Liberated Companies: Are they more socially responsible? A quasi experiment in a partially liberated firm
University Savoie Mont Blanc - IREGE, France
Hiring a “Chief Happiness Officer” or measuring employees’ satisfaction at work are typical initiatives taken by liberated companies. They reflect companies’ desire to expand their responsibilities and meet stakeholder expectations, especially social ones (Gilbert, Raulet-Croset, & Teglborg, 2018). However, it remains unclear whether liberated companies are more socially responsible.
Employees take a prominent stakeholder position in the most commonly used definition of liberated companies as an “organizational form in which employees have complete freedom and responsibility to take actions that they, not their managers, decide are best” (Getz, 2009, p. 34). These companies engage in a set of distinctive practices (Picard, 2015), most of which are dedicated to employees, such as active participation in decision-making or the right to make mistakes (Gilbert et al., 2017). However, both organizational and individual outcomes for employees are still debated, some authors stressing a possible “dark side” (Picard & Islam, 2019). While employees should be key beneficiaries of liberated companies (Picard, 2015), results from existing empirical studies do not reach a consensus. While some studies report increased satisfaction of employees (Getz, 2009) or improvement in well-being (Ramboarison-Lalao & Gannouni, 2018), others suggest a resulting increase in employee turnover.
We extend Clarkson’s Corporate Social Performance (CSP) model (1995) to establish this missing link between liberated managerial practices and social performance. Moreover, by focusing on stakeholder expectations, social performance can be measured through employee satisfaction, critical for organizational survival.
This paper seeks to examine whether liberated companies are more socially responsible than non-liberated companies, and if so, which managerial practices can foster this social performance.
We use a quasi-experimental quantitative study to compare the effect of managerial practices on social performance in the case of a liberated unit versus a non-liberated unit. We chose to conduct this study within the same French industrial company in order to control for external and internal contingencies. The managerial practices for liberated companies are derived from the literature and validated by interviews with experts. Social performance is captured by subjective measures in terms of perceptions (Clarkson, 1995).
Nine experts were interviewed using semi-structured interviews that reveal six main managerial practices typical of liberated companies as seen in the literature: (1) the right to make mistakes, (2) personalized support, (3) self-managing work teams, (4) practices promoting autonomy and accountability, (5) information transparency and (6) participative decision-making practices. Then, 50 employees in the “non-liberated” unit and 59 in the “liberated” unit were surveyed (i.e. 109 employees of a total 144). The questionnaire has three parts. First, employees indicated how frequently they used the six managerial practices. Second, they rated the social performance of their unit on four measures (working conditions, loyalty, happiness and satisfaction at work). Third, they provided information on contextual variables including their unit affiliation and their perception of pressure from clients (a preliminary interview with the chief executive reveals that the non-liberated unit is subject to more client pressure).
We used linear regression to identify the effects of managerial practices on social performance. The model includes a dependant variable for social performance that aggregates the four measures, the six managerial practices as independent variables and two control variables. The first control variable tells whether the unit is liberated, and the second variable captures client pressure.
The results are twofold. First, descriptive statistics (t-test) show a significant difference between the “liberated” and “non-liberated” units regarding managerial practices (except the right to make mistakes) and social performance. Secondly, we run a regression analysis to examine the link between managerial practices and social performance, all else being equal. Results show that (1) liberated companies are more socially responsible than are non-liberated. These results are consistent with those of Colle et al. (2017) and Ramboarison-Lalao & Gannouni (2018), whose qualitative studies find beneficial effects of liberated companies on employees. (2) The results also reveal that four managerial practices have a significant and positive effect on social performance (personalized support, right to make mistakes, self-managing work teams and participative decision-making). According to the literature, these managerial practices influencing social performance are those that best characterize liberated companies. For example, if employees are encouraged to participate in decision-making, they need to know that their mistakes are not systematically penalized but result in support and training. This last result indicates that liberated companies not only authorize employee action but “enable” it (Adler & Borys, 1996). This internal consistency is a characteristic of liberated companies (Mattelin Pierrard et al., 2018).
Contribution to Scholarship
This study provides preliminary empirical evidence of the effects of liberated companies on social performance, which is still a subject for debate in the literature. It also contributes to the CSP literature due to its extension of Clarkson’s model (1995) as we focus on managerial practices related to employees. The managerial dimension of CSP still receives little attention, and the link with the model’s outcome dimension remains underexplored (Jamali, 2008; Bourgel, 2018). Moreover, empirical studies on social dimensions remain scare compared to economic and environmental studies (Delmas & Pekovic, 2018).
