Human & Technological Resource Management (HTRM)

New Insights into Revolution 4.0

Payal Kumar, Anirudh Agrawal, Pawan Budhwar, Payal Kumar, Anirudh Agrawal, Pawan Budhwar

• Publisher: Emerald Publishing Limited
• Year: 2020
• Print ISBN: 9781838672249
• eBook ISBN: 9781838672256
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

Industrial Revolution 4.0 is upon us, with disruptive technology rapidly changing our personal and professional lives. In this climate it is not clear how organization reorganization will take place and there is haziness over the strategic HRM required to attract, develop, and retain talent. 

This book shines a light on the rapidly changing work landscape by bringing together international expert contributors, who address issues such as the long-term effects of artificial intelligence and block chain technologies on the firm and on human resources, and deliberate on the effects Industrial Revolution 4.0 is likely to have on both emerging economies and developed countries. A number of fundamental questions are asked: Will HR managers perceive IT as a supporting adjunct or a core operational department? Will man and machine co-exist, or will artificial intelligence have more ominous implications for humanity, as predicted by Stephen Hawking? In other words, is HRM 4.0 an opportunity, a transient phase, or an impending threat? Human and Technological Resource Management is a must read for students and scholars of HRM, as well as anyone interested in the future of technology in the workplace

Part I

Conceptual and Historical Frameworks

Chapter 1

Futuristic Organisational Design: The Role of Technological Imperative in Defining the Changing Nature of Structure, Coordination and People Practices

Tomislav Hernaus, Aleša Saša Sitar and Ana Aleksić Mirić

Abstract

Technological development creates technological imperative for organisations. The most recent is dedicated to digital technologies with a strong influence on the way of managing and organising. To gain a better understanding of the latest business practice, the authors use a multilevel perspective and apply the historical analysis method. Specifically, this chapter explores organisational design (OD) of the future through the evolutionary perspective (spanning across the four industrial revolutions) and brings into focus how technological imperatives modified organisational structure, coordination mechanisms and people/job practices. By reflecting on the historical changes in OD practices that happened throughout different phases of industrialisation, the authors analyse how building blocks of digital OD shape managerial and employee behaviours, thus unleashing the performance potential of digital technologies.

Keywords: Organisational design; industrial revolutions; technological imperative; digital organisation; digital technologies; multilevel perspective

Introduction

Technology – development and application of tools, machines, materials and processes that help in solving human problems (Reisman, 2006) – represents an umbrella term for innumerable advances introduced throughout the history of our civilisation. These developments have made an indelible mark both on society and organisations. Therefore, not surprisingly, technology has been recognised as an important contingency variable determining the level of structure of an organisation (Donaldson, 2001) that is casually prior both to the size of the workforce and organisational structure (see Hickson, Pugh, & Pheysey, 1969). Often boosted through hype cycles, accelerated technological developments create technological imperative (having direct impacts on organisations; see Orlikowski, 1992). The most recent has been dedicated to digital technologies (e.g. social-collaborative technologies, 3D printing and additive manufacturing, artificial intelligence (AI), big data and analytics, blockchain technology, machine learning, robotic process automation, internet of things, etc.).

Digital transformation alters the global economy landscape by introducing new market rules, enabling novel business models and redefining the category of business success. Fast-moving companies, such as Uber, Airbnb and Task Rabbit have already acknowledged this new environmental setting and started to use digital platforms accordingly (see de Reuver, Sorensen, & Basole, 2018), thus making a shift from the traditional (hierarchical) way of managing and organising. Indeed, digital transformation is not so much about technology as it is about transformation of strategy, structure, culture and leadership for choosing the right technology for the right job (Westerman, 2018). Nevertheless, we still do not know whether a digital revolution is just another management fad (e.g. Phillips Carson, Lanier, Carson, & Birkenmeier, 1999), and to what extent organisations are ready for a digital world.

To gain a better understanding of the latest business practice, we use a multilevel perspective and apply the historical analysis method. Specifically, this chapter explores organisational design (OD) of the future through the evolutionary perspective (spanning across the four industrial revolutions) and brings into focus how technological imperatives modified organisational structure, coordination mechanisms and people/job practices. By reflecting on the historical changes in OD practices that happened throughout different phases of industrialisation, we analyse how building blocks of digital OD shape managerial and employee behaviours, thus unleashing the performance potential of digital technologies.

