 Page 2
between labor and management has indeed become outmoded as a result of technological and other sources of change, U.S. labor laws, drafted on the assumption that this relationship must be confrontational, are overdue for revision:
work force would require new thinking. Although workers with strong basic skills should not face serious difficulties in obtaining quality jobs, many of the individuals entering the U.S. labor force during the next decade will lack the foundation of basic skills on which employers can develop new jobrelated skills. The less-educated suffer higher rates of unemployment, are more apt to fall into poverty, and have substantially less social mobility and employment security:
As a society we will have to do better in our efforts to make adequate educational achievement a reality for all Americans. It makes no economic sense to spurn technological change and opt for low value-added work to meet the needs of the disadvantaged. It is far, far better to embark on the difficult but more rewarding venture of eliminating the causes of poor educational performance.
Our labor laws are a product of a former age, an outdated work construct, and a work force holding values and seeking goals difterent in many ways from those of today. These laws are based on the outmoded assumption that the parties have incompatible objectives and that they are condemned to a nover-ending adversarial relationship. Such a relationship is inconsistent with the nation's nood for competitive enterprise and its concurrent need for a more committed work force actively sharing in the process of corporate governance.
A final policy issue that stems from demographic and political factors and interacts with changing technology is national immigration policy. Should the legal immigrant mix be changed to favor more highly educated and skilled people, as is proposed in recently introduced federal legislation? Lovell noted that this issue has traditionally been a matter of conflict between business and labor. Lovell concluded his assessment by:
New technologies have both positive and negative implications for workplace health and safety. Although the workplace is a safer environment than it was earlier in this century, Lovell noted the presence of different and potentially serious health effects produced by new technologies. Perhaps of greatest concern are the uncertain, unknown, and often latent risks associated with chemical, biological, and electronic technologies. Unfortunately, few if any of these risks can be prevented by wearing hard hats and safety shoes. Public policies addressing these hazards, including the regulation of workplace safety and health, will require attention in the near future. Another area in which technological change is affecting the substance of policy debates, Lovell noted, is labor law. If the adversarial relationship
We have an interesting day in store for us tomorrow. The interplay of new technologies with labor and human resource policies is best contemplated in the totality of developIng workplace concerns. I look forward to joining all of you tomorrow as we begin our discussion of these most challenging issues.
t the opening of the day-long discussion, participants were welcomed by cochairmen
John Stepp and Richard Cyert. Stepp re
in management and labor and from academic life. . . . We can look at approaches that appear to assist in the cooperative adoption of new technologies, and . .. at the issues that impede or support the implementation of these approaches.
called the 1966 report of the Presidential Commission on Technology, Automation, and Economic Progress. He quoted with approval the report's statement that "technology is not a vessel into which people are to be poured and to which they must be molded,” and expressed the view that
... it is technology that must be molded to mesh with the capabilities, needs, and preferences of workers who must operate the machines of production. What we must strive for in the years ahead is a new means of reconciling the aims and purposes of labor and management in an arrangement whereby they can work together in fashioning new technologies that are as socially constructive as they are economically efficient.
A number of participants acknowledged the importance of establishing mutual trust between workers and management and the need to share the gains resulting from new technologies to maintain the international competitiveness of the American economy. Participants also expressed considerable interest in learning from the experiences of other companies and other unions. Discussing the importance of more rapid productivity growth and technology's role in achieving it, Thomas Donahue (Secretary-Treasurer, AFL-CIO) noted that
There is every reason to believe, he asserted, that men and women of good will can design and implement tomorrow's technology in ways that advance the interests and needs of all stakeholders. Adding his welcome, Richard Cyert pointed out that the U.S. is now part of a global economy. No longer does this nation have (if indeed it ever had) a monopoly on industrial knowledge, knowledge which now moves very rapidly around the world. Productivity growth, which relies on a strong technological foundation, is essential to competitiveness:
.. we need to see the prospect of gain sharing in the application of that technology and in the enhancement of that productivity. Wrapped into all of those problems for us, 1 think, is the question of cooperation. Certainly none of the trade unionists at this table would dispute the validity of that cooperation, but (we are concerned] about cooperating in ways in which we do not lose our identity or lose our effective bargaining power because, until the millennium and until we all have the same concepts of gain sharing, workers are going to need an effective force to represent them.
A number of these were associated with the largescale use of nonmetallic composite materials, while others were responses to federal airworthiness and product safety directives. Boeing workers had expressed growing concern about apparently adverse reactions to some of these chemicals. McKean noted the importance for Boeing of worker safety and expressed a strong desire to learn from others in dealing with the health and safety implications of rapid technological change. John Jordan (Senior Vice President, Corporate Development and Human Resources, Bethlehem Steel Corporation) emphasized the importance of the role and philosophy of the chief executive of
ficer in establishing the tone for corporate labor relations: “... it makes all the difference in the world in a corporation in terms of how you get things done. .” Responding to a number of comments about the development of knowledge among workers and managers of “best practice" methods for managing the adoption of new technologies, Robert Zager noted that many of these practices are not new, but have been around for nearly a century-a fundamental issue, which received attention throughout the course of the day and raised questions as to why they have not been adopted more widely.
New Technology and the
A Paper Prepared by Paul Osterman
Sloan School of Management M.I.T.
technology. Much of the employment system surrounding the technology is therefore simply derivative of that technology. The only real challenge is to discover that optimum arrangement and move toward it as quickly as possible. Also implicit in this view is that the technology in some sense drives its users toward the optimum, and so over time if we observe firms employing the same technology, we will also observe very similar employment systems and productivity. What evidence is there of the variable impact of technology? Numerous observers have noted that similar or identical technologies are used in dramatically different ways in different settings. For example:
veryone knows that new technologies will reshape work. Everyone also knows that this reconfiguration will have deep impacts upon the distribution of workers across occupations and firms and upon the skills which employees will be expected to bring to work. The rub comes when we move beyond these easy generalizations. What will be the "job description" of the white collar or production worker in the 1990s? Will their work become more or less skilled, broader or narrower? How will the organizational transformations induced by information technology feed back upon careers? This paper will attempt to answer these questions, but we will not pretend that there is any single identifiable impact which flows automatically from the nature of the technology and which the discerning researcher can extract and identify. Instead our view is that the impact is contingent upon decisions made by individuals and institutions. In some circumstances, technology will lead to one set of outcomes while in other settings the same technology will have quite different effects. We will also argue that efforts to implement new technologies in a manner which combines high productivity with broad skilled jobs and an acceptable degree of employment security will require innovation in labormanagement relations. Our perspective stands in contrast to the more traditional argument. In this view—which has long dominated both scholarly and popular thinkingthere is a single optimum way to configure a given
In recent studies of automobile production, researchers have been able to hold the level of technology constant and examine several measures of productivity. High technology strategies in the absence of human resource innovations do not achieve productivity gains. However, even modest investments in technology when combined with flexible labor practices lead to significant productivity improvements (Krafcik, 1988).
Another striking example is provided by a (1986). He compared similar FMS systems in firms in the United States and in Japan. In Japan, the time it took to develop the system
was half that of the United States, the number of different parts the Japanese set-ups produced was much higher, the labor requirements lower, the fraction of the day the machines ran was higher, and total output was higher. Jaikumar attributed these differences to the skill level of the labor force and the amount of training provided by firms, i.e., to human resource policy.
