tele commuting & its effect on global economy of 21st century

8/8/2019 Tele Commuting & its Effect on Global Economy Of 21st Century

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ACKNOWLEDGEMENT

For fulfilment of my 4th trimester Global Economy course, I went for this project forone weeks duration and it

bears inspirit of several person. Doing this project in between my PGDM course isvery helpful for me. It has given a lot of experience to me regarding the theoretical &practical ground realities and also improved my personality. Be hind everyachievement there are some immortal memories .it is a valuable opportunity for meto express my heart gratitude towards all those who helped me in the best possibleway by giving their unforgettable support both by behind front of screen and thescreen.

The completion of any project depends upon the co-operation, coordination andcombined efforts of several resources of knowledge, inspiration & energy.

For their moral support and encouragement throughout my project work.

I am grateful to my team mate For their moral support and encouragementthroughout my project work & the contribution and whole hearted support and all,which truly reflect their deep insight into the project and the professional touch whichis their benchmark.

I express my sincere thanks to Prof. S.S. Sarma (Faculty, Inmantec), who gave meprofessional advice from time to time, & Whose constant guide and support madecompletion of this project more enriching experience.


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PREFACE

The PGDM curriculum is so designed that student get enough practical knowledge ofbusiness world which helps them to explore their skills in the corporate world infuture.The purpose of this report is to explain what I did and learned during myproject period.

This project looks at the evolution of telework as well as the benefits and potentialproblems associated with this growing phenomenon. One of these issues, effectiveleadership of teleworkers, is the focus of the article. The authors suggest thatSituational Leadership"m, a economical model which has been in use since the late1960s, is an appropriate tool for leaders to use in successfully influencing their off -site workers

Pritam Ghoshal


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EXECUTIVE SUMMARY

The first telecommuter on record was a Boston bank president who installed a phoneline between his bank and home in 1877. (Langhoff, 1996) What allowed thisevolution from this humble beginning to our current state of affairs has been thedrastic evolution in computer technology. Home computers today are about 80percent faster than the original IBM PC and their price dropped roughly 40 percentduring the 1990s. That, combined with the developments in the world wide web,video conferencing, groupware, digital phones, and satellite communications, havemade virtual offices more feasible and popular. (Bredin, 1996) Some home officestoday are probably more technologically capable than many corporate offices wereten years ago. In a country where in 2000, fifty -one percent of all households had

home computers, this provides the opportunity for a dramatic shift in work dynamics.(U.S. Census Bureau, 2001) Such is the case in the United States today.Telecommuting, while still in its infancy, has already drastically changed businessesall over the world. While employers can now offer a new way for employees to workand thus increase their productivity, as well as tap into never before accessible laborresources, they must also change old attitudes and break down outdatedmanagement practices to capitalize on this new resource..


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INTRODUCTION

Definition of telecommunicating

A work arrangement in which supervisors direct or permit employees toperform their usual job duties away from their central workplace, in accordance withwork agreement.

In recent years, the concept of telecommuting has received considerableattention, from the media, from would-be practitioners, from employers, from

potentially affected industries (telecommunications services, home office suppliers)and from public planners and policymakers. On net, telecommuting is perceived bymany of these parties to have important personal, organizational, social, economic,transportation, and environmental benefits. These benefits have been documentedto varying degrees in the academic and popular literature. For example, any numberof mass-market books (Kugelmass, 1995; Nilles, 1994; Gray et al., 1993) onimplementing telecommuting (from the perspective of the employee, the employer, orboth) describe,conceptually and anecdotally, various benefits as well as potentialdisadvantages (while finding that the former outweigh the latter when telecommutingis appropriately applied).The advantages and disadvantages of telecommuting have

been evaluated from the perspective of the employer (Bernardino and Ben-Akiva,1996; Duxbury et al., 1987; Yen et al., 1994) and employee (DeSanctis, 1984;Gordon, 1976; Hesse, 1995; Katz, 1987; Mahmassani et al.1993; Mokhtarian andSalomon, 1997; Varma et al., 1997; Salomon and Salomon, 1984; Sullivan etal. ,1993).

On the transportation and environmental side, a sizable number of studieshave documented the benefits at the individual and program level (Hamer et al.,1991, 1992; Henderson et al., 1996; Koenig et al., 1996; Pendyala et al., 1991),

while some have expressed caution about extrapolating those benefits to anaggregate or systemwide level (Mokhtarian et al., 1995; Salomon, 1984, 1995;Mokhtarian, 1997). Others, such as Dagang (1993) and Nelson and Shakow(1995),have examined the effectiveness of telecommuting compared to theeffectiveness of other transportation demand management measures. Some of thetelecommuting advantages and disadvantages that have been identified in theaforementioned studies have obviously included various costs and benefi ts.


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However, it is notable that the determination of which benefits or which costs wereincluded, or conversely which were ignored, has largely not been addressed.

As will also be seen, those studies that do go into some depth on the

economic evaluation of telecommuting have often lacked appropriate discounting 2methods and characterization of variable uncertainty. In part, this lack of asystematic accounting of benefits and costs and their uncertainties, has been afunction of the evolution of telecommuting itself; as the practice of telecommutinghas grown so also has an understanding of the range of plausible benefits and costs.

TELECOMMUTING: WHAT IS IT?

Telecommuting, also known as telework or work at/from home, allows individualswhose jobs can be conducted away from the office to do so remotely from home or asatellite location.Telecommuting is generally used by companies whose employeesrely on the Internet, computers, and phones to complete tasks. Modern technologymakes computer work possible virtually everywhere, and with wireless capabilities,employers can offer virtual access to work servers from remote locations.2 Clearly, itwould not be appropriate or feasible for certain

retail or public service jobs. Telecommuting offers several benefits to individuals,

organizations and their communities. Individuals are able to cut gasoline costsandmileage on personal vehicles, which also impacts community congestion and airquality. In addition to environmental benefi ts, various human resource managementstudies have found that employees are at least as effective, if not more, in a homesetting as in the offi ce, improving organizational productivity and employee morale.Thirty percent of chief f i nancial offi cers surveyed by staffi ng c onsultant Robert HalfInternational said telecommuting is the best way to attract talent, and almost 50%said it was second best, after salary.3 Of course, there are drawbacks totelecommuting, which range from potential abuse by employees, loss of officeinteraction, limited direct management, and workplace safety issues, among others.


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TELECOMMUTING IN THE 21ST CENTURY: BENEFITS, ISSUES

In the first years of the 2 1st century, America finds itself well along in the transitionto Toffler's third wave, the post-industrial society characterized by knowledgeworkers who are far more educated and professional than their forebearers. Many ofthese workers are deserting the traditional factory or office and working in non -traditional environments such as hotel rooms and home offices. Can Both centuryleadership techniques work in this age of the teleworker or is a drasticreconceptualization of leadership needed?

This article posits that one time-honored leadership model, Situational

Leadership(TM), can be effectively applied by leaders who work with teleworkers ofall types. First, however, the authors look at the definition and evolution of teleworkin the United States and then investigate the benefits and challenges associated withthis relatively new phenomenon.

Telecommuting, telework and teleworking are terms used somewhatinterchangeably. Telecommuting involves working at one's home or another locationwhere employees use computers and communication technology to communicatewith the main office, supervisors, co-workers, and customers. (Gainey et. al, 1999)

Telecommuting occurs whenever an employee is paid for work done at an alternativeworksite and total commuting time is thereby reduced. (Mariani, 2000) This does not, however, include self-employed persons or those employees who feel it necessaryto take work home with them on a regular basis. An alternative worksite can bedefined as a person's home and/or office, a satellite office, or a telecenter. Atelecenter is a satellite office shared by more than one employer. While it does notappear to be a telecommuting situation, it is. Employees may only have to commutea shorter distance than they would otherwise.