Contribution to Practice
This study provides empirical evidence on the effects of liberated companies on social performance, which represents a key managerial concern (Anact, 2015; Chabanet et al., 2017). While an increasing number of managers are interested in liberated companies, to initiate or enable “liberation”, they need to know its potential effects. Using Clarkson’s model, this work is meant to be comprehensible for practitioners since stakeholder approaches are recognized to be “easy to grasp by managers as most ﬁrms understand and deﬁne obligations and responsibilities vis-a-vis their traditional stakeholders” (Jamali, 2008, p. 229).
This paper perfectly fits into “Track 9.4 - Freedom in organisations: myths and realities” as it deals with one of the suggested topics related to the effects of liberated companies on social performance.
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Anact. (2015). Synthèse documentaire sur l’entreprise libérée (p. 25).
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Clarkson, M. E. (1995). A stakeholder framework for analyzing and evaluating corporate social performance. Academy of Management Review, 20(1), 92–117.
Colle, R., Corbett-Etchevers, I., Defélix, C., Perea, C., & Richard, D. (2017). Innovation et qualité de vie au travail : les entreprises « libérées » tiennent-elles leurs promesses ? Management & Avenir, (93), 161–183.
Delmas, M. A., & Pekovic, S. (2018). Organizational Configurations for Sustainability and Employee Productivity: A Qualitative Comparative Analysis Approach. Business & Society, 57(1), 216–251.
Getz, I. (2009). Liberating leadership: how the initiative-freeing radical organizational form has been successfully adopted. California Management Review, 51(4), 32–58.
Gilbert, P., Teglborg, A.-C., & Raulet-Croset, N. (2017). L’entreprise libérée, innovation radicale ou simple avatar du management participatif ? Annales des Mines - Gérer et comprendre, (127), 38–49.
Gilbert, P., Raulet-Croset, N., & Teglborg, A.-C. (2018). How the Materialization of a Managerial Model Contributes to its Take Up: The Case of ‘Liberating Management’ in France. In N. Mitev, A. Morgan-Thomas, P. Lorino, F.-X. De Vaujany, & Y. Nama (Eds.), Materiality and Managerial Techniques (pp. 281–305). Palgrave Macmillan, Cham.
Jamali, D. (2008). A Stakeholder Approach to Corporate Social Responsibility: A Fresh Perspective into Theory and Practice. Journal of Business Ethics, 82(1), 213–231.
Mattelin Pierrard, C., Bocquet, R., & Dubouloz, S. (2018). L’entreprise libérée : quelle(s) nouveauté(s) ? Une revue systématique de la littérature. In 27ème congrès de l’Association Internationale de Management Stratégique (AIMS).
Picard, H. (2015). « Entreprises libérées », parole libérée ? Lectures critiques de la participation comme projet managérial émancipateur. Paris 9.
Picard, H., & Islam, G. (2019). ‘Free to Do What I Want’? Exploring the ambivalent effects of liberating leadership. Organization Studies.
Ramboarison-Lalao, L., & Gannouni, K. (2018). Liberated firm, a leverage of well-being and technological change? A prospective study based on the scenario method. Technological Forecasting and Social Change.
The Diversity Behind Freedom-Form Companies : Eight Case Studies on Empowerment and Accountability in the Workplace
Mines ParisTech, France
To do justice to the complexity and diversity that lie behind the umbrella term of ‘freedom-form companies’ (Carney & Getz, 2009), the present study examines in depth how ten companies have reshaped their work organisation in order to give their employees more autonomy and responsibility.
The concept of ‘freedom-form companies’ is widely discussed in the literature on empowerment and accountability at the workplace (Peters, 1992; Carney & Getz, 2009; Laloux, 2014). Many critiques have been levelled against it (Verrier & Bourgeois, 2016; Brière, 2017; d'Iribarne, 2017; Gilbert et al., 2017).
A great deal of research either offers single-case studies or compares several companies with a narrow focus. The present study intends to address this gap by being more systematic: the same analytical framework (a questionnaire comprising 37 items) is applied to ten case studies.
We aim to cast some light on the practices implemented to promote autonomy and responsibility at the workplace, thereby better defining the scope, the context and the limits of subsidiarity. Our study also focuses on the difficulties encountered, along with the procedures needed to overcome them.
• Ten employees from various backgrounds and hierarchical positions are interviewed per case study. A confidential report is submitted to each interviewee for content validation.
• Each case study follows the same analytical framework (37 items). Any cues that could reveal the interviewees’ identity are omitted. The company can suggest edits before the results are published (only suggestions that are consistent with the collected data are taken into account). In case of a major disagreement, the case study may be published anonymously or not published at all.
