How the COVID-19 crisis could generate sustainable competitive advantages

    Santiago G. Ponce

The world is amid the COVID-19 pandemic, which impacts society in many aspects. Due to quarantine, routines drastically changed, modifying our relationship with the environment. In the meantime, enterprises and individuals are still adapting to this new scenario.

Crisis often offers opportunities to deconstruct established patterns and routines; however, a certain level of preparedness and openness is required. In this article, we focus our attention on how telework could change the dynamics of work. We will analyze the implications of telework on organizations and its members, as well as how to develop a supportive environment for doing telework.

During the last 30 years telework has been addressed by managers and scholars as a flexible work arrangement that enables people to work from any location distinct than the traditional office on either a temporary or regular basis (Di Martino and Wirth 1990; Maruyama et al. 2009; Bosua et al. 2017). To be more specific, telework comprises the modalities of the so-called virtual office and home office. Hill et al. (2003) define a virtual office environment as those employees who have the portable means to work from a variety of venues. Those in the home office practice an intense form of home-based telecommuting, where the home is the primary work venue (Hill et al. 2003).

However, why is telework so relevant now? While the answer to this question seems to be quite evident due to quarantine and business continuity, telework also puts in focus the type of organizational culture and the barriers to overcome (Standen 2000).

Before the outbreak of COVID-19, telework wasn’t a must. A decade ago, a handful of organizations sincerely embraced telework. Examples such as IBM, Sun, and Cisco Systems already had more than 50% of its workforce working at least one or more weekdays away from the traditional office (Meister and Willyerd 2010; Ruth 2009). Though they were the exception, despite many potential benefits of telework, few organizations offer telework arrangements due to challenges of supervising teleworkers and measuring worker productivity (O’Sullivan and Student 2013).

However, the COVID-19 has accelerated telework’s adoption as a way to cope with nowadays requirements. This could signify a competitive advantage for organizations that were already more amenable to telework in terms of management mindset and cultural fit. What’s more, even after the crisis has passed, these organizations could intensify telework by expanding its current boundaries, disrupting the established working environment preconception, and eventually developing sustainable competitive advantages. Some evidence about the benefits of telework shows greater job motivation, better job retention, more workload success, increased career opportunity, and improved work/life balance (Hill et al. 2003). Additional evidence supports measurable productivity increases, less absenteeism, lower unit labor costs, and an overall improvement in operating effectiveness (Kelly 1988; Kraut 1989).

The scenario for companies who were indifferent or even against telework is quite different. In these organizations, a primary managerial concern about telework is losing control of workers when they are out of sight (Kraut 1987; Olson 1989; Wilson 1991). Therefore, jumping all of a sudden, to a telework scheme could lead to organizational misfits. Previous studies indicate that telework does not always work effectively, as it can conflict with the management style (Bayrak 2012; Hoang et al. 2008; Maruyama and Tietze 2012; Peters and Heusinkveld 2010; Bosua et al. 2017).

Thus, the limitation of telework isn’t technological; it is about managerial mindset and organizational culture. Although the concept of culture has been proven difficult to define, it generally refers to a set of shared beliefs, norms, or assumptions that arise when a group of people has a shared history (Schein 1990).

The latter translates into a set of potential cultural barriers, not only for telework deniers but also for telework advocates. Let’s first analyze the telework deniers. A considerable risk that they might face is incorporating telework only as a result of external pressure, translated into what Meyer and Rowan (1977) defined as isomorphism, which means to be identical or similar in shape, structure, or form to something. In this sense, formal organizations become matched with their context by technical and exchange interdependencies (Meyer and Rowan 1977; DiMaggio and Powell 1983). Following this idea, managers would incorporate telework to the organization’s agenda and eventually re-shaping its formal structure. The risk of the latter emerges when managers do not bear in mind the harmonization of these new practices with the shared beliefs, norms, and assumptions inside the organization. According to Meyer and Rowan (1977), the result is that the new methods are often decoupled from the rest of the organization, leading to an unsuccessful experience. Frequently, the misfit of the formal and informal structures is misinterpreted by the members of the organization, blaming the process and tools adopted, reinforcing a vicious circle of path dependency.

To avoid the latter, organizational leaders need to focus on stimulating the organization throughout their mindset and behavior. Acting as role models, harmonizing the organization’s culture and shaping the company’s system, represent a must when it comes to change.

Regarding telework advocates, the horizon seems to be more accessible. However, telework also presents some challenges. Kurland and Bailey (1999) found that telework may lead to less synergy because of less informal learning, weaker organizational culture, less availability during regular business hours, and loss of non-verbal communication, all of which may lead to decreased job performance (Kurland and Bailey 1999). Following this assumption, managers would need to balance telework with a set of social activities to keep the organizational culture alive as well as to reinforce the knowledge creation process, especially in the phase of socialization (Nonaka 1990)

In a nutshell, mindset and behavior are critical elements for both organization types. Organizations need to navigate turbulent waters in the following months. Beyond assuring continuity in times of the crisis, telework could represent a set of opportunities such as reducing costs, avoiding lay-off, building up sustainable competitive advantages, increasing motivation, and improving work/life balance. However, telework success will rely on the mindset and behavior of management and its harmonization with the organization’s processes and structure.

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