Handy Shamrock Organization, or the model organizational structure for the future of businesses, gets its name from a three-leafed clover.
It was first created by Charles Handy, the co-founder of London Business School in 1967, who believed that businesses must be able to include structural changes into their organizational structures as a result of the dynamic nature of changes within organizations and the external business environment.
What is Handy Shamrock Organization?
Handy Shamrock Organization is a model of organizational structure characterized by a core of essential executives and workers supported by part-time employees and outside contractors.
Handy argued that the traditional hierarchical organizational structure was no longer suitable for the modern workplace, which is characterized by rapid change and uncertainty. He proposed the Shamrock Organization as a more flexible and adaptable model that could better meet the needs of businesses in the 21st century.
There are three groups of workers, or the three leaves of the clover, are within a Handy Shamrock Organization:
- Core workers. They are full-time professional workers who are very important to the firm’s daily operations and future business growth. This group of permanent workers mainly includes managers and engineers who are very experienced, well-paid and highly motivated. They are also highly productive and enjoy job security that comes from being the core staff. When a business decides to downsize, it will restructure the workforce in a way that this groups become smaller.
- Peripheral workers. They are part-time workers, temporary workers and portfolio workers who are employed only when they are needed. This group of flexible workers is paid wages either by piece rate or time rate, hence is easier to hire and fire than core workers as their employment is for short periods of time. This can help to reduce labor costs for the business, but may cause lack of job security for the workers.
- Outsourced workers. They are individuals or businesses who are not employed by the business organization, but hired externally to complete a particular tasks or project. This group includes subcontractors, freelancers, agencies or self-employed professionals who are hired for their expertise despite being relatively more expensive than peripheral workers.
Features of Handy Shamrock Organization
There are a few common features for Handy Shamrock Organization.
People are the most important resource for any business that is why greater emphasis should be placed on meeting the needs of workers.
Workers should be given more interesting and challenging tasks (job enrichment) instead of being strictly supervised, controlled and punished. Flexible working human practices should be adopted to improve their well-being and morale.
Also, as a result of this flexibility, workers should be offered short-term employment contracts where more appropriate.
Any non-essential work – tasks that can be done by other specialist organizations who can do the work more productively and cost efficiently – should be contracted outside of the business.
When is Handy Shamrock Organization used?
There is growing trend in the number of businesses that adopt the principles of Handy Shamrock Organization.
For example, schools and universities might subcontract their non-core business services such as cleaning, security, catering and maintenance to outside firms. Famous supermarkets such as Walmart, Tesco and Carrefour employ a great number of part-time workers minimizing the number of full-time workers.
While workers who prefer flexible employment such as students, retiree, new mothers with young children would have more choice over the hours that they work.
Handy Shamrock Organization – Evaluation
Advantages of Handy Shamrock Organization include:
- Increased flexibility. The Handy Shamrock Organization is a flexible structure that can be easily adapted to changing business needs. This is because the organization is not reliant on a large number of full-time employees, and it can easily outsource work to contractors or part-time workers.
- Reduced costs. The Handy Shamrock Organization can help to reduce costs by outsourcing work to contractors or part-time workers. This can free up the organization’s core staff to focus on more strategic work.
- Increased expertise. The Handy Shamrock Organization can help to increase expertise by bringing in outside contractors and consultants. This can help the organization to stay up-to-date on the latest trends and technologies.
- Improved decision-making. The Handy Shamrock Organization can help to improve decision-making by decentralizing power and authority. This can help to speed up decision-making and make the organization more responsive to customer needs.
- Increased employee motivation. The Handy Shamrock Organization can help to increase employee motivation by providing employees with more autonomy and control over their work. This can help to create a more engaged and productive workforce.
Disadvantages of Handy Shamrock Organization include:
- Potential for decreased morale and loyalty. Employees who are not full-time may feel less connected to the company and may be less likely to go the extra mile. Additionally, the use of contractors and part-time workers can create a two-tiered workforce, with full-time employees feeling resentful of the perceived benefits and privileges of their non-full-time counterparts.
- Potential for communication and coordination challenges. With a more distributed workforce, it can be more difficult to ensure effective communication and coordination. This can lead to delays, errors, and missed opportunities.
- Potential for knowledge loss. When employees leave the company, they take their knowledge with them. This can be a problem for the company, especially if it relies on the expertise of these employees.
- Potential for increased costs. While outsourcing can save money in the short term, it can also lead to increased costs in the long term. This is because contractors and part-time workers may not be as efficient as full-time employees, and they may require more training.
- Potential for legal and regulatory challenges. Companies that use the Handy Shamrock Organization need to be aware of the legal and regulatory implications of doing so. For example, they may need to comply with different labor laws and regulations for full-time and non-full-time employees.
With introducing the Handy Shamrock Organization was introduced in the early 1990s, more and more businesses are restructuring – reducing the full-time core workers while increasing part-time staff and outsourcing – to become more flexible.
