Employee Training And U.s. Competitiveness

Lessons For The 1990s

Lauren Benton

• Publisher: Routledge
• Year: 2019
• ISBN:
  9780429722448
• Edition: 1
• Topic: Politique et relations internationales
• Subtopic: Politique

It is by now commonplace to assert that the global economy is entering a new phase and that the paradigm of economic growth that was relevant to the early postwar decades no longer holds sway. Major changes, such as the explosive growth of services, the rise of a handful of highly successful newly industrializing countries, and the rapid expansion

1
Introduction

The global economy is entering a new phase, and the paradigm of economic growth of the postwar decades no longer holds sway. Major changes, such as the explosive growth of services, the rise of a handful of highly successful newly industrializing countries, and the rapid expansion of international trade, are now seen to fit a comprehensive pattern of economic restructuring that affects every aspect of social and political life.

Although a full discussion of the causes of this process cannot be provided here, and many of the consequences remain to be determined, it is clear that, along with this major restructuring, have come fundamental changes in the nature and organization of work and in the needs and special requirements of worker training.

The Coming of a New Era

Observers now agree that one of the casualties of the new era is mass production as a model for industrial and work organization. Explanations for the demise of mass production as a model tend to focus on demand factors. A saturation of markets for standardized goods and services, the argument goes, has led to rapidly accelerating differentiation of demand for consumer products that has been facilitated by, and has contributed to the rapid introduction of new technologies, particularly those based on microcomputer technology. The response of producers to this shift also has prompted increasing diversification of demand for goods and services. The effect of these trends, combined with the increasing internationalization of both markets arid production, is that nearly all firms are facing greater competition in more variable and more fragmented markets. This has resulted, for example, in the spread of fashion-consciousness to previously standardized segments of many consumer markets.¹

In manufacturing, the crisis of mass production has been denoted by a shift away from the general strategy of employing specialized machinery for fixed stages of manufacturing production and by the resurgence of a pattern involving the use of general-purpose machinery to perform a more varied set of tasks. The goals of this shift is to make it possible for firms to produce a wider range of goods and to respond more quickly to market shifts. New technologies have sometimes facilitated these objectives, but they have not driven the process. Indeed, the changeover to flexible manufacturing has contributed to the development of new technologies as skilled workers have become more engaged in the "tinkering" that produces technological adjustments in manufacturing.²

Although much of the literature on the demise of the mass production, or "Fordist," paradigm of production and its effects has focused on the changes taking place in manufacturing, a parallel, though somewhat different, process also has been apparent in the services.³ As the market for relatively standardized services also has become saturated, there has been a push toward diversification within existing services and an opening of new markets for entirely new types of services. The organizational changes within services accompanying these trends have been less apparent than in manufacturing, but they have been no less important. Firms have adopted numerous strategies to increase their sensitivity to market changes and to enable them to respond more flexibly and more rapidly to such shifts. As in manufacturing, the introduction and spread of microcomputer technologies have facilitated this effort. For example, the ability to transmit computer-stored data to decentralized locations has supported the internationalization of banking services, and computer tracking has made it easier to reduce inventory and improve market sensitivity in retailing.

More important than changes in technology, however, have been changes in organizational and institutional arrangements in which such technological adaptations are embedded. In both manufacturing and services, these changes can range from internal firm reorganization to the restructuring of entire sectors and even to changes in the political and institutional framework regulating the production of goods and services.

Restructuring and Reorganization

Several patterns of restructuring have become increasingly common as a result of adaptations to the competitive pressures and market changes described above. These patterns of restructuring have had a somewhat different character in manufacturing and in the services, particularly in the United States, where growth patterns in the two sectors have been so different.