• The main findings will be discussed in a final report (May 2019).
In order to account for the diversity of ‘freedom-form companies’, our sample includes a wide variety of business types and sizes: two public administrations, two cooperative corporations, three SMBs and three departments of large companies (an insurance company, a telco and an energy provider) were selected.
We are still collecting and processing the data for the last case studies. However, our final results will be available by the end of May. The case studies completed so far suggest there are significant differences along the following variables: objectives of the transformation, attitude of its proponent(s), chronology of events, actors and roles, scope and limits of subsidiarity, benefits and difficulties encountered, exercise of authority and organisational changes.
Contribution to Scholarship
The present study should lay down the groundwork for a typology of ‘freedom-form companies’. Our sample is by no means large enough for us to tackle this immense task on our own. However, the variety of business types and sizes covered in this study should enable us to pinpoint the main variables of ‘freedom-form companies’. Fine-tuning could then be done by further research.
Contribution to Practice
Our hope is that the present study will provide guidance to companies that wish to rethink their organisation and empower their employees. We are building a platform to assist them in adopting practices informed by the successes and failures of others who undertook similar efforts.
The literature often claims that ‘freedom-form companies’ are a major organisational innovation. Our main motivation is to emphasise the diversity that lurks behind this blanket term and debunk some of the myths surrounding it.
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Philosophical roots of freedom and management
1IAE de Paris; 2ESCP Europe
In the land of Rousseau and Sartre, an increasing number of French companies are aspiring to develop alternative workplaces based on the underlying principle of individual and collective freedoms.
Based on the analysis of cases of such alternative workplaces, Getz coined the notion of "Freedom-form" (Carney & Getz, 2009; Getz, 2009). In order to “liberate” employees, organisations are redesigned by flattening out hierarchies, subordinating their functional staff to operational staff and, insofar as possible, replacing formalization by mutual adjustment among employees. It is claimed that this leads to increased empowerment and develops the autonomy of teams. Furthermore, the workforce’s intelligence is mobilised through participation in the decision-making process and a collective involvement in seeking out new opportunities and developing innovations.
These freedom-form organisations strike a particularly strong chord in France, where freedom (or liberty) is part of the national motto: “Liberty – Equality – Fraternity” (liberté-égalité-fraternité). Nevertheless, little thought has been given to what freedom in organisations actually means.
The nascent literature on these freedom forms does not define what freedom actually means in the context of freedom-form organisations. Therefore, it is no surprise that freedom remains a nebulous notion in the realm of companies experimenting with these work practices.
In this paper, we set out to analyse the extent to which the notion of freedom has taken on different meanings and examine how they relate to different philosophical traditions.
We explore the different forms of freedom encountered in freedom-form organisations by analysing three case studies on which the paper is based.
The first of these studies concerns Favi, a firm that, over a twenty-five year period, has developed a freedom-form management model that is considered to be an inspiration in this field. The second concerns Poult, whose management model is clearly inspired by the Favi model, and the third case study relates to Chronoflex, an industrial flexible hose maintenance service company which has more recently begun the transition toward the freedom-form model.
In this paper, we set out to analyse the extent to which the notion of freedom has taken on different meanings and examine how they relate to different philosophical traditions. Therefore, we start by discussing the philosophical foundations of freedom by focusing on five different conceptions of freedom developed in the philosophical tradition: (1) freedom as the absence of impediments; (2) total individual freedom; (3) freedom limited by laws; (4) freedom as non-dominance; (5) freedom through being one’s own master. Secondly, we explore the different forms of freedom encountered in freedom-form organisations by analysing three case studies on which the paper is based. Based on those data, we present five modes of existence for freedom, reflecting different conceptions of freedom in the different social equations analysed in the three case studies.
Contribution to Scholarship
In this article, we have addressed the question of whether freedom-form organisations share the same vision of freedom. Focusing strictly on Getz (2009), his definition refers to ‘complete freedom’ what is related to the second conception of freedom developed in this article. Our research reveals a far more complex picture of freedom in the workplace; indeed, we were able to isolate five different visions of freedom.
Contribution to Practice
The use of philosophical approaches to deepen our understanding of specific management issues is beginning to gain ground in organisational science. Indeed, it can be used to provide executive directors and HR managers with a deeper understanding of organisational changes. We believe that it is particularly useful in analysing what are referred to as freedom-form organisations.
The paper address directly the topic of freedom in organisations.
Arendt, H. (1972) “Qu’est-ce que la liberté ?”, La Crise de la culture, Paris: Gallimard.