These, of course, are just examples, and we need more evidence before the point is established (and additional material provided throughout the paper). It is also important to remember that the point can be exaggerated: The nature of a technology does set limits or establish patterns. For example, Piore and Sabel (1984) distinguish between flexible and mass production technologies and argue that the possibilities of each are quite different with respect to a range of issues, including shopfloor relations and macro-economic policy. This point is similar to the long-standing discussion in the sociology literature concerning the relationship between technology and organizational form (Thompson, 1967; Woodward, 1965). Nonetheless, it is apparent that one cannot understand outcomes by reference to technology alone; additional considerations must be brought to bear. Because of this variation, the most useful role for a paper like this is to identify the range of the possible outcomes and attempt to explain what factors determine which path the impact will follow. In the first half of the paper, we examine the descriptive evidence and try to summarize the facts regarding how new information technologies alter job design. In the second half, we consider what lies behind the considerable variation in outcomes. We close with some questions which policy makers might consider.
be supplemented by a desire to limit employee knowledge of the production process and hence concentrate power in management hands. Although few people would identify themselves with as crude a view as the foregoing, it seems hard to deny that these attitudes underlie much of the American production system. In both union and non-union settings, narrow job categories, strict work rules, lack of sharing of information concerning new technology, and the general absence of involvement of workers in planning production all flow from a Tayloristic approach to organizing work. Implicit in this line of thought is the assumption that new technologies, by replacing human skill and judgment, deskill the labor force. Such deskilling is seen as technically efficient and as a nearly inevitable consequence of the technology. A good illustration of the kind of innovation which (seemingly) fits this logic is the advent of electronic switching in the telephone industry. Prior to the introduction of electronic digital switching, the repair of mechanical switching equipment was a highly skilled craft job in which an individual developed a substantial “feel” for the equipment. Wires would break, circuits would fail, foreign matter would get into the equipment, and the craftsperson's job was to find and fix the fault. By contrast, the new system is essentially a computer. The rate of mechanical failure is low, and repairs are more straightforward in that modular boards can be removed and inserted. Software failures are more likely to be the province of programmers than craftpeople. All of this is not to argue that the new repair jobs are not skilled. However, the nature of the skill has changed considerably, and it is arguably the case that from the former craft perspective the job has been deskilled. It is possible to argue that the move to electronic switching and the shift in job boundaries which ensued were due to the characteristics of the technology itself, in that the substitution of computers, or “boxes” as they are derisively termed by telephone people, inevitably implied a loss of skill on the part of the craftsmen. For this reason, the introduction of electronic switching can stand as an illustration of the “technological imperative” perspective (although even this proposition is open to some question, since it begs the issue of whether the old craftsmen were taught the new programming skills). Whereas the Tayloristic perspective held sway for many years, recently the burden of opinion has swung against it. Two points are notable about the shift. First, much of the impetus has come from observations of how work is organized in other countries, not just Japan but also European nations such as Germany and Sweden. In each of these nations, high quality, efficiency, and cost advantages
The Traditional Debate About Job Design Do new technologies lead to more narrow and deskilled work or to broader more complex jobs? Which course is the most desirable from the (differing) perspectives of the several interested parties? These two questions, the first empirical and the second normative, have dominated debate on this topic. Followers of Frederick Taylor believe that there is a single best way to accomplish any task. This “best way" can be discovered by management experts and then conveyed to the labor force. The key assumption is that the labor force has nothing to contribute to the production process. In effect, employees are simply appendages to machines, and therefore the most cost-effective approach is to drive skill out of work and operate with as lowcost a labor force as possible. This motivation may Page 3Page 4
between labor and management has indeed become outmoded as a result of technological and other sources of change, U.S. labor laws, drafted on the assumption that this relationship must be confrontational, are overdue for revision:
work force would require new thinking. Although workers with strong basic skills should not face serious difficulties in obtaining quality jobs, many of the individuals entering the U.S. labor force during the next decade will lack the foundation of basic skills on which employers can develop new jobrelated skills. The less-educated suffer higher rates of unemployment, are more apt to fall into poverty, and have substantially less social mobility and employment security:
As a society we will have to do better in our efforts to make adequate educational achievement a reality for all Americans. It makes no economic sense to spurn technological change and opt for low value-added work to meet the needs of the disadvantaged. It is far, far better to embark on the difficult but more rewarding venture of eliminating the causes of poor educational performance.
Our labor laws are a product of a former age, an outdated work construct, and a work force holding values and seeking goals difterent in many ways from those of today. These laws are based on the outmoded assumption that the parties have incompatible objectives and that they are condemned to a nover-ending adversarial relationship. Such a relationship is inconsistent with the nation's nood for competitive enterprise and its concurrent need for a more committed work force actively sharing in the process of corporate governance.
A final policy issue that stems from demographic and political factors and interacts with changing technology is national immigration policy. Should the legal immigrant mix be changed to favor more highly educated and skilled people, as is proposed in recently introduced federal legislation? Lovell noted that this issue has traditionally been a matter of conflict between business and labor. Lovell concluded his assessment by:
New technologies have both positive and negative implications for workplace health and safety. Although the workplace is a safer environment than it was earlier in this century, Lovell noted the presence of different and potentially serious health effects produced by new technologies. Perhaps of greatest concern are the uncertain, unknown, and often latent risks associated with chemical, biological, and electronic technologies. Unfortunately, few if any of these risks can be prevented by wearing hard hats and safety shoes. Public policies addressing these hazards, including the regulation of workplace safety and health, will require attention in the near future. Another area in which technological change is affecting the substance of policy debates, Lovell noted, is labor law. If the adversarial relationship
We have an interesting day in store for us tomorrow. The interplay of new technologies with labor and human resource policies is best contemplated in the totality of developIng workplace concerns. I look forward to joining all of you tomorrow as we begin our discussion of these most challenging issues.
t the opening of the day-long discussion, participants were welcomed by cochairmen
John Stepp and Richard Cyert. Stepp re
in management and labor and from academic life. . . . We can look at approaches that appear to assist in the cooperative adoption of new technologies, and . .. at the issues that impede or support the implementation of these approaches.
called the 1966 report of the Presidential Commission on Technology, Automation, and Economic Progress. He quoted with approval the report's statement that "technology is not a vessel into which people are to be poured and to which they must be molded,” and expressed the view that
... it is technology that must be molded to mesh with the capabilities, needs, and preferences of workers who must operate the machines of production. What we must strive for in the years ahead is a new means of reconciling the aims and purposes of labor and management in an arrangement whereby they can work together in fashioning new technologies that are as socially constructive as they are economically efficient.
A number of participants acknowledged the importance of establishing mutual trust between workers and management and the need to share the gains resulting from new technologies to maintain the international competitiveness of the American economy. Participants also expressed considerable interest in learning from the experiences of other companies and other unions. Discussing the importance of more rapid productivity growth and technology's role in achieving it, Thomas Donahue (Secretary-Treasurer, AFL-CIO) noted that
There is every reason to believe, he asserted, that men and women of good will can design and implement tomorrow's technology in ways that advance the interests and needs of all stakeholders. Adding his welcome, Richard Cyert pointed out that the U.S. is now part of a global economy. No longer does this nation have (if indeed it ever had) a monopoly on industrial knowledge, knowledge which now moves very rapidly around the world. Productivity growth, which relies on a strong technological foundation, is essential to competitiveness:
.. we need to see the prospect of gain sharing in the application of that technology and in the enhancement of that productivity. Wrapped into all of those problems for us, 1 think, is the question of cooperation. Certainly none of the trade unionists at this table would dispute the validity of that cooperation, but (we are concerned] about cooperating in ways in which we do not lose our identity or lose our effective bargaining power because, until the millennium and until we all have the same concepts of gain sharing, workers are going to need an effective force to represent them.
A number of these were associated with the largescale use of nonmetallic composite materials, while others were responses to federal airworthiness and product safety directives. Boeing workers had expressed growing concern about apparently adverse reactions to some of these chemicals. McKean noted the importance for Boeing of worker safety and expressed a strong desire to learn from others in dealing with the health and safety implications of rapid technological change. John Jordan (Senior Vice President, Corporate Development and Human Resources, Bethlehem Steel Corporation) emphasized the importance of the role and philosophy of the chief executive of
ficer in establishing the tone for corporate labor relations: “... it makes all the difference in the world in a corporation in terms of how you get things done. .” Responding to a number of comments about the development of knowledge among workers and managers of “best practice" methods for managing the adoption of new technologies, Robert Zager noted that many of these practices are not new, but have been around for nearly a century-a fundamental issue, which received attention throughout the course of the day and raised questions as to why they have not been adopted more widely.
