Optimal time switching from tayloristic to holistic workplace organization

The introduction of information and communication technologies over the past decades has fostered a process of internal workplace reorganization of firms who have tried to maximize their performance. Using a two stage optimal control technique, this paper provides analytical solutions to the conditions under which an economy decides to adopt a new organizational regime characterized by multitasking and an horizontal hierarchical structure (holistic organization). We consider two flexibility options : a) the possibility that only a part of the labor force is shifted to the modern wokrplace organization and, b) the possibility that the loss of productivity is not permanent. In all cases we conclude that the modern organization is adopted if and only if the productivity gains in the capital-goods sector compensate both the loss of expertise suffered by workers and he drop in consumption.