The International Telework Association and Council prefers the term "telework" ITA Ccautions that much of the current literature refers to telecommuters as those who"work at home during the day for part or all of the work week instead of going to theoffice." (ITAC, 2001, 1) ITAC goes on to define telework:


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Telework is a much broader term that means using telecommunications to workwherever you need to in order to satisfy client needs; whether it be from a homeoffice, telework center, satellite office, a client's office, an airport lounge, a hotelroom, the local Starbucks, or from your office to a colleague 10 floors down in thesame building-wherever. (ITAC, 2001, 1)

For purposes of this paper, the authors will use these terms interchangeably to meananyone who, with full approval of the employer, regularly conducts business from anontraditional office location.

Evolution of Telework

The first telecommuter on record was a Boston bank president who installed a phoneline between his bank and home in 1877. (Langhoff, 1996) What allowed thisevolution from this humble beginning to our current state of affairs has been thedrastic evolution in computer technology. Home computers today are about 80percent faster than the original IBM PC and their price dropped roughly 40 percentduring the 1990s. That, combined with the developments in the world wide web,video conferencing, groupware, digital phones, and satellite communications, havemade virtual offices more feasible and popular. (Bredin, 1996) Some home officestoday are probably more technologically capable than many corporate offi ces wereten years ago. In a country where in 2000, fifty-one percent of all households had

home computers, this provides the opportunity for a dramatic shift in work dynamics.(U.S. Census Bureau, 2001) Such is the case in the United States today.Telecommuting, while still in its infancy, has already drastically changed businessesall over the world. While employers can now offer a new way for employees to workand thus increase their productivity, as well as tap into never before accessible laborresources, they must also change old attitudes and break down outdatedmanagement practices to capitalize on this new resource.

By 1996, people who telecommuted in some fashion made up about ten percent ofthe U. S. workforce. (Langhoff, 1996). These telecommuting arrangements can varyfrom working in a conventional office most of the week, but being able to work from aremote location as needed, to workers who never go to an office. Some corporationshave also set up remote office centers, to which employees can commute, usuallyonly a short distance from their residences, and have all the conveniences of themain office. These remote office arrangements have proven especially attractive inareas where property values are extremely high, or there is much congestio n on thehighways, such as in Silicon Valley. Although in the past telecommuting was drivenmostly by employees and their desire for more flexibility, increasingly employers are


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beginning to embrace this trend due to the substantial benefits they can achie vefrom it.

A 2000 research survey sponsored by AT&T and conducted by the Behavior

Research Center concluded that 16.5 million employees aged 18 or over can now beclassified as teleworkers. Interestingly, the same survey showed that while morethan half of these have been working offsite for at least three years, 2.8 million werenew teleworkers with one year or less experience as telecommuters. This statisticrepresented a growth rate of 20.6 over one year earlier, indicating a rapidlyaccelerating number of off-site workers. ITAC projected at that time that by 2004,there would be as many as 30,000,000 teleworkers. (ITAC, 2000b, 1) This statisticwas confirmed by a Government Accounting Office survey which found that 16.5million employees telecommute at least once a month, with 9.3 million employeestelecommuting once a week or more. (Leonard, 2001) Another 2001 report showed

that the number of teleworkers had already soared to almost 30 million workers ortwenty-two percent of the workforce who frequently work at least three days permonth from home. Most of these telecommute one or two days per week. (Rodgers& Teicholz, 2001)

The demographics of those who choose to telecommute are also interesting. The2000 Behavior Research Center survey found that teleworkers tend to be over 25years old with a mean age of mid +Os. They are slightly more likely to live in urbanareas, and they most commonly work in manufacturing, business services,

construction, banking, transportation, communication, and insurance. As for actuallocation of their work, the breakdown was as follows: home-based (89%), telework--center based (7%) and a mix of these two locations (4%). Clearly, the great majorityof telecommuters work at home. (ITAC, 2000a) Interestingly, there seem to be nosignificant differences in terms of race, ethnicity, age, or marital status. (Fetto, 2002)

The question remains, why is telework growing in popularity? What are its benefits toemployees and employers?

Many employers believe that telecommuting increases morale and productivity,improves retention and recruitment opportunities, and reduces absenteeism.(Solomon, 2000) Merrill Lynch and AT&T are two examples of major corporationsthat have made use of telecommuters from almost the very beginning. The irprograms are formalized and have an exceptionally low turnover rate. As of early


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2001, half of AT&T's 50,000 managers worldwide telecommute, while Merrill Lunchannounced that they save anywhere from $5,000 to $6,000 per office per year inoverhead costs because of their employees who have chosen to telecommute(Rodgers & Teicholz, 2001)

This reduction in required real estate is certainly a major benefit reported byemployers. As early as 1998, IBM, AT&T, Andersen Consulting, and HewlettPackardhave, through telecommuting, achieved 35 to 55 percent reductions in office space.(Crandall & Wallace, 1998). A new consideration since 9/11 is that some firms arereluctant to have significant percentages of their employees and resources in onephysical location. The chaos after the World Trade Towers disaster has encouragedthese companies to have employees working from remote locations. (Mearian, 2002;Shellenbarger, 2002) Employees, too, increasingly desire to stay close to theirfamilies and avoid potential targets of terrorist attack. (Lublin, 2001) Besides thesedirect benefits of telecommuting, three other important benefits are increased workerproductivity, staffing flexibility, and decreased turnover.

According to one study, Control Data Corporation r eported early increases of 15 to25 percent in productivity by at-home programmers

. Traveler's Insurance Company reported a 22 percent increase by its telecommutingstaff and Los Angeles County reported a huge 37 percent increase, with acorresponding 60 percent decrease in errors, by their telecommuting, data -entryclerks. (Kugelmass, 1995) When American Express set up remote offices in thehopes of addressing the decline in its customer service employees' productivity,

productivity soared. (Hawkins, 2001) Research conducted by ITAC showed anaverage productivity increase among telecommuting workers of 22%. CiscoSystems, Inc., for example, verified a 20% increase among their teleworkers.(Verespej, 2001)

Absenteeism, an important corollary to productivit y, seems to decline when peoplework at home. Nilles (1998) found that teleworkers took an average of two less daysof sick time per year than traditional employees. When telecommuters themselveswere asked why they are more productive, the most popular answers were fewer

distractions, being able to work at personal "peak" times, increased motivationbecause of having the desired flexibility they wanted, and working more due tonormal workplace interruptions such as meetings. (Olmsted & Smith, 1994)

Flexibility in staffing is another benefit to companies. The workforce today oftenconsists of three groups: the core, full -time workers; the part-time or temporaryassignment workers; and the support workers. The last group have skills that are


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outside the main work flow of the company and take on outsourced work functions.Although all of these groups can capitalize on telecommuting, it is in attracting theassignment and support workers that telework opens new doors to employers. Sincethis work is either temporary or requires very specific skills, employers can quicklyseek out virtual workers to fill these voids as the needs arise. Telecommuting in

these cases reduces the costs to the company since they do not have the traditionalcosts of relocating or housing temporary workers. (Crandall & Wallace, 1998) Thus,a company may hire a robotics expert in India and have them work with a team inSwitzerland. As one recruiter put it, "Why should I limit my talent pool for newemployees simply because of geography?" (Leonard, 1995)

Companies can also use telecommuting to open new labor pools including disabledemployees, those unwilling to relocate, and those potential employees unable orunwilling to commit to normal work arrangements. When looking at just the 43 mi llion

Americans with disabilities, of those that can work, only 15 percent do.


