions gain relevance; mobilising resources becomes
more important than organising a firm in a traditional sense; empowerment has
the potential to replace control; direct instruction loses importance in favour of
long-term goals and internal orientation is widened to an external orientation
(Handy 1995).
Therefore, the question arises as to whether organisations moving to networked
structures are on a path from control to cooperation or whether control is merely
changing form. For example, forms of direct control may lose relevance in favour
of controlling work results. Small project groups make it possible to attach exact
responsibilities for product outputs as well as performance results. In this way,
control, monitoring and coordination are easier in smaller project groups enabling
easier implementation of performance-oriented reward systems as well as social
control through group dynamics (Picot et al. 1999).
The paper posits that a combination of both cooperation and cooptation may
be needed in organisations using networked structures. Cooperation within an
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organisation appears necessary as it brings together the stakeholders and employees to jointly achieve organisational goals (Royer et al. 2003). Cooptation differs in
that the driver is top-down and joint action is achieved through assimilating divergent groups to the dominant culture (Brown et al. 2002). How cooperation occurs
and the degree to which cooptation resembles or extends into coercion needs to
be explored in the context of an organisation changing to a networked form and
through a research design that captures both process and different stakeholder
experiences.
METHODOLOGY
The research project examined the management and control issues surrounding
the implementation of virtual teams across organisational boundaries. A case study
of an organisation preparing to shift to networked organisational structures was
used to examine the process of moving to a networked structure and the managerial
and employee responses to this shift.
The data collection commenced with introductory interviews with senior
managers that allowed identification and exploration of managerial approaches
(Sekaran 1992). These managers were chosen because of their strategic position
in the organisation. Two focus groups with middle managers were undertaken,
followed by four focus groups with employees from various levels and occupations. This procedure ensured that all major groups of the organisation were
covered including different hierarchical levels, administrative, operational, professional and technical staff. Rather than achieving proportional representation,
interviewees were purposefully selected from volunteers within the department
to obtain widespread perspectives. Interview and focus group participants were
therefore chosen according to principles of purposeful sampling (Patton 1990).
One-on-one semistructured interviews were conducted with a range of senior
officers including a group interview with all regional directors in the department.
These directors are geographically dispersed, being located within their regions
throughout the state of Queensland. Given their role as instigators and in some
cases, also as recipients of change, it was important to gain regional directors’ perceptions of what changes they were seeking to implement and their perceptions
of what more senior management in the department were seeking to achieve.
Semistructured interviews were considered as the most suitable method to accomplish this as they allowed the main topics and general themes to be targeted
through specific questions, while allowing the freedom to pursue other relevant
issues as they arose (Maykut & Morehouse 1994). These research methods were
designed to draw out managerial attitudes towards, and understanding of, networked arrangements and their implications for labour management relations in
their organisation.
CASE STUDY
The Queensland Department of Main Roads (QDMR) is a large public sector department responsible for the management and development of the statecontrolled roads, as well as joint management responsibility of the total public
road system through a network arrangement with local government (Main Roads
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1998). It is a geographically dispersed organisation consisting of four regional
and 14 district offices (Main Roads 1998). QDMR is also a technically oriented
organisation with high-level expertise in construction and engineering which is
undergoing significant change processes. One such change is a planned shift to a
networked organisation with the priority and focus changing from construction
of infrastructure projects to managing and policy formulation (Main Roads 2000).
Up to the early 1990s, QDMR was characterised by a bureaucratic structure
and culture. A hybrid organisation has evolved through a purchaser–provider split
where the organisation is now comprised of half commercialised/business structures and half bureaucratic administrative structures. The case study is concerned
with the commercial operations arm of QDMR, RoadTek. It provides civil infrastructure delivery to local governments, the private sector and the non-commercial
arm of QDMR through the purchaser provider arrangement (Ryan et al. 2000).
In moving from a regionally based organisation to a statewide operation, RoadTek aims to achieve vertical and horizontal integration of its activities. The goal
is stated to be a self-driven organisation with high levels of leadership skills and
a culture of innovation. Although ICT as an integrated business process is an
important aspect of the project management approach aspired to, another crucial
aspect is communication and the linking of teams through a relational approach
to stakeholders. The vision for the organisation reflects notions of self-learning,
empowerment and networked organisational structures facilitating learning, informal education and alliances.
NETWORKED ORGANISATIONAL APPROACH
The initial changes implemented in RoadTek sought to shift the previous bureaucratic program approach to embrace a ‘commercial project management culture’
through
Ensuring the implementation of a common and consistent business system and process; the development of a project management culture within commercial operations
(Lewis et al. 2002).
The objective of these changes is to become a networked organisation to gain
economies of scope, improve innovation and introduce flexible workforce utilisation. Therefore, QDMR seeks to achieve a shift from the traditional bureaucratic
policy, culture and structure of a public sector organisation and forego authoritarian positions to enter into true network relationships. An overarching structure
has to be found for both parts of the current organisation that is compatible with
the new organisational order.
ADOPTION OF INFORMATION AND COMMUNICATION TECHNOLOGIES
Information and communication technologies established a significant base for
developing the chain of linkages to achieve the ‘ideal’ of a cooperative networked
organisation. QDMR adopted an intranet system, an electronic forum for dispatching messages called ‘Main Roads Junction’ and Gateway, an integrated payroll and human resource information system. However, the introduction of other
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innovative ICTs formed the basis to shift to a new level of interconnectedness
through networks. In particular, Project 21 was an innovative program that has
arguably affected the delivery of new forms of labour management relations.
Project 21 was not only an integrated ICT to improve organisational processes
and business systems but also a change management program. The aim of Project
21 was to shift RoadTek away from a ‘hierarchical, functional structure’ to a
structure ‘based on project teams’ through implementing ICTs that integrate
business systems (Lewis et al. 2002). Project 21 adopted a holistic approach to
achieving these aims by focusing not just on operations and systems but also on
financial and delivery outcomes, the management of stakeholder relations and
a training and development program that sought to achieve skill-based career
progression.
Information and communication technologies provided the platform for shifting to a networked organisation. However, the introduction and use of ICTs such
as intranets and human resource information systems did not initiate the move
to a network. The research findings indicate that recognising the inefficiencies
arising from system inconsistencies in the numerous highly autonomous regional
offices, the implementation of Project 21 and the adoption of a project management approach provided the impetus to explore the notion of virtual teams in
networked organisational structures.