Berlin, I. (1969) “Two Concepts of Liberty”, Four Essays on Liberty, Oxford, UK: Oxford University Press., pp. 953-978.
Carney, B. M., & Getz, I. (2009). Freedom, Inc.: Free your employees and let them lead your business to higher productivity, profits, and growth. Crown Business.
Getz, I. (2009) “Liberating Leadership: How the Initiative-Freeing Radical Organizational Form has been Successfully Adopted.” California Management Review. 51/4 (Summer 2009), pp. 32-58
Free-form organization: self-management or another avatar of organizational control? An exploratory study
IAE Sorbonne, France
“Free-form organization” is a fashionable topic making headlines in business newspapers and magazines for several years while very few empirical studies investigate it. It’s reported that in liberated firms, the formal hierarchy symbols are barely visible: reserved parking for senior managers, ranks, titles and formal controls are removed.
The literature on “Free-form organization” is essentially proselytical: Getz (1992) insists on the individual freedom based on the self-determination behavior theory (Deci & Ryan, 2000); as well as “liberation management” by Peters (1992).
Nevertheless, there is a literature on post-bureaucratic organizations that can be a source of inspiration (Maravelias, 2003; Hogdson 2004; Fleming et Sturdy, 2009).
Getz insists on the individual freedom based on the self-determination behavior theory, but he keeps silent on this important question: How individuals attain this self-determination? Very few empirical studies have investigated the question of How individuals are “liberated” in “free-form organization” literature.
This paper aims to explore "Free-form organization" by answering two interrelated questions: what are the new forms of control in “free-form organizations” and how they take place. The answer to these two questions will also contribute to the debate around the question if this management fashion is a real managerial innovation.
It is a qualitative case study based on an auto-ethnographical fieldwork conducted by one of the authors in a commercial organization undertaking the “liberation”, from the beginning of 2018 to spring 2019. The research is performed in a configuration “doing research on living liberation”, that is, the researcher has played two roles simultaneously: full-time Finance Director of case organization and part-time opportunist but reflexive researcher. This empirical approach is inspired by methodological implication of practice turn in strategy which requests simply: “Doing Research on doing strategy”. (Johnson, Langley, Melin & Whittington, 2007)
The case organization is a subsidiary of a large French industrial group which is its sole shareholder and its core business is ground passenger transport between France and Italy. Its staff is less than 50 people located either in Italy or in France. At the end of 2016, its General Director and the Human Resource Director decided to launch the “liberated organization” and obtained the approval of the Board.
Consistent with the research configuration “doing research on living the liberation” and thanks to the privileged position occupied by the researcher who is not only a native insider but also a member of the executive committee of the case organization, the empirical data is constituted of 12 fieldwork diaries triangulated by15 emails, 20 internal documents in Word, PowerPoint or Excel including several presentations to the Board and the several records of the Board meeting.
This paper reveals that in order to "liberate" the employees, the management team of the case organization makes use of several psychological techniques with the assistance of external consultants. Firstly, a personality test is offered to all employee who accepts it voluntarily. Afterwards, several seminars “become manager-coach” are organized in order to train employees to the coaching techniques stemming from the humanist psychology which was born in the fifties in the USA, in particular that of Carl Rogers and Will Schutz.
The use of these techniques aims to implement some new forms of control based on self-management, whereas the existing hierarchical and bureaucratic controls persist.
The implementation of these techniques of management of the self (Foucault, 2005; Brunel, 2004) is not problem-free in this organization. For example, the majority of French employees simply refused to resume the seminar after they practiced the first exercise during which the instructor asked them to “open the mind, the heart and the guts”, and to “lay yourself bare”. Also, some managers just went backwards after they realized the risks of legal consequences for them when the General Manager tried to “liberate” them by granting them the delegation of authority.
Contribution to Scholarship
Our paper is one of the few empirical studies investigating this management fashion “free-form organization”. Contrary to what its proponents claim, the empirical evidence from our research unveils that the free-form organization is far from being control-free since the “new” forms of control are replacing the hierarchical and bureaucratical controls which persist, instead of disappearing completely. Additionally, these “new” forms of control are not really new, because they were born in the fifties.
Contribution to Practice
Our research configuration “a manager studies liberation on living liberation” helps to reduce research-practice gap. The empirical evidence and its theoretical interpretation from our research should also help managers to better understand the importance of control issue during the liberation process and to distinguish the goals from means, instead of being blinded by the tempting discourse of “freedom”.
Empirical evidence from our paper demonstrates that this free-form organization can not be considered as an organization innovation in terms of forms of control. But the co-existence of multiple forms of control observed constitutes a new specific arrangement which is a source of various tensions.
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