New Technology and the
A Paper Prepared by Paul Osterman
Sloan School of Management M.I.T.
technology. Much of the employment system surrounding the technology is therefore simply derivative of that technology. The only real challenge is to discover that optimum arrangement and move toward it as quickly as possible. Also implicit in this view is that the technology in some sense drives its users toward the optimum, and so over time if we observe firms employing the same technology, we will also observe very similar employment systems and productivity. What evidence is there of the variable impact of technology? Numerous observers have noted that similar or identical technologies are used in dramatically different ways in different settings. For example:
veryone knows that new technologies will reshape work. Everyone also knows that this reconfiguration will have deep impacts upon the distribution of workers across occupations and firms and upon the skills which employees will be expected to bring to work. The rub comes when we move beyond these easy generalizations. What will be the "job description" of the white collar or production worker in the 1990s? Will their work become more or less skilled, broader or narrower? How will the organizational transformations induced by information technology feed back upon careers? This paper will attempt to answer these questions, but we will not pretend that there is any single identifiable impact which flows automatically from the nature of the technology and which the discerning researcher can extract and identify. Instead our view is that the impact is contingent upon decisions made by individuals and institutions. In some circumstances, technology will lead to one set of outcomes while in other settings the same technology will have quite different effects. We will also argue that efforts to implement new technologies in a manner which combines high productivity with broad skilled jobs and an acceptable degree of employment security will require innovation in labormanagement relations. Our perspective stands in contrast to the more traditional argument. In this view—which has long dominated both scholarly and popular thinkingthere is a single optimum way to configure a given
In recent studies of automobile production, researchers have been able to hold the level of technology constant and examine several measures of productivity. High technology strategies in the absence of human resource innovations do not achieve productivity gains. However, even modest investments in technology when combined with flexible labor practices lead to significant productivity improvements (Krafcik, 1988).
Another striking example is provided by a (1986). He compared similar FMS systems in firms in the United States and in Japan. In Japan, the time it took to develop the system
was half that of the United States, the number of different parts the Japanese set-ups produced was much higher, the labor requirements lower, the fraction of the day the machines ran was higher, and total output was higher. Jaikumar attributed these differences to the skill level of the labor force and the amount of training provided by firms, i.e., to human resource policy.
These, of course, are just examples, and we need more evidence before the point is established (and additional material provided throughout the paper). It is also important to remember that the point can be exaggerated: The nature of a technology does set limits or establish patterns. For example, Piore and Sabel (1984) distinguish between flexible and mass production technologies and argue that the possibilities of each are quite different with respect to a range of issues, including shopfloor relations and macro-economic policy. This point is similar to the long-standing discussion in the sociology literature concerning the relationship between technology and organizational form (Thompson, 1967; Woodward, 1965). Nonetheless, it is apparent that one cannot understand outcomes by reference to technology alone; additional considerations must be brought to bear. Because of this variation, the most useful role for a paper like this is to identify the range of the possible outcomes and attempt to explain what factors determine which path the impact will follow. In the first half of the paper, we examine the descriptive evidence and try to summarize the facts regarding how new information technologies alter job design. In the second half, we consider what lies behind the considerable variation in outcomes. We close with some questions which policy makers might consider.
be supplemented by a desire to limit employee knowledge of the production process and hence concentrate power in management hands. Although few people would identify themselves with as crude a view as the foregoing, it seems hard to deny that these attitudes underlie much of the American production system. In both union and non-union settings, narrow job categories, strict work rules, lack of sharing of information concerning new technology, and the general absence of involvement of workers in planning production all flow from a Tayloristic approach to organizing work. Implicit in this line of thought is the assumption that new technologies, by replacing human skill and judgment, deskill the labor force. Such deskilling is seen as technically efficient and as a nearly inevitable consequence of the technology. A good illustration of the kind of innovation which (seemingly) fits this logic is the advent of electronic switching in the telephone industry. Prior to the introduction of electronic digital switching, the repair of mechanical switching equipment was a highly skilled craft job in which an individual developed a substantial “feel” for the equipment. Wires would break, circuits would fail, foreign matter would get into the equipment, and the craftsperson's job was to find and fix the fault. By contrast, the new system is essentially a computer. The rate of mechanical failure is low, and repairs are more straightforward in that modular boards can be removed and inserted. Software failures are more likely to be the province of programmers than craftpeople. All of this is not to argue that the new repair jobs are not skilled. However, the nature of the skill has changed considerably, and it is arguably the case that from the former craft perspective the job has been deskilled. It is possible to argue that the move to electronic switching and the shift in job boundaries which ensued were due to the characteristics of the technology itself, in that the substitution of computers, or “boxes” as they are derisively termed by telephone people, inevitably implied a loss of skill on the part of the craftsmen. For this reason, the introduction of electronic switching can stand as an illustration of the “technological imperative” perspective (although even this proposition is open to some question, since it begs the issue of whether the old craftsmen were taught the new programming skills). Whereas the Tayloristic perspective held sway for many years, recently the burden of opinion has swung against it. Two points are notable about the shift. First, much of the impetus has come from observations of how work is organized in other countries, not just Japan but also European nations such as Germany and Sweden. In each of these nations, high quality, efficiency, and cost advantages
The Traditional Debate About Job Design Do new technologies lead to more narrow and deskilled work or to broader more complex jobs? Which course is the most desirable from the (differing) perspectives of the several interested parties? These two questions, the first empirical and the second normative, have dominated debate on this topic. Followers of Frederick Taylor believe that there is a single best way to accomplish any task. This “best way" can be discovered by management experts and then conveyed to the labor force. The key assumption is that the labor force has nothing to contribute to the production process. In effect, employees are simply appendages to machines, and therefore the most cost-effective approach is to drive skill out of work and operate with as lowcost a labor force as possible. This motivation may Page 5Page 6
between labor and management has indeed become outmoded as a result of technological and other sources of change, U.S. labor laws, drafted on the assumption that this relationship must be confrontational, are overdue for revision:
work force would require new thinking. Although workers with strong basic skills should not face serious difficulties in obtaining quality jobs, many of the individuals entering the U.S. labor force during the next decade will lack the foundation of basic skills on which employers can develop new jobrelated skills. The less-educated suffer higher rates of unemployment, are more apt to fall into poverty, and have substantially less social mobility and employment security:
As a society we will have to do better in our efforts to make adequate educational achievement a reality for all Americans. It makes no economic sense to spurn technological change and opt for low value-added work to meet the needs of the disadvantaged. It is far, far better to embark on the difficult but more rewarding venture of eliminating the causes of poor educational performance.
Our labor laws are a product of a former age, an outdated work construct, and a work force holding values and seeking goals difterent in many ways from those of today. These laws are based on the outmoded assumption that the parties have incompatible objectives and that they are condemned to a nover-ending adversarial relationship. Such a relationship is inconsistent with the nation's nood for competitive enterprise and its concurrent need for a more committed work force actively sharing in the process of corporate governance.
A final policy issue that stems from demographic and political factors and interacts with changing technology is national immigration policy. Should the legal immigrant mix be changed to favor more highly educated and skilled people, as is proposed in recently introduced federal legislation? Lovell noted that this issue has traditionally been a matter of conflict between business and labor. Lovell concluded his assessment by:
New technologies have both positive and negative implications for workplace health and safety. Although the workplace is a safer environment than it was earlier in this century, Lovell noted the presence of different and potentially serious health effects produced by new technologies. Perhaps of greatest concern are the uncertain, unknown, and often latent risks associated with chemical, biological, and electronic technologies. Unfortunately, few if any of these risks can be prevented by wearing hard hats and safety shoes. Public policies addressing these hazards, including the regulation of workplace safety and health, will require attention in the near future. Another area in which technological change is affecting the substance of policy debates, Lovell noted, is labor law. If the adversarial relationship
We have an interesting day in store for us tomorrow. The interplay of new technologies with labor and human resource policies is best contemplated in the totality of developIng workplace concerns. I look forward to joining all of you tomorrow as we begin our discussion of these most challenging issues.
t the opening of the day-long discussion, participants were welcomed by cochairmen
John Stepp and Richard Cyert. Stepp re
in management and labor and from academic life. . . . We can look at approaches that appear to assist in the cooperative adoption of new technologies, and . .. at the issues that impede or support the implementation of these approaches.
called the 1966 report of the Presidential Commission on Technology, Automation, and Economic Progress. He quoted with approval the report's statement that "technology is not a vessel into which people are to be poured and to which they must be molded,” and expressed the view that
... it is technology that must be molded to mesh with the capabilities, needs, and preferences of workers who must operate the machines of production. What we must strive for in the years ahead is a new means of reconciling the aims and purposes of labor and management in an arrangement whereby they can work together in fashioning new technologies that are as socially constructive as they are economically efficient.
