An economic and managerial analysis of telework adoption : drivers, impediments and road externality impacts in the Brussels context.

Student thesis: Doctoral Thesis

Abstract

This dissertation has attempted to answer the question whether telework is likely to become one of the dominant work forms in the 21st century. The dissertation suggests that for most of the stakeholders involved, the socio-economic benefits of this practice usually exceed its costs. The present study focused on two specific elements. First, a conceptual framework was developed to determine the key drivers and impediments related to telework implementation. Second, the dissertation assessed the relative procedural and potential effectiveness of telework as a policy tool to reduce road transport externalities.

This final part of the dissertation includes a brief presentation of the major research findings of each of the five chapters of the dissertation as well as a discussion of the challenges they present for future research on this same topic.

In Chapter 1 an introduction was provided to a number of elements critical to the development of a conceptual framework for evaluating the effectiveness of telework implementation as an anti-congestion policy tool. These elements included, inter alia :
1. the identification of the key problems associated with the unconstrained growth in transport demand;
2. the identification of a set of relevant road transport externalities;
3. the definition of the telework concept and a description of its various forms;
4. an assessment of the present occurrence and future adoption potential of the telework practice.

The insights derived from Chapter 1 were instrumental to (a) constructing the conceptual framework to analyze the procedural effectiveness problems associated with the adoption of telework in Chapter 2, (b) the empirical applications of this conceptual framework in Chapter 3 and Chapter 4 and (c) evaluating the potential effectiveness of telework implementation as a policy tool to reduce road transport externalities in Chapter 5.
The main objective of Chapter 2 was to construct a conceptual framework which would allow to assess the various components of the expected procedural effectiveness of telework as a policy tool to reduce road externalities. As indicated in Chapter 1, procedural effectiveness consists of three main components: legitimacy, administrative implementation potential and target group implementation potential. In this dissertation, the focus was on the target group implementation potential, with some attention also devoted to the legitimacy issue, by surveying the main stakeholders involved in implementing the practice (employees and employers). The lesser attention devoted to government administrative implementation issues, resulted from the observation that little or no resources need to be directly allocated by public agencies when implementing the practice. The role of government is viewed more as that of a catalyst or facilitator, rather than that of a conventional regulator. Given that telework primarily results in more choices, rather than less choices or more strongly constrained choices for all affected parties, it also appeared reasonable to restrict the legitimacy issue investigation to the parties directly involved in its implementation, i.e., the organizations and employees adopting the practice.

The telework adoption model developed in Chapter 2 allowed to investigate both the implementation potential of telework in terms of key drivers and impediments, and the impact of telework implementation on road transport externalities. The conceptual framework used for assessing the likelihood of telework adoption incorporates organizational as well as individual-level elements.

In Chapter 3, the first empirical application allowed to assess the organizational parameters relevant for organizations located in Brussels. The choice model relevant to organizations acting as employers of workers who may be interested in adopting the practice revealed that at present the adoption of telework programs in an organization is mainly determined by the following parameters: (1) awareness of the telework concept, (2) the presence of a coordination and control mechanism which is output oriented, (3) experience with flexible work hours, (4) activities in a knowledge based sector, (5) experience with outsourcing and (6) a factor highly correlated with a variable related to the opposition of trade unions and a variable related to clear labour regulations. The same model revealed that, in the future, adoption may be primarily influenced by the following variables (1) awareness of the telework concept, (2) experience with flexibele work hours and (3) the availability of electronic communication. The fact that experience with outsourcing has a positive influence on the current adoption of telework programs suggests that at present cost-savings goals may be important to adopting the practice. Outsourcing is often implemented in order to improve cost-driven control over the non-strategic or lowly skilled labour. This variable, however, does not appear to explain the expected implementation of telework programs in the future. Future telework implementation becomes more likely, pending the availability of electronic communication; this suggests that future programs are likely to be oriented especially towards highly skilled workers. The empirical work led to the conclusion that organizations not yet adopting the practice have the same perceptions on telework benefits but a much more negative view on telework costs, as compared to organizations that have already adopted the practice. The empirical assessment of the environmental elements relevant for telework implementation in Brussels also led to the conclusion that the most effective way to achieve a higher telework adoption rate appears to be through the diffusion of best practices. This conclusion is in line with the research finding that organizations and individuals without any telework experience tend to have an overly pessimistic view of the disadvantages of this practice.