NEW ORGANISATIONAL FORMS—DIVISION OF LABOUR
The project management approach together with a need to develop a way of
providing consistency of operations and flexibility of functions acted as both an
introductory phase and also a continuing feature in the shift towards networked
organisational arrangements. A project is an assignment that has to be finalised
in a specific time frame, is unique and therefore not integrated into established
organisational structures. One senior manager commented that the project management approach was about
Getting them [the districts] to break out of their silos because they have district and
group responsibility and they needed to think about the group as a whole, statewide.
In mid-2001, the director of RoadTek commented:
It’s about getting the whole organisation to operate on project management principles. Whether you are the person who orders the stationery or builds the big project
or road, we want to use project management as the way to do business.
One District Director stated in relation to the implementation of project
management:
All our future projects will be networked projects—better outcomes regarding objectives and goals when people are focused on the project rather than where they come
from.
Thus, the project management approach focused attention on the need not
only to break down the formalised rigidities of hierarchical structures but also to
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adopt an organisationwide perspective. In project teams, the property rights are
centralised in a small organisational unit that is technically able and also motivated to maximise project success (Picot et al. 1999). What was observed within
the Department of Main Roads was the coexistence of these autonomous work
groups alongside a traditional functional hierarchy that was necessarily changing
to allow it to successfully operationalise project management. The autonomy of
the regions, while providing a strong identity for localised work groups, worked
against achieving synergies across RoadTek. Mobility between regions was considered costly and inefficient for the organisation as employees needed retraining
for region-specific systems and work duties.
Therefore, another element introduced simultaneously with the project management concept was working towards a standardised statewide integrated system (Lewis et al. 2002). This approach was not specifically driven by the project
management concept, but rather from a need to align the disparate geographical branches of the department, partly to gain economies of scale and scope
and partly, to enable a mobile, flexible workforce statewide to deal with uneven
workflows.
Senior management within the department wanted to achieve economies of
scale by rationalising the workforces of many different regions. This was to be
achieved through both systems alignment and providing consistent staff training
throughout the state. A senior manager commented that maintaining the independence of the regions came at a high commercial cost. The autonomy of the
regions had acted as a force for employees to adopt a relatively narrow focus on
their functional and geographical area.
The new division of labour focused on achieving higher levels of flexibility of
the workforce, specifically staff mobility. Organisational problems identified by
the District Manager was the ‘inability to move people around the organisation’,
whereas another suggested that teams would now need to be flexible and mobile:
We will either have another large project for them or move them onto minor works.
Project Management brings people in as needed.
In this way, it was argued that the project management approach dislocated
managerial control of employees in their day-to-day work by shifting the teams
between different kinds of work. It was considered to be the start of a dismantling
of traditional patterns of labour management relations. Furthermore, the temporary and mobile nature of work teams required an emphasis on new forms of
communication to connect geographically dispersed members.
A benefit of adopting networked organisational arrangements was therefore
about changing the work environment through the development of sophisticated
ICTs:
People are thinking laterally and they’re looking at having the technology there,
satellite technology, GPS [Global Positioning System] and you’ve got designers there
linking that technology onto their plans, to survey it. . . having it all digitised then
feeding it across to construction crews and they run it into a grader or something like
that to do the job with it. So you’ve got integration from right out in the technological
area right the way through.
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It was contended that a further benefit associated with a highly mobile workforce in a networked organisation was the ability to bring in expertise when
projects required specific or high level skills. One District Manager cited the
case of the Environmental Officer who could be brought from another region
into their more remote region when needed. The ability to shift specialist officers
around to different projects displaces the managerial locus of control exercised at
a particular workplace.
The traditional division of labour has been under threat from moves to develop
a team-based approach and a statewide operational focus. The senior managers
within the department saw an overriding need to deploy teams to different project
sites and that shift started to break down the geographical configurations of a
workforce located within specific regions.
CHANGING LABOUR MANAGEMENT RELATIONS—COOPERATION
Mobilising the workforce and establishing geographically dispersed and temporary project management teams offers the possibility of changes in mechanisms
of management control and the establishment of cooperation. The published objectives of the department suggest that cross-cutting initiatives are integral to
the operation of the workplace at a regional level and are an expected managerial goal. Senior departmental managers have recognised these new organisational
forms require new sets of managerial strategies and imperatives. A senior manager
commented that:
We generally have got to get used to the idea of being able to work in an environment
where we don’t always control the people we work with, they don’t always report to
you, we need to be able to work in these virtual teams or whatever. Because one of
the things we’re finding is if you want to be successful you’re going to have to work
in a whole lot of different ways. You need to be very fluid to meet customer needs so
you’re going to have to form and re-form.
This manager went on to suggest that the introduction of the ICTs in Project
21 paved the way for a completely new way of managing employees:
I think that’s one of the things we’re starting to learn out of Project 21 now is really
you’ve got to get a culture that has an acceptance of people being able to manage
people without controlling them.
The methods of implementing the changes were acknowledged by the Director
of Roadtek as requiring both top-down and bottom-up implementation processes
that took into account employee attitudes and interests.
For one District Director, a networked organisation brought standardisation
and consistency. It also could deliver members of the organisation onto a ‘similar
wavelength’ and thus become the vehicle for developing ‘more common views of
the world’. For another senior manager, the introduction of a networked organisation not only permitted better ‘value for dollars’ but also allowed a ‘focus on
higher level issues’.
For employees, there was recognition that there was a new way of working and an acknowledgement of the possibility of their having input into those
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arrangements with a focus on cooperation. For one employee, the cooperative
approach meant that their ideas were heard and opinions valued. Another employee felt that there was the possibility to shift the frontier of control, ‘since
the relationship framework, there is more room in RoadTek to challenge things.
The general manager encourages people to challenge things’. Another employee
noted the change from the previous culture as a change to greater flexibility observing that, ‘traditionally Main Roads culture is to build monolithic systems
and processes that inhibit flexibility while we are trying to build things more
flexibly’.
The shift was not perceived specifically as a move to a networked organisation,
but to new forms of organisational arrangements.