A number of participants acknowledged the importance of establishing mutual trust between workers and management and the need to share the gains resulting from new technologies to maintain the international competitiveness of the American economy. Participants also expressed considerable interest in learning from the experiences of other companies and other unions. Discussing the importance of more rapid productivity growth and technology's role in achieving it, Thomas Donahue (Secretary-Treasurer, AFL-CIO) noted that
There is every reason to believe, he asserted, that men and women of good will can design and implement tomorrow's technology in ways that advance the interests and needs of all stakeholders. Adding his welcome, Richard Cyert pointed out that the U.S. is now part of a global economy. No longer does this nation have (if indeed it ever had) a monopoly on industrial knowledge, knowledge which now moves very rapidly around the world. Productivity growth, which relies on a strong technological foundation, is essential to competitiveness:
.. we need to see the prospect of gain sharing in the application of that technology and in the enhancement of that productivity. Wrapped into all of those problems for us, 1 think, is the question of cooperation. Certainly none of the trade unionists at this table would dispute the validity of that cooperation, but (we are concerned] about cooperating in ways in which we do not lose our identity or lose our effective bargaining power because, until the millennium and until we all have the same concepts of gain sharing, workers are going to need an effective force to represent them.
A number of these were associated with the largescale use of nonmetallic composite materials, while others were responses to federal airworthiness and product safety directives. Boeing workers had expressed growing concern about apparently adverse reactions to some of these chemicals. McKean noted the importance for Boeing of worker safety and expressed a strong desire to learn from others in dealing with the health and safety implications of rapid technological change. John Jordan (Senior Vice President, Corporate Development and Human Resources, Bethlehem Steel Corporation) emphasized the importance of the role and philosophy of the chief executive of
ficer in establishing the tone for corporate labor relations: “... it makes all the difference in the world in a corporation in terms of how you get things done. .” Responding to a number of comments about the development of knowledge among workers and managers of “best practice" methods for managing the adoption of new technologies, Robert Zager noted that many of these practices are not new, but have been around for nearly a century-a fundamental issue, which received attention throughout the course of the day and raised questions as to why they have not been adopted more widely.
New Technology and the
A Paper Prepared by Paul Osterman
Sloan School of Management M.I.T.
technology. Much of the employment system surrounding the technology is therefore simply derivative of that technology. The only real challenge is to discover that optimum arrangement and move toward it as quickly as possible. Also implicit in this view is that the technology in some sense drives its users toward the optimum, and so over time if we observe firms employing the same technology, we will also observe very similar employment systems and productivity. What evidence is there of the variable impact of technology? Numerous observers have noted that similar or identical technologies are used in dramatically different ways in different settings. For example:
veryone knows that new technologies will reshape work. Everyone also knows that this reconfiguration will have deep impacts upon the distribution of workers across occupations and firms and upon the skills which employees will be expected to bring to work. The rub comes when we move beyond these easy generalizations. What will be the "job description" of the white collar or production worker in the 1990s? Will their work become more or less skilled, broader or narrower? How will the organizational transformations induced by information technology feed back upon careers? This paper will attempt to answer these questions, but we will not pretend that there is any single identifiable impact which flows automatically from the nature of the technology and which the discerning researcher can extract and identify. Instead our view is that the impact is contingent upon decisions made by individuals and institutions. In some circumstances, technology will lead to one set of outcomes while in other settings the same technology will have quite different effects. We will also argue that efforts to implement new technologies in a manner which combines high productivity with broad skilled jobs and an acceptable degree of employment security will require innovation in labormanagement relations. Our perspective stands in contrast to the more traditional argument. In this view—which has long dominated both scholarly and popular thinkingthere is a single optimum way to configure a given
In recent studies of automobile production, researchers have been able to hold the level of technology constant and examine several measures of productivity. High technology strategies in the absence of human resource innovations do not achieve productivity gains. However, even modest investments in technology when combined with flexible labor practices lead to significant productivity improvements (Krafcik, 1988).
Another striking example is provided by a (1986). He compared similar FMS systems in firms in the United States and in Japan. In Japan, the time it took to develop the system
was half that of the United States, the number of different parts the Japanese set-ups produced was much higher, the labor requirements lower, the fraction of the day the machines ran was higher, and total output was higher. Jaikumar attributed these differences to the skill level of the labor force and the amount of training provided by firms, i.e., to human resource policy.
These, of course, are just examples, and we need more evidence before the point is established (and additional material provided throughout the paper). It is also important to remember that the point can be exaggerated: The nature of a technology does set limits or establish patterns. For example, Piore and Sabel (1984) distinguish between flexible and mass production technologies and argue that the possibilities of each are quite different with respect to a range of issues, including shopfloor relations and macro-economic policy. This point is similar to the long-standing discussion in the sociology literature concerning the relationship between technology and organizational form (Thompson, 1967; Woodward, 1965). Nonetheless, it is apparent that one cannot understand outcomes by reference to technology alone; additional considerations must be brought to bear. Because of this variation, the most useful role for a paper like this is to identify the range of the possible outcomes and attempt to explain what factors determine which path the impact will follow. In the first half of the paper, we examine the descriptive evidence and try to summarize the facts regarding how new information technologies alter job design. In the second half, we consider what lies behind the considerable variation in outcomes. We close with some questions which policy makers might consider.
be supplemented by a desire to limit employee knowledge of the production process and hence concentrate power in management hands. Although few people would identify themselves with as crude a view as the foregoing, it seems hard to deny that these attitudes underlie much of the American production system. In both union and non-union settings, narrow job categories, strict work rules, lack of sharing of information concerning new technology, and the general absence of involvement of workers in planning production all flow from a Tayloristic approach to organizing work. Implicit in this line of thought is the assumption that new technologies, by replacing human skill and judgment, deskill the labor force. Such deskilling is seen as technically efficient and as a nearly inevitable consequence of the technology. A good illustration of the kind of innovation which (seemingly) fits this logic is the advent of electronic switching in the telephone industry. Prior to the introduction of electronic digital switching, the repair of mechanical switching equipment was a highly skilled craft job in which an individual developed a substantial “feel” for the equipment. Wires would break, circuits would fail, foreign matter would get into the equipment, and the craftsperson's job was to find and fix the fault. By contrast, the new system is essentially a computer. The rate of mechanical failure is low, and repairs are more straightforward in that modular boards can be removed and inserted. Software failures are more likely to be the province of programmers than craftpeople. All of this is not to argue that the new repair jobs are not skilled. However, the nature of the skill has changed considerably, and it is arguably the case that from the former craft perspective the job has been deskilled. It is possible to argue that the move to electronic switching and the shift in job boundaries which ensued were due to the characteristics of the technology itself, in that the substitution of computers, or “boxes” as they are derisively termed by telephone people, inevitably implied a loss of skill on the part of the craftsmen. For this reason, the introduction of electronic switching can stand as an illustration of the “technological imperative” perspective (although even this proposition is open to some question, since it begs the issue of whether the old craftsmen were taught the new programming skills). Whereas the Tayloristic perspective held sway for many years, recently the burden of opinion has swung against it. Two points are notable about the shift. First, much of the impetus has come from observations of how work is organized in other countries, not just Japan but also European nations such as Germany and Sweden. In each of these nations, high quality, efficiency, and cost advantages
The Traditional Debate About Job Design Do new technologies lead to more narrow and deskilled work or to broader more complex jobs? Which course is the most desirable from the (differing) perspectives of the several interested parties? These two questions, the first empirical and the second normative, have dominated debate on this topic. Followers of Frederick Taylor believe that there is a single best way to accomplish any task. This “best way" can be discovered by management experts and then conveyed to the labor force. The key assumption is that the labor force has nothing to contribute to the production process. In effect, employees are simply appendages to machines, and therefore the most cost-effective approach is to drive skill out of work and operate with as lowcost a labor force as possible. This motivation may Page 7Page 8
between labor and management has indeed become outmoded as a result of technological and other sources of change, U.S. labor laws, drafted on the assumption that this relationship must be confrontational, are overdue for revision:
work force would require new thinking. Although workers with strong basic skills should not face serious difficulties in obtaining quality jobs, many of the individuals entering the U.S. labor force during the next decade will lack the foundation of basic skills on which employers can develop new jobrelated skills. The less-educated suffer higher rates of unemployment, are more apt to fall into poverty, and have substantially less social mobility and employment security:
As a society we will have to do better in our efforts to make adequate educational achievement a reality for all Americans. It makes no economic sense to spurn technological change and opt for low value-added work to meet the needs of the disadvantaged. It is far, far better to embark on the difficult but more rewarding venture of eliminating the causes of poor educational performance.