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SCOPE OF TELE COMMUTING

In order to be able to telecommute one needs to have basic computer skills andaccess to the internet. Broadband Internet facilities will be an advantage as thescope of telecommuting jobs increases. With the added peripherals such as a web

cam and microphone people can setup a home office to serve a wide range ofindustries. Many people are known to have set up customer care centers f orcompanies and offer online consultancy and customer support in their line ofexpertise. This line could be computer assistance, or just taking down customerenquiries or replying to customer mails. Many online marketing companies offertelecommuting jobs to people, which requires them to make international phone callsthough the voice over Internet Protocol. This is a very inexpensive way of telecallingand many people have taken up such telecommuting contracts.

The fact is that people are beginning to see the light of telecommuting. IT savesthem a lot of cash on commuting, there is a lot more time to spend with family andfriends or just doing what you like to do. There is no need to stay in one place if youcan work from a laptop, this meant that if your laptop has access to the internet youcan travel and do your work at the same time. This is a very advantageousproposition for software freelance engineers and web designers. Telecommuting ismade just to suit their industry. These professionals can telecommute and enjoy agood vacation at the same time. In fact, people who telecommute will be in a morehealthy state of mind than those who travel miles to get to work every day.

The evolution of mobile telecommunication technology has enabled a worker t o work

from any location irrespective of the distance gaps. The increasing prospects oftelecommuting has compelled many organizations today to adopt this techniquewhich is beneficial both to the employee as well as the organization in toto.

But, merely espousing telecommuting does not work, the scope of telecommutingneeds to be viewed from a management perspective and its effective implementationrequires a strategic approach.

The present scope of telecommuting is limited to certain areas of work, for examplethe work of consulting, telerecuitment, or at the most IT related jobs. It for surerequires a major boost since can be beneficial to the organizations in a muchbroader aspect. Especially women who are housewives or are otherwise unable tomanage home and office together can reap the advantage of telecommuting and atthe same time be helpful to the organizations too.


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While many organizations still prefer to get the work done in an elementary style,they prefer to have their employees each day in office. With the tools like virtualprivate networks

, videoconferencing and voice over IP used in telecommuting, an employee can havean access to the office intranet.

So, what are the benefits associated to telecommuting:

Cost-benefit: Companies who have less office space will obviously be benefited byallowing employees to telecommute. Also there is significant cost -saving due to thedecreased spending on overhead costs.The employees too save due to the savingson fuel, vehicle maintenance and costs related to repair.

During the period when petrol price is hiked, the organizations should initiate such akind of work arrangement in order to increase their savings.

Time saving: The employees can also save their precious time which otherwisewould get wasted in commuting from home to the work-place.

Work-life balance: The employees can have an improved quality of life by balancingtheir family life with their office work and hence can look forward to a better healthtoo. In this way, the employees can give in their best to the work assigned.

Enhanced productivity: The employees who have an access to this facility obviouslycan lend greater productivity since they balance their work-life. And also due to thetime-saving the organizations do not lose on their productive hours.

Decrease in the employee turnover: Such a kind of work arrangement providesflexibility to an employee and so there are fairer chances of increased employeeretention.

Apart from all these benefits, there is also an energy conse rvation and protection ofthe ecosystem due to the reduced overall traffic congestion and controlled pollution.


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CONCEPTUAL FRAMEWORK FOR TELECOMMUTING EFFECT GLOBAL

ECONOMY

In general, an economic evaluation of telecommuting should ideally begin first,by identifying the scale, perspective, and scope of the study, and second, byestablishing the base case conditions. Beginning with the study scale, two levels ofanalysis can be identified: macroscale and micro -scale. The micro-scale studiesfocus on the individual behavior of telecommuters or telecommuters within acompany or organization. In these studies, the interest lies primarily in estimating theprivate sector costs and benefits that will accrue from telecommuting.Alternatively,macro-scale studies are typically more concerned with estimating the aggregatecosts or benefits that can result when considering the population of all possibletelecommuters. Here, the primary emphasis is on identifying the public costs andbenefits associated with telecommuting.Because some costs may also beconsidered cross-sector benefits (e.g., public sector subsidies for private -sectortelecommuting) and vice-versa, ideally a point of view, or perspective is madeexplicit at the onset of the study. The adoption of a perspective clarifies anylimitations associated with what constitutes a cost or a benefit. Each perspectiveshould also be accompanied by a definition of the project scope. For example, isonly home-based telecommuting to be considered in the analysis, or is a regionalnetwork of telecommuting centers assumed? The project scope is also somewhatdependent upon the perspective adopted. The pure home -based telecommutingoption will usually correspond to no publicly funded telecommuting centers. Likewise,when publicly funded centers are involved, the possibility of center -based

telecommuting arises in the private sector.

Additionally, a base case should then be established for each of the identifiedproject scopes. Clearly specifying the base case allows for consistent quantificationand comparison of benefits and costs across project scopes. The base case isusually considered the status quo or the alternative in which no costs or benefits areincurred. A properly defined base case should identify a starting reference, currenttraffic conditions, and any applicable trip reduction policies.The private sector basecase might also include additional assumptions regarding t he type of business,current employee demographics, and the availability of parking and/or building

infrastructure.Once the study scale, perspective, and scope and the base caseconditions have been established, the costs and benefits to be included in the studycan be defined. A wide range ofcosts and benefits has been identified in thetelecommuting literature. Table 1 presents apreliminary inventory of the types ofbenefits and costs that have been identified (but not necessarily measured ormonetized) in prior research and practice. Note that we have also identified costsand benefits that may be assigned to the individual. In some cases, the employermay lower its costs of telecommuting by transferring some of the associated


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costs(e.g.,equipment, utilities, or space) to the individual. That is, the individualswillingness to pay for some of the costs of telecommuting represents a benefit to theemployer. Finally, it is important to note that the inclusion of an item in the table doesnot necessarily imply that it will be considered material once it is critically examined.Inclusion connotes only that the factor has been identified or used in one or more

prior studies evaluating telecommuting.

Economy and Benefits Associated with Telecommuting

Employing a benefit-cost analysis also requires the specification of a discountrate,project life, and the timing of project benefits. The selection of a discount rate isassociated both with the different theoretical perspectives (e.g., neo -Classical,Keynesian, etc.) and with market imperfections. Theoretically, the discount ratebalances the marginal rate of productivity (the rate of productivity of the last dollarinvested) and the marginal rate of time preference.


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HOW TELECOMMUTING IMPROVES PRODUCTIVITY IN ANY COUNTRY

OVER THE GLOBE

Telecommuting is not exactly a new concept in the workplace, but it is one thatcontinues to grab the attention of both employers and employees. There are benefitsto both parties and one of those advantages is the fact it increasesproductivity.There is a school of thought that is suspicious of allowing employees theautonomy of working on their own. Their reasoning is telecommuting actuallydecreases productivity. In some cases perhaps there is a degree of truth, but for themost part, its probable productivity goes up not down.Even if there are a percentageof employees trying to buck the system and take advantage of not having eyeslooking over their shoulder, organizational studies suggest that realistically the bulkof the telecommuting population offers higher levels of output when given the optionto telecommute.The reasons for this increase of productivity are many and what it

primarily comes down to is motivation. Organizational behaviorists often point tointrinsic rewards as being a strong motivator for employees in a company.What thismeans is that employees who are rewarded by non -tangible rewards such asautonomy, responsibility, and empowerment often perform at higher levels ofproductivity and get more work done.The micromanaging element is removed bytelecommuting and it is not uncommon for staff members to jump at the opportunityto work on their own initiative. This feeling offers a strong sense of accomplishmentwhich is encouraging to do even a better job. Employees who feel this kind ofachievement are typically high producing workers who are constantly looking tocontinue to feed this internal need.There are also extrinsic rewards that come with

telecommuting which also can improve productivity.

The flexibility of working from home is very valuable to some employees,especially those who have small children or parents that need taking care of duringthe day. Eliminating the need for outside care is very helpful to these employees andmuch appreciated.Telecommuting also eliminates the need for commute, whichgives back hours in an employee's day that frees them up to tend to other matters oreven get more work done. Instead of spending time traveling back and forth to work,employees have more elasticity with their time and can tend to otherthings.Additionally physical commutes can be stressful when employees are pressedfor time with morning and evening obligations or have a long commute each way.

