SPECIAL EDITION

 

Organisational design and human capital management for an increasingly agile service environment

 

 

M. Musaigwa^*; J. Swanepoel

Department of Industrial Engineering, Tshwane University of Technology, South Africa

 

 

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ABSTRACT

The evolving phenomena of technical organisations, defined by the integration of Industry 4.0 technologies and enhanced international collaboration, have caused a heightened demand for specialised skills and experience. This shift has called for a focus on agile organisational design to adapt quickly to the rapidly changing environment as a result of technological advancements and market dynamics. Simultaneously, the increase in expatriate employment and transnational recruitment has increased competition for skilled professionals, highlighting the demand for dynamic human capital management strategies. This study employed a narrative literature review with the aim of analysing existing trends and practices in organisational agility, technology adaptation, and human capital management. The findings suggest that there is a growing emphasis on developing agile organisational practices and services. To remain competitive, technical organisations should adopt agile organisational design and human capital management practices. Continuous adaptation to market trends and technological advancements would be essential for sustained success.

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OPSOMMING

Die ontwikkelende verskynsels van tegniese organisasies, gedefinieer deur die integrasie van Industry 4.0-tegnologieë en verbeterde internasionale samewerking, het 'n groter vraag na gespesialiseerde vaardighede en ervaring veroorsaak. Hierdie verskuiwing het 'n fokus op ratse organisasie-ontwerp vereis om vinnig aan te pas by die vinnig veranderende omgewing as gevolg van tegnologiese vooruitgang en markdinamika. Terselfdertyd het die toename in uitgewekene indiensneming en transnasionale werwing mededinging vir geskoolde professionele persone verhoog, wat die vraag na dinamiese mensekapitaalbestuurstrategieë beklemtoon. Hierdie studie gebruik 'n sistematiese literatuuroorsig om bestaande neigings en praktyke in organisatoriese behendigheid, tegnologie-aanpassing en mensekapitaalbestuur te analiseer. Dit behels die keuse, kritiese assessering en sintetisering van die relevante literatuur om omvattende insigte te verkry. Die voorlopige resultate dui daarop dat, namate ondernemings poog om aan die vinnig toenemende vereistes van produkaanpassing te voldoen en vinnig op markvereistes te reageer, daar 'n groeiende klem op die ontwikkeling van ratse organisasiepraktyke en -dienste is. Hierdie evolusie word beklemtoon deur die behoefte aan indiensnemingstrategieë en meer reaktiewe werwing om toptalent internasionaal te lok. Om mededingend te bly, moet tegniese organisasies ratse organisatoriese ontwerp en menslikekapitaalbestuurspraktyke aanneem. Deurlopende aanpassing by markneigings en tegnologiese vooruitgang sal noodsaaklik wees vir volgehoue sukses.

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1. INTRODUCTION AND BACKGROUND

In the contemporary business landscape, the concept of organisational design and human capital management has gained significant attention owing to the increasing need for agility in service environments. Organisations are facing a rapidly changing and competitive landscape, requiring them to adapt quickly and efficiently to meet evolving customer demands and market trends. The recent literature examines various aspects of strategic agility, internationalisation speed, coordination mechanisms, growth modes, big data analytics, readiness for agile-sustainability, empowerment dynamics, team adaptability, intellectual capital, workforce agility, and the impact of human capital on organisational agility [1]; ]2].

One key aspect highlighted in the literature is the critical role of human capital in enhancing organisational agility. 'Human capital' refers to the knowledge, skills, and abilities of employees in an organisation [3]. Studies have shown that organisations with high human capital are better equipped to respond to changes in the business environment, enabling them to innovate, collaborate, and deploy services in a flexible manner [3]. Furthermore, the relationship between human resource management (HRM) strategies and sustainable competitive advantage has been explored, emphasising the importance of human capital management in improving strategic agility in dynamic and competitive environments [4].

Moreover, the literature emphasises the significance of organisational readiness for agile operations, particularly in sectors such as healthcare. Human capital plays a crucial role in enhancing agility in healthcare organisations by improving human resources and enhancing supply chain efficiency, ultimately leading to increased organisational agility [5]. The role of the human dimension in organisational agility has been studied, highlighting the need for a management paradigm that is oriented to agility in order to navigate today's dynamic business landscape [6].

