[Socialism Today, No 7, April 1996, p. 19-22]
In many workplaces the employers‘ offensive against the workforce comes under the name of „new management techniques‘. The latest example is the Employee Agenda proposals in the Royal Mail. Dave Beale, author of Driven by Nissan? A critical guide to the New Management Techniques, outlines the new methods pioneered in the UK by Japanese car and consumer electronics multinationals, and the threat they pose to independent trade unionism in both public and private sectors.
New Management Techniques present an important challenge to the labour movement in the 1990s, not least in the UK. In the political and economic climate of the 1980s they emerged as a pioneering combination of new management methods and ideas, particularly in the car and consumer electronics industries. Nissan, and the subsequent Japanese investment projects in the UK car industry, received extensive media attention.
UK employers in a wide range of industries embraced new management techniques with evangelical zeal. The chemical industry pioneered many of the „blockbuster‘ agreements on labour flexibility. Non-manufacturing sectors such as the retail trade realised the advantages of just-in-time philosophy and customer-orientated quality systems. The public sector began to link new management techniques to the challenge of public spending cuts and the threat of privatisation. The dismantling of the public sector, the establishment of a market philosophy within it, public service users perceived as customers, pseudo-quality of service initiatives and the Citizen’s Charter, are all part and parcel of these developments. In short, a process of diffusion of new management techniques throughout almost all sectors of employment began in the 1980s, and developed apace in the 1990s. What then are the main features of new management techniques?
(1) Labour flexibility is a key dimension. It is a term often used to refer to several rather different labour practices. A useful way of resolving confusion about its precise meaning is to distinguish between numerical labour flexibility (temporary, part-time and casual labour), functional flexibility (the breakdown of demarcation between different skills and/or between skilled, semi-skilled and unskilled jobs), and temporal flexibility (flexibility regarding working time such as averaged and annualised hours agreements, more flexible shift arrangements and flexitime). Of course, employers‘ attempts to create greater labour flexibility are hardly new, What is new. however, is the way in which some employers are integrating labour flexibility initiatives with the other new techniques.
Research suggests that employers have made far less progress on functional labour flexibility than they would have us believe (see Incomes. Data Services‘ studies for example), and that in fact the concept of the flexible firm, heralded so loudly by Thatcher’s friends in the 1980s, has remained just that – a concept.
Numerical labour flexibility, however, continues to provide a nightmare existence of insecurity and low pay for vast numbers of workers in the UK – loudly defended by British employers against employers in most European Union countries who to date have not placed such emphasis on numerical labour flexibility and oppose what they perceive as unfair competition by UK business within the EU.
(2) Total quality management or TQM is a term used in a confusing variety of ways. Perhaps the most useful approach is to see it as a broad concept which encompass various stages of quality assurance through which companies and public sector organisations might progress. Seen like this TQM can refer to anything from British Standard 5750 (now referred to as the ISO 9000 Series), through the idea of every employee having responsibility for quality and getting things „right first time‘, to concepts of value which incorporate major improvements in quality simultaneously with vigorously competitive pricing strategies. BS 5750/ISO 9000 Series is often used as a complex system for ensuring companies make or do exactly what they say they make or do. It has been used predominantly in manufacturing, particularly to ensure a higher percentage of components and products are made to conform precisely to design specifications. However, many total quality initiatives in manufacturing have been essentially cost-cutting exercises rather than genuine attempts to improve the real quality of the product sold.
Similarly, workers in the public sector know only too well the reality of total quality and the related Citizen’s Charter and Investors in People initiatives, and the extent to which they are an attempt to con the public into believing that a better quality service can be provided simultaneously with massive public spending cuts, compulsory competitive tendering, market testing and threatened privatisation. One of the problems for unions about all this is that quality is a particularly politically loaded concept.
(3) Just-in-time methods, often referred to as lean production, bring about minimum levels of stock at all stages of the production process. Production is much more closely related to fluctuations in customer demand than is the case with more traditional methods. Such a system is intended to create a series of repercussions which result in radical changes to working practices and workplace philosophy. The closer to „zero inventory‘ that a workplace can get (i.e. no stock of raw materials and components except that which is used immediately), the more that problems in the production process are forced to the surface, creating a situation in which it becomes very difficult for workers to avoid lasting solutions to them.