In manufacturing, one prominent trend involves the decentralization of production through the distribution of various phases of production to smaller units or subcontractors: in short, the dismantling of the vertically integrated firm. The strategies of individual firms to augment flexibility through such decentralization shapes a new structure in each industry. As various case studies have shown, the profile that results depends on, among many other factors, the relationship between subcontractors and client firms: In some cases, the profile that emerges is a flat pyramid, with a small number of firms controlling the finished products and putting out production to a large number of subcontractors; in other cases, the result Is a more complex web of producers, with more autonomy for subcontracting firms that supply a larger clientele, contribute substantially to design, and perhaps also produce their own finished goods. In the former cases, enhanced flexibility results not only from subcontractor specialization but also from lower labor costs and reduced risks for larger firms. In the latter cases, small specialized firms play a more important role, and flexibility results from the enhanced sensitivity to the market at all levels.⁴

An alternative to decentralization in manufacturing is to promote greater responsiveness by reorganizing vertically integrated firms. This can be achieved in at least two ways. One approach is to decentralize internally by creating smaller units of production that are not specialized by function but rather by broad product category or market. The units then tend to constitute microcosms responsible for finishing specific products or ranges of products. The goal is to improve market responsiveness by bringing divisions into closer contact with clients. Another approach is to make discrete units of production more responsive to one another. By reducing inventories at each stage of production, by speeding the transfer of goods from one stage to another, and by reducing the costs of equipment changes that are required to produce different types and styles of goods, even vertically integrated firms can process orders more quickly and produce a wider variety of goods.

One possible result of restructuring in manufacturing is the disruption of the traditional hierarchical organization of production inside firms and of the hierarchy of firms within an industry. Supervisory tasks, for one thing, become more evenly spread throughout the productive structure. Locations for decision-making about products are multiplied, as are places for contact between production workers and clients. Once the rigid structure of mass production of standardized goods is removed, alternative ways of accomplishing the same tasks are opened up for individual workers. Finally, workers must communicate more often and with more people in order to adjust their jobs to the changes in production schedule and content that are continually taking place around them. It is important to note that the reorganization of production presents an opportunity for these changes in worker and job functions, but the degree to which firms and industries embrace these opportunities may vary widely.

In services, the scenario has been somewhat different, although the opportunities for change in organization and in work are equally important. In many service sectors, there has been a tendency for the importance of large firms to continue to grow. But those large firms tend to be highly specialized, sticking to what they know how to do best. As a result, large service firms tend to maintain extensive supplier and contractor relationships to procure inputs that they do not produce or produce only partially. In addition, the structure of work in the services has been less dominated by the principles of mass production. This has to do with both the different timing of explosive growth in services and the fact that services are inherently more highly decentralized. The very act of producing services implies some contact between service workers and customers. Thus retailing, for example, can be more or less concentrated but is always decentralized. Partly as a result, traditionally there has been more openness in interpreting the procedural norms that structure the tasks performed by service workers. Whereas the Fordist factory aimed at making production workers interchangeable if they could perform the same tasks at the same speed, even the most traditional service firms recognized important qualitative differences in worker performance that had little to do with productivity as conventionally measured. Finally, the separation between supervisory workers and operatives was never as sharp in services as it was in Fordist manufacturing. Managers' jobs traditionally combined supervisory functions with work that directly contributed to the production of services.

Although the origins of restructuring were substantially similar in manufacturing and services, the nature and organization of work in the services sector have given its restructuring a different cast. Service firms have responded to intensified competition by seeking new ways to distinguish themselves in the marketplace. In the process, the very nature of work inside some firms—the procedures structuring jobs and the technologies used to produce and market services—has become more closely related to the identities of individual firms. This trend has placed an increasing burden on training because for workers to function even minimally they have to become acquainted with firm-specific technology and practices. It also has meant that the training and jobs of managers, and not just those of low-level workers, have been substantially changed. Moreover, service organizations must build in some capacity for continued change.

