STRATEGIC INTEGRATION OF WORKPLACE DESIGN FOR ENTREPRENEURS AND INTRAPRENEURS Joshua Hall Kelley A Thesis Submitted to the University of North Carolina Wilmington in Partial Fulfillment of the Requirements for the Degree of Master of Business Administration Cameron School of Business University of North Carolina Wilmington 2008 Approved by Advisory Committee L. Vince Howe Coordinator Accepted by _____________________________ Dean, Graduate School TABLE OF CONTENTS TABLE OF CONTENTS.........................................................................................................................ii ABSTRACT...........................................................................................................................................iii LIST OF FIGURES................................................................................................................................iv CHAPTER I: INTRODUCTION............................................................................................................1 CHAPTER II: LITERATURE REVIEW ................................................................................................3 Functions of Office Design ..................................................................................................................3 The Concept of Workplace Performance and Its Value to Managers.....................................................9 Technological Innovations in the Work Environment......................................................................... 16 Workplace Design in Practice............................................................................................................ 18 CHAPTER III: METHODOLOGY....................................................................................................... 22 CHAPTER IV: RESULTS & FINDINGS............................................................................................. 24 Figure 3. Three Pillars of Strategic Workplace Design (WD)............................................................. 26 Purpose of the Three Pillars of Strategic Workplace Design Model .................................................... 27 Testing the Three Pillars of Strategic Workplace Design Model......................................................... 29 Figure 5. Three Pillars of Strategic Workplace Design @ SEI........................................................... 41 CHAPTER V: CONCLUSIONS........................................................................................................... 42 REFERENCES...................................................................................................................................... 44 ii ABSTRACT This study was designed to explore the effects of workplace design on employees, organizational culture, and the work environment. A Meta­analysis of academic literature on workplace design was conducted and revealed three functional roles of workplace design that affect business operations. Furthermore, the analysis revealed that workplace design can influence productivity levels on individual, team, and organizational levels. These findings led to the creation of a generic business model that can be used as a starting point to evaluate the potential role of strategic workplace design strategies in a company. The “Three Pillars of Strategic Workplace Design” model’s usage is validated by cross verification with a case study that examines the Software Engineering Institute’s successful design strategies. Based on current research, the “Pillar” model will work as a generic model and starting point for companies looking to enhance the business by investing in workplace design. The model acts as a guide for businesses to develop a design strategy that reflects and clarifies the culture of the company, but also embody all of the overarching values that drive the fir in order to increase market competitiveness and business sustainability. iii LIST OF FIGURES Figure Page 1. A Framework of Leveraged Office Design ................................................................. 7 2. Ranges of Environmental Comfort ........................................................................... 13 3. Three Pillars of Strategic Workplace Design (WD)................................................... 26 4. Workplace Design and Art Are Drivers of Growth and Innovation ........................... 31 5. Three Pillars of Strategic Workplace Design @ SEI ................................................. 41 iv CHAPTER I: INTRODUCTION As today’s business environment changes, so does how, when, and where workers perform their daily tasks. The advent of mobile technology and electronic communication has, in part, led to a new corporate focus on strategically designing workspaces that maximize both individual and company output. A framework of the effects office design has on business operations reveals three functions: instrumental functions (improving performance and satisfaction), symbolic functions (creating identities and cultures), and aesthetic functions (invoking sensory responses and place attachment). The environmental conditions molded by office design have effects on three levels of productivity: individual task performance, collaborative teamwork, and organizational effectiveness. Further, recent innovations in workplace design have created new office design concepts, such as the “hoteling” office, the office as a club, the virtual office, the home office, and the paperless office. In addition, Ernst & Young (US tax company) and Vodafone (New Zealand based international mobile network company) have effectively integrated their corporate missions with design concepts and created fun work environments that foster productivity and efficiency. Based on a Meta­analysis of research studies, four research questions evolve: What role does office design play in the daily business operations of a company? How does the workplace affect performance and productivity of employees? What are some recent innovations in the working environment? How has workplace design been applied in a “real world” setting? In answering these questions the need for a systematic approach to design considerations was developed. The main purpose of the study is to therefore develop and support the creation of a business model that provides a method for new and existing businesses to evaluate the integration of workplace design into their business. 2 CHAPTER II: LITERATURE REVIEW Functions of Office Design A corporate focus on office design has increased the amount of academic research conducted among fields such as sociology, environmental psychology, organizational identity, and organizational symbolism (Elsbach, 2007, p. 82). Research among these fields has revealed that outside of practical function, office design, also affects every part of a firm’s operations. In the sociology field, studies show that office design can signal status and group membership, improve collaboration and problem solving between groups, and affect people’s attachment to their workplaces (Elsbach 2007, p. 82). In the other three aforementioned fields, research has provided evidence that office design influences individual identities, creativity, and mood, in addition to traditionally researched variables such as comfort, safety, and ergonomics (Elsbach, 2007, p. 82). The many effects of office design on business operations have led researchers to develop a framework that encompasses the business functions of office design. Anat Rafaeli and Iris Vilnai­Yavetz’s framework portrays the role of office design in three functions: instrumental functions, symbolic functions, and aesthetic functions (Vilnai­Yavetz & Rafaeli, 2006). First, instrumental functions can be defined as any function resulting in improvements in the performance and satisfaction of office workers. Traditional research in instrumental functions focused on efforts to improve efficiency and output, whereas more current research has been focused on the effects of office design on information transfer and transmission among knowledge workers and groups (Vischer, 2007, p. 83). Office design positively affects the decision making process while encouraging collaboration. 3 Important decision making processes require that all necessary resources are easily accessible. According to “evidence­based management” theory(Elsbach, 2003), managers make better decisions when they use “hard” data and archives during the decision making process. This is to say that strategic office design can deter managers from seeking personal, less reliable sources by making all resources readily available. Also, office design affects collaboration by managing boundaries and providing sufficient space and objects that facilitate social interaction among co­workers. Boundary objects are located between groups with divergent viewpoints and are used to pool heterogeneous information and help solve organizational problems (Elsbach, 2007, p. 93). The creation of a location, in an office, that acts as a hub for workers can help foster informal communication and develop strong ties, resulting in increased collaboration. Second, symbolic functions (identities and cultures) are perceived, in variance, by employees according to office layout and décor. A company can affirm an employee’s individual distinctiveness by allowing them to decorate their office with personal mementos or they can affirm the status of a group by using task­relevant décor. Personal décor allows an employee to develop