How Businesses Deal With Mounting Pressures

One of the world’s internet giants has sparked controversy over its decision not to allow employees to work from home. The decision has been met with public criticism from a well-known entrepreneur who says the move is backward in a modern era. It also goes against the plan for the Australian workforce to double the number of employees working from their homes. The federal government’s National Digital Economy Strategy wants to increase the number of “teleworkers” by 12% by 2020. The government has also launched a website about the advantages of the National Broadband Network and features promotional videos about why people should consider working from home.

Yahoo! Sunnyvale headquarters.  October 28, 2001 (Y! Photo / Brian McGuiness)

As cheaper internet access and hardware has become commonplace more people have taken up the trend of working from home so the latest decision has baffled citizens and critics alike. The new memo from the technology giant, signed off by the company chief executive, states that working from home will not be allowed from June this year as work quality and speed may be compromised in the home environment. The memo also says that spontaneous decisions and ideas generated by workplace meetings are most effective.

Despite the motivation it cannot be denied that working from home is a very cost-effective way to do business and more companies are making the transition to working from avirtual office. Major companies that have embraced the new way of doing things have been enjoying benefits like flexibility and cost saving for a number of years.

And although some company heads fear people become lax working at home, the research actually suggests they are more productive. In fact the data shows that work becomes more intense as people work harder and, not faced with the daily toils of traffic and commuting, employees have more hours available to invest in their work.

The tech giant’s decision not to embrace the modern work environment certainly is surprising given their status in information technology and they have been called on the decision, but the company says it does not make public comments on internal decisions.

An industry research group has pointed out that despite the research leaning in its favour there is still a prevailing stigma about the concept of telework that needs to be addressed.

And, while some companies look to the road lesser travelled to deal with the changes happening around them, others ask the government for assistance. A leading vehicle manufacturer has asked the government for financial assistance as it looks to add a third model to its vehicle family. The last three years have seen the company post a $700million loss but it has been saved by government funding in the past.

Federal government and the government of Victoria have given the vehicle manufacturer $100milliontowards the production of a model and to upgrade an engine factory just outside Melbourne. By adding a third model the manufacturer hopes to increase vehicle output from 94,000 to 150,000 per year. The purpose of the funding request is to be able to keep vehicle manufacturing in the country, something which can only be done if the volume of output increases. The manufacturer has voiced its commitment to local manufacturing even though the competitive landscape is tough. They also stated that the company had a long and positive history in the local market. Certainly, while local manufacturing is ‘nice to have’ analysts have raised the question of whether it is truly sustainable and whether the government really should continue to contribute to an industry that is not providing a favourable return on investment. The government funding support has received vociferous criticism, but only until the sector started cutting jobs. Now broader questions are being raised about the viability of the model down under.

Vijayraj Reddy is founder & editor-in-chief of, a financial blog which helps people to earn money, invest money and save money.

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