When this stress factor is removed, employees are more equipped to have morefocus, thus having a direct effect on efficiency and output.Employees who areoffered the chance to work autonomously and on a flexible schedule are moremotivated in their jobs. With motivation typically comes a higher level of productivity.While telecommuting is not for everyone, those who do engage in it find it to be awin-win situation for both employer and employee.


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ISSUES WITH TELECOMMUTING

Many employees report concern about the decrease in communication with theircoworkers. A 1999 survey found dissatisfaction with peer relationships. This same

survey showed a lower satisfaction with promotion among teleworkers whofrequently fear the "out of sight, out of mind" syndrome. Others expressed a feelingof isolation from the corporate culture.One tele commuter lamented that she was"forgotten when good projects come up.Employers express other concerns abouttheir teleworkers regarding the costs associated with telecommuting and security. Anew survey by Cutter Consortium found that more than half of the employerssurveyed said "security concerns were a deterrent to implement telecommutingarrangements."Other researchers found that: Employer's concerns about supervisingteleworkers, the security of sensitive information and the effect of telecommuting onprofits often prevent privatesector companies from implementing or using

telecommuting programs.Even more discouraging to the future of telework is therecent report that many senior executives feel that telecommuting is out of sync withthe current emphasis on teamwork and rapid change and response. One senior vice -president said, "There's a certain esprit de corps you develop working together. It'sdifficult to celebrate when you get that big order if everyone's not together."Whileissues with security and technology are beyond the scope of this article, the humanissues of managing teleworkers as part of the overall corporate culture and teamenvironment is very much a function of successful leadership. Research suggeststhat"There are differences in managing remote workers, which although are notdifferent in essence, require a different concentration of management skills. In

particular a more deliberate approach is necessary to develop relationships andteams." Having established the benefits and trends of telework, the authors nextfocus on the specific issue of leadership of teleworkers and suggest that SituationalLeadership(TM) is a "deliberate approach" that can be quite beneficial to those wholead teleworkers. It is that specific issue, leadership of teleworkers, which becomesthe focus of the rest of this article.

Leadership and Telework

Technological revolutions lead to people revolutions. This is the case withtelecommuting. The difference between management and leadership has neverbeen more important. Management has been defined as "the planning, organizing,leading, and controlling of resources to achieve organizational goals effectively andefficiently" (Jones et. al., 2000, 720) while leadership is "the process by which anindividual exerts influence over other people and inspires, motivates, and directstheir activities to help achieve group or organizational goals." (Jones et. al., 2000,720) Managers are responsible for getting the job done through other people and


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may spend a great deal of their time doing paper work, dealing with organizationalproblems, and clearing the obstacles so that employees can do their jobs. Leaders,according to Paul Hersey, are in the business of "influencing someone to dosomething that he or she might otherwise not do." (Blackwell, 2001, 138) Leadersinfluence based not only on their job title, but by their expertise and relationship

power. By definition, management is more comfortable in dealing with routine eventswhile leadership is more appropriate in times of change. It is the contention of theauthors that the rapid evolution of telework represents a significant change in themanager-employee relationship, a change which requires effective leadership tomaximize results for everyone.

Teleworkers need effective leadership to feel comfortable in their off -siteworking environment. Leaders can make them feel connected and integral to theoverall operation and this in turn can lead to career satisfaction and job retention.Just consider the fact that it is now possible to recruit, hire, employ, train, andsupervise an employee without ever seeing them. How do you bond that employee

to the organization, even though that bond may be a virtual one? How do you enablethat employee to do his or her job effectively? One leadership model which has beenhighly successful for more than three decades seems equally applicable toteleworkers as it has been with traditional workers. The model is SituationalLeadership(TM) as originated by Paul Hersey and Ken Blanchard.

Situational Leadership(TM) and Teleworkers

Situational Leadership(TM) , developed in the late 1960s by Paul Hersey andKen Blanchard, provides a practical model for leaders to use in diagnosing the needsof the employees and then applying an appropriate leadership style. It is based onHersey's contention that leadership is a process of influence. Hersey further positsthat leadership requires three basic competencies:

1) diagnosing-being able to understand the situation you are attempting to influence;

2) adapting-being able to adapt your behavior, and the other things that you have

control over, to the contingencies of the situation; and

3) communicating-being able to put the message in a way that people can easilyunderstand and accept.

Situational Leadership(TM) as shown in Figure 1 is based on a two-dimensional approach that says leaders use a combination of task behavior


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(directive behavior) and relationship behavior (supportive behavior). These twocritical elements of leadership are defined as follows:

Task behavior is the extent to which the leader engages in spelling out theduties and responsibilities of an individual or group. These behaviors include tellingpeople what to do, how to do it, when to do it, where to do it, and who is to do it.

Relationship behavior is defined as the extent to which the leader engages intwo-way or multiway communication. The behaviors include listening, facilitating, andsupportive behavior.

The leader's job is to diagnose how much of each behavior a given employeeneeds in a given situation. The role of diagnostician is an important one. SaysSchein,

The successful manager must be a good diagnostician and must value a spirit ofinquiry. The abilities and motives of the people under the manager may vary;

therefore, managers must have the sensitivity and diagnostic ability to be able tosense and appreciate the differences.

The diagnosis of how much task behavior or relationship behavior is requiredfrom the leader depends on the "readiness" of the follower or employee.

Current and Expected Number of Telecommuters

Perhaps the most critical variable in the estimation of telecommuting costs andbenefits is the number of telecommuters. For the macro-scale studies, where

regional or national estimates are needed, the total number of estimatedtelecommuters is usually based on the total number of information workers in thelabor force.1 A subset of information workers, whose job performance isindependent of the location of the worker are assumed to be candidates f ortelecommuting (p. 305, Nilles, 1988). Methodologically, the national estimates oftelecommuters are derived from an estimated fraction of information workers whichin turn is estimated from national labor statistics of individuals estimated to be in thework force as shown in Figure 1 (e.g., DOT, 1993).

More recently, however, it has been noted (Mokhtarian, 1991a, 1991b) that anumber of people not considered to be in information worker occupations are infact telecommuting (e.g., police and probation officers, restaurant inspectors, healthcare workers, etc.). Hence, the segment of the workforce whose jobs are amenableto telecommuting is probably larger than previously believed. On the other hand, theextent to which constraints other than job title are preventing telecommuting has


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probably been underestimated. For example, in one sample, containing 95%information workers, 44% of the sample indicated that their jobs were not

suitable for home-based telecommuting any amount of time (Mokhtarian andSalomon., 1996).

Constraints other than job suitability are also at work as well. To some unknownextent, these effects (underestimating both the size of the potential telecommuti nguniverse based on job title, and the extent to which constraints other th an job title arebinding) counteract each other.

In general, it remains unclear how accurately the number of potential telecommuterscan be derived from estimates of the number of information workers. Nilles, whooriginated this forecasting approach, has acknowledged that it remains difficult toverify even the current levels of telecommuting, let alone predict future levels:

These few documented studies . . . do not show how many telecommuters there are

today. Nor do they show how many there will be in 5, 10 or 20 years. They also failto point out what the distribution of modal choices in telecommuting will be.

Despite limited empirical data on the current levels of telecommuting, Nillesextrapolates future levels using estimated current levels of telecommuting. However,employing this method to forecast levels of telecommuting requires an additionalassumption an estimate of the growth in the number of telecommuters. In 1987,Nilles assumed both a linear and exponential growth function. Alternatively, in 1991he assumed a logistic growth function. All three forms can be fit to the limitedavailable data, with each yielding different results.