A Multilevel Perspective of Organisational Design

Organisations are multilevel social systems where (1) diverse employees are assigned to various jobs, embedded in multiple dyadic relationships and expected to play diverse team roles; (2) functional and/or cross-functional teams integrate individual efforts and develop intra- and intergroup/unit dynamics; and (3) multiple departments and work processes nested within or spanning across organisational boundaries deliver value through mutual interaction. Therefore, OD is much more than only the structure of an organisation; it represents the deliberate process of configuring structures, work processes, reward systems and people’s practices to create an effective organisation capable of achieving the business strategy (Galbraith, Downey, & Kates, 2002).

Macrostructural design issues targeting system-wide characteristics with a primary focus on organisational structure (i.e. ‘the formal reporting relationships that define roles and authority at different levels of the organization’; cf. Worren, 2012) such as grouping and linkage decisions dictate the basic framework within which all other OD decisions are made (Nadler & Tushman, 1997). While a large number of structural variables have been recognised and examined in the literature, we can conceptualise organisational complexity (the level of vertical and horizontal differentiation), formalisation and (de)centralisation as the most relevant dimensions of organisational structure (e.g. Hernaus, Aleksić, & Klindžić, 2013).

Although important, sole or primary focus on organisation level interactions might limit our understanding of the underlying design mechanisms driving organisational life. Effective design and coordination effort at the unit level of the organisation is recognised as being equally relevant for success as macrolevel design practices (e.g. Nadler et al., 1992). In particular, coordination as a design activity is aimed towards connecting individual positions, work units and organisations in a way to ensure fluent and logical integration of differentiated tasks and work processes. The goal of coordination is to achieve the integration of the organisation without, at the same time, losing its necessary differentiation. Different coordination mechanisms might enable integrating organisational activities and contribute to them. Three basic mechanisms of coordination are: (1) direct control (through an authority hierarchy or chain of command); (2) standardisation (inputs, processes and outputs); and (3) direct communication (between managers, and between managers and employees) (Mintzberg, 1992). They can be used interchangeably or simultaneously, which might in general differ across industrial revolutions.

Designing an organisation ultimately involves job or work design – defining the content and organisation of an individual’s work tasks, activities, relationships and responsibilities (Parker, 2014). Each job consists of distinctive levels of job characteristics (i.e. job demands and job resources) that shape motivation, work behaviour and emotional and cognitive capabilities of job incumbents (Grant, Fried, & Juillerat, 2010). These job attributes (such as work autonomy, task variety, job complexity, skill variety or task interdependence) strongly define employee motivation and workplace behaviour.

Aforementioned levels of designing are highly intertwined. For instance, as argued by Simon (1996):

Structure is to break a big purpose or problem into smaller problems and units. The result is a set of tasks that have to be performed. The coordination is managing these smaller problems, units, and tasks into a whole so that they fit together to achieve an overall purpose.

Along the similar line, Burton, Obel, and Håkonsson (2015) described that

the goal of coordination is to achieve the integration of the organisation without, however, losing its necessary differentiation achieved via organisational unit grouping and task design and bring the units together through choices of adequate coordination mechanisms. (Communications, IT, leadership, culture, incentives, routines and procedures, to name a few)

Obviously, an integrative approach to OD spanning across different levels of analysis is needed and welcome to analyse how organisations operate and create value.

A Brief Overview of Historical Organisational Designs

Historical events have shown that crucial shifts in theory and practice of organisations coincide with industrial revolutions (Kapás, 2008). The industrialisation – a rapid technology-driven transformation in the significance of business operations – started at the end of the eighteenth century. This multiphase process has been accompanied by far-reaching societal, economic and organisational changes.

The first industrial revolution (1800–1875) with the invention of steam engine, cotton spinning and railroads led to a shift from farming to manufacturing society with the establishment of factories characterised by mechanistic design prevailed with functional differentiation (Bodrožić & Adler, 2018), centralised power, exploitation of labour and bad working conditions. Coordination in manufacture production was largely practiced via direct control, and explicitly relied on hierarchical structure of control and formal communication as a way to integrate differentiated tasks. Jobs were rationalised and designed so as to consist of a few routine and manual tasks, at the same time not providing employees with opportunities for discretionary actions and workplace learning. The imbalance in the rights of employees with regard to owners and managers – noted already by Smith (1776) – eventually resulted in setting up first trade unions.

The second industrial revolution (1875–1960) with the development of internal combustion engine and Henry Ford’s instalment of assembly line led to mass production, automatisation powered by oil and electricity, growth of organisations in size, job specialisation and technical division of labour. The birth of modern corporations eventually triggered the development of classic theories of organisation and management, which were primarily single focussed on structural and technical as...

Table of contents

• Cover
• Title
• Part I. Conceptual and Historical Frameworks
• Part II. HRM 4.0: Practice, Strategy and Policy
• Index