Flexibility in the Networked Society

Welcome

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I have chosen to focus my web log on Manuel Castells’ concept that flexibility is an important feature of the networked society. Organisational structures and processes need to be flexible to cope with change (Flew 2002, p.68).

I have highlighted three organisations - The Glue Society, IKEA and HealthDirect Australia – which I believe reflect the hypothesis discussed in study topic five ‘that flexibility is the preferred organisational quality for the successful use of the new informational media’. I have discussed The Glue Society and IKEA in more detail however I felt that HealthDirect Australia was a unique example of a public health service which is also adapting in the new ‘information age’.

The Glue Society provides a unique and flexible alternative to the traditional advertising agency. It is a creative collective of freelance art directors, designers, writers and film directors. Home furnishing store IKEA is an example of a ‘flat and boundaryless’ organisational structure which has adapted to a rapidly changing world with shoppers becoming pro-sumers – half producers and half consumers. And finally, HealthDirect Australia is a national health call centre based in Tasmania. Calls to local emergency department triage desks are diverted to the call centre which provides health advice to callers throughout Australia 24 hours a day, 7 days a week.

The Glue Society

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The Glue Society is a unique and flexible alternative to the traditional advertising agency. The Glue Society is a creative collective of freelance art directors, designers, writers and film directors whose work stretch across media and incorporates graphic design, sculpture, installations, art exhibitions, live events and books alongside more traditional print and television advertising (The Glue Society 2007). The structure of The Glue Society confirms Castells’ theory that in the new informational organisation, a flattened staff structure provides the creative freedom in the ‘research and development’ and ‘applications and specifications’ sections of implementation of new and adaptive production.

The Glue Society was established in Sydney in 1998 by former Young & Rubicam art director / copywriter team Jonathan Kneebone and Gary Freedman (Advertising’s Guns for Hire 2006). They reject the title ‘agency’ and the idea of having retained clients, preferring to be referred to as a ‘creative collective’ or ‘creative enterprise’ (Bridging the Divide 2005). They provide creative content and work on a project-by-project basis for brands, agencies and individuals around the globe without the traditional long-term account management, planning and media buying associated with advertising agencies. However they are able to deliver much more creative variety than the individual creative person or team employed by an advertising agency (Advertising’s Guns for Hire 2006).

There has been a shift in organisational units from being capability oriented to being project oriented (Geof 2005). Resources are brought together to work on projects and then dispersed again when the project is complete. This new environment requires flexible and skilled workers. Unskilled workers who have nothing to offer the network are excluded. According to Zygmunt Bauman (Liquid Modernity), in the last 40 to 50 years, we have moved from a solid stage of modernity where we live and work towards a specific project, to a liquid stage where we work from one project to another across the globe without acquiring expertise in a specific area. Our society has become integrated by projects.

Kneebone and Freedman attribute the formation of The Glue Society to Rupert Murdoch (Advertising’s Guns for Hire 2006). While working for global advertising giant Young & Rubicam, they produced a book for News Limited - as opposed to developing the expected print advertising - to persuade agencies and marketers that newspapers were an exciting medium. The book which featured provocative designs by artists and designers had no connection to advertising and although Young & Rubicam supported their idea, it was evident that they were in the business of producing advertising – not books – so Kneebone and Freedman established The Glue Society so they could do those types of creative projects. The Glue society has won numerous awards including the Cannes Advertising Festival’s Grand Prix Direct award in 2004 and the prestigious Titanium trophy in 2005 (The Glue Society 2007).

Commentary – what do others say

Business Week: Helen Walters reports in Advertising’s Guns for Hire (2006), that ‘while the advertising industry continues to debate its place within the media landscape, The Glue Society has sidestepped the issue to focus on creating content across all media’. According to a report by Robert Coen, Senior Vice President and Director of Forecasting at Universal McCann, worldwide advertising expenditure reached $599.5 billion in 2006, an increase of 5.3% since 2005 (Advertising’s Guns for Hire 2006). However Coen claims that new technology is having an impact on advertising strategies and there is considerable confusion about the direction of marketing communications. Concern is also reaching critical mass within the traditional advertising agencies themselves regarding the rapid change in marketing and no one within the industry seems to know where it is heading (Advertising’s Guns for Hire 2006). However Walters reports that while the advertising agencies themselves have a problem, advertising is by no means dead, ‘it is just that the old order of things won’t cut it anymore’.

Boards: The Brooklyn Brothers provide a similar ‘creative collective’ out of New York (Bridging the Divide 2005). According to one of the founders, Barnett, new technology has been an enabler as large TV production teams are no longer needed. There are enough people in the industry to gather small teams together to be able to service their clients.

IKEA

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IKEA was established by Småland entrepreneur, Ingvar Kamprad in the 1940s (IKEA 2007). The original IKEA concept was based on providing a large range of quality, well designed, functional home furnishing products at the lowest price possible so that as many people as possible can afford them.

Kamprad started advertising in local newspapers in the late 1940s and soon became too busy to make house calls (IKEA 2007). As a result, he produced a mail order catalogue which he had delivered via the local milk round delivery. This was the beginning of the free annual IKEA catalogue which today, is produced in 27 languages for 34 countries / territories throughout the world and delivered to more than 100 million homes, free of charge. Interestingly, the catalogue is still an integral part of pulling customers and consistent with modern push technology although society has moved significantly towards post modern pull technology in new communication and media and indicates that we still continue to use old and new media together.

