Technology And Employment

Concepts And Clarifications

Eli Ginzberg, Thierry J Noyelle, Thomas M Stanback Jr

• Publisher: Routledge
• Year: 2020
• eBook ISBN: 9781000314106
• Edition: 1
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

This volume is the first of four publications that will present the research on technology and employment carried out by Conservation of Human Resources of Columbia University over the past several years. This research was started with a small grant from the Rockefeller Foundation in 1982.

1
A Pass at Conceptualization

Introduction: A New Technological Era

Four principal questions are raised at the outset of this chapter: (1) What makes the current phase of computerization qualitatively different from that which preceded it? (2) How can we assess the pace and scope of diffusion of the new technology? (3) What are the determinants of the pace and scope of diffusion? (4) What is the impact of the new technology on employment, especially on the employment of women and minority workers who have traditionally been at a disadvantage?

In order to assess the nature of the transformations that are being brought about by the new generation of microprocessing and distributed data processing technology, it is helpful to contrast the emerging era with the one that preceded it and that began with the introduction of the first commercial computers in the late 1950s.

The first stage of commercial computer technology was primarily directed at putting in place large number-crunching machines that were able to do a great many calculations at high speed and at steadily lower unit cost. The mainframe computer became the recordkeeping war-horse for large companies, and the data processing service bureaus performed many of the same tasks for a great number of middle- and small-sized companies. This new number-crunching capability provided U.S. businesses with a much-improved way to stay on top of many administrative functions, especially those with a heavy clerical content, from order taking and recordkeeping to billing, accounts receivable, and general ledger.

In brokerage houses, for example, the new capability for data processing was the only way the vastly enlarged burdens of the "back offices" could have been successfully handled after the early 1960s, when the volume of transactions carried out on the various exchanges increased spectacularly. AT&T was able to cope with large-scale expansion in areas of toll calculations, billing, and recordkeeping only because of labor economies made possible through new technology. AT&T had pointed out earlier that had it not been for the constant advances in technology it would have had to hire all the clerks who could work in order to cope with its increased volume.

As computerization proceeded, other important developments beyond the simple substitution of computers for clerical labor in routine data processing began to unfold. Among the most important developments was the computerization of inventory control procedures, followed later by crude linkages between electronically recorded point-of-sales information and inventory control and reordering mechanisms. These developments were facilitated by the emergence of on-line technology, making possible continuous data entry and direct monitorization at the point of operation. By the end of this first stage of computer technology (late 1960s and early 1970s), significant realignments of functions were beginning to occur, especially regarding the ways in which management was able to control much larger volumes of information and to perform critical operations not only more cheaply but much more effectively.

By the mid-1970s, a new era of computerization had been launched, marked by the rapid and widespread development of on-line distributed data processing systems involving improved data communication, massive data storage, high-speed processing capability, and the development of user friendly software. With this new technology, end users learned that data processing no longer needed to be centralized and performed at points far removed from operations but that computerized operations could be performed throughout an organization. In the process, users also discovered that the new technology could be utilized to handle a vast array of tasks, including file management (personnel files, vendor files, insurance policy files, welfare check files, etc.), simple decision-making procedures (file updating, insurance policy rating, order taking, etc.), and analyses required to assess operating efficiencies and to help plan strategies. In short, the computer is now the critical instrument used to restructure work throughout an organization from managerial decisionmaking to routine operations. No longer is the computer restricted largely to the improved processing of masses of data with only peripheral effects on the core work of organizations.

The Pace and Scope of Technological Change

In the process of being introduced far more pervasively than it has been earlier, the new technology challenges existing institutional arrangements and opens up opportunities for critical transformations in the following areas: work, organizations, markets, products, and private/public interfaces.

In effect, technological diffusion can be viewed as the outcome of the dialectical relationship between the new technology and the critical institutional arrangements underlying these five areas of transformation. On the one hand, the technology alters traditional institutional arrangements. On the other, older institutional arrangements moderate the speed with which the new technology diffuses.

The Transformation of Work

One of the greatest challenges brought about by the introduction of the new technology in the workplace is the opportunity it opens to create new operating procedures and new approaches to the division of labor. As one manager in charge of installing new systems in several agencies for the City of New York put it: "We must not simply use the technology to replicate the old manual procedures but seize the challenge of completely reorganizing the work flow."

Two examples illustrate this point. The City of New York is currently developing a full geo-coded file of the city's commercial, industrial, and residential structures. With this system, each building will receive a file number that can then be related directly to decentralized data bases maintained in various departments including, for example, information on real estate tax payment or tax delinquency and information on housing or fire violations. In the short run, by making available online information based on existing records, agencies will be able to double-check and update files as soon as new information is entered, which will eliminate the enormous redundancies involved with current manual procedures. For example, five similar complaints phoned by five tenants in the same building cannot currently be cross-checked. One immediate result of the new system is that it will be possible to avoid sending several inspectors to the same building to check on the same violation. In the long run, the new system will enable inspectors to collate various types of information on a specific building rather than being limited in their response by fragmented information. In addition, the new system will transform much of the work carried on in the head offices of agencies because much of the file updating will be handled directly by inspectors in the field. The inspectors will be able to update files via portable computerized units that can be downloaded to central data files by pay phones or from field offices.