So where RoadTek is thinking about how we can solve the problem by a different
management style or incorporate project management principles at all projects. . .
Main Roads is just throwing resources at it.
The need for a cooperative approach to implementing networked organisational arrangements was cited as a significant departure from traditional organisational approaches to managing employees. However, it is very early in the
process of changing to new arrangements. Lynch et al. (2000: 409) argue that a
public sector organisation implementing a virtual team approach ‘increases the
availability of talent and expertise, creates synergy and provides different perspectives’. However, a threat lies in weakening the bonds between employer and
employees as this may militate against employees remaining with the organisation and simultaneously weaken employers’ sense of responsibility for employees.
Korac-Kakabdase et al. (1999) further warn that decentralised teams may lapse into
dysfunctional behaviour through the ‘dark side’ of increased managerial control
rather than achieving greater innovation and empowerment.
The potential for such increased managerial control exists in a number of elements of Project 21. In the design of integrated and standardised business systems
across RoadTek exists the possibility of significant control of the labour process.
The concept of an integrated technology guiding a construction project from
survey through to final construction suggests, as proposed by Laurel (1991), that
in the purposeful design of virtual workforces exists the possibility to both control
and be controlled.
Project 21 has also sought to shift the focus of control away from scientific
management principles towards a reliance on financial delivery and performance.
This shift is in keeping with the proposition of Panteli and Dibben (2001) that
these new forms of work organisation result in traditional forms of control being
untenable, leading to a greater reliance on output measurements. While the design
of ICT may seek to reinforce industry ‘best practice’ and therefore managerial
prerogative, the geographical and organisational dispersion of a project team may
ultimately result in outputs being the only real means of control. This suggests
the possibility of a genuine shift in the nexus of control. There is already evidence
that management has recognised the need to alter the traditional control cycle to
cope with projects where workers on a project do not directly report to a particular
organisation or management team.
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Within networked organisations, management therefore appears far from being
obsolete but is more important than ever. Management, however, has to take place
within new organisational forms such as the combination of traditional hierarchy
and project management in the QDMR case. This case suggests that management
is aware of the need to manage without controlling, but that managing project
teams without controlling them is still some way to being achieved. Direct control, however, loses relevance in favour of controlling work results. This occurs
alongside the problems associated with situations where output is hard to measure
or takes time to achieve such as in the often large-scale projects undertaken by
QDMR.
It appears from this case that it is important that both top-down implementation from management and bottom-up implementation from within the groups
and project teams is fostered. Top-down implementation was used in QDMR to
achieve consistency of systems and processes to enable espousal of project management principles. Cooptation therefore appears to have occurred to assimilate
divergent groups towards the dominant hierarchical culture. In terms of cooperation, QDMR employees saw a shift to new organisational forms but did not
necessarily understand the network philosophy. Such a situation may ultimately
have a negative impact on the success of shifting to a network organisational form.
Networked organisations do not work without cooperation between employees
and employers (Royer et al. 2003). Traditional control instruments become ineffective and the statements of QDMR managers underline this. However, May
(2002) argues that control is more important than cooperation leading to the
implementation of control systems in many organisations, often through ICT.
Potentially opportunistic human behaviour leads to risks from a principal agent
point of view (Rumelt et al. 1991) in this context. The problem of opportunistic
behaviour in cooperative work teams cannot be solved by contracts as a traditional way out of this dilemma. Therefore other possibilities for the management
of labour have to be identified. These are argued to be found in the area of trust
and reputation that lead to successful cooperation (Royer et al. 2003).
In considering the empirical evidence presented, team workers in an organisation shifting from a traditional hierarchy to a networked organisation may
experience a shift in their relationship with management to cooperation, but the
relationship may also not be completely free of control. In networked organisations there may be a shift to new output-oriented forms of control and the use of
cooptation. The insights into the case of QDMR as an organisation on the way
to a networked organisation suggest that a balance between control, co-optation
and cooperation is difficult to achieve but that this is necessary to successfully
operationalise a networked organisation.
CONCLUSION
In adopting a networked organisational model, the emphasis of management and
managerial endeavour has shifted to harnessing the effort of different teams in
a project management approach. This process may involve individual workers’
input and effort being split over time, place and project. The arrangement serves
to fracture the traditional management–worker nexus by displacing the traditional
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structure and function allied to day-to-day management and thus has the potential
to change the nature of managerial control.
The process of shifting to a networked organisation necessitates adapting existing organisational arrangements such as the traditional forms of labour division and conventional managerial practices to account for changes in the way
work is scheduled and organised and the way workers are managed. It has been
argued that organisations implementing networked organisational forms create
non-traditional boundaries and fewer bureaucratic structures through the formation of networks. Labour Process Theory posits that the frontier of control is
maintained by management who seek to use authority and coercion to control
the workforce. Network arrangements may however present an opportunity for a
shift in the labour management control nexus through eliminating the ability for
direct control, potentially leading to greater reliance on cooperation to achieve
organisational goals.
The findings indicate that senior managers within QDMR recognise that traditional employee control mechanisms are not applicable to the new network arrangements, acknowledging the need for a change to ‘managing not controlling’.
Although the shift to a networked organisation was in its early stages, the approach signalled that senior managers were seeking a more cooperative approach
to labour management relations. Employees acknowledged the emergence of new
organisational forms, but did not conceive of the new approach as a networked
organisation and did not necessarily conceptualise labour management relations
as cooperative. However, the response of middle managers, traditionally the gatekeepers between senior management and employees, may be crucial in negotiating
the implementation of virtual teams in the new networked organisation.
The management of employees dislocated from traditional forms of managerial
authority through the adoption of networked organisational forms may enable a
shift in the frontier of control. With their reliance on virtual teams undertaking project-based work, networked organisational forms offer the prospect of
transforming traditional managerial roles. The case study indicates that managers recognise the need to change their reliance on direct managerial control
of workers in order to establish a networked organisation. Although employees
recognised new forms of cooperation through consultative mechanisms, they also
identified that these new arrangements may also usher in new forms of managerial
control.