All of this is important to note, because Nilles estimates and/or related methodologyhave been referenced throughout the telecommuting literature, including the DOT,DOE, and Boghani et al. studies. The repeated use of Nilles approach has cer tainlyincreased the likelihood of repeating any errors when new research efforts havedepended upon this data for estimating future levels of telecommuting. Essentially,the estimated current levels of telecommuting remain the basis from which futurelevels of telecommuting are extrapolated which in turn affects the results of anyprojected macro-scale cost-benefit analysis.

presents how estimates of telecommuters were derived in the DOT (1993) reportusing Nille methodology. The assumptions used to derive the e stimates include:growth in the labor force, the percentage of information workers in the labor force,and the adoption of telecommuting by information workers. In 1991, the number oftelecommuters was predicted to increase from 2 million in 1992 to 15 million by theyear 2002, which represents an average annual increase of 20.2%. Current andExpected Number of Telecommuters in DOT Study (1993)


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a. Based on Bureau of Census estimates (not referenced).

b. Based on 1988 Bureau of Labor Statistics projections.

c. Based on projections made by Nilles (Telecommuting Research Institute, 1991)from classifications of standard

occupations as information workers by Porat (1977). DOT assumes thatinformation workers

constitute 56%of the U.S. workforce and gradually increase to around 59% in 2002(p. 54, DOT 1993).d. Based on projections made by Nilles (TelecommutingResearch Institute, 1991).

e. These numbers represent the DOT upper bound. To reflect the uncertainty in theanalysis, the DOT authorsalso created a lower bound scenario. The number oftelecommuters in the lower bound scenario was simply set as half of number of

telecommuters the upper bound scenario.Of. Calculated by the authors of this paper, using a compounding interest ratefunction, i = (- ln (P/F) ) / N, where P is present year value, F is the future year value,and N is the time between P and F.

In 1994, the DOE used Nilles methodology to develop growth functions for theexpected

share of information workers and the share of telecommuters in the labor force. Thecoefficientsin the new growth functions were extrapolated from DOT using ordinaryleast squares regressionextrapolations.2 Logistic curves were fitted to the DOT data

and used to extrapolate projections to 2005 and 2010 (p 85, DOE, 1994). It isimportant to note that the data used by DOE are actually Nilles forecasts containedin the DOT report, not empirical data. Table 5 presents how estimates oftelecommuters were derived in the DOT report using Nilles methodology.

Using the equations provided in the DOE report, estimate s for the number ofinformation workers and the telecommuting labor force can be back-calculated fromthe number of telecommuters (Table 5) and compared with those values presentedin the DOT study

While there might appear to be discrepancies between both the e stimated numbersof information workers and the estimated numbers in the labor force, it is important tonote that the DOE study assumes telecommuting market penetration only for the339 largest U.S. cities (about 2/3 of the nations population) (p. xx, DOE, 1994),while the DOT derives its potential telecommuters from the entire U.S. populationand the entire U.S. labor force. Nonetheless, we can see that the average annualgrowth of the labor force and the information wor kforce is consistent with thosepresented in the DOT study as one would expect, given that the DOE


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telecommuter estimates are still derived from the DOT telecommuter estimates.Additionally, we can see that, although it extrapolates much farther into the future,the DOE has a lower average annual growth rate for telecommuters (15.5% over 22years) than the DOT (20.2% over 10 years).

Current and Expected Number of Telecommuters in DOE Study (1994)

a. Back-calculated by the authors of this paper from given number oftelecommuters, using the functions shown in this paper on at the bottom of page 9.The functions are originally from page 85 of the DOE study.

b. Based on projections made by Nilles (Telecommuting Research Institute,1991).

c. Projected by DOE.

d. Calculated by the authors of this paper, using a compoundi ng interest rate

function, whereP is present year value, F is the future year value, and N is the time between P andF.

Additionally, Figure 2 presents the extrapolated adoption levels in the DOT and DOE

constitute 56%

of the U.S. workforce and gradually increase to around 59% in 2002 (p. 54, DOT1993).

d. Based on projections made by Nilles (Telecommuting Research Institute, 1991).e. These numbers represent the DOT upper bound. To reflect the uncertainty inthe analysis, the DOT authors

also created a lower bound scenario. The number of telecommuters in thelower bound scenario was simply

set as half of number of telecommuters the upper bound scenario.

f. Calculated by the authors of this paper, using a compounding interest ratefunction, i = (- ln (P/F) ) / N, where P is present year value, F is the future year value,

and N is the time between P and F. In 1994, the DOE used Nilles methodology todevelop growth functions for the expected

share of information workers and the share of telecommuters in the labor force. Thecoefficients in the new growth functions were extrapolated from DOT using ordinaryleast squares regressionextrapolations.2 Logistic curves were fitted to the DOTdata and used to extrapolate projections to 2005 and 2010 (p 85, DOE, 1994). It isimportant to note that the data used by DOE are actually Nilles forecasts


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contained in the DOT report, not empirical data. Table 5 presents ho estimates oftelecommuters were derived in the DOT report using Nilles methodology.Usi ng theequations provided in the DOE report, estimates for the number ofinformationworkers and the telecommuting labor force can be back -calculated fromthe number oftelecommuters (Table 5) and compared with those values presented in

the DOT study While there might appear to be discrepancies between both theestimated numbers of information

workers and the estimated numbers in the labor force, it is important to note that theDOE study assumes telecommuting market penetration only for the 339 largestU.S. cities (about 2/3 of the nations population) (p. xx, DOE, 1994), while the DOTderives its potential telecommuters from the entire U.S. population and the entireU.S. labor force. Nonetheless, we can see that the average annual growth of thelabor force and the information workforce is consistent with those presented in theDOT study as one would expect, given that the DOE telecommuter estimatesarestill derived from the DOT telecommuter estimates. Additionally, we can see that,

although extrapolates much farther into the future, the DOE has a lower averageannual growth rate fortelecommuters (15.5% over 22 years) than the DOT (20.2%over 10 years).


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TELECOMMUTING AND ECONOMIC DEVELOPMENT

The problem with hunting, as prevalent as it is, is that it doesn't work very well.There just aren't that many big facilities to go around. There are about 700 corporatemoves visible to the naked eye in a given year in the whole U.S.A., and 15,000

economic development organizations chasing those moves. There's a lot of evidencethat what economic development authorities do to market their region just doesn'thave much to do with what corporate site planners decide. Tax abatements arecertainly taken if offered, but they come out of the hides of the taxpayers alreadythere who often say, "What the hell is going on; did I vote for this?"

Then, too, the facilities that are owned by out -of-town companies are often thevery first to lay off workers or shut down completely when bad times come. And, overthe course of the past decade, experience has shown that the net number of jobsadded by big corporations nationwide -- the jobs created in those new facilities minusthe jobs that go away when those facilities go away, the other side of hunting -- is all

just a wash.

Hunting is known as "smokestack chasing." In the high-tech age, it's also knownas "chip chasing". Now that telemarketing centers, credit card operations, and otherback offices can be placed anywhere that has access to the worldtelecommunications grid and a good labor force, perhaps hunting should be called"work station chasing." Back offices full of computer and telecommunicationsequipment and people to use this gear, have been moving from downtowns into thesuburbs for years, looking for lower rent and shorter commutes for the workers whoare already employed at those facilities.

But, beginning with the establishment of the Citibank credit card operation out inSouth Dakota in the early 1980's, information intensive operati ons have discoveredthat the whole country is the suburbs. And Sioux Falls, South Dakota is now home toa 45-acre facility employing 2,800 people processing the work, the charge slips andthe phone calls, for 17 million credit cards. Telemarketing centers and back officesnow dot the Great Plains. The workforce there, as you can guess, has been recruitedfrom the more productive agricultural economy, that doesn't need as many people togrow our food.