The key to understanding the logic of this approach is to appreciate that management are deliberately setting the workforce objectives which are impossible to achieve. This promotes a philosophy of continuous improvement or kaizen- management always want more out of the workforce and ‚management by stress‘ prevails.
Total quality management initiatives are a necessary ingredient of developed just-in-time systems, and increased labour flexibility, employee involvement and team-working generally play an important role as well. Effectively just-in-time can be put together with other pieces of a new management techniques jigsaw.
Certainly employers in engineering and manufacturing can make massive sayings from just-in-time, but it has its downside for them: it is vulnerable to industrial action, Whilst companies with significant stock levels can continue to supply customers during the early stages of a strike, just-in-time companies cannot. In Japan companies like Toyota, Nissan and Hitachi ruthlessly crushed independent unions in the 1950s, replacing them with compliant company unions which would never contemplate strike action. In the UK Japanese car and consumer electronics companies have largely gone for greenfield sites, which have enabled them to court right-wing union leaders, principally of the engineering and electricians‘ unions (now the combined AEEU), and establish single union no-strike deals – much to the delight, of course, of successive Tory governments.
Where companies have tried to imitate Japanese-style techniques at established union workplaces, the problem of preventing strike action has been more difficult for management. Whilst high unemployment has been important in discouraging strikes in recent years in the UK, employers have also been busy promoting the ideas of employee involvement as a means of trying to change aspects of workplace culture, to subvert union loyalties and discourage industrial action. It is for this reason that employee involvement programmes have been an important accompaniment to just-in-time.
The unoriginal though important conclusion, therefore, is that defence of the right to strike, and the willingness of members to take such action periodically, is fundamental to any effective union policy to tackle just-in-time.
(4) Employee involvement refers to a range of techniques which include team briefings, attitude surveys, video presentations on company initiatives and company performance, employers‘ newspapers, quality circles and related problem-solving groups, employee share-ownership plans, profit-sharing schemes, profit-related pay, works councils and other workplace consultative committees and structures. Employee involvement is about improving workplace communication, developing loyalty to the company at the expense of loyalty to the union, increased awareness of the business organisation’s needs and better use of workers‘ expertise to solve management problems on the cheap.
(5) Team-working is a system usually applied to manual workers in industrial workplaces. It refers to the establishment of teams of between approximately ten and twenty, and provides workers with a much greater level of autonomy within the team with regard to how their work is organised. Common outcomes of team-working are to create greater levels of functional labour flexibility within the team, to promote employee involvement and total quality initiatives, to change supervisory roles radically and to act as an important vehicle for the introduction of just-in-time. In management terms team-working can be a very effective means of introducing integrated new management techniques programmes. Union experience in the US (see publications by the Detroit-based union research group, Labor Notes) demonstrates the disturbing extent to which team-working can be the driving force behind „management by stress‘.
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The international and historical context of new management techniques is essential to appreciate if an effective labour movement strategy is to be adopted. Just-in-time, based on minimum stock levels, is a customer-orientated or demand-led system, sometimes referred to as a pull-system of production. This is in contrast to more traditional production systems, sometimes referred to as push systems or „just-in-case‘, which operate high stock levels, are based on a determination to achieve the optimum return on investment in machinery, and are therefore supply-led, The push system is epitomised by traditional car assembly line production pioneered by Ford. Whilst Ford’s ideas originated in the production of the Model T Ford immediately before and after the First World War, the push system of production took on a new lease of the life in the context of the prolonged upturn in the international economy in the 1950s and 1960s.
Ford was greatly influenced by the American engineer and management theorist, FW Taylor. Taylor put forward the concept of scientific management, believed economic rewards were the key to increasing workers‘ motivation and effectively founded the concept of time and motion study. Whilst Lenin showed interest in Taylorism and its potential for modification and application within a socialist economy, it was Ford who embraced it with a vengeance under capitalism.