In the context of agile service provision, intellectual capital has been identified as a key factor influencing organisational agility. Firms that effectively transform employees' knowledge into organisational knowledge and that possess strong human and structural capital are more likely to be innovative and agile in their service delivery [7]. Furthermore, the literature explores the impact of intellectual capital on information communication technology firm performance, emphasising the need for the dynamic management of intellectual resources to achieve superior performance in uncertain environments.

The relationship between supply chain agility and business performance has also been investigated, highlighting the importance of agility in ensuring responsiveness to customer requirements, resource efficiency, and competitiveness in volatile business environments [7]. The role of information technology capabilities (IT) in enhancing organisational agility has been recognised, with studies indicating a positive influence of IT capabilities on organisational agility.

Overall, the recent literature underscores the critical role of human capital management in organisational design for enhancing agility in service environments. By leveraging human capital effectively, organisations can improve their responsiveness, innovation, and competitiveness in dynamic and competitive markets. The integration of intellectual capital, IT capabilities, and supply chain agility contributes further to organisational agility, enabling firms to adapt and thrive in today's rapidly changing business landscape.

1.1. Problem statement

The rapid evolution of Industry 4.0 technologies and the expanding global presence of technical firms have brought about a notable transformation in the competitive arena, prompting organisations to embrace agile methodologies to maintain their competitiveness. Nonetheless, numerous organisations encounter problems when it comes to integrating these cutting-edge technologies and effectively managing their workforce to foster agility and responsiveness in the light of market dynamics. This research is focused on addressing the issue of inadequate strategies for implementing agile organisational structures and dynamic human capital management approaches in technical firms. This deficiency obstructs organisations from fully capitalising on the advantages offered by technological innovations and international collaborations, leading to a diminished competitiveness and adaptability in an increasingly turbulent market setting. This study aims to identify optimal practices and offer comprehensive insights into how organisations could bolster their agility by strategically combining Industry 4.0 technologies with optimised human capital management strategies.

1.2. Objective

The study aims to conduct a thorough analysis of current trends and strategies in organisational agility, technology integration, and human capital management. The trend ranges from 2015 to 2023. By reviewing a wide range of literature, the study seeks to offer valuable perspectives on successfully implementing agile organisational methods and flexible human capital management approaches to boost agility and responsiveness in organisations. The objective is to identify and suggest optimal practices that technology-driven firms could use to attract top talent, adjust to technological advancements, and maintain their competitive edge.

 

2. METHODOLOGY: NARRATIVE LITERATURE REVIEW

This study employed a narrative literature review methodology to conduct a comprehensive analysis of research that focuses on organisational agility, technology adaptation, and human capital management. The selection of this approach was based on its flexibility and depth, enabling an extensive exploration of various sources and perspectives within the specified research area.

2.1. Literature selection

The initial phase involved identifying and selecting pertinent academic articles, books, and conference papers that address key themes such as agile organisational design, Industry 4.0 technologies, human capital management, and international collaboration. The inclusion criteria focused on sourcing publications from reputable databases such as Google Scholar, Scopus, and IEEE Xplore.

Each piece of literature was critically evaluated for its relevance, methodological rigour, and contribution to the comprehension of agile organisational practices and human capital management. The evaluation criteria encompassed assessing the literature's relevance to the study's core themes, the robustness of its research design, and the significance of its insights in advancing understanding.

2.2. Insight synthesis

Insights from the selected literature were synthesised to construct a cohesive narrative structured around key study themes, which included the following: agile organisational design, exploring principles and practices that facilitate organisations in adapting to market changes effectively; technology adaptation; analysing the impact of Industry 4.0 technologies on enhancing organisational agility; and human capital management - that is, investigating strategies for managing human resources to support agile operations in a competitive global landscape.