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FRONTIER OF CONTROL
KERRY BROWN,∗ SUSANNE ROYER,∗∗ JENNIFER WATERHOUSE∗
AND
STACY RIDGE∗
I
t is argued that adopting a networked organisational model improves organisational
performance and provides opportunities for innovation and creativity. The model is
premised on introducing a range of information and communication technology (ICT)
into the work environment. ICTs establish a fundamentally different interface between
workers and their tasks and also connect managers and workers in new ways that require
re-conceptualising of labour management relations. This process necessitates adapting existing organisational structures and systems to account for changes in the way work is
scheduled and organised and the way workers are managed. It is argued that organisations implementing such new organisational forms create non-traditional organisational
boundaries and fewer bureaucratic structures through forming networks. These network
arrangements may present an opportunity for shifting the labour management control
nexus.
INTRODUCTION
Industrial society is characterised by the rise of bureaucratic hierarchies and the
development of the managerial profession (Braverman 1974). Labour Process
Theory (LPT) emerged as a means of analysing labour management relations in
capitalist workplaces. Labour Process Theory suggests that the fundamental role
of management is the conversion of labour power into labour effort to support the
accumulation of capital (Braverman 1974). Labour effort is maximised through,
among other things, tight managerial control. The interdependence of labour and
management in negotiating effort and power relations thus results in a frontier of
control and conflict emerges when this frontier is crossed (Dufty & Fells 1989).
However, over time the traditional command and control mechanisms of managerial authority have undergone transition as organisational forms have altered
(Markus et al. 2000).
Within the new organisational environment of post-industrial society, it is
suggested that new organisational forms are replacing the traditional hierarchical style of management (Jackson & Stainsby 2000). Castells (2000) identifies
the organisational form in the ‘new economy’ as ‘information networking’. For
organisations, networked structures represent a possible new organisational form
that may be selected to adapt to meet the challenges of the new environment.
Networked organisational forms combine elements of team cooperation within
enterprises as well as across the borders of an enterprise. In this way, networks
∗ School
of Management, Queensland University of Technology, GPO Box 2434, Brisbane, QLD,
Australia ∗∗ International Management, Universitat Flensburg, Munketoft 3b, D-24937 Flensburg,
Germany.
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establish an organisational form that has the flexibility to transcend traditional
organisational boundaries and the rigidities of bureaucracy and avoid the adversarial relationships inherent in contractual market-based agreements.
Such networked arrangements rely on information and communication technology (ICT) as a means of linking functions and dispersed sectors (Castells 2000).
Relationships between relatively autonomous parties therefore exist within a ‘virtual reality’. Through the use of ICT, porous organisational boundaries and fewer
bureaucratic structures, networks may provide an opportunity for a shift in the
labour management control nexus. The networked organisational form is the
focus of this paper. The paper examines the potential dislocation of the labour
management control nexus within networked organisational structures using ICT
and posits the possibility of a self-directed and empowered workforce or the relocation of the locus of control with either new forms of managerial control or
with peers at the level of the team.
This research examines the implications and outcomes of adopting networked
organisational arrangements in relation to managing virtual workforces. In summary, two research questions are addressed: (i) are the new organisational forms
a challenge to managerial power; and (ii) do these developments actually change
the frontier of control?
A case study of a public sector organisation adopting a networked organisational model through a refined project management approach was undertaken to
examine managing and utilising virtual, networked workforces. The Department
of Main Roads, Queensland, Australia presents an ideal case for examining the
research question as the department is in the process of shifting from a traditional
hierarchy to a networked form.
This paper addresses the research questions through first presenting an
overview of the emergence of new organisational forms. Networks are then described and examined. The ways that ICT may be used within networks to coordinate activities are explored, leading to a discussion about how networked
organisational forms and ICT may act as a means to alter the locus of control.
The case study of the organisation is then introduced and consideration is given
as to whether the case demonstrates a shift from control to cooperation.
NEW ORGANISATIONAL FORMS: DEVELOPMENT AND UNDERLYING
FACTORS
Factors such as the globalisation of business activities and strongly rising fixed
costs have led many organisations to expand business activities beyond the traditional firm boundaries (Picot et al. 1998). Traditional organisational boundaries
have blurred and more hybrid organisational forms between market and hierarchy have come into existence to overcome entry barriers to new global markets, access market-specific knowledge and implement global economies of scale
(Camuffo 2002). Firms have also adapted their internal structures to include internal and external modularisation in many areas and project teams that work on
a geographically dispersed basis.
Transaction cost research (Williamson 1991) has analysed the appropriateness
of such different organisational forms and modes of governance. The pursuit
of efficiency outcomes are presented as a reason for the formation of alliances,
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outsourcing and contracting. At the same time, the costs and benefits of hierarchy
are recognised as useful prescriptions for resolving various organisational design
problems (Teece 1984). Transaction cost economics considers hybrid organisational forms between market and hierarchy to be efficient in different situations.
Justification for the selection of hybrid forms includes transactions characterised by high uncertainty or complexity and high specificity and strategic relevance. These factors force firms to work together with partners in different
organisational forms. Hybrid forms also enable partners to exchange information efficiently by being able to overcome problems with information complexity
(Arrow 1971), sticky information (Hippel 1994) and information spillovers (Picot
et al. 2002: 191). Cooperative forms, including hybrids, are viewed as capable of
reducing risk and uncertainty, overcoming knowledge, capital and capacity constraints and managing information exchange problems in an increasingly dynamic
and complex business environment.
Cooperative forms can be simple licensing agreements, joint ventures, different
kinds of (mutual) capital investments, long-term contracts with suppliers with a
dual sourcing option as well as franchise organisations or dynamic networks (for an
overview see Picot et al. 2002: 189–212). Networks, described in the next section,
therefore represent a new organisational structure that can be selected to address
the changing business environment.
NETWORKED ORGANISATIONAL FORMS AND PROJECT MANAGEMENT
Networked organisational forms are characterised by independent people and
groups acting as independent nodes, linking across traditional firm boundaries.
Such networked organisational forms usually have multiple leaders and voluntary
links as well as a variety of interacting levels (Lipnack & Stamps 1994). Hierarchical elements are exchanged for cooperative structures to achieve a common
goal. These new features influence the relationship between the organisational
members. Networked organisational structures are an option for smaller firms
to retain ‘the entrepreneurial spirit’ of smaller units while realising economies of
scale. Networks are also an organisational alternative for larger firms that want to
achieve the same but from the opposite position, that is, to become more flexible
and achieve entrepreneurial spirit without losing scale and scope advantages.