In Chapter 4, the second empirical application allowed to assess the individual-level elements relevant to the adoption of telework for employees employed in Brussels. The individual-level choice model of telework adoption revealed that today the adoption of telework by an individual is determined by the following parameters: (1) the use of a car during work hours, (2) the availability of a company car, (3) the consideration of telework as an available option, (4) holding a clerical function, (5) a positive attitude of the direct superior regarding telework, (6) experience with taking work home, (7) a factor which is highly correlated with a variable reflecting whether telework is perceived as a solution if the employer were relocating and a variable reflecting whether telework is perceived as a solution if a relocation of the private residence were in order and (8) a factor which is highly correlated with a variable reflecting whether teleworkers are socially isolated, a variable reflecting whether teleworking has a negative influence on the culture within an organization and a variable reflecting whether teleworkers are less in touch with the organization. The same model revealed that expected future individual-level adoptions will be determined by the following parameters (1) the use of a car during work hours, (2) the consideration of telework, as an available option (3) holding a managerial function, (4) a relocation factor as described above, (5) a factor which is highly correlated with the isolation and related variables as described above and (6) a factor which is highly correlated with a variable reflecting whether face-to-face contact with the direct supervisor is important, a variable reflecting whether face-to-face contact with other employees is important and a variable reflecting whether the atmosphere in the office is important. The individual-level choice model confirms that highly skilled workers appear to be the prime interested party in expected future telework programs (holding a managerial function appears to be a parameter instrumental to future telework adoption). The comparison of the perceptions of potential regular teleworkers and employees not willing to telework reveals that both categories of workers identify the same benefits of the practice, but the latter category clearly perceives more and higher costs.

The main objective of Chapter 5 was to assess the potential effectiveness of teleworking as a policy tool to reduce road transport externalities. Conventional policy measures aimed to alleviate such external effects (either by reducing or otherwise constraining demand, or by increasing the supply of infrastructure) often require substantial resources, which government agencies sometimes cannot afford to spend. Often such policy measures, especially those at the demand side, require several years before becoming truly effective, either because they require fundamental behavioral shifts difficult to implement in the short run, or because they are themselves associated with unintended side-effects, e.g., in the distributional arena, which in turn need to be corrected. Moreover, policy measures associated with high potential effectiveness such as road pricing, may encounter substantial political and societal resistance. In this context, telework can be viewed as an alternative to conventional policy measures aimed to directly affect traffic flows. The application of the model of Olszewski and Lam and the model of Mokhtarian in order to assess the impact of telework implementation on the number of commuting trips to/from Brussels, revealed that telework implementation can significantly reduce the number of commuting trips, even when recognizing that it may also generate some new traffic. The net impact of telework implementation leads to significant monetary savings in external costs related to road congestion, air pollution, noise pollution and road accidents as well as to energy savings.

In addition, the following three outcomes, resulting from the present study, may be especially useful to the stakeholders involved.

1. The dissertation has revealed that government agencies have a high percentage of employees with a job suited for telework. Furthermore, the research conducted has shown that the most optimal way to enhance telework implementation is through the diffusion of information on best practices. This specific policy measure appears to be associated with both a high potential effectiveness and procedural effectiveness.
2. The research conducted also suggests that current and (potential) regular teleworkers have a positive perception of the influence of telework on procedural justice (the perception of the fairness of the distribution of work rewards relative to the actual work performed) and job satisfaction, whereas non-teleworkers tend to have a negative view of the impact of telework on these parameters (in case they would themselves adopt the practice). This research finding is important, as it suggests that HR-managers do not need to be overly concerned about the impact of telework on procedural justice and job satisfaction when dealing with bottom-up requests to adopt the practice: the own perception of the employees of the likely impact of telework implementation on procedural justice and job satisfaction, acts as a natural selection force. Only the employees with a positive perception are likely to volunteer or to ask for telework implementation projects. The main managerial implication of this research project is that HR-managers can use telework as a human resources management tool to satisfy the needs of highly skilled employees.
3. The dissertation also provides an important policy implication for policy makers in the field of transportation. At present, road pricing is often put forward by transport economists as the alleged most efficient policy measure to close the gap between the demand for mobility and the supply of infrastructure. In principle, road pricing can likely contribute to solving congestion problems. However, the implementation of textbook road pricing would require continuous monitoring of the traffic conditions on each particular point of the network, taking into account the features of each vehicle as well as that of the road to determine the tax to be levied, which should be equal to the marginal costs generated by each particular car, associated with a marginal change in traffic. These requirements, which are virtually impossible to satisfy in practice, undermine the real effectiveness of this policy tool when implemented in real-life situations: given that both the taxation level and the way the tax would be levied in practice will likely diverge substantially from textbook suggestions, major barriers can be expected in areas such as perceived legitimacy, target group implementation potential (including the problem of unintended policy effects) and administrative implementation potential. In practice, a second best policy that entails the introduction of a uniform tax per vehicle-kilometer (perhaps differentiated according to the time traveled) is the most likely approach. A uniform tax implies that every road user is charged the same amount of tax regardless of the external costs really caused. Here, is it doubtful that the affected parties will accept this shift of burden for the sake of overall economic impact. Even when leaving aside this lack of efficiency at the micro-level, the distributive effects of this policy tool are likely to lead to substantial resistance, especially by those categories of road users whose real living standards may be greatly affected by road taxes and who do not have access to acceptable alternatives such as high quality public transport for their commuting trip. Interestingly, these negative features of road pricing could be minimized by offering an alternative to avoid this tax, namely telework and at the same time road pricing would minimize unintended negative effects of telework, through curbing the possible travel generating effects of telework.
Date of AwardJun 2001
Original languageEnglish
SupervisorAlain Verbeke (Promotor) & Rosette S'Jegers (Co-promotor)

Keywords

  • Telework
  • transport externalities

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