2.3. Thematic examination

A thematic analysis was conducted to identify common patterns, trends, and gaps in the literature. This process enabled the development of a unified narrative that integrated diverse perspectives into a holistic understanding of the subject matter. The key themes that were identified included the pivotal role of human capital in driving organisational agility, and the challenges related to implementing agile methodologies across varied organisational contexts.

2.4. Integration of findings

The findings from the literature were integrated to provide a comprehensive view of how organisations could leverage agile practices and human capital management strategies to enhance their competitiveness. This integration also highlighted best practices and potential pitfalls, offering a balanced perspective on the implementation of these strategies. The narrative literature review methodology allowed for an in-depth exploration of the multifaceted nature of organisational agility and human capital management in the context of Industry 4.0. By synthesising insights from a wide range of sources, this study provides valuable recommendations for organisations that seek to navigate the complexities of a rapidly changing business environment. The findings emphasise the critical role of human capital and technology integration in fostering organisational agility and sustaining competitive advantage.

2.5. Specific methods employed for data extraction

To ensure accuracy and consistency, the data extraction used several methods:

• Reviewing abstracts and titles to determine their preliminary relevance to the core themes. The process excluded studies that did not meet the inclusion criteria.

• Doing a full-text review of studies that passed the initial screening. This stage included data extracted using the predefined codebook. Each study was assessed independently by at least two reviewers to ensure reliability.

• Cross-verifying the extracted data by the reviewers to reduce errors.

The excluded papers were the following: studies that did not discuss the main themes of human capital, agility in the service organisation, and organisational design; studies without a rigorous methodology; studies that had significant biases; studies presenting the same results; and studies that were not available in English.

 

3. LITERATURE REVIEW

3.1. Project, programme, portfolio organisational designs

Project portfolio management (PPM) is a critical aspect of effective project management, involving the management of a set of programmes and projects as an integrated system to ensure the appropriate allocation of resources [8]. This integrated approach facilitates the efficient administration of grouped work to achieve strategic business objectives [9]. PPM also plays a vital role in overseeing and holistically managing projects, aligning them with organisational strategies from the portfolio to programme and project levels [10]. Organisational designs in project, programme, and portfolio management are essential for enhancing the effectiveness of scientific activities in higher education institutions [11]. By using portfolio management methods, universities could increase the efficiency of their scientific endeavours, form effective research project portfolios, and align their projects with their strategic research goals [11].

The integration of organisational, methodological, and technological components in project and programme portfolio management systems is crucial for successfully implementing and achieving strategic goals [12]. Effective project portfolio management practices are key to supporting organisational ambidexterity, which involves balancing exploration and exploitation activities in projects [13]. By ensuring tight resource-based, contextual, and structural synergies between individual projects, project portfolios could enhance overall PPM effectiveness [14]. Moreover, the categorisation of projects in a portfolio is essential for aligning the portfolio with organisational strategies and goals [15].

3.2. Agile project management for shifting or unknown targets

Agile project management is widely recognised as a valuable approach for handling projects with shifting or unknown targets. The agile project management (APM) methodology offers flexibility in responding to changing requirements and client demands while ensuring the delivery of high-quality software [16]. By emphasising increased interaction among project stakeholders, agile project management aims to enhance the flexibility of product development processes, making it suitable for projects with evolving or uncertain targets [17]. In the context of risk and vulnerability management, agile principles advocate for processes that prioritise client proximity, iterative approaches to handle disruptive events, and regular team meetings to maintain project status awareness [18].

This iterative nature of agile project management allows for adaptability and responsiveness to changing targets or uncertainties, ensuring that projects can pivot effectively as needed. Moreover, agile project management principles have been successfully applied beyond software development, such as in archival project management, where agile factors are tailored to support project success in archival settings [19]. The adoption of agile methodologies involves closer collaboration with stakeholders and a different approach to project management aspects such as scope, risk, and quality management, making it suitable for projects with shifting or unknown targets [20]. Agile project management is also viewed as a platform for fostering creativity in project environments that are characterised by uncertainty, complexity, and unpredictability [21]. This approach provides an alternative to traditional project management methods, aligning well with the dynamic nature of projects with evolving or unclear targets.