The term networked organisational structure, therefore, can be considered as
a general term used for organisations that react to environmental challenges by
creating more flexible organisational structures containing linked teams and individuals who interact with each other on different levels to achieve set objectives
together. Networks form through the different constellations of teams and individuals working together within the firm and across traditional firm boundaries.
Networked organisational structures are cooperative forms inside and/or between
relatively autonomous organisational units or firms that are bound in a net of relationships (Sydow 2003: 1).
A less permanent and more role-specific arrangement relating to networks is
the project management approach which seeks to achieve the goals of a networked
organisation by transcending organisational boundaries and linking together dispersed internal and external units and people. The aim of project management is
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to bring together experts in different fields to achieve the successful completion of
a particular project. This approach requires parties to form ‘self-managing, fluid
teams’ requiring a different cultural and managerial orientation to that found in
hierarchical, bureaucratic organisations (Lewis et al. 2002). Both networks and
project management are made possible through ICT and become ‘virtual’ in that
teams and individuals work together across space and time as well as organisational
boundaries.
INFORMATION AND COMMUNICATION TECHNOLOGY
Information and communication technology plays a major role in the context of
the changing environment and changing organisational structures. The infrastructure of the twenty-first century implies sophisticated communication, transportation, and computing technologies (Lynch et al. 2000), enabling the efficient
coordination of extensive activities.
Within networked organisational forms, studies tend to focus on the technological aspects of virtual networks by examining the utilisation of ICT and the
interface between ICT and its users (Wilson 1999). To adopt a networked organisational model, it is necessary to exploit technologies in the area of ICT to
provide the framework and interconnectedness that mediate traditional organisational structures (Herndon 1997). ICTs thus play a dominant role in the success
of networked organisations in providing the basis for these organisational forms.
The new technologies such as video conferences, email functionalities, workflow
management or groupware make these new organisational forms possible.
Two other significant aspects of virtual network organisational forms relate
first to identifying the characteristics of these emerging work arrangements and
second the way in which labour is deployed to undertake tasks in the virtual
workplace (Markus et al. 2000). Networked forms may, for example, comprise
temporary contracted teams that work across organisations (Markus et al. 2000)
or groups such as those formed to deal with intractable social issues such as poverty
(Provan & Millward 1995), and these forms of organisation cut across traditional
management and labour utilisation techniques. The second aspect considers how
traditional management approaches may need to change to respond to these different organisational forms. Within networked organisational forms, new forms
of division of labour may thus become possible and success in shifting the frontier
of control appears achievable.
THE FRONTIER OF CONTROL IN NETWORKED ORGANISATIONS
Within networked organisations, aspects such as team orientation, project management and managing dispersed employees gain importance. New forms of the
division of labour lead to a movement away from a firm orientation towards achieving the goals of a specific project. This can be considered as a cognitive, rather
than technical, division of labour and forms a development away from a technically oriented logic of the division of labour to forms of competency-oriented
and qualifications-oriented divisions of labour (Moaty & Mouhoud 1994). Relevant dimensions to be analysed are team-based organisational forms as well as the
virtualisation of workplaces.
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In examining the social construction of virtual workplaces, the traditional forms
of control through formalised rules and close supervision are no longer tenable
and new norms relying on output rather than input-based criteria need to be implemented (Panteli & Dibben 2001). These new organisational forms may have
the potential to disrupt the cycle of control-resistance by workers and management postulated by labour process theorists (e.g. Braverman 1974). However,
May (2002) contends that, unless intellectual property relations are codified to
acknowledge the contribution of labour, there is little prospect of breaking the
management domination of labour.
A crucial success factor in overcoming the control–conflict–resistance cycle
within a network organisational form therefore becomes the ability to cooperate
(Waterhouse et al. 2002). If cooperation is a ‘higher order’ mode of work organisation in networked arrangements, then this requires a different conceptualisation
of labour management relations. Traditional models of labour management relations have been premised on a notion of conflict as underpinning the employment
relationship with a specific focus on conflict at work (Godard & Delaney, 2000).
To manage this conflict, managerial practice has focused on maintaining authority to control the workforce. As organisations have changed form, mechanisms
for control of labour management relations may also change. Due to a propensity
for cultural manipulation and an inability to garner the benefits of team synergies,
self-managed teams may, however, deliver a greater degree of control rather than
achieve cooperation (Korac-Kakabadse et al. 1999).
Cooperation in the form of personal relationships between the often dispersed
employees in virtual teams and between different virtual teams in a network grows
over time and is considered the essence of successful networked organisations
(Sydow 2003). Managerial dilemmas often arise because the structure makes it
difficult to have ad hoc meetings and more preparation and planning activities are
necessary in this area (e.g. video conferences have to be prepared and technically
scheduled in advance). Figure 1 summarises the outlined determinants of networked organisations and identifies the three main features of such organisations.
COOPERATION, CO-OPTATION AND CONTROL
Many approaches and existing examples in business show that research is fairly
advanced with regard to success factors relating to the implementation and continued use of ICT (Konrad & Deckop 2001). This situation is somewhat different
in relation to the success factors of the division of labour leading to the ability to
cooperate (Markus et al. 2000). The ability to address issues surrounding the division of labour appears to be a central determinant in achieving cooperation within
new organisational forms such as networks that utilise ICT. Moreover, cooperation relies on bringing together complex relationships across cultural, technical
and structural frameworks.
Organisational cultures characterised by rigid bureaucratic reporting lines,
minimal interdepartmental interaction, and little tradition of change experience
significant obstacles in adapting to a project management, cross functional structure (Brown 1999). This research finding suggests that the instigation of structures
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Figure 1
315
Relevant determinants of networked organisations.
Cooperation
Division of Labour
(e.g. new forms of team
organisation)
Information and Communication Technology
(e.g. workflow system, groupware approaches)
and behaviour necessary to achieve cooperation is more difficult within such organisations and there may be a tendency to maintain the management locus of
control.