In the 1950s and 1960s the emphasis was on the volume of production because the emerging multi-nationals focused on the battle for new and expanding markets. However, by the 1970s the post-war boom was coming to end, and companies were having to fight over each others‘ customers instead. Economies have been dominated in the period since by varying degrees of recession and very aggressive battles for market share. It was in this context that companies, led by the giant car and consumer electronic multinationals, began to develop new production and management techniques which could simultaneously hold down prices, improve quality, be much more customer-orientated, and maximise profits through increased exploitation of labour. It is precisely these issues which just-in-time, continuous improvement and total quality, linked to labour flexibility and employee involvement, and implemented by means of team-working and sometimes single union deals, are intended to address.
There is an important theoretical debate which has emerged as a result of these international developments. Not only is it argued that they have brought with them an increasing emphasis on the human relations school of management as opposed to Taylorism, but it has also been argued that these new techniques are linked to much more fundamental changes in capitalist society which amount to a „post-Fordist‘ era. This perspective, particularly associated with the (former Euro-communist) Democratic Left in the UK, effectively argues that Thatcherism was an expression of unavoidable and irreversible changes in society and that organised labour will never again have a central role to play.
It would certainly be a mistake to consider the new management techniques as little more than a series of management fads, or to consider them in isolation of broader changes which are taking place internationally. They do indeed present a challenge of major proportions. However, a rigid distinction between Fordism and post-Fordism seems to be more of a theory in search of reality, with insufficient evidence to conclude that a new, qualitatively different phase of capitalism is emerging. Rejection of this perspective, whilst recognising that just-in-time is indeed an important new approach to the problems of production, opens up much greater possibilities for an effective analysis of new management techniques.
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An overview of how the new management techniques fit together, of the employers‘ strategy and managements objectives, is important if union representatives in the workplace are to anticipate effectively and to prepare to resist management’s next initiative.
Most union reps are only too familiar with the extent of British management incompetence, arrogance and lack of real commitment in many workplaces. When related to the implementation of new management techniques programmes, this provides some scope for shop stewards and union reps to overtake management in their knowledge of these issues. and thus offers a basis for effective union resistance.
The car and consumer electronics industries represent the employers‘ cutting edge for new management techniques, and one would expect management to be more effective in these sectors, At the other extreme would seem to be the public service sector, with many managers not only dogmatically committed to imitating private industry – with their obsessions of users as customers and public services as products – but often also having a concept of the private sector which is perhaps 15 years out of date. With an aggressive campaign based on co-ordinated industrial action across the public sector, linking the fight against cuts, privatisation and new management techniques with a public political debate about how to defend workers‘ rights and improve the quality of service to the community simultaneously, new management techniques could be quickly wiped out in the public sector and exposed for what they are.
However, the issues for trade unionists in private manufacturing are perhaps more complex. The crux of the problem is related to the international diffusion of just-in-time, and whether this is a process which is ultimately unstoppable in certain sectors of industry under capitalism. If this is the case (and there is serious doubt), there is still plenty of scope for an effective union strategy. The problems for big business are in many senses more complex than those facing the labour movement regarding this issue, principally because of the vulnerability of just-in-time to strike action. Neither single union no-strike deals. nor high unemployment, nor anti-union legislation, have resolved this problem for employers as a whole in the UK.
Indeed British employers may continue to introduce just-in-time but with baited breath, since, when workers fully recover their confidence after the mauling of the Thatcher era, their bargaining power under just-in-time may be more than sufficient to wipe away the ‚management by stress‘ dimensions of the system, to destroy employee involvement, to control changes to job demarcation and to establish a new and powerful union culture within the workplace. Thatcherism failed to destroy trade unionism in the key industrial sectors in the way that Toyota, Nissan and Hitachi did in Japan in the 1950s, and therefore missed its opportunity to lay a secure foundation for the introduction by big business of confident programmes of new management techniques. In short, there is plenty of scope for trade unionists to fight back in spite of the dismal record of the labour movement leadership on these issues.
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