3.3. Scrum technique in software development

Scrum, a widely recognised agile methodology in software development, is known for its effectiveness in managing projects. It is acknowledged as one of the most often used agile models in software development projects, emphasising iterative and incremental development cycles [22]. This iterative approach allows for flexibility and adaptability to changing requirements, making Scrum particularly suitable for projects with evolving or uncertain targets [23]. The Scrum framework has significantly enhanced software project management practices by providing a structured approach to development. It is considered a lightweight and agile framework that offers processes for managing and controlling software and product development effectively [24]. This structured methodology ensures that projects are well-organised and progress efficiently towards their goals.

Moreover, the adoption of Scrum in software development has led to the development of innovative approaches such as Scrumban, which integrates Scrum and Kanban methodologies, to enhance software engineering practices [25]. This integration of methodologies allows teams to leverage the strengths of both Scrum and Kanban, resulting in improved project management and delivery processes. Scrum's effectiveness in software development is further highlighted by its role in project risk management. A study introduced a new project risk management model based on the Scrum framework and the Prince2 methodology, showing how Scrum could be used to manage risks effectively in software projects [26]. This demonstrated the versatility of Scrum in addressing various project management aspects to ensure successful project outcomes. In addition, Scrum has been recognised for fostering collaboration and knowledge sharing in software development teams. Studies have explored the effectiveness of Scrum in promoting trust, knowledge sharing, and collaboration in IT organisations, emphasising the positive impact of agile methodologies on team dynamics and project success [27]. This highlights how Scrum not only improves project management processes, but also enhances team interactions and productivity.

3.4. Technology integration into business operations

The integration of technology into business operations is essential to driving innovation, improving efficiency, and enhancing customer experiences in today's digital age. Digital technologies such as cloud computing, big data analytics, and artificial intelligence play a significant role in enhancing operational efficiency, optimising processes, and improving customer engagement [28]. These technologies offer businesses the opportunity to develop new products and services while streamlining their operations to meet the evolving needs of customers and stakeholders. Digital technologies embedded in products enable the monitoring and control of process activities, facilitating the gathering, accessing, manipulating, and communicating of information. This capability creates opportunities for the integration of business processes, leading to improved efficiency and effectiveness in operations [29]. The use of information and communication technologies (ICTs) has revolutionised organisational management, enabling efficient decision-making, competitive advantage, and seamless integration and communication with key stakeholders [30]. Innovative business models driven by digitalisation have a profound impact on business performance. By leveraging digital technologies, organisations could drive business model innovation, optimise operations, and enhance customer experiences [31]. The integration of digital technologies across all areas of a business fundamentally changes how the business operates, creating value and driving growth.

The adoption of digital technologies in business operations extends beyond internal processes to external interactions and communication with clients and stakeholders. Digital technologies facilitate communication, content management, networking, data analysis, and customer satisfaction, ultimately enhancing business performance and sustainability [32]. The integration of automated systems and cybersecurity measures in global business operations ensures operational efficiency and customer service excellence in the Industry 4.0 era [33]. The measurement of technology integration using approaches such as the balanced scorecard enables organisations to assess and improve their system performance, driving organisational success [34]. The integration of management accounting practices (MAPs) as an innovative strategy sustains small businesses by optimising financial and non-financial information, improving their strategic focus, and enhancing their decision-making processes [35]. In addition, the e-commerce ecosystem leverages knowledge management and e-business technologies to integrate product information in supply chains, enhancing operational functions and activities [36].

3.5. Impact of technology on payroll, administrative databases, and client contact and communication

The impact of technology on payroll, administrative databases, and client contact and communication is a critical aspect of modern organisational operations. Several studies provide valuable insights into how technology influences these areas, enhancing efficiency, accuracy, and communication in organisations. [37] discussed the role of ICT in payroll operations for polytechnics in Nigeria, emphasising how technology improves the effectiveness of managing organisational resources. This highlighted the transformative impact of technology on traditional payroll processes, leading to increased productivity and organisational adaptability. [38] explored trends in HR analytics research, highlighting how blockchain technology could enhance various HR processes, including identity verification, payroll processing, talent acquisition, and employee retention.

