Laudon & Laudon, p. 100


"Work is something you do, not a place to go" at Chiat/Day Inc., an advertising agency with operations based in Los Angeles and New York. Chiat/Day is eliminating its offices and letting its employees work from any location they choose. IBM, the consulting firms Ernst & Young and Arthur Andersen, and other firms are starting to follow suit. Some of their employees are supposed to work in "virtual offices," any place like a car, plane, train, or home where they can get work done. Virtual offices are possible because of information technology like cellular telephones, fax machines, portable computers, and other mobile computing and communications devices (see Chapter 9).

Chiat/Day armed its employees with laptop computers and cellular car telephones and eliminated private offices and assigned desks. It redesigned its work spaces to create a feeling of creative unrest. There are workrooms dedicated to specific clients; 10 small project workrooms; a library; several large open common areas for meetings, screenings, or socializing; and audio‑video and print production centers. Employees keep all of their personal items in assigned lockers. Chiat/Day employees can check in whenever they want or work part of the time at home, Chiat/Day believes that this architecture and structure support the organizational need to be nimble and fast in today's fast‑changing business environment.

All seven of IBM's regional U.S. markets are trying to convert to nonterritorial offices. In November 1993 IBM converted seven offices in five midwestern cities into "productivity centers," sending 700 executives into the field right away. These productivity centers replace traditional office environments with small "team rooms" that mobile executives can use when they are around. Each room contains a round conference table, plugs for networked computers, and telephones. Eight executives are assigned to a room on a rotating basis and are expected to use the rooms as ‑work pods" to solve specific problems. After the problems are solved, the executives go back to the customers. IBM expects to convert all of its 30 Midwest locations into productivity centers.

Ernst & Young, the accounting firm, began moving its Chicago‑based accountants and consultants, including senior managers, from offices into a "hoteling" system in June 1992 as means of reducing office space 15 to 18 percent and thereby reducing costs. Office spaces must be reserved at least one day in advance so that everything necessary to do the work, such as personal belongings and files, can be set up beforehand. Ernst & Young has targeted for elimination 1 million of the 7 million square feet of office space it rents nationwide, a savings of $40 million per year.

These companies are not alone. According to Link Resources, a New York market research firm, approximately 7 million people already do at least some of their work on the road; by 2000 this number will swell to 25 million people.

Eliminating private offices can cut down on real estate rental costs and increase the amount of time employees spend with customers. It may help firms comply with the U.S. government's Clean Air Act, which requires companies with 200 or more employees in major metropolitan areas to reduce commuter automobile mileage 25 percent by 1996. Working on the go potentially gives employees more flexibility and control over their own time. The question is, Is it a better way of working? What is the impact of virtual offices on individual identity, worker satisfaction, and corporate community?

Many employees are fearful of the virtual office. To some it sounds too much like downsizing, part‑time work, or a "virtual" work force of consultants. They are frightened for their jobs. Others respond to the loss of daily social contact. According to Andrea Saveri, a director at the Institute for the Future in Menlo Park, California, electronically mediated work raises questions about "the extent to which humans and human contact are needed. It also threatens to fragment an organization. People begin to wonder what's holding them together. "

A Bell Telephone study done years ago on employees working from their homes found that their productivity and morale plunged precipitously unless they kept in very close personal contact with the office. Some fear the breakdown of the separation between the refuge known as home and pressure‑cooker environment known as work. High‑level executives may resent relinquishing offices that they spent years trying to acquire. A few recent studies have been more positive. Surveying 300 Indiana‑based executives, IBM found that nearly three quarters of its mobile employees had become more productive. The company believes that customer‑related activities register the largest productivity gains. Ernst & Young registered 99 percent employee approval of its hoteling arrangement, with reports of increased interaction among employees from different areas and between employees and their bosses.

Companies with virtual offices are experimenting with alternative ways of promoting a team atmosphere. IBM ran staff seminars that described how to stay in touch with peers, managers, and clients and made sure all of its mobile employees had the right equipment for the job‑cellular phones, text pagers, and IBM ThinkPad laptop computers. Chiat/Day runs "team reconstruction" seminars that bring together account team members with senior management and makes computer training part of every employee review. Chiat/Day realizes that not everyone makes an easy transition to a virtual office environment. People fearful of new technology, people with trouble drawing boundaries between work and relaxation, or managers who can't deal with employees who are more empoweredered to make their own decisions will be slow to adapt.


Montieth M. Illingworth, "Virtual Managers", Information Week, June 13, 1994; Phil Patton, "The Virtual Office Becomes Reality", The New York Times, October 28, 1993; and Mitchell Pacelle, "To trim their costs, Some Companies Cut Space for Employees", The Wall Street Journal, June 4, 1993.

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