Where does working from home “work”?

Abstract

AbstractAs the COVID‐19 outbreak forced many organizations to shift to work from home (WFH) arrangements, many are now considering whether to continue these arrangements post‐pandemic. To make informed decisions, understanding the environmental factors that influence employees' capacity to WFH effectively is crucial. This study contributes to this understanding by drawing on neo‐institutional theory to develop a model that characterizes how employees' WFH outcomes are shaped by their national institutional environment. The model was tested using data from multiple national‐level sources and individual‐level data obtained via a survey. The findings reveal that employees from high competency (cognitive institutions), meritocratic (normative institutions), and more labor‐regulated (regulatory institutions) contexts demonstrate higher levels of perceived productivity and satisfaction with WFH. Moreover, the link between the institutional context and WFH effectiveness is more pronounced when employees' capacity to adjust to WFH is high. Theoretical and practical implementations for organizations, especially multinational ones, are being discussed.