The integration of blockchain technology into HR functions signifies a shift towards more secure and efficient payroll management systems. [39] conducted a feasibility study on implementing a human resources salary management system based on cloud computing, showcasing the significant impact of cloud technology on talent recruitment processes. Cloud computing offers scalability, flexibility, and accessibility, revolutionising how organisations manage payroll and HR functions. [40] investigated the role of blockchain in HR's response to the new normal, emphasising how technology and talent analytics contribute to developing a high-performing talent pool. By leveraging technology for talent management, organisations could enhance their competitive edge and drive their organisational performance. [41] compared human versus technology perceptions among HR professionals, highlighting the increasing automation in various HR functions, including payroll systems.

The adoption of rapid computing technology and automation tools underscores the shift towards efficiency and effectiveness in managing HR processes. [42] suggested that investment in information technology increases employee productivity, market share, revenue, and profitability. [43] emphasised the strategic impact of information technology on organisational change readiness through human capital effectiveness. The application of technology in HR functions directly influences organisational agility, adaptability, and competitiveness.

3.6. Online social media and recruitment platforms

Online social media and recruitment platforms have become integral to modern human resource practices, especially with the rise of digitalisation and the impact of events such as the COVID-19 pandemic. Research has shown that platforms such as LinkedIn, Facebook, Twitter (now X), Google Plus, YouTube, and Instagram play significant roles in supporting recruitment efforts [44]. Particularly since the onset of the COVID-19 pandemic, social media have emerged as a widely used recruitment platform thanks to their accessibility and reach [45]. Studies have demonstrated the feasibility and efficacy of directly recruiting participants online through social media, highlighting their efficiency and acceptability among participants [46]. The shift towards online data collection and social media recruitment has been accelerated by the COVID-19 pandemic, making these tools primary for conducting research in various fields, including the social sciences [47]. Social media advertising campaigns on platforms such as Facebook, Instagram, and Pinterest have proven to be cost-effective methods for increasing enrolment in research studies, especially when in-person recruitment is limited [48].

Platforms such as social media have been leveraged for nationwide surveys on topics such as COVID-19 knowledge, beliefs, and practices, showcasing the potential and difficulties of using social media as a recruitment platform [49]. Comparative studies have shown that social media recruitment, including platforms such as Facebook, Instagram, and Grindr, can be cost-effective and efficient in reaching diverse populations for research studies [50]. Leveraging social media for human factors research in healthcare has been highlighted as a valuable approach to studying health information communication, behaviours, and recruiting study participants [51]. During the COVID-19 pandemic, using social media as a survey recruitment strategy was crucial in reaching post-secondary students, demonstrating the adaptability and effectiveness of online recruitment methods [52]. A systematic review and meta-analysis have indicated that social media advertising is a promising tool for recruiting participants for clinical studies, offering improved cost efficiency and targeted population recruitment [53]. Recruitment through Facebook has gained popularity for research purposes owing to its ability to reach broad and diverse populations, enhancing the inclusivity of study samples [54].

Despite the advantages of online recruitment through social media, studies have also highlighted potential biases and problems associated with this approach, emphasising the need for the careful consideration of recruitment strategies [55]. Ethical considerations in using social media for health research recruitment and intervention delivery have been discussed, emphasising the importance of participants' willingness and of ethical practices throughout the research process [56]. Concerns about data quality and threats from bots and bad actors following research participant recruitment through social media have been raised, underscoring the need for vigilance in maintaining data integrity [57]. The use of social media for recruitment into clinical studies and health behaviour interventions has been recognised for its potential to reach a broader audience and to improve participant engagement [58].

