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NonEntrepreneurial Firm Motives
Nonentrepreneurial firms, in contrast to entrepreneurial firms, have two distinct sets of motives for contingent resource use: the conscious, intended strategic motives and the emergent motives. The conscious motives are the province of top management and human resource managers. The emergent motives represent how managers below the executive level may use contingent resources in contradiction to or ignorance of top management objectives. Intended and emergent strategies on contingent work use may be decoupled in nonentrepreneurial firms.
Conscious motives for technical contingent resource use focus primarily around flexibility. Firms build contingent resource use into their human resource strategy to staff cyclical areas such as testing and customer support after product release and to staff new areas of business. The use in cyclical areas resembles that found in entrepreneurial firms. Nonentrepreneurial firms, however, are very explicit in noting that contingent positions are not an entree to traditional employment arrangements. The use in new areas occurs for different reasons than in entrepreneurial firms, though. Entrepreneurial firms use contingent resources because they need the knowledge they possess. While nonentrepreneurial firms also need knowledge in new areas, they are motivated to use contingent resources to staff new areas until they better understand whether this area will become something viable longterm. They use contingent resources to reduce uncertainty with regard to new endeavors. When the endeavor proves itself worthy, contingent resources are replaced by traditional work arrangements.
When we have a new area of business, like entertainment or
media or something that we have NO experience in, we wont
know if the business will be around for a long time or if it will
work out. The ratio of contingents to regular will be much
higher in those areas. And some projects just
have periods when you need a lot of people. For example, we
just had a bunch of testers in and now theyre all gone.
Director of Contingent Staffing, large software firm (LR)
In addition to intended strategies for contingent resource use, nonentrepreneurial firms also have emergent practices with regard to contingent resource use. (In entrepreneurial firms, there is no decoupling of the intended and the emergent.) Emergent patterns of contingent resource use focus on circumventing constraints. While it is common for intended strategies to try to build walls around core areas of the firm to block the view of contingent resources, emergent practices expose the holes in these walls. Bureaucratic constraints, in particular, motivate contingent resource use. To circumvent administrative constraints, middle level managers may play an accounting shell game by bringing in contingent resources in order to meet project deadlines without alerting top management that more people are needed to complete a project. Because the funding for contingent resources customarily comes out of an area without strict budgets, the cost of these additional resources raises few eyebrows.
Budget and head count are the big things that executives are
worried about. So managers dont want HR or the execs
to know theyre bringing people in, so they bring in
contractors....then they try to sneak the cost around by
classifying it as some mysterious expense. Executives are
driven by head count.
HR Director, Mid sized software firm (WD)
We use them even in core competency areas, which we really
shouldnt...Theyre in intellectual property
areas. Like the group that does all of the support for our
internal systems. That group is something like 60%
contingent and theyre in really sensitive areas. But
the problem is that we (the entire company) need to budget how
much support we will need for the next year, and nobody really
knows. So then, because nobody budgets for them, they have
no people around. So we end up bringing in contractors.
That worries me. We have maybe 200 people that work as
contractors in really core architecture areas at any time.
Director of Contingent Staffing, large software firm (LR)
Of 653 people in IS, only 250 were full time employees... At
(this company), it took an act of God to hire a fulltime
person. (This company) bypassed the bureaucracy of going
through HR this way. There was no budget for
contractors. But to bring in a fulltime person, you
needed a signature of the President. Literally. So
everyone went contractit was just easier...
HR Recruiter, Mid size software firm (LDMC)
In addition to bureaucratic constraints, technical constraints may also motivate emergent practices for contingent resource use. Project managers, in the process of making certain that customer preferences are well attended to as a project develops, may request that certain features be added to a program or project. Technical personnel, faced with tight deadlines and an ever increasing list of "bells and whistles" requested by multiple constituencies, may resist. To circumvent this resistance, the manager may bring in contingent resources to code the addition. Once it is completed, technical personnel have few arguments to justify not adding the feature. Also, in the process of completing a complex program or project, unrecognized capabilities gaps may surface. Technical staff or project managers may bring in a contingent resource to fill a gap that bridges several areas of established inhouse capabilities. Alternatively, contingent resources may be brought in to code up certain features because of tightening time constraints on the technical staff that may accompany a project as it falls behind schedule.
A note here, too, on cost motives is warranted. As with
the entrepreneurial firms, cost is not a guiding motive.
Even larger companies with very rich benefit packages perceived
the wage difference paid of contingent resources and saved
benefit costs to, on average, balance each other out.
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