Our labor laws are a product of a former age, an outdated work construct, and a work force holding values and seeking goals difterent in many ways from those of today. These laws are based on the outmoded assumption that the parties have incompatible objectives and that they are condemned to a nover-ending adversarial relationship. Such a relationship is inconsistent with the nation's nood for competitive enterprise and its concurrent need for a more committed work force actively sharing in the process of corporate governance.
A final policy issue that stems from demographic and political factors and interacts with changing technology is national immigration policy. Should the legal immigrant mix be changed to favor more highly educated and skilled people, as is proposed in recently introduced federal legislation? Lovell noted that this issue has traditionally been a matter of conflict between business and labor. Lovell concluded his assessment by:
New technologies have both positive and negative implications for workplace health and safety. Although the workplace is a safer environment than it was earlier in this century, Lovell noted the presence of different and potentially serious health effects produced by new technologies. Perhaps of greatest concern are the uncertain, unknown, and often latent risks associated with chemical, biological, and electronic technologies. Unfortunately, few if any of these risks can be prevented by wearing hard hats and safety shoes. Public policies addressing these hazards, including the regulation of workplace safety and health, will require attention in the near future. Another area in which technological change is affecting the substance of policy debates, Lovell noted, is labor law. If the adversarial relationship
We have an interesting day in store for us tomorrow. The interplay of new technologies with labor and human resource policies is best contemplated in the totality of developIng workplace concerns. I look forward to joining all of you tomorrow as we begin our discussion of these most challenging issues.
t the opening of the day-long discussion, participants were welcomed by cochairmen
John Stepp and Richard Cyert. Stepp re
in management and labor and from academic life. . . . We can look at approaches that appear to assist in the cooperative adoption of new technologies, and . .. at the issues that impede or support the implementation of these approaches.
called the 1966 report of the Presidential Commission on Technology, Automation, and Economic Progress. He quoted with approval the report's statement that "technology is not a vessel into which people are to be poured and to which they must be molded,” and expressed the view that
... it is technology that must be molded to mesh with the capabilities, needs, and preferences of workers who must operate the machines of production. What we must strive for in the years ahead is a new means of reconciling the aims and purposes of labor and management in an arrangement whereby they can work together in fashioning new technologies that are as socially constructive as they are economically efficient.
A number of participants acknowledged the importance of establishing mutual trust between workers and management and the need to share the gains resulting from new technologies to maintain the international competitiveness of the American economy. Participants also expressed considerable interest in learning from the experiences of other companies and other unions. Discussing the importance of more rapid productivity growth and technology's role in achieving it, Thomas Donahue (Secretary-Treasurer, AFL-CIO) noted that
There is every reason to believe, he asserted, that men and women of good will can design and implement tomorrow's technology in ways that advance the interests and needs of all stakeholders. Adding his welcome, Richard Cyert pointed out that the U.S. is now part of a global economy. No longer does this nation have (if indeed it ever had) a monopoly on industrial knowledge, knowledge which now moves very rapidly around the world. Productivity growth, which relies on a strong technological foundation, is essential to competitiveness:
.. we need to see the prospect of gain sharing in the application of that technology and in the enhancement of that productivity. Wrapped into all of those problems for us, 1 think, is the question of cooperation. Certainly none of the trade unionists at this table would dispute the validity of that cooperation, but (we are concerned] about cooperating in ways in which we do not lose our identity or lose our effective bargaining power because, until the millennium and until we all have the same concepts of gain sharing, workers are going to need an effective force to represent them.
A number of these were associated with the largescale use of nonmetallic composite materials, while others were responses to federal airworthiness and product safety directives. Boeing workers had expressed growing concern about apparently adverse reactions to some of these chemicals. McKean noted the importance for Boeing of worker safety and expressed a strong desire to learn from others in dealing with the health and safety implications of rapid technological change. John Jordan (Senior Vice President, Corporate Development and Human Resources, Bethlehem Steel Corporation) emphasized the importance of the role and philosophy of the chief executive of
ficer in establishing the tone for corporate labor relations: “... it makes all the difference in the world in a corporation in terms of how you get things done. .” Responding to a number of comments about the development of knowledge among workers and managers of “best practice" methods for managing the adoption of new technologies, Robert Zager noted that many of these practices are not new, but have been around for nearly a century-a fundamental issue, which received attention throughout the course of the day and raised questions as to why they have not been adopted more widely.
New Technology and the
A Paper Prepared by Paul Osterman
Sloan School of Management M.I.T.
technology. Much of the employment system surrounding the technology is therefore simply derivative of that technology. The only real challenge is to discover that optimum arrangement and move toward it as quickly as possible. Also implicit in this view is that the technology in some sense drives its users toward the optimum, and so over time if we observe firms employing the same technology, we will also observe very similar employment systems and productivity. What evidence is there of the variable impact of technology? Numerous observers have noted that similar or identical technologies are used in dramatically different ways in different settings. For example:
veryone knows that new technologies will reshape work. Everyone also knows that this reconfiguration will have deep impacts upon the distribution of workers across occupations and firms and upon the skills which employees will be expected to bring to work. The rub comes when we move beyond these easy generalizations. What will be the "job description" of the white collar or production worker in the 1990s? Will their work become more or less skilled, broader or narrower? How will the organizational transformations induced by information technology feed back upon careers? This paper will attempt to answer these questions, but we will not pretend that there is any single identifiable impact which flows automatically from the nature of the technology and which the discerning researcher can extract and identify. Instead our view is that the impact is contingent upon decisions made by individuals and institutions. In some circumstances, technology will lead to one set of outcomes while in other settings the same technology will have quite different effects. We will also argue that efforts to implement new technologies in a manner which combines high productivity with broad skilled jobs and an acceptable degree of employment security will require innovation in labormanagement relations. Our perspective stands in contrast to the more traditional argument. In this view—which has long dominated both scholarly and popular thinkingthere is a single optimum way to configure a given
In recent studies of automobile production, researchers have been able to hold the level of technology constant and examine several measures of productivity. High technology strategies in the absence of human resource innovations do not achieve productivity gains. However, even modest investments in technology when combined with flexible labor practices lead to significant productivity improvements (Krafcik, 1988).
Another striking example is provided by a (1986). He compared similar FMS systems in firms in the United States and in Japan. In Japan, the time it took to develop the system
was half that of the United States, the number of different parts the Japanese set-ups produced was much higher, the labor requirements lower, the fraction of the day the machines ran was higher, and total output was higher. Jaikumar attributed these differences to the skill level of the labor force and the amount of training provided by firms, i.e., to human resource policy.
These, of course, are just examples, and we need more evidence before the point is established (and additional material provided throughout the paper). It is also important to remember that the point can be exaggerated: The nature of a technology does set limits or establish patterns. For example, Piore and Sabel (1984) distinguish between flexible and mass production technologies and argue that the possibilities of each are quite different with respect to a range of issues, including shopfloor relations and macro-economic policy. This point is similar to the long-standing discussion in the sociology literature concerning the relationship between technology and organizational form (Thompson, 1967; Woodward, 1965). Nonetheless, it is apparent that one cannot understand outcomes by reference to technology alone; additional considerations must be brought to bear. Because of this variation, the most useful role for a paper like this is to identify the range of the possible outcomes and attempt to explain what factors determine which path the impact will follow. In the first half of the paper, we examine the descriptive evidence and try to summarize the facts regarding how new information technologies alter job design. In the second half, we consider what lies behind the considerable variation in outcomes. We close with some questions which policy makers might consider.