In the networked organisation management is still necessary, but their role in
controlling the labour process changes, because new forms of labour division need
coordination, rather than control, to be successful. Managerial strategies and imperatives, however, require a new kind of thinking and action. Instead of accurate
planning, project goals and visions gain relevance; mobilising resources becomes
more important than organising a firm in a traditional sense; empowerment has
the potential to replace control; direct instruction loses importance in favour of
long-term goals and internal orientation is widened to an external orientation
(Handy 1995).
Therefore, the question arises as to whether organisations moving to networked
structures are on a path from control to cooperation or whether control is merely
changing form. For example, forms of direct control may lose relevance in favour
of controlling work results. Small project groups make it possible to attach exact
responsibilities for product outputs as well as performance results. In this way,
control, monitoring and coordination are easier in smaller project groups enabling
easier implementation of performance-oriented reward systems as well as social
control through group dynamics (Picot et al. 1999).
The paper posits that a combination of both cooperation and cooptation may
be needed in organisations using networked structures. Cooperation within an
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organisation appears necessary as it brings together the stakeholders and employees to jointly achieve organisational goals (Royer et al. 2003). Cooptation differs in
that the driver is top-down and joint action is achieved through assimilating divergent groups to the dominant culture (Brown et al. 2002). How cooperation occurs
and the degree to which cooptation resembles or extends into coercion needs to
be explored in the context of an organisation changing to a networked form and
through a research design that captures both process and different stakeholder
experiences.
METHODOLOGY
The research project examined the management and control issues surrounding
the implementation of virtual teams across organisational boundaries. A case study
of an organisation preparing to shift to networked organisational structures was
used to examine the process of moving to a networked structure and the managerial
and employee responses to this shift.
The data collection commenced with introductory interviews with senior
managers that allowed identification and exploration of managerial approaches
(Sekaran 1992). These managers were chosen because of their strategic position
in the organisation. Two focus groups with middle managers were undertaken,
followed by four focus groups with employees from various levels and occupations. This procedure ensured that all major groups of the organisation were
covered including different hierarchical levels, administrative, operational, professional and technical staff. Rather than achieving proportional representation,
interviewees were purposefully selected from volunteers within the department
to obtain widespread perspectives. Interview and focus group participants were
therefore chosen according to principles of purposeful sampling (Patton 1990).
One-on-one semistructured interviews were conducted with a range of senior
officers including a group interview with all regional directors in the department.
These directors are geographically dispersed, being located within their regions
throughout the state of Queensland. Given their role as instigators and in some
cases, also as recipients of change, it was important to gain regional directors’ perceptions of what changes they were seeking to implement and their perceptions
of what more senior management in the department were seeking to achieve.
Semistructured interviews were considered as the most suitable method to accomplish this as they allowed the main topics and general themes to be targeted
through specific questions, while allowing the freedom to pursue other relevant
issues as they arose (Maykut & Morehouse 1994). These research methods were
designed to draw out managerial attitudes towards, and understanding of, networked arrangements and their implications for labour management relations in
their organisation.
CASE STUDY
The Queensland Department of Main Roads (QDMR) is a large public sector department responsible for the management and development of the statecontrolled roads, as well as joint management responsibility of the total public
road system through a network arrangement with local government (Main Roads
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1998). It is a geographically dispersed organisation consisting of four regional
and 14 district offices (Main Roads 1998). QDMR is also a technically oriented
organisation with high-level expertise in construction and engineering which is
undergoing significant change processes. One such change is a planned shift to a
networked organisation with the priority and focus changing from construction
of infrastructure projects to managing and policy formulation (Main Roads 2000).
Up to the early 1990s, QDMR was characterised by a bureaucratic structure
and culture. A hybrid organisation has evolved through a purchaser–provider split
where the organisation is now comprised of half commercialised/business structures and half bureaucratic administrative structures. The case study is concerned
with the commercial operations arm of QDMR, RoadTek. It provides civil infrastructure delivery to local governments, the private sector and the non-commercial
arm of QDMR through the purchaser provider arrangement (Ryan et al. 2000).
In moving from a regionally based organisation to a statewide operation, RoadTek aims to achieve vertical and horizontal integration of its activities. The goal
is stated to be a self-driven organisation with high levels of leadership skills and
a culture of innovation. Although ICT as an integrated business process is an
important aspect of the project management approach aspired to, another crucial
aspect is communication and the linking of teams through a relational approach
to stakeholders. The vision for the organisation reflects notions of self-learning,
empowerment and networked organisational structures facilitating learning, informal education and alliances.
NETWORKED ORGANISATIONAL APPROACH
The initial changes implemented in RoadTek sought to shift the previous bureaucratic program approach to embrace a ‘commercial project management culture’
through
Ensuring the implementation of a common and consistent business system and process; the development of a project management culture within commercial operations
(Lewis et al. 2002).
The objective of these changes is to become a networked organisation to gain
economies of scope, improve innovation and introduce flexible workforce utilisation. Therefore, QDMR seeks to achieve a shift from the traditional bureaucratic
policy, culture and structure of a public sector organisation and forego authoritarian positions to enter into true network relationships. An overarching structure
has to be found for both parts of the current organisation that is compatible with
the new organisational order.
ADOPTION OF INFORMATION AND COMMUNICATION TECHNOLOGIES
Information and communication technologies established a significant base for
developing the chain of linkages to achieve the ‘ideal’ of a cooperative networked
organisation. QDMR adopted an intranet system, an electronic forum for dispatching messages called ‘Main Roads Junction’ and Gateway, an integrated payroll and human resource information system. However, the introduction of other
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innovative ICTs formed the basis to shift to a new level of interconnectedness
through networks. In particular, Project 21 was an innovative program that has
arguably affected the delivery of new forms of labour management relations.
Project 21 was not only an integrated ICT to improve organisational processes
and business systems but also a change management program. The aim of Project
21 was to shift RoadTek away from a ‘hierarchical, functional structure’ to a
structure ‘based on project teams’ through implementing ICTs that integrate
business systems (Lewis et al. 2002). Project 21 adopted a holistic approach to
achieving these aims by focusing not just on operations and systems but also on
financial and delivery outcomes, the management of stakeholder relations and
a training and development program that sought to achieve skill-based career
progression.
