Technological progress, organizational change and the size of the Human Resources Department



It is important to observe that the results of these simulations (in particular, as
outlined above, from the qualitative point of view) are consistent with the available
data, concerning for instance the intensity of multi-tasking and other flexible organi-
zational forms, and the behaviour of the workforce employed in the human resources
service (see Tables 2 and 3) following the ICT Revolution of the 90s. This fraction
of the workforce has increased in major economies and started to decrease in the
early 2000s. This is the kind of behaviour that also emerges from the simulation
exercises of the present model, which therefore behaves extremely well in replicating
the organizational features of the ICT revolution. Interestingly enough, our model
predicts a transitory increase in the size of the human resources department in re-
sponse to all the performed permanent technological shocks, which certainly needs
to be corroborated on updated data.

6 Conclusion

This paper develops a model to analyze the intensity of multi-tasking under various
exogenous technological accelerations. The model has two original characteristics: it
includes endogenous coordination costs, and it introduces the size of the human re-
sources department as a key variable for the firms to control their coordination costs.
In our modelling, and building on recent economic and management literature, we
distinguish between vertical and horizontal coordination costs, which proves crucial
in the equilibrium properties of the model. The model also includes endogenous hu-
man capital accumulation, and therefore bring together enough ingredients to study
some highly relevant stylized facts identified in the introduction section in OECD
data. Although technological progress is exogenous in our set-up, and no technology
adoption decision is to be taken, we believe that the model offers a useful shortcut
to analyze the consequences of technological accelerations on workplace organiza-
tion. The fact that all performed numerical simulations corroborate the ability of
the model to replicate the observed stylized facts is a good indication of that.

Two extensions are currently in our agenda. One concerns the incorporation
of an explicit technology adoption decision where the firms have to decide whether
they should buy a more efficient technology also involving costly organizational re-
structuring. This sensitive issue is left in the dark in our framework. A second issue
concerns a component of coordination costs not treated in this paper, but already
explicitly mentioned in the Introduction, that’s the negative impact of flexible or-
ganizational forms (like multi-tasking) on the health of workers by inducing more
stress, pressure and so on, as documented for example by Askenazy et al. (2002). We
are currently studying the normative implications of such a situation (Boucekkine
et al., 2008).

23



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