be supplemented by a desire to limit employee knowledge of the production process and hence concentrate power in management hands. Although few people would identify themselves with as crude a view as the foregoing, it seems hard to deny that these attitudes underlie much of the American production system. In both union and non-union settings, narrow job categories, strict work rules, lack of sharing of information concerning new technology, and the general absence of involvement of workers in planning production all flow from a Tayloristic approach to organizing work. Implicit in this line of thought is the assumption that new technologies, by replacing human skill and judgment, deskill the labor force. Such deskilling is seen as technically efficient and as a nearly inevitable consequence of the technology. A good illustration of the kind of innovation which (seemingly) fits this logic is the advent of electronic switching in the telephone industry. Prior to the introduction of electronic digital switching, the repair of mechanical switching equipment was a highly skilled craft job in which an individual developed a substantial “feel” for the equipment. Wires would break, circuits would fail, foreign matter would get into the equipment, and the craftsperson's job was to find and fix the fault. By contrast, the new system is essentially a computer. The rate of mechanical failure is low, and repairs are more straightforward in that modular boards can be removed and inserted. Software failures are more likely to be the province of programmers than craftpeople. All of this is not to argue that the new repair jobs are not skilled. However, the nature of the skill has changed considerably, and it is arguably the case that from the former craft perspective the job has been deskilled. It is possible to argue that the move to electronic switching and the shift in job boundaries which ensued were due to the characteristics of the technology itself, in that the substitution of computers, or “boxes” as they are derisively termed by telephone people, inevitably implied a loss of skill on the part of the craftsmen. For this reason, the introduction of electronic switching can stand as an illustration of the “technological imperative” perspective (although even this proposition is open to some question, since it begs the issue of whether the old craftsmen were taught the new programming skills). Whereas the Tayloristic perspective held sway for many years, recently the burden of opinion has swung against it. Two points are notable about the shift. First, much of the impetus has come from observations of how work is organized in other countries, not just Japan but also European nations such as Germany and Sweden. In each of these nations, high quality, efficiency, and cost advantages
The Traditional Debate About Job Design Do new technologies lead to more narrow and deskilled work or to broader more complex jobs? Which course is the most desirable from the (differing) perspectives of the several interested parties? These two questions, the first empirical and the second normative, have dominated debate on this topic. Followers of Frederick Taylor believe that there is a single best way to accomplish any task. This “best way" can be discovered by management experts and then conveyed to the labor force. The key assumption is that the labor force has nothing to contribute to the production process. In effect, employees are simply appendages to machines, and therefore the most cost-effective approach is to drive skill out of work and operate with as lowcost a labor force as possible. This motivation may Page 9Page 10
between labor and management has indeed become outmoded as a result of technological and other sources of change, U.S. labor laws, drafted on the assumption that this relationship must be confrontational, are overdue for revision:
work force would require new thinking. Although workers with strong basic skills should not face serious difficulties in obtaining quality jobs, many of the individuals entering the U.S. labor force during the next decade will lack the foundation of basic skills on which employers can develop new jobrelated skills. The less-educated suffer higher rates of unemployment, are more apt to fall into poverty, and have substantially less social mobility and employment security:
As a society we will have to do better in our efforts to make adequate educational achievement a reality for all Americans. It makes no economic sense to spurn technological change and opt for low value-added work to meet the needs of the disadvantaged. It is far, far better to embark on the difficult but more rewarding venture of eliminating the causes of poor educational performance.
Our labor laws are a product of a former age, an outdated work construct, and a work force holding values and seeking goals difterent in many ways from those of today. These laws are based on the outmoded assumption that the parties have incompatible objectives and that they are condemned to a nover-ending adversarial relationship. Such a relationship is inconsistent with the nation's nood for competitive enterprise and its concurrent need for a more committed work force actively sharing in the process of corporate governance.
A final policy issue that stems from demographic and political factors and interacts with changing technology is national immigration policy. Should the legal immigrant mix be changed to favor more highly educated and skilled people, as is proposed in recently introduced federal legislation? Lovell noted that this issue has traditionally been a matter of conflict between business and labor. Lovell concluded his assessment by:
New technologies have both positive and negative implications for workplace health and safety. Although the workplace is a safer environment than it was earlier in this century, Lovell noted the presence of different and potentially serious health effects produced by new technologies. Perhaps of greatest concern are the uncertain, unknown, and often latent risks associated with chemical, biological, and electronic technologies. Unfortunately, few if any of these risks can be prevented by wearing hard hats and safety shoes. Public policies addressing these hazards, including the regulation of workplace safety and health, will require attention in the near future. Another area in which technological change is affecting the substance of policy debates, Lovell noted, is labor law. If the adversarial relationship
We have an interesting day in store for us tomorrow. The interplay of new technologies with labor and human resource policies is best contemplated in the totality of developIng workplace concerns. I look forward to joining all of you tomorrow as we begin our discussion of these most challenging issues.
t the opening of the day-long discussion, participants were welcomed by cochairmen
John Stepp and Richard Cyert. Stepp re
in management and labor and from academic life. . . . We can look at approaches that appear to assist in the cooperative adoption of new technologies, and . .. at the issues that impede or support the implementation of these approaches.
called the 1966 report of the Presidential Commission on Technology, Automation, and Economic Progress. He quoted with approval the report's statement that "technology is not a vessel into which people are to be poured and to which they must be molded,” and expressed the view that
... it is technology that must be molded to mesh with the capabilities, needs, and preferences of workers who must operate the machines of production. What we must strive for in the years ahead is a new means of reconciling the aims and purposes of labor and management in an arrangement whereby they can work together in fashioning new technologies that are as socially constructive as they are economically efficient.
A number of participants acknowledged the importance of establishing mutual trust between workers and management and the need to share the gains resulting from new technologies to maintain the international competitiveness of the American economy. Participants also expressed considerable interest in learning from the experiences of other companies and other unions. Discussing the importance of more rapid productivity growth and technology's role in achieving it, Thomas Donahue (Secretary-Treasurer, AFL-CIO) noted that
There is every reason to believe, he asserted, that men and women of good will can design and implement tomorrow's technology in ways that advance the interests and needs of all stakeholders. Adding his welcome, Richard Cyert pointed out that the U.S. is now part of a global economy. No longer does this nation have (if indeed it ever had) a monopoly on industrial knowledge, knowledge which now moves very rapidly around the world. Productivity growth, which relies on a strong technological foundation, is essential to competitiveness:
.. we need to see the prospect of gain sharing in the application of that technology and in the enhancement of that productivity. Wrapped into all of those problems for us, 1 think, is the question of cooperation. Certainly none of the trade unionists at this table would dispute the validity of that cooperation, but (we are concerned] about cooperating in ways in which we do not lose our identity or lose our effective bargaining power because, until the millennium and until we all have the same concepts of gain sharing, workers are going to need an effective force to represent them.
A number of these were associated with the largescale use of nonmetallic composite materials, while others were responses to federal airworthiness and product safety directives. Boeing workers had expressed growing concern about apparently adverse reactions to some of these chemicals. McKean noted the importance for Boeing of worker safety and expressed a strong desire to learn from others in dealing with the health and safety implications of rapid technological change. John Jordan (Senior Vice President, Corporate Development and Human Resources, Bethlehem Steel Corporation) emphasized the importance of the role and philosophy of the chief executive of
ficer in establishing the tone for corporate labor relations: “... it makes all the difference in the world in a corporation in terms of how you get things done. .” Responding to a number of comments about the development of knowledge among workers and managers of “best practice" methods for managing the adoption of new technologies, Robert Zager noted that many of these practices are not new, but have been around for nearly a century-a fundamental issue, which received attention throughout the course of the day and raised questions as to why they have not been adopted more widely.
New Technology and the
A Paper Prepared by Paul Osterman
Sloan School of Management M.I.T.
technology. Much of the employment system surrounding the technology is therefore simply derivative of that technology. The only real challenge is to discover that optimum arrangement and move toward it as quickly as possible. Also implicit in this view is that the technology in some sense drives its users toward the optimum, and so over time if we observe firms employing the same technology, we will also observe very similar employment systems and productivity. What evidence is there of the variable impact of technology? Numerous observers have noted that similar or identical technologies are used in dramatically different ways in different settings. For example:
veryone knows that new technologies will reshape work. Everyone also knows that this reconfiguration will have deep impacts upon the distribution of workers across occupations and firms and upon the skills which employees will be expected to bring to work. The rub comes when we move beyond these easy generalizations. What will be the "job description" of the white collar or production worker in the 1990s? Will their work become more or less skilled, broader or narrower? How will the organizational transformations induced by information technology feed back upon careers? This paper will attempt to answer these questions, but we will not pretend that there is any single identifiable impact which flows automatically from the nature of the technology and which the discerning researcher can extract and identify. Instead our view is that the impact is contingent upon decisions made by individuals and institutions. In some circumstances, technology will lead to one set of outcomes while in other settings the same technology will have quite different effects. We will also argue that efforts to implement new technologies in a manner which combines high productivity with broad skilled jobs and an acceptable degree of employment security will require innovation in labormanagement relations. Our perspective stands in contrast to the more traditional argument. In this view—which has long dominated both scholarly and popular thinkingthere is a single optimum way to configure a given
In recent studies of automobile production, researchers have been able to hold the level of technology constant and examine several measures of productivity. High technology strategies in the absence of human resource innovations do not achieve productivity gains. However, even modest investments in technology when combined with flexible labor practices lead to significant productivity improvements (Krafcik, 1988).