 

4. DISCUSSION

The research results emphasise the critical significance of embracing agile organisational structures and dynamic human capital management approaches in the evolving landscape of agile service environments. The incorporation of Industry 4.0 technologies and subsequent global collaborations has brought about substantial changes in operational frameworks for technical entities, underscoring agility as a key factor in sustaining competitiveness. Successful implementation of agile organisational methodologies positions organisations favourably to address the requirements of customised products and prompt market responses. The focus on agile practices such as agile project management (APM) and Scrum fosters adaptability and flexibility, empowering organisations to pivot in response to fluctuating market demands and technological progressions, which would be especially crucial in environments marked by uncertainties, in which traditional management methods may prove inadequate. The findings also accentuate the pivotal role of human capital in enhancing organisational agility - constituting employees' knowledge, skills, and capabilities as a core asset enabling innovation, collaboration, and adaptable responses to business environment dynamics. Organisations with robust human capital levels show greater proficiency in deploying agile strategies, leading to superior performance outcomes. Moreover, the correlation between human resource management (HRM) strategies and sustainable competitive advantages underscores the necessity of dynamic human capital management practices.

Aligning HRM strategies with agility targets enables companies to cultivate a workforce that is able to propel innovation and sustain competitiveness amid dynamic market conditions. The integration of digital technologies into business operations significantly enhances organisational agility by boosting operational efficiency and elevating customer engagement through tools such as cloud computing, big data analytics, and artificial intelligence (AI). The integration of digital technologies into products and operations enables real-time monitoring and control, facilitating improved decision-making and resource management. The impact of technology on payroll, administrative databases, and client communication has been profound. Using blockchain and cloud computing in HR processes enhances security, efficiency, and accessibility, transforming conventional payroll and talent management systems. This technological advancement not only enhances operational efficiency, but also supports the cultivation of a high-performing talent pool that is crucial for organisational agility.

While the advantages of agile methodologies and technological incorporation are evident, potential difficulties are also highlighted. Relying on social media and online platforms for recruitment and data collection raises concerns about data quality and security. Ethical considerations and the risk of biases need to be addressed to ensure recruitment processes' integrity and inclusivity. Moreover, implementing agile practices requires a cultural shift in organisations to align all stakeholders with agile principles for desired outcomes. This cultural transformation entails fostering an environment that is conducive to continuous learning, collaboration, and adaptability.

 

5. CONCLUSION

This study underscores the critical need for technical organisations to embrace agile organisational design and dynamic human capital management strategies in the context of Industry 4.0. The integration of advanced technologies, coupled with a heightened competition for skilled professionals, requires a transition towards more flexible, responsive, and adaptive organisational approaches.

The adoption of agile methodologies such as agile project management (APM) and Scrum is essential for organisations to stay competitive in rapidly evolving markets. These practices enhance flexibility, enabling organisations to adapt swiftly to emerging technological trends and changing customer needs. The effective management of human capital is crucial for organisational flexibility.

Organisations that invest in nurturing and overseeing their human resources are better equipped to innovate and uphold a competitive advantage. Strategies that harmonise human resource management with agile principles cultivate a workforce that is able to foster continuous improvement and adaptability. The incorporation of digital technologies such as cloud computing, big data analytics, and artificial intelligence significantly boosts operational efficiency and customer interaction. These technologies empower organisations to monitor, regulate, and optimise processes, thus supporting agile operations. However, the increasing reliance on digital platforms for recruitment and data gathering poses challenges concerning data integrity, security, and ethical considerations. Overcoming these challenges would be vital to safeguard the integrity and inclusiveness of organisational practices.

The results of this study offer valuable insights for technical organisations that seek success in the Industry 4.0 era. By embracing agile organisational structures, maximising the use of human capital, and integrating cutting-edge technologies, organisations could improve their flexibility, responsiveness, and competitiveness. Future research should investigate the long-term ramifications of these strategies, and develop approaches to overcome implementation hurdles to ensure enduring success in dynamic business environments. This research augments the existing knowledge on organisational agility and human capital management by delivering practical recommendations and strategic direction for organisations that are navigating the complexities of today's business landscape. By adopting the principles and methodologies outlined in this study, technical organisations could position themselves more effectively to meet future demands and achieve sustained prosperity.

 

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Available online 29 Nov 2024

 

 

* Corresponding author: msaigwamish@gmail.com
ORCID® identifiers
M. Musaigwa: https://orcid.org/0000-0002-1474-5949
J. Swanepoel: https://orcid.org/0000-0001-6861-4437