Unfortunately for workstation hunters, the suburbs are still expanding...now globally. And this is a familiar story that ties into what we've experienced inmanufacturing.American Airlines carries 1500 pounds of airline tickets each day on aflight down to Bridgetown in the Barbados, where 500 people sitting at terminalsprocess those tickets and send the data from them by telecommunications back upto American Airlines' computer in Tulsa, Oklahoma New York Life InsuranceCompany has 50 claims examiners in Ireland. Doctors in New York City hospitals are


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sending their medical transcription work to the Philippines where trained transcriberseven correct medical logic and send the work back by telecommunications. Thereare a number of ways that telecommuting can improve productivity, depending onhow you define productivity. Productivity can be looked at in a number of ways.Production per man hour is one of the most common. Alternatively productivity can

be looked at as return on capital investment. Another measure of productivity caninclude profitability for total cost.

Increasing return per man hour of labor

Telecommuting can improve your production per unit of labor in a couple of differentways. By hiring the best people from around the country, or even the world, you arenot limited to those who are within a reasonable commute distance. By allowing

employees being able to work in a more comfortable environment they are oftenmore productive.

When you are able to hire from virtually anywhere you can be more selective in yourhiring process. If an employee must be within a limited geographical location you arelimiting your hiring to only those people that live near your offices. Many times thevery best potential employees, those that have the capability to be more productive, just aren't in such a location. By expanding the area from which you hire you canoften find more productive employees.

There are a number of factors that affect how productive an individual can be. Manypeople just don't work well in an office environment. When you are hiring people forcreativity, in particular, you will often find particular personality types that can bemore productive when they work in a location of their own design and choosing. Byforcing certain individuals into a particular situation you can often reduce theirproductivity over what they can do when they are free to choose where and how theywork.

Increasing return on capital investment

Office buildings are expensive capital investments. When you hire a telecommuteryou are taking advantage of workspaces owned by that person and not relying onproperty owned and maintained by your company. Most people who work in an officeenvironment have homes that sit empty for a significant portion of the day. By


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allowing them to use the space that they are already paying for you can cut yourcapital costs with little or no additional burden on your employees.

Increasing return on total cost

Variable costs are also a factor in productivity. Hiring telecommuters can reduce a

number of your variable costs including labor and utilities.When you can hire fromdifferent geographical locations you can take advantage of lower laborcosts.Telecommuting is an aspect of technology that has invaded the workplace andchanged for the foreseeable future.The office has been extended to include the athome parents and other individuals, who may be tending to household duties, whileawaiting feedback from their latest submissions. Productivity has improved, due tothe change in environment for some workers who enjoy working by themselves,because they can remain focus and maximize their performances. The energy theyusually expend to worry about family concerns, traffic congestion, lunch, and timeoffs to make timely payments, and other business transactions, can now be

channeled towards improving themselves on the job.Telecommuting means also, that there are less people on the company property

at one time, and as such, companies will experience reductions in the operatingexpenses, especially in terms of the utilities, and other equipment and services.Reductions in expenses will lead to increase in profitability in the long term.

The frequency at which job gets done, will also improve when telecommuting isinvolved, because workers may choose different hours to meet their deadlines, someof which may be while others sleep. Managers and supervisors then, althoughhaving less direct supervision to do, will have the benefit of jobs being submitted to

them first thing in the mornings, thereby allowing them to make timely, and revenuemaking decisions, especially in terms of shipping goods, or providing quality serviceto customers.

Problems workers may encounter while telecommuting, does not have to besolved by making on site visits, but can be solved using e-mails, faxes, telephone, oron-line. Companies are therefore able to make substantial savings on an annualbasis, because of this technological feature, where the job can be done in theconfines of workers home, and submitted in time to meet critical deadlines.

Companies that are globally involved, can engage in multi -tasking by issuing

different job orders to their workers in diverse locations, and then be able to ship thetotal finished product from one source, to the different destinations around the world,without paying excessive postal and other fees. This amounts to increaseproductivity,

The flexibility advantages derived from the practice of telecommuting can benefitboth the employer and employee if applied correctly. Its birth was necessitated bythe need to eliminate the obligation to commute to a central point of work, thus


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opening new possibilities for people living in remote areas, the disabled and parentswith young ones in their care. Additional spin offs to such work arrangements includeenvironmental considerations such as the reduction in the home workers' carbon footprint, reduction in traffic congestion, and operational flexibility for firms withinternationalized activities (makes around the clock service attainable).

Telecommuting also render employee retention easier, reduces absenteeism, availsa workforce that might not have been available and promotes productivity.Improvements in technology has impacted positively on the practicality oftelecommuting as workers can stay connected to their controlling offices or clientsthrough groupware, virtual private networks, and other technologies.

The cost saving nature of the today's home office operations translates to moreand more professionals preferring to stay at home, and make use of affordablecommunications options such as VOIP, high speed internet connections and VPNcapable routers. In the early days telecommuting began as a result of the emergenceof technology in the form of linkages to the downtown main frames by dumb

terminals that used telephone lines to form a network utility. And as time went on theuse of local area networks nudged the practicality of sharing resources even further,and today's rise in laptops, cloud computing technology and WIFI has made possibleeven greater decentralization. The US government has been in the forefront ofpromoting the practice as a way of reducing negative environment impact associatedwith commuting, by encouraging its own departments to adopt telecommuting intotheir operational activities.

To cement its advocacy for the implementation of telecommuting strategies intoarms of government, the US Congress enacted an appropriations bill to encourageFederal agencies to offer telecommuting options to some of its staff. However, somefactors which impede the widespread adoption of telecommuting include lack of apersonalized collective among employees (or company team), and also distrust byemployers. The benefits of today's technology towards telecommuting go beyondhome based work, as individuals can work in alternative locations such as clients'premises or other relevant sites. Some of the professions best suited by teleworkinginclude graphic designers, computer programmers, tax consultants, customerservice agents, freelance journalists, accountants among others. Distributed workoffers great potential for companies to gain access to a variety of high end scarceskills base, enhance agility and competitiveness in their industry.


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HOW TELECOMMUTING IMPROVES PRODUCTIVITY IN THE WORKPLACE

Telecommuting is an aspect of technology that has invaded the workplace andchanged for the foreseeable future.

The office has been extended to include the at home parents and other individuals,who may be tending to household duties, while awaiting feed back from their latestsubmissions. Productivity has improved, due to the change in environment for someworkers who enjoy working by themselves, because they can remain focus andmaximize their performances. The energy they usually expend to worry about f amilyconcerns, traffic congestion, lunch, and time offs to make timely payments, and otherbusiness transactions, can now be channeled towards improving themselves on thejob.

Telecommuting means also, that there are less people on the company property atone time, and as such, companies will experience reductions in the operatingexpenses, especially in terms of the utilities, and other equipment and services.Reductions in expenses will lead to increase in profitability in the long term.

The frequency at which job gets done, will also improve when telecommuting isinvolved, because workers may choose different hours to meet their deadlines, someof which may be while others sleep. Managers and supervisors then, althoughhaving less direct supervision to do, will have the benefit of jobs being submitted tothem first thing in the mornings, thereby allowing them to make timely, and revenuemaking decisions, especially in terms of shipping goods, or providing quality serviceto customers.

Problems workers may encounter while telecommuting, does not have to be solvedby making on site visits, but can be solved using e-mails, faxes, telephone, or on-line. Companies are therefore able to make substantial savings on an annual basis,because of this technological feature, where the job can be done in the confines ofworkers home, and submitted in time to meet critical deadlines.