Information and communication technologies provided the platform for shifting to a networked organisation. However, the introduction and use of ICTs such
as intranets and human resource information systems did not initiate the move
to a network. The research findings indicate that recognising the inefficiencies
arising from system inconsistencies in the numerous highly autonomous regional
offices, the implementation of Project 21 and the adoption of a project management approach provided the impetus to explore the notion of virtual teams in
networked organisational structures.
NEW ORGANISATIONAL FORMS—DIVISION OF LABOUR
The project management approach together with a need to develop a way of
providing consistency of operations and flexibility of functions acted as both an
introductory phase and also a continuing feature in the shift towards networked
organisational arrangements. A project is an assignment that has to be finalised
in a specific time frame, is unique and therefore not integrated into established
organisational structures. One senior manager commented that the project management approach was about
Getting them [the districts] to break out of their silos because they have district and
group responsibility and they needed to think about the group as a whole, statewide.
In mid-2001, the director of RoadTek commented:
It’s about getting the whole organisation to operate on project management principles. Whether you are the person who orders the stationery or builds the big project
or road, we want to use project management as the way to do business.
One District Director stated in relation to the implementation of project
management:
All our future projects will be networked projects—better outcomes regarding objectives and goals when people are focused on the project rather than where they come
from.
Thus, the project management approach focused attention on the need not
only to break down the formalised rigidities of hierarchical structures but also to
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adopt an organisationwide perspective. In project teams, the property rights are
centralised in a small organisational unit that is technically able and also motivated to maximise project success (Picot et al. 1999). What was observed within
the Department of Main Roads was the coexistence of these autonomous work
groups alongside a traditional functional hierarchy that was necessarily changing
to allow it to successfully operationalise project management. The autonomy of
the regions, while providing a strong identity for localised work groups, worked
against achieving synergies across RoadTek. Mobility between regions was considered costly and inefficient for the organisation as employees needed retraining
for region-specific systems and work duties.
Therefore, another element introduced simultaneously with the project management concept was working towards a standardised statewide integrated system (Lewis et al. 2002). This approach was not specifically driven by the project
management concept, but rather from a need to align the disparate geographical branches of the department, partly to gain economies of scale and scope
and partly, to enable a mobile, flexible workforce statewide to deal with uneven
workflows.
Senior management within the department wanted to achieve economies of
scale by rationalising the workforces of many different regions. This was to be
achieved through both systems alignment and providing consistent staff training
throughout the state. A senior manager commented that maintaining the independence of the regions came at a high commercial cost. The autonomy of the
regions had acted as a force for employees to adopt a relatively narrow focus on
their functional and geographical area.
The new division of labour focused on achieving higher levels of flexibility of
the workforce, specifically staff mobility. Organisational problems identified by
the District Manager was the ‘inability to move people around the organisation’,
whereas another suggested that teams would now need to be flexible and mobile:
We will either have another large project for them or move them onto minor works.
Project Management brings people in as needed.
In this way, it was argued that the project management approach dislocated
managerial control of employees in their day-to-day work by shifting the teams
between different kinds of work. It was considered to be the start of a dismantling
of traditional patterns of labour management relations. Furthermore, the temporary and mobile nature of work teams required an emphasis on new forms of
communication to connect geographically dispersed members.
A benefit of adopting networked organisational arrangements was therefore
about changing the work environment through the development of sophisticated
ICTs:
People are thinking laterally and they’re looking at having the technology there,
satellite technology, GPS [Global Positioning System] and you’ve got designers there
linking that technology onto their plans, to survey it. . . having it all digitised then
feeding it across to construction crews and they run it into a grader or something like
that to do the job with it. So you’ve got integration from right out in the technological
area right the way through.
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It was contended that a further benefit associated with a highly mobile workforce in a networked organisation was the ability to bring in expertise when
projects required specific or high level skills. One District Manager cited the
case of the Environmental Officer who could be brought from another region
into their more remote region when needed. The ability to shift specialist officers
around to different projects displaces the managerial locus of control exercised at
a particular workplace.
The traditional division of labour has been under threat from moves to develop
a team-based approach and a statewide operational focus. The senior managers
within the department saw an overriding need to deploy teams to different project
sites and that shift started to break down the geographical configurations of a
workforce located within specific regions.
CHANGING LABOUR MANAGEMENT RELATIONS—COOPERATION
Mobilising the workforce and establishing geographically dispersed and temporary project management teams offers the possibility of changes in mechanisms
of management control and the establishment of cooperation. The published objectives of the department suggest that cross-cutting initiatives are integral to
the operation of the workplace at a regional level and are an expected managerial goal. Senior departmental managers have recognised these new organisational
forms require new sets of managerial strategies and imperatives. A senior manager
commented that:
We generally have got to get used to the idea of being able to work in an environment
where we don’t always control the people we work with, they don’t always report to
you, we need to be able to work in these virtual teams or whatever. Because one of
the things we’re finding is if you want to be successful you’re going to have to work
in a whole lot of different ways. You need to be very fluid to meet customer needs so
you’re going to have to form and re-form.
This manager went on to suggest that the introduction of the ICTs in Project
21 paved the way for a completely new way of managing employees:
I think that’s one of the things we’re starting to learn out of Project 21 now is really
you’ve got to get a culture that has an acceptance of people being able to manage
people without controlling them.
The methods of implementing the changes were acknowledged by the Director
of Roadtek as requiring both top-down and bottom-up implementation processes
that took into account employee attitudes and interests.
For one District Director, a networked organisation brought standardisation
and consistency. It also could deliver members of the organisation onto a ‘similar
wavelength’ and thus become the vehicle for developing ‘more common views of
the world’. For another senior manager, the introduction of a networked organisation not only permitted better ‘value for dollars’ but also allowed a ‘focus on
higher level issues’.
For employees, there was recognition that there was a new way of working and an acknowledgement of the possibility of their having input into those
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arrangements with a focus on cooperation. For one employee, the cooperative
approach meant that their ideas were heard and opinions valued. Another employee felt that there was the possibility to shift the frontier of control, ‘since
the relationship framework, there is more room in RoadTek to challenge things.
The general manager encourages people to challenge things’. Another employee
noted the change from the previous culture as a change to greater flexibility observing that, ‘traditionally Main Roads culture is to build monolithic systems
and processes that inhibit flexibility while we are trying to build things more
flexibly’.
