Flexible Work Arrangements and Financial Performance in Korea

Purpose - The purpose of this paper is to verify the effectiveness of various types of flexible work arrangements and to provide implications on financial performance. This study further examined the effects of flexible work arrangements on firm performance depending on the size of firms. Design/Methodology/Approach - Using the panel data collected from 2016 to 2018, the study performed multiple regression analyses to analyze the effects of introduction and practical utilization of flexible work arrangements on firm performance, respectively. This study used the panel data of flexible work arrangements from the Korean Women Manager Panel Survey by the Korean Women's Development Institute. Findings - We found that firm performance was not enhanced by mere introduction of flexible work arrangements. The empirical results provided evidence that the utilization of work from home positively affected firm performance, while the other flexible work arrangements did not have significant effects on firm performance. The findings were more evident in smaller companies, where the utilization of work from home was positively related to firm performance, and flexi-time was negatively related. For larger companies, flexible working hour utilization was positively related to firm performance. Research Implications - The use of flexible working hours could be of help for larger companies with relatively more rigid culture. Flexi-time utilization could sacrifice financial performance for smaller firms, implying that having core hours might be more crucial for these companies to prevent potential communication problems. The use of work from home may benefit smaller companies with relatively more compact teams or a simpler structure.