Companies that are globally involved, can engage in mu lti-tasking by issuingdifferent job orders to their workers in diverse locations, and then be able to ship thetotal finished product from one source, to the different destinations around the world,


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without paying excessive postal and other fees. This amounts to increaseproductivity,

BARRIERS OF TELECOMMUTING WHICH EFFECTS ON GLOBAL ECONOMY

There is considerable potential for expanding telecommuting, but some barriersmust first be overcome. The principal barriers are:

Business Reluctance: Business acceptance of telecommuting is growing. Accordingto a 2007 survey by Hewitt Associates, 38 percent of employers allow some form of

telecommuting, up from 14 percent a decade ago.39 Still, many business managersare reluctant to allow employees to telecommute. Despite the empirical evidenceshowing productivity gains, many employers remain skeptical about the level ofperformance they can count on from employees working outside the direct view ofsupervisors. Some of the reluctance may reflect a natural comfort with traditionalpractices. Information technology can allay these concerns, however, by providingaccurate data on employee production, whether the employee is housed in theoffice or at home. In the case of telecommuting employees serving customers bytelephone, calls can be monitored for training and quality, just as if they were in anoffice. Indeed, information technology has been cited as the key factor in reversing

a historic trend toward lower productivity from the mid-1970s to the mid-1990s.40Telecommuting has played a part in this and is likely to play an even greater part inthe future.

Job Compatibility: Telecommuting is not compatible with all jobs because some workrequires employees to be physically present at the job site. For e xample, the work ofplumbers or construction workers cannot be performed by telecommuting. Therequirement of physical presence represents the ultimate limitation on the potentialfor telecommuting. In some cases, it is possible for employees to telecommute onlyon some days rather than every day. However, improving technology is wideningthe potential span of jobs in which telecommuting can be used. Consider the fact that

in 2001, doctors performed the first trans-Atlantic tele-surgery. Internet-basedtelephone systems, conference calls and video conferencing, for example, arecommonly replacing physical meetings.

As noted previously, it is estimated that up to 14 percent of current commuterscould switch to telecom-muting,41 or more than 19 million employees at 2006employment levels. However, this number may grow as organizations gain more


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experience with remote workers and discover that many jobs are performed aseffectively by remote employees.

Broadband Availability: Broadband connections are a vi rtual necessity for effectivetelecommuting because they enable employees to be connected to the office at alltimes and enable the high speed exchange of data, especially video and files withlong download times. While dial-up access to the Internet may be acceptable forsome type of remote work, reliance on dial-up will typically limit productivitycompared to broadband because some activities are virtually impossible over dial -upconnections.

Relatively low adoption rates among some groups of Americans and/or relativelylimited availability of broadband in many rural areas is a major limitation to thegrowth of telecommuting.

Conversely, lack of broadband is a significant barrier to telecommuting. Relativelylow adoption rates among some groups of America ns and/or relatively limitedavailability of broadband in many rural areas is a major limitation to the growth oftelecommuting.

For example, the most recent data from the Pew Internet & American Life Projectshow that only a small minority of Americans with annual incomes of $30,000 or lesshave broadband service in their homes. Among those earning less than $20,000 ayear, only 13 percent had a broadband connection as of May 2008. For those withhousehold incomes of $20,000-$30,000 a year, just 19 percent reported a homebroadband connection.42 This is the same group that loses out on job opportunitiesbecause of mobility issues and that could benefit significantly from jobs that would be

open through telecommuting. Without broadband, the potential telec ommutingopportunities disappear. Similarly, rural Americans are also relatively less likely toenjoy home broadband. According to the Pew survey, only 38 percent of ruralhouseholds had a broadband connection, compared to 57 percent of urban homesand 60 percent in suburbia. The lower adoption rates in rural communities, whichcould benefit substantially from telecommuting options that connect them to jobs atdistant locations, appear to reflect a combination of lower interest and reducedbroadband availability. Overall, broadband is less available in rural areas than inurban ones.43

This barrier should become less significant over time as broadband spreads to more

remote communities and is adopted at higher rates by lower income households.Yet, telecommuting opportunities and resulting benefits would be realized muchsooner if public policy was used to accelerate the spread of broadband. Businesses,too, can promote telecommuting by paying for employees home broadbandconnections and also by providing computer equipment. Some businesses arealready taking such steps, though it is likely that businesses are more inclined to


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make such investments for more senior employees than for new hires or lower leveljobs.

Tax Restrictions: Some state laws may also present a threat to telework by enablingstates to subject telecommuters to taxes based on where the employer is located. Ifa nonresident chooses to telecommute some of the time to an employer located inthe state, the state may tax the telecommuter on 100% of his or her income,including the income earned from home. Because the telecommuters home statemay also tax the income earned from home, the telecommuter may face doubletaxation.44

COMMUTING: TRENDS and evaluation of work accessmodes:

Because the benefits of telecommuting are so significant, it is important to considerthe variety of positive impacts. But as noted above, a clear one relates totransportation. In considering the role of telecommuting on transportation andmobility, its worth comparing telecommuting to other modes of getting to work.Since 1980, virtually all growth in commuting in the United States has been drivingalone. Driving alone has risen from a 1980 market share of 66 percent to thepresent 77 percent. The alternative travel modes have done less well (see Figure3).45

Car pooling has declined by 4.2 million daily commutes. This represents a marketshare loss from 20 percent to 10 percent. In 2006, 14.9 million workers commuted bycar pool, compared to 105 million who commuted by driving alone. Between 1980and 2000, car pool commuting declined by more than 3,000,000.

daily commuters and experienced a market share loss from 19.7 percent to 12.2percent. In the latter part of the 1990s, the number of people using car poolsincreased somewhat, though the market share continued to decline. The latest dataindicates no material change in car pool usage, however; by 2006 the car poolmarket share had dropped to 10.2 percent, barely one -half of the 1980 figure. Thecar pool share is considerably smaller if household car pools are excluded.

Transit has gained 0.5 million daily commuters. However, commuting has grown bya greater rate and transits share of work trips has fallen from 6.3 percent to 4.9percent between 1980 and 2006.

The walk share of work trips has been falling and has declined 1.4 million, with amarket share loss from 5.7 percent to 2.9 percent, a drop of nearly one -half. From1980 to 2006, the number of people walking to work dropped by 1,500,000.

Working at home, however, gained strongly and is the only method of commutingother than single-occupant driving that has experienced both an increase innumbers, a rise by 3.2 million daily commutes, and market share, a rise from 2.3


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percent to 4.0 percent, an increase of approximately 75 percent. The rate of increaseis accelerating, with the annual market share increase for working at home morethan doubling from 2.0 percent in the 1990s to 2.6 percent in the 2000s.

It seems likely that driving alone a nd working at home have experienced morepositive trends because they make more jobs accessible in a shorter period of timethan the other commuting modes. As noted above, greater job access in a shorterperiod of time is associated with a higher standard of living and a better quality oflife.

EVALUATION OF WORK ACCESS MODES

It is important to analyze more carefully the transportation impacts oftelecommuting compared to other modes. The strengths, weaknesses and prospectsof the most usual work trip modes vary substantially in the current policy context.46Each of the significant modes are evaluated based upon their travel time, labormarket access, flexibility, commuter costs, general tax subsidies and greenhousegas emissions.

DRIVINGALONE:

As noted above, driving alone is by far the most popular way to commute to workpartly because driving alone is flexible and has superior travel time in comparison toother travel modes. However, it is more costly to users than car pools or mass transitand receives fewer subsidies per passenger mile than mass transit. Currently,driving alone is the most intensive in greenhouse gas emissions. However,considerable improvement could emerge in the future. Generally, cars are usedextensively because, all things being equal, they complement the life styles ofcommuters and households.

Travel Time: Superior travel time is a principal advantage of driving alone. Theaverage daily round trip commute time for driving alone in 2007 was 48 minutes,which is the best of any motorized mode. This is nearly nine minutes less than carpools and one-half that of transit (see Figure 4).

Labor Market Access: Driving alone provides ubiquitous access throughout ametropolitan area. The commuter can access 100 percent of jobs f rom anyresidence within the metropolitan area by car.