The shift was not perceived specifically as a move to a networked organisation,
but to new forms of organisational arrangements.
So where RoadTek is thinking about how we can solve the problem by a different
management style or incorporate project management principles at all projects. . .
Main Roads is just throwing resources at it.
The need for a cooperative approach to implementing networked organisational arrangements was cited as a significant departure from traditional organisational approaches to managing employees. However, it is very early in the
process of changing to new arrangements. Lynch et al. (2000: 409) argue that a
public sector organisation implementing a virtual team approach ‘increases the
availability of talent and expertise, creates synergy and provides different perspectives’. However, a threat lies in weakening the bonds between employer and
employees as this may militate against employees remaining with the organisation and simultaneously weaken employers’ sense of responsibility for employees.
Korac-Kakabdase et al. (1999) further warn that decentralised teams may lapse into
dysfunctional behaviour through the ‘dark side’ of increased managerial control
rather than achieving greater innovation and empowerment.
The potential for such increased managerial control exists in a number of elements of Project 21. In the design of integrated and standardised business systems
across RoadTek exists the possibility of significant control of the labour process.
The concept of an integrated technology guiding a construction project from
survey through to final construction suggests, as proposed by Laurel (1991), that
in the purposeful design of virtual workforces exists the possibility to both control
and be controlled.
Project 21 has also sought to shift the focus of control away from scientific
management principles towards a reliance on financial delivery and performance.
This shift is in keeping with the proposition of Panteli and Dibben (2001) that
these new forms of work organisation result in traditional forms of control being
untenable, leading to a greater reliance on output measurements. While the design
of ICT may seek to reinforce industry ‘best practice’ and therefore managerial
prerogative, the geographical and organisational dispersion of a project team may
ultimately result in outputs being the only real means of control. This suggests
the possibility of a genuine shift in the nexus of control. There is already evidence
that management has recognised the need to alter the traditional control cycle to
cope with projects where workers on a project do not directly report to a particular
organisation or management team.
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Within networked organisations, management therefore appears far from being
obsolete but is more important than ever. Management, however, has to take place
within new organisational forms such as the combination of traditional hierarchy
and project management in the QDMR case. This case suggests that management
is aware of the need to manage without controlling, but that managing project
teams without controlling them is still some way to being achieved. Direct control, however, loses relevance in favour of controlling work results. This occurs
alongside the problems associated with situations where output is hard to measure
or takes time to achieve such as in the often large-scale projects undertaken by
QDMR.
It appears from this case that it is important that both top-down implementation from management and bottom-up implementation from within the groups
and project teams is fostered. Top-down implementation was used in QDMR to
achieve consistency of systems and processes to enable espousal of project management principles. Cooptation therefore appears to have occurred to assimilate
divergent groups towards the dominant hierarchical culture. In terms of cooperation, QDMR employees saw a shift to new organisational forms but did not
necessarily understand the network philosophy. Such a situation may ultimately
have a negative impact on the success of shifting to a network organisational form.
Networked organisations do not work without cooperation between employees
and employers (Royer et al. 2003). Traditional control instruments become ineffective and the statements of QDMR managers underline this. However, May
(2002) argues that control is more important than cooperation leading to the
implementation of control systems in many organisations, often through ICT.
Potentially opportunistic human behaviour leads to risks from a principal agent
point of view (Rumelt et al. 1991) in this context. The problem of opportunistic
behaviour in cooperative work teams cannot be solved by contracts as a traditional way out of this dilemma. Therefore other possibilities for the management
of labour have to be identified. These are argued to be found in the area of trust
and reputation that lead to successful cooperation (Royer et al. 2003).
In considering the empirical evidence presented, team workers in an organisation shifting from a traditional hierarchy to a networked organisation may
experience a shift in their relationship with management to cooperation, but the
relationship may also not be completely free of control. In networked organisations there may be a shift to new output-oriented forms of control and the use of
cooptation. The insights into the case of QDMR as an organisation on the way
to a networked organisation suggest that a balance between control, co-optation
and cooperation is difficult to achieve but that this is necessary to successfully
operationalise a networked organisation.
CONCLUSION
In adopting a networked organisational model, the emphasis of management and
managerial endeavour has shifted to harnessing the effort of different teams in
a project management approach. This process may involve individual workers’
input and effort being split over time, place and project. The arrangement serves
to fracture the traditional management–worker nexus by displacing the traditional
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structure and function allied to day-to-day management and thus has the potential
to change the nature of managerial control.
The process of shifting to a networked organisation necessitates adapting existing organisational arrangements such as the traditional forms of labour division and conventional managerial practices to account for changes in the way
work is scheduled and organised and the way workers are managed. It has been
argued that organisations implementing networked organisational forms create
non-traditional boundaries and fewer bureaucratic structures through the formation of networks. Labour Process Theory posits that the frontier of control is
maintained by management who seek to use authority and coercion to control
the workforce. Network arrangements may however present an opportunity for a
shift in the labour management control nexus through eliminating the ability for
direct control, potentially leading to greater reliance on cooperation to achieve
organisational goals.
The findings indicate that senior managers within QDMR recognise that traditional employee control mechanisms are not applicable to the new network arrangements, acknowledging the need for a change to ‘managing not controlling’.
Although the shift to a networked organisation was in its early stages, the approach signalled that senior managers were seeking a more cooperative approach
to labour management relations. Employees acknowledged the emergence of new
organisational forms, but did not conceive of the new approach as a networked
organisation and did not necessarily conceptualise labour management relations
as cooperative. However, the response of middle managers, traditionally the gatekeepers between senior management and employees, may be crucial in negotiating
the implementation of virtual teams in the new networked organisation.
The management of employees dislocated from traditional forms of managerial
authority through the adoption of networked organisational forms may enable a
shift in the frontier of control. With their reliance on virtual teams undertaking project-based work, networked organisational forms offer the prospect of
transforming traditional managerial roles. The case study indicates that managers recognise the need to change their reliance on direct managerial control
of workers in order to establish a networked organisation. Although employees
recognised new forms of cooperation through consultative mechanisms, they also
identified that these new arrangements may also usher in new forms of managerial
control.
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