Another striking example is provided by a (1986). He compared similar FMS systems in firms in the United States and in Japan. In Japan, the time it took to develop the system
was half that of the United States, the number of different parts the Japanese set-ups produced was much higher, the labor requirements lower, the fraction of the day the machines ran was higher, and total output was higher. Jaikumar attributed these differences to the skill level of the labor force and the amount of training provided by firms, i.e., to human resource policy.
These, of course, are just examples, and we need more evidence before the point is established (and additional material provided throughout the paper). It is also important to remember that the point can be exaggerated: The nature of a technology does set limits or establish patterns. For example, Piore and Sabel (1984) distinguish between flexible and mass production technologies and argue that the possibilities of each are quite different with respect to a range of issues, including shopfloor relations and macro-economic policy. This point is similar to the long-standing discussion in the sociology literature concerning the relationship between technology and organizational form (Thompson, 1967; Woodward, 1965). Nonetheless, it is apparent that one cannot understand outcomes by reference to technology alone; additional considerations must be brought to bear. Because of this variation, the most useful role for a paper like this is to identify the range of the possible outcomes and attempt to explain what factors determine which path the impact will follow. In the first half of the paper, we examine the descriptive evidence and try to summarize the facts regarding how new information technologies alter job design. In the second half, we consider what lies behind the considerable variation in outcomes. We close with some questions which policy makers might consider.
be supplemented by a desire to limit employee knowledge of the production process and hence concentrate power in management hands. Although few people would identify themselves with as crude a view as the foregoing, it seems hard to deny that these attitudes underlie much of the American production system. In both union and non-union settings, narrow job categories, strict work rules, lack of sharing of information concerning new technology, and the general absence of involvement of workers in planning production all flow from a Tayloristic approach to organizing work. Implicit in this line of thought is the assumption that new technologies, by replacing human skill and judgment, deskill the labor force. Such deskilling is seen as technically efficient and as a nearly inevitable consequence of the technology. A good illustration of the kind of innovation which (seemingly) fits this logic is the advent of electronic switching in the telephone industry. Prior to the introduction of electronic digital switching, the repair of mechanical switching equipment was a highly skilled craft job in which an individual developed a substantial “feel” for the equipment. Wires would break, circuits would fail, foreign matter would get into the equipment, and the craftsperson's job was to find and fix the fault. By contrast, the new system is essentially a computer. The rate of mechanical failure is low, and repairs are more straightforward in that modular boards can be removed and inserted. Software failures are more likely to be the province of programmers than craftpeople. All of this is not to argue that the new repair jobs are not skilled. However, the nature of the skill has changed considerably, and it is arguably the case that from the former craft perspective the job has been deskilled. It is possible to argue that the move to electronic switching and the shift in job boundaries which ensued were due to the characteristics of the technology itself, in that the substitution of computers, or “boxes” as they are derisively termed by telephone people, inevitably implied a loss of skill on the part of the craftsmen. For this reason, the introduction of electronic switching can stand as an illustration of the “technological imperative” perspective (although even this proposition is open to some question, since it begs the issue of whether the old craftsmen were taught the new programming skills). Whereas the Tayloristic perspective held sway for many years, recently the burden of opinion has swung against it. Two points are notable about the shift. First, much of the impetus has come from observations of how work is organized in other countries, not just Japan but also European nations such as Germany and Sweden. In each of these nations, high quality, efficiency, and cost advantages
The Traditional Debate About Job Design Do new technologies lead to more narrow and deskilled work or to broader more complex jobs? Which course is the most desirable from the (differing) perspectives of the several interested parties? These two questions, the first empirical and the second normative, have dominated debate on this topic. Followers of Frederick Taylor believe that there is a single best way to accomplish any task. This “best way" can be discovered by management experts and then conveyed to the labor force. The key assumption is that the labor force has nothing to contribute to the production process. In effect, employees are simply appendages to machines, and therefore the most cost-effective approach is to drive skill out of work and operate with as lowcost a labor force as possible. This motivation may Page 11Page 12
between labor and management has indeed become outmoded as a result of technological and other sources of change, U.S. labor laws, drafted on the assumption that this relationship must be confrontational, are overdue for revision:
work force would require new thinking. Although workers with strong basic skills should not face serious difficulties in obtaining quality jobs, many of the individuals entering the U.S. labor force during the next decade will lack the foundation of basic skills on which employers can develop new jobrelated skills. The less-educated suffer higher rates of unemployment, are more apt to fall into poverty, and have substantially less social mobility and employment security:
As a society we will have to do better in our efforts to make adequate educational achievement a reality for all Americans. It makes no economic sense to spurn technological change and opt for low value-added work to meet the needs of the disadvantaged. It is far, far better to embark on the difficult but more rewarding venture of eliminating the causes of poor educational performance.
Our labor laws are a product of a former age, an outdated work construct, and a work force holding values and seeking goals difterent in many ways from those of today. These laws are based on the outmoded assumption that the parties have incompatible objectives and that they are condemned to a nover-ending adversarial relationship. Such a relationship is inconsistent with the nation's nood for competitive enterprise and its concurrent need for a more committed work force actively sharing in the process of corporate governance.
A final policy issue that stems from demographic and political factors and interacts with changing technology is national immigration policy. Should the legal immigrant mix be changed to favor more highly educated and skilled people, as is proposed in recently introduced federal legislation? Lovell noted that this issue has traditionally been a matter of conflict between business and labor. Lovell concluded his assessment by:
New technologies have both positive and negative implications for workplace health and safety. Although the workplace is a safer environment than it was earlier in this century, Lovell noted the presence of different and potentially serious health effects produced by new technologies. Perhaps of greatest concern are the uncertain, unknown, and often latent risks associated with chemical, biological, and electronic technologies. Unfortunately, few if any of these risks can be prevented by wearing hard hats and safety shoes. Public policies addressing these hazards, including the regulation of workplace safety and health, will require attention in the near future. Another area in which technological change is affecting the substance of policy debates, Lovell noted, is labor law. If the adversarial relationship
We have an interesting day in store for us tomorrow. The interplay of new technologies with labor and human resource policies is best contemplated in the totality of developIng workplace concerns. I look forward to joining all of you tomorrow as we begin our discussion of these most challenging issues.
t the opening of the day-long discussion, participants were welcomed by cochairmen
John Stepp and Richard Cyert. Stepp re
in management and labor and from academic life. . . . We can look at approaches that appear to assist in the cooperative adoption of new technologies, and . .. at the issues that impede or support the implementation of these approaches.
called the 1966 report of the Presidential Commission on Technology, Automation, and Economic Progress. He quoted with approval the report's statement that "technology is not a vessel into which people are to be poured and to which they must be molded,” and expressed the view that
... it is technology that must be molded to mesh with the capabilities, needs, and preferences of workers who must operate the machines of production. What we must strive for in the years ahead is a new means of reconciling the aims and purposes of labor and management in an arrangement whereby they can work together in fashioning new technologies that are as socially constructive as they are economically efficient.
A number of participants acknowledged the importance of establishing mutual trust between workers and management and the need to share the gains resulting from new technologies to maintain the international competitiveness of the American economy. Participants also expressed considerable interest in learning from the experiences of other companies and other unions. Discussing the importance of more rapid productivity growth and technology's role in achieving it, Thomas Donahue (Secretary-Treasurer, AFL-CIO) noted that
There is every reason to believe, he asserted, that men and women of good will can design and implement tomorrow's technology in ways that advance the interests and needs of all stakeholders. Adding his welcome, Richard Cyert pointed out that the U.S. is now part of a global economy. No longer does this nation have (if indeed it ever had) a monopoly on industrial knowledge, knowledge which now moves very rapidly around the world. Productivity growth, which relies on a strong technological foundation, is essential to competitiveness:
.. we need to see the prospect of gain sharing in the application of that technology and in the enhancement of that productivity. Wrapped into all of those problems for us, 1 think, is the question of cooperation. Certainly none of the trade unionists at this table would dispute the validity of that cooperation, but (we are concerned] about cooperating in ways in which we do not lose our identity or lose our effective bargaining power because, until the millennium and until we all have the same concepts of gain sharing, workers are going to need an effective force to represent them.