A second example is drawn from the Corporate Electronic Fund Transfer department of a large bank in the midst of a major overhaul. Under the old system, the unit was organized around a traditional step-by-step division of work involving a half dozen work stations and a great deal of paper shuffling from one work station to the next. A call that came in from a customer firm's treasurer for a specific transfer was recorded by the clerk who answered the phone, who then passed on the information to several additional work stations for validation, revalidation, entry into the computer, and execution of the transaction. Under the new system, the bank set up an experimental work station where the simple decisionmaking procedures had been computerized and a single clerk had the responsibility of managing a number of customer accounts, receiving the original phone call, double-checking the order, entering the data, and executing the transfer. The bank also extended limited on-line access to the customer, permitting the initiation of direct remote transactions and holding the clerk at the bank responsible for security checks, transaction activations, and day-to-day customer relations with the clients' treasurer's offices.

We encountered a large number of such examples in many different settings. Their implications are profound. In many cases, they bring to an end the classic manner in which most large manufacturing and service industries have traditionally organized their work flows, based on an extreme division of labor, of which the assembly line had been the prototype. The transition from the old division of labor to the new must contend with a number of obstacles and much resistance, for, as noted below, it has major unsettling effects on the ways both managers and workers have hitherto conceptualized their work and their interdependencies and have performed their distinctive tasks.

The Transformation of Organizations

As noted earlier, during the first phase of computerization, the introduction of computer services in most large organizations proceeded as an add-on activity. In largely independent divisions, specialists in charge of the new machines interacted infrequently with the rest of the organization, except for units directly engaged in the many clerical operations to which they were providing assistance. The new era of distributed data processing renders this sort of ad hoc, peripheral organizational adaptation dysfunctional; it calls instead for major organizational restructuring and often requires a fundamental revamping of the lines of authority and decisionmaking power. Here again a few examples will help capture the magnitude of potential changes that confront firms and organizations.

In banking, for example, sometime more than a decade ago, managers of a few firms, such as Citicorp, perceived that the new technology had the potential to enable them to fundamentally alter the way their institutions transacted business with key customer groups, ranging from the neighborhood depositor to the large corporate borrower, and in the process to step out front and gain a significant lead over competitors. Data made available by Citicorp suggest that in consumer branch banking alone, the bank invested over $1 billion in the mid- and late 1970s in building a new technological infrastructure before the system yielded any profits.

The important point is that in the process of making broader and fuller use of the new technology, Citicorp managers rapidly came to understand that they had to alter the corporation's basic organizational structure. They did so by setting up three major independent units—consumer banking, corporate banking, and investment banking—each as its own profit center and each competing with the others for capital resources. In addition, Citicorp found it necessary to alter many of its traditional human resources policies: raising standards for new hires, putting a greater emphasis on entrepreneurially oriented middle managers, and altering its reward structures to pay for performance. To the outsider, the many changes often appeared to involve a mad scramble among managers, with different managers competing at times with similar products for the same consumer and individual units building their own computerized infrastructure with little attention to what other divisions were doing. Nevertheless, this "force-fed" decentralization of power helped Citicorp to embrace the new technology, to reposition itself in domestic and international markets, to develop a host of new or improved products, and ultimately to take the lead in redefining and altering the regulatory climate under which banking had traditionally operated.

The experience of the Bank of America stands in sharp contrast to that of Citicorp. At the time that Citicorp was planning its move into the new technological era, Bank of America led the U.S. banking industry in terms of total assets. But it substantially failed to embrace the new technology and make the necessary organizational and decisionmaking changes, which led to serious and continuing slippage in its profits and market position as Citicorp raced ahead. Furthermore, in its belated efforts to modernize, it now encounters much tougher competition for the simple reason that not only Citicorp but other more responsive banking organizations have taken the lead in many of Bank of America's traditional markets.

A similar story of changing organizational structures can be sketched in the not-for-profit sector, A key illustration is provided by New York City's government. The 1975 financial crisis demonstrated clearly that the City had become unmanageable if only because no one could tell for sure how much money was being spent on what, where, and when. At a minimum, a computerized system was needed to track the budgets of the City's 120 departments and agencies and to assure accounting rigor and financial controls. In order to accomplish these minimum goals, the City established a new agency—Financial Information Services Agency (FISA)—to take over the responsibilit...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• List of Tables
• Preface
• 1 A Pass at Conceptualization
• 2 Work Force Trends
• 3 Technology, Women, and Work
• 4 The New Technology and Equal Employment Opportunity
• 5 Metropolitan Economies
• 6 New York City: Dangers Ahead
• 7 Directions for Policy and Future Research
• About the Authors
• Index