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Flextime and Profitability

Authors

  • BYRON Y. LEE,

  • SANFORD E. DeVOE

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    •  The authors’ affiliation are, respectively, Renmin Business School, Renmin University of China, 59 Zhonguancun Street, Haidian District, Beijing, China, 100872. E-mail: byronlee@rbs.org.cn; and Rotman School of Management, University of Toronto, 105 St. George Street, Toronto, ON M5S 3E6, Canada.
      The authors thank Morley Gunderson for helpful comments. Byron Lee also thanks the Renmin publication grant for financial support. While the research and analysis are based on data from Statistics Canada, the opinions expressed do not represent the views of Statistics Canada.


Abstract

Despite the well-documented benefits of flexible work schedules (flextime), generalizable assessments of how flextime influences organizational profitability have proven elusive. Using a unique data set representative of organizations in Canada, we examine the effect of flextime in combination with organizational strategies to predict profitability. Using fixed effects and controlling for prior profitability, we find that flextime increases profitability when implemented within a strategy centered on employees but decreases profitability when implemented within a strategy focused on cost reduction.

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