Chapter 10: Change and Innovation: New Organizational Forms

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Chapter 10 Change and Innovation New
Organizational Forms
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Chapter aims

• Examine the nature of organization innovation and
  change
• Explain how mainstream thinking accounts for the
  development of new organizational forms
• Demonstrate how new forms of production release
  the productive potential of employees in novel
  ways
• Examine new organizational forms from a critical
  perspective

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Naming new organizational forms

• Just-in-time
• Lean production
• Innovation-mediated production
• Cellular manufacturing
• Production-focused manufacturing

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Overview

• Both mainstream and critical perspectives
  acknowledge the existence of new organizational
  forms in advanced industrial societies
• BUT they differ in their assessment of its
  effects
• Mainstream sees benefits for both employers and
  employees
• Critical skeptical about the benefits to
  employees and argue new organizational forms can
  lead to work intensification and stronger
  managerial control

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Theoretical approaches

• Flexible specialization
• Post-Fordism
• Toyotaism
• Japanization
• Neo-Fordism

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Just-in-time (JIT) production

• Aims to
• Reduce stock and work-in-progress to the minimum
  possible level
• Prevent large quantities of work-in-progress from
  building up
• Reduce finished goods inventories by sending them
  to customers as soon as they are produced
• Implications for employees
• Increased responsibilities for identifying and
  resolving problems quickly

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JIT production process
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Rhetoric and reality

• Rhetoric
• Customer first
• Total quality management
• Lean production
• Flexibility
• Recognizing the individual
• Teamworking

• Reality
• Market forces rule
• Doing more with less workers
• Mean production
• Management prerogative
• Undermining trade unions
• Reducing individual discretion

Source Sissons (1994)
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The flexible firm (Atkinson, 1984)

• 3 characteristics
• Functional flexibility
• How firms assign employees to different tasks to
  meet changes in market demand and customer
  requirements
• Numerical flexibility
• How firms adjust workforce size in relation to
  fluctuations in output requirements and market
  demands by using employment agencies or
  non-standard employment practices
• Financial flexibility
• How firms adjust their wage costs to make savings
  by altering pay structures or introducing
  performance-related pay

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Core and periphery workers

• Core
• Highly skilled
• Experts in their field
• Essential to firm
• Secure jobs
• High wages
• Good perks/benefits

• Periphery
• low skilled
• Easily replaecable
• Low job security
• Low wages
• Few perks/benefits

The mainstream tends to assume NOFs benefit
employees equally, without recognizing the
effects on different groups of workers
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Critical approaches Overview

• Challenge the credibility and expose the limits
  of mainstream thinking
• Seek a genuinely human-centered approach but does
  not provide a blueprint for change. Should it?
• YES otherwise the critique is idealistic and
  utopian
• NO this would be the imposition of an elite view
  on workers

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The excellent movement

• The focus of critical approaches
• Associated with
• Peters Waterman (1982)
• Ouchi (1982)
• Pascale and Athos (1982)
• Deming (1982)
• Based on a series of events in 1970s
• The poor performance of Western economies
  triggered by the oil shocks of 1973 and 1979
• The strong performance of the Japanese economy
  during this time
• The rise of highly competitive global capitalist
  market conditions
• The emergence of new organizational forms,
  pioneered by Japanese organizations.

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Secrets of Japans success

• Economic success in 1970s and 1980s attributed
  to
• Closely integrated family owned and controlled
  cooperative business cartels
• Japanese state supported capital investment in
  industry
• Novel manufacturing and market-responsive
  production regimes and a customer-driven business
  strategy
• A particular form of organizational culture

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Japanese organizational culture

• Key feature of the excellence movement
• Believed to explain strong performance of
  Japanese organizations in 1970s/80s
• Values the collective in comparison to Western
  emphasis on the individual
• Desire by mainstream thinkers to transform
  Western management practices and develop strong
  organizational cultures

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Problematizing culture change

• Excellent movement overlooks
• Threats to employee identity from organizational
  change
• E.g. doctors in the NHS felt their autonomy was
  compromised by managerialism
• Existence of occupational subcultures
• Questions the concept of organizational culture
• Excellent movement assumes a unitary and
  apolitical culture