I was watching a report on CNN that talked about "Casual Fridays" in England - London to be specific - and how people did not want to "dress down" for work. The reason that was given was that having a dress code made it simpler to know what was required and actually made things easier for the worker.
There is another underlying fear, as made quite evident from my days with Andersen Consulting, that if employees dress casually, they will take their work casually and not produce the same quality of work they would otherwise. While one of the unwritten rules was that you were to follow your clients standards with regard to what you wore, another unwritten rule was that you would wear a tie at all times. So, while you could dress casually (i.e. take your jacket off), too casually was a no-no.
Being part of the generation that grew up with suits and has subsequently ushered in the "Casual-era", I've seen both sides of the coin. While I believe that going casual has reduced some of the discipline that is required, I believe it has been more than made up for by the atmosphere in which we work. A suit and tie impose a certain level of discipline when you're working and losing those pieces of clothing has, apparently, reduced the level of discipline that people seem to have. (Please note that there is a limit to being casual, a limit that some people just don't understand.)
However, I also think that the work atmosphere now is more conducive to change, more willing to accept new challenges and new ideas and, well, more fun than it used to be. The fact that I don't wear a suit and tie makes me more comfortable at work and, as a result, makes me more attentive and able to focus on a problem. (Who can fix something when you're convinced that the next time you cough your tie is going to spontaneously tighten itself around your throat and stop you from breathing?)
Back in the suit and tie world the Internet would never have been a success: it breeds contempt for boring; offers success for being different; allows people to do things in amazingly different ways; and was built by people without ties.
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