Number of Jobs Accessible: Equal to the metropolitan labor market.

Flexibility: Driving alone provides maximum flexibility. The driver is not constrainedby timetables or the schedules of fellow workers. The single-occupant commuter canleave work at any time in response to unforeseen circumstances. The driver canmake whatever stops to and from work as are necessary, such as day care centersor for shopping. However, the increase in congestion, par ticularly non-recurringcongestion can make driving less reliable.


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Commuter Costs: Consequently, driving alone is more costly for commuters than carpools, walking or telecommuting and also tends to be more costly for commutersthan transit.

General Tax Subsidies: Driving alone involves some non-user taxpayer subsidies.Most of the direct costs of driving alone are paid for directly by drivers (largelythrough gas taxes). Based upon overall highway figures, user fees including directuser tolls and indirect.

user charges in the form of motor fuels taxes and vehicle-related fees provide 72percent of total costs. Approximately 14 percent of these amounts are used for non -highway purposes, such as transit. Regardless of the treatment of the highway userfees applied to other programs, the deficit between highway expense and revenuesis approximately $0.01 per passenger mile.47 The lions share of the rest come fromgeneral fund subsidies such as sales taxes and property taxes, most of whichsupport local roadways, rather than high-capacity state owned roadways, such as

freeways.Greenhouse Gas Emissions: At present, driving alone produces more greenhousegas emissions than the other commute methods on a passenger mile basis. In2005, the average car emitted 481 greenhouse gas grams per mile. However, thisfigure is likely to improve. For example, the 35 mile per gallon new cars and SUVsrequired by 2020 in the United States would emit 212 grams per passenger mile.Even more progress could occur. It is reported that Volkswagen has developed atwo-seater car that will achieve 235 miles per gallon, and would thus emit less than40 grams per passenger mile. There are reports that limited marketing will begin in2010.48 These emission rates would be lower than present mass transit greenhouse

gas emissions in the United States.

CARPOOLS:

Car pools are the second most popular method of commuting. However, when carpools composed of household members are excluded,49 car pools rank thirdamong the commute modes, following mass transit, with a market share of 4.1percent.

In recent decades, considerable public policy effort and funding has been expendedto increase car pool use. High-occupancy vehicle lanes (HOV) have been built on

many freeways. These exclusive lanes allow car pools to speed by stopped traffic ingeneral purpose lanes of freeways. Yet, the general trend of car pools has beendownward.50

Car pools are less costly for commuters than driving alone. The importance of thisadvantage is illustrated by the fact that average participant incomes are lower inlarger car pools.51 Car pools also have the advantage of lower greenhouse gas


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emissions. As a shared mode of transport, however, car pools have longer traveltimes and are less flexible than driving alone.

Travel Time: Car pools are generally slower than driving alone, with an averageround trip journey to work of 56.6 minutes per day. Car pools with three or moreparticipants have an average round trip work trip travel time of approximately 70minutes.

Telecommuting offers considerable advantages.59 It requires no travel time, isflexible and costless to tele-commuters. Telecommuting incurs no general taxsubsidies and is not associated with commute-related greenhouse gas emissions.Telecommuting can provide broader labor market access than driving, but cannot beused for jobs that require physical presence at work or activity site. On the otherhand, telecommuting alone has no geographical access constraints and, as a result,potential number of jobs that the telecommuter can theoretically choose from islarger even than driving alone.

Travel Time: Telecommutings most important advantage is its travel timezero.The telecommuter saves nearly five hours weekly in travel time compared to thosewho drive alone and nearly 10 hours weekly compared to mass transit commuters.

Labor Market Access: Like driving alone, telecommuting provides access to jobsthroughout the labor market, but also potentially beyond that to almost any locationin the United States, including the entire world. However, telecommuting will not bean option in cases where the workers physical presence is required or because ofother circumstances.

Number of Jobs Accessible: With respect to automobile competitiveness, there areno geographical limitations. Telecommuters often work in geographical areas thatare remote from their base office location and may even work in other nations. As aresult, the potential number of jobs from which to choose can be greater than areavailable by automobile in the labor market. The ultimate example of this is the off -shoring telecommuting in which, for example, customer service representatives inIndia or the Philippines telecommute to jobs in the United States. A reservationsagent, for example, may work electronically at a center in New York and live inCheyenne.

Flexibility: Telecommuting provides maximum flexibility, along with driving alone.

The telecommuter is not constrained in accessing work by mass transit timetablesor the schedules of others. The telecommuter can leave work at any time inresponse to unforeseen circumstances and can travel as necessary, such as to daycare centers or for shopping.

Cost to the Commuter: Generally, telecommuting imposes no costs on thecommuter. Costs are usually paid by the employer.


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TELECOMMUTING: COMPETITIVE

ASSESSMENT

Telecommuting has emerged as a strongly competitive mode of access to work.

Telecommuting Compared to Car Pools: While sufficient data on household carpools are not available, it is likely that telecommuting is now used by moreemployees than non-household car pools in most metropolitan areas.60

Telecommuting Compared to Mass Transit: Working at home has already emergedas a larger commute mode than mass transit and walking in the overwhelmingmajority of large and small metropolitan areas (see Table 2). Working at home ismore popular than transit in 68 percent of metropolitan areas over 1,000,000population, or 34 out of 50 areas. Working at home is more popular than transit in 90percent of all metropolitan areas, or 284 out of the 315 metropolitan areas for whichdata is available. There is a clear pattern among the large metropolitan areas in

which transit is more popular than working at home. Except for Las Vegas,61 each ofthe metropolitan areas has a large, dense, historic downtown area (central businessdistrict). Twelve of the 16 metropolitan areas have a downtown area among thenations 25 largest, while Milwaukee, Buffalo and Providence have dense, historicdowntown areas. Only in the metropolitan areas with the six largest downtown areasis the transit market share more than 3 percentage point greater than the work athome market share. In all of the others, working at home could become morepopular than transit in the next 25 years if national trends are applied.

Telecommuting Compared to Walking: Working at home is more popular thanwalking in 82 percent of metropolitan areas over 1,000,000 population, or 41 out of50 areas. Working at home is more popular than walking in 73 percent ofmetropolitan areas, or 230 out of 315 areas. All of the nine metropolitan areas inwhich walking is more popular than working at home have dense, historic downtowndistricts, and all but one (Milwaukee) are in the Northeast. Genera lly, the differencesare slight where walking is more popular than working at home.

TELECOMMUTING, DEMOGRAPHICS ANDTHEFUTURE

The markets in which telecommuting is strongest are attracting overwhelmingmajority of population growth and net domestic migration.

Population Growth: National population growth trends correspond to areas in whichworking at home is more popular. The areas in which working at home is morepopular are growing faster than the nations average.


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There was 8.6 percent population growth between 2000 and 2006 among themetropolitan areas in which working at home is more popular than mass transit. Inthe metropolitan areas with higher rates of mass transit usage, the populationgrowth rate was 3.8 percent. Overall, 80 percent of met ropolitan growth has been inareas where telecommuting is more popular than mass transit.


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CONCLUSION

Telecommuting is an aspect of technology that has invaded theworkplace and changed for the foreseeable future.

The office has been extended to include the at home parents and otherindividuals, who may be tending to household duties, while awaitingfeedback from their latest submissions. Productivity has improved, dueto the change in environment for some workers who enjoy working bythemselves, because they can remain focus and maximize theirperformances. The energy they usually expend to worry about family

concerns, traffic congestion, lunch, and time offs to make timelypayments, and other business transactions, can now be channeledtowards improving themselves on the job.

Telecommuting means also, that there are less people on the companyproperty at one time, and as such, companies will experience reductionsin the operating expenses, especially in terms of the utilities, and otherequipment and services. Reductions in expenses will lead to increase in

profitability in the long term


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tele commuting & its effect on global economy of 21st century

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