In both manufacturing and services, sectoral restructuring has altered the geographical distribution of work. In manufacturing, studies in the 1970s pointed out that the dismantling of Fordist factories was often associated with the geographical dispersion of production (including off-shore production).⁵ Later studies emphasized the links between flexible manufacturing and the emergence of regional economies (sometimes called industrial districts) in which the close proximity of producers had permitted greater cooperation in technology and product design among subcontractors and clients, inventory reduction as nearby suppliers responded more quickly to orders, and benefits from the overlap between social ties and relationships at work.⁶ In the services, the patterns have been somewhat different. The internationalization of markets has forced leading service firms to extend multinational ties; at the same time, in some sectors, regional firms are again becoming major competitors, sometimes by capitalizing on their ability to respond better to local markets, often by finding that they can do a better job of projecting a distinctive market image in a smaller territory, and sometimes by benefiting from the same networking advantages found in industrial districts.⁷

The political implications of these trends will take some time to play out. Some observers have suggested, however, that the economic policy functions of local and regional institutions will be substantially affected by the reemergence of strong subnational regional economies.⁸ As suggested above, this pattern threatens to involve local and state public sector institutions more closely in training. This tendency is borne out in industries that already are highly geographically concentrated; for example, in both the textile industry of North Carolina and the electronics industry in California, state government has been heavily involved in planning and financing sectoral-specific training. In a handful of key cases outside the United States, the strengthening of subnational regional economies also has helped to solidify local alliances among business, government, and labor in promoting new types of customized training. There may be evidence of similar linkages having already developed in certain services. For example, in the state of New York there exist well-developed networks of technical and professional institutions that train manpower for the health care and banking industries.

Changes in the Demand for Skills

Recent firm and industry restructuring clearly has an effect on the mix of skills used by workers. In some cases, firms enact changes in the organization of work or in specific jobs in order to reduce the level of skills needed. Although deskilling has taken place in some firms and jobs, typically the effect of recent changes on worker skills has been considerably more complex In particular, case studies suggest that in order to create more flexible production systems, firms must not only implement technological changes and stimulate worker participation in a production process that is still highly regimented, they must enlist workers in the process of anticipating production problems, finding the best methods of adjusting production for different, now more variable, products and even contributing ideas based on their knowledge of production that will feed into product design.⁹|Parallel roles can be identified for workers in the services, where competitive conditions now not only link worker behavior more closely to company image (and ability to protect and garner market share) but also enlist workers in the effort to anticipate client needs and customize services accordingly. The skills now in rising demand can be grouped loosely into the following three categories: technical and specialized skills, conceptual skills, and communications skills.¹⁰

Technical and Specialized Skills

In manufacturing, the increasing cost and complexity of machinery create a need for more highly skilled technicians. In some industries, technicians used to be routinely recruited from lower-level positions and given training in-house or sent outside for upgrading. But fewer workers at lower levels now have the skills to benefit from upgrading. Even workers recruited from technical programs usually need supplemental training in areas specific to the firm, and they will lack many of the other, nontechnical skills that are rising in demand.

Technical skills are also increasingly needed by nontechnical personnel. The cost of errors and downtime rises as equipment costs rise and as quick response becomes a priority. Rather than waiting for breakdowns or malfunctions, employers prefer to have line workers capable of noting problems before they become serious and of adjusting to unexpected deviations from normal procedures in order to keep production going. This ability implies a sophisticated understanding of the technical aspects of production.

In the services, the need for technical skills is somewhat different and is most apparent among middle- and some higher-level professionals. Increasing specialization of firms and of units within firms creates a need for higher-level workers to have more specialized training (that of systems analysts, for example) and to be able to change specializations more frequently as products and jobs change. The accelerating pace of new applications of technology also requires some lower-level workers to learn new technical skills more quickly. And, clearly, as information-processing service firms grow to depend more heavily on computer technology, repair technicians also become crucial to the smooth operation of firms.

Conceptual Skills

There is evidence of an increasing need for symbolic rather than concrete knowledge. As tasks become less repetitive and as workers are called upon not only to interpret more frequently but also to interpret more complex information, they need a more abstract understanding of their work. Computer-based information-processing and production control contribute to this need but so do work organizations that feature the use of one set of tools to produce a wider variety of products. A line production worker in a metal-working firm, for example, who uses a press to stamp out identical pieces all day, needs to understand very little about the task; the same worker, asked to use a numerical control machine to cut ten different pieces, will have to convey in symbols both general information about the task and specific information about how each piece varies from a general pattern. Or, to take an example from the services, consider the difference in the complexity of jobs for customer service representatives in banks ten years ago, when all or nearly all questions would have pertained to checking and savings a...