The first IKEA store outside of Sweden opened in 1963 (IKEA 2007). The opening was such a success that it led to the idea of opening up the warehouse and allowing customers to serve themselves. Another important development of the IKEA concept demonstrating IKEA’s flexible organisational culture. IKEA customers are actively involved in the shopping experience, choosing, collecting, transporting and assembling the IKEA products. Flat packaging resulted in reduced transport costs which also meant lower prices for consumers. According to IKEA of Sweden (1996), IKEA shoppers are pro-sumers – half producers and half consumers. This is consistent with Foucault’s ‘technologies of power relations’ discussed in lectures where the consumer becomes part of production. Knowledgeable co-workers are available to provide advice and support if needed, but the concept of ‘you do your part, we do ours, and together we save money’, relies on very limited sales support and service. The industrial economy was based on a value chain from manufacturers to retailers whereas the value chain in the new information economy includes positions related to information technologies such as designers and operators (Introduction to the Network Society 2007).

IKEA were also very quick to establish a presence on the Internet in 1997, with their history timeline on their website stating ‘1997 - IKEA opens in a place where no one lives – the Internet’. Their website today is a global portal which provides information about the IKEA concept and franchising and provides links to individual sites providing local information.

IKEA founder Ingvar Kamprad is quoted in a 1993 Annual Report stating ‘if retailers are to succeed in an overseas market, they must not only master the traditional skills of market segment cultural and economic traditions of the host country’, (Ikea of Sweden 2006). Today, IKEA has more than 235 stores in more than 30 countries and more than 110,000 co-workers.

IKEA has developed its own global distribution network with suppliers usually located in low-cost nations, with low proximity to raw-materials and reliable access to distribution channels. The products produced are standardised for the global market (Ikea of Sweden 1996). Although the strategy to standardise products does consider cultural sensitivities, IKEA’s marketing manager believes that consumer tastes are merging globally.

Although IKEA is made up of many organisations throughout the world which employ co-workers to perform a specific purpose and function and manufacturers are subcontracted throughout the world for supplies, some functions such as such as research and development are centralised in Sweden. Other functions such as human resources, finance and store construction also span the whole company regardless of organisational boundaries. Other support functions including, Information Technology, Communication, and IKEA Indirect Materials and Service also provide service to IKEA stores globally.

For example:

· Their Communication Division is responsible for producing the catalogue which is distributed to 250 million homes throughout the world. The Communication Division produces all on-line and hard copy publicity and information that reaches their consumers and co-workers world-wide. Employment in Communication is only available in Älmhult, Sweden.

· The IKEA Indirect Materials and Service section purchases all of the materials that the IKEA co-workers need to perform their work. This includes uniforms, pens and forklift trucks. With the sheer size of IKEA world-wide, this provides them with maximum buying power to purchase goods at low prices. This service is located in Sweden, Germany, France and the USA.

· IT is located in Sweden, Germany, France, USA and Singapore.

Since all of these functions are carried out in a similar way, co-workers can easily transfer their experience from one part of IKEA to another providing them with personal and professional developmental opportunities (IKEA 2007).

The flexibility of modern business is a reflection of the flexible nature of new networks (Introduction to the Network Society 2007). In the 19th century, the structure of business was generally vertical with its reliance on mass production systems and mass distribution networks. However new technologies in the new economy have altered business structures to become flexible and horizontal with production and consumption relying on the new global and digital networks (Introduction to the Network Society 2007). Organisations can redeploy their workers from one market to another globally, since the global economy allows flexible and arbitrary linkage between nodes.

Commentary – what do others say

Dr Les Pang uses IKEA as an example of a flat and boundaryless organisational structure (Pang, L n.d.) Pang claims that problems with traditional organisational structures include lack of flexibility to adapt to a rapidly changing world, poor communication of ideas, difficulty for customers and suppliers to navigate the organisation, turf battles and poor responses to customer needs. By reducing the layers in an organisation, optimal efficiency and effectiveness are achieved (Pang, L n.d.).

Pang highlights IKEA’s close working relationship with its suppliers which has brought production to world class standards and acknowledges their ability to refine the role of the customer to choose, select, transport and assemble their products which has resulted in lower prices for customers and global growth for IKEA (Pang, L n.d).

HealthDirect Australia

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HealthDirect Australia, provides another example of Castells new informational organisation. HealthDirect Australia is a national health call centre network based in Tasmania which was introduced by the Australian Government in July 2007 (HealthDirect Australia begins operation 2007). All people living in Western Australia, Northern Territory and Australian Capital Territory can call a 1800 number for health advice 24 hours a day, seven days a week.

Currently in South Australia, only people calling Flinders Medical Centre’s or Noarlunga Hospital’s Emergency Departments for information or advice are transferred to HealthDirect Australia. Services will be available in New South Wales from 2008 and national coverage achieved in by 2011. Once the national network is fully operational, anyone in Australia can seek advice from a registered nurse at HealthDirect Australia, ensuring all Australians have access to health information when they need it.

According to the Department of Health and Ageing (Overview of the National Health Call Centre Network 2006), health call centres are an effective way of providing the community with advice and information to make decisions about their health care without time or geographical restrictions. Registered nurses, ‘supported by a single national set of electronic decision support software and algorithmns, provide safe and effective health triage, information and advice to callers’ (Overview of the National Health Call Centre Network 2006).

It could be said that registered nurses are an example of the skilled workers who have moved to the bottom of the organisational structure in the shift from the ‘heavy’ industry to the ‘light’ industry. However, nurses working for HealthDirect Australia are an example of ‘heavy’ industry skilled workers who have moved to become informational workers.

Castells (Introduction to the Network Society 2007) states:
‘The more our information systems are complex, and interactively connected to data bases and information sources, the more what is required from labor is to be able of this searching and recombining capacity. This demands the appropriate training, not in terms of skills, but in terms of creative capacity, and ability to evolve with organisations and with the addition of knowledge in society.’

Bibliography

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