A number of these were associated with the largescale use of nonmetallic composite materials, while others were responses to federal airworthiness and product safety directives. Boeing workers had expressed growing concern about apparently adverse reactions to some of these chemicals. McKean noted the importance for Boeing of worker safety and expressed a strong desire to learn from others in dealing with the health and safety implications of rapid technological change. John Jordan (Senior Vice President, Corporate Development and Human Resources, Bethlehem Steel Corporation) emphasized the importance of the role and philosophy of the chief executive of
ficer in establishing the tone for corporate labor relations: “... it makes all the difference in the world in a corporation in terms of how you get things done. .” Responding to a number of comments about the development of knowledge among workers and managers of “best practice" methods for managing the adoption of new technologies, Robert Zager noted that many of these practices are not new, but have been around for nearly a century-a fundamental issue, which received attention throughout the course of the day and raised questions as to why they have not been adopted more widely.
New Technology and the
A Paper Prepared by Paul Osterman
Sloan School of Management M.I.T.
technology. Much of the employment system surrounding the technology is therefore simply derivative of that technology. The only real challenge is to discover that optimum arrangement and move toward it as quickly as possible. Also implicit in this view is that the technology in some sense drives its users toward the optimum, and so over time if we observe firms employing the same technology, we will also observe very similar employment systems and productivity. What evidence is there of the variable impact of technology? Numerous observers have noted that similar or identical technologies are used in dramatically different ways in different settings. For example:
veryone knows that new technologies will reshape work. Everyone also knows that this reconfiguration will have deep impacts upon the distribution of workers across occupations and firms and upon the skills which employees will be expected to bring to work. The rub comes when we move beyond these easy generalizations. What will be the "job description" of the white collar or production worker in the 1990s? Will their work become more or less skilled, broader or narrower? How will the organizational transformations induced by information technology feed back upon careers? This paper will attempt to answer these questions, but we will not pretend that there is any single identifiable impact which flows automatically from the nature of the technology and which the discerning researcher can extract and identify. Instead our view is that the impact is contingent upon decisions made by individuals and institutions. In some circumstances, technology will lead to one set of outcomes while in other settings the same technology will have quite different effects. We will also argue that efforts to implement new technologies in a manner which combines high productivity with broad skilled jobs and an acceptable degree of employment security will require innovation in labormanagement relations. Our perspective stands in contrast to the more traditional argument. In this view—which has long dominated both scholarly and popular thinkingthere is a single optimum way to configure a given
In recent studies of automobile production, researchers have been able to hold the level of technology constant and examine several measures of productivity. High technology strategies in the absence of human resource innovations do not achieve productivity gains. However, even modest investments in technology when combined with flexible labor practices lead to significant productivity improvements (Krafcik, 1988).
Another striking example is provided by a (1986). He compared similar FMS systems in firms in the United States and in Japan. In Japan, the time it took to develop the system
was half that of the United States, the number of different parts the Japanese set-ups produced was much higher, the labor requirements lower, the fraction of the day the machines ran was higher, and total output was higher. Jaikumar attributed these differences to the skill level of the labor force and the amount of training provided by firms, i.e., to human resource policy.
These, of course, are just examples, and we need more evidence before the point is established (and additional material provided throughout the paper). It is also important to remember that the point can be exaggerated: The nature of a technology does set limits or establish patterns. For example, Piore and Sabel (1984) distinguish between flexible and mass production technologies and argue that the possibilities of each are quite different with respect to a range of issues, including shopfloor relations and macro-economic policy. This point is similar to the long-standing discussion in the sociology literature concerning the relationship between technology and organizational form (Thompson, 1967; Woodward, 1965). Nonetheless, it is apparent that one cannot understand outcomes by reference to technology alone; additional considerations must be brought to bear. Because of this variation, the most useful role for a paper like this is to identify the range of the possible outcomes and attempt to explain what factors determine which path the impact will follow. In the first half of the paper, we examine the descriptive evidence and try to summarize the facts regarding how new information technologies alter job design. In the second half, we consider what lies behind the considerable variation in outcomes. We close with some questions which policy makers might consider.
be supplemented by a desire to limit employee knowledge of the production process and hence concentrate power in management hands. Although few people would identify themselves with as crude a view as the foregoing, it seems hard to deny that these attitudes underlie much of the American production system. In both union and non-union settings, narrow job categories, strict work rules, lack of sharing of information concerning new technology, and the general absence of involvement of workers in planning production all flow from a Tayloristic approach to organizing work. Implicit in this line of thought is the assumption that new technologies, by replacing human skill and judgment, deskill the labor force. Such deskilling is seen as technically efficient and as a nearly inevitable consequence of the technology. A good illustration of the kind of innovation which (seemingly) fits this logic is the advent of electronic switching in the telephone industry. Prior to the introduction of electronic digital switching, the repair of mechanical switching equipment was a highly skilled craft job in which an individual developed a substantial “feel” for the equipment. Wires would break, circuits would fail, foreign matter would get into the equipment, and the craftsperson's job was to find and fix the fault. By contrast, the new system is essentially a computer. The rate of mechanical failure is low, and repairs are more straightforward in that modular boards can be removed and inserted. Software failures are more likely to be the province of programmers than craftpeople. All of this is not to argue that the new repair jobs are not skilled. However, the nature of the skill has changed considerably, and it is arguably the case that from the former craft perspective the job has been deskilled. It is possible to argue that the move to electronic switching and the shift in job boundaries which ensued were due to the characteristics of the technology itself, in that the substitution of computers, or “boxes” as they are derisively termed by telephone people, inevitably implied a loss of skill on the part of the craftsmen. For this reason, the introduction of electronic switching can stand as an illustration of the “technological imperative” perspective (although even this proposition is open to some question, since it begs the issue of whether the old craftsmen were taught the new programming skills). Whereas the Tayloristic perspective held sway for many years, recently the burden of opinion has swung against it. Two points are notable about the shift. First, much of the impetus has come from observations of how work is organized in other countries, not just Japan but also European nations such as Germany and Sweden. In each of these nations, high quality, efficiency, and cost advantages
The Traditional Debate About Job Design Do new technologies lead to more narrow and deskilled work or to broader more complex jobs? Which course is the most desirable from the (differing) perspectives of the several interested parties? These two questions, the first empirical and the second normative, have dominated debate on this topic. Followers of Frederick Taylor believe that there is a single best way to accomplish any task. This “best way" can be discovered by management experts and then conveyed to the labor force. The key assumption is that the labor force has nothing to contribute to the production process. In effect, employees are simply appendages to machines, and therefore the most cost-effective approach is to drive skill out of work and operate with as lowcost a labor force as possible. This motivation may Page 13Page 14
between labor and management has indeed become outmoded as a result of technological and other sources of change, U.S. labor laws, drafted on the assumption that this relationship must be confrontational, are overdue for revision:
work force would require new thinking. Although workers with strong basic skills should not face serious difficulties in obtaining quality jobs, many of the individuals entering the U.S. labor force during the next decade will lack the foundation of basic skills on which employers can develop new jobrelated skills. The less-educated suffer higher rates of unemployment, are more apt to fall into poverty, and have substantially less social mobility and employment security:
As a society we will have to do better in our efforts to make adequate educational achievement a reality for all Americans. It makes no economic sense to spurn technological change and opt for low value-added work to meet the needs of the disadvantaged. It is far, far better to embark on the difficult but more rewarding venture of eliminating the causes of poor educational performance.
Our labor laws are a product of a former age, an outdated work construct, and a work force holding values and seeking goals difterent in many ways from those of today. These laws are based on the outmoded assumption that the parties have incompatible objectives and that they are condemned to a nover-ending adversarial relationship. Such a relationship is inconsistent with the nation's nood for competitive enterprise and its concurrent need for a more committed work force actively sharing in the process of corporate governance.
A final policy issue that stems from demographic and political factors and interacts with changing technology is national immigration policy. Should the legal immigrant mix be changed to favor more highly educated and skilled people, as is proposed in recently introduced federal legislation? Lovell noted that this issue has traditionally been a matter of conflict between business and labor. Lovell concluded his assessment by:
New technologies have both positive and negative implications for workplace health and safety. Although the workplace is a safer environment than it was earlier in this century, Lovell noted the presence of different and potentially serious health effects produced by new technologies. Perhaps of greatest concern are the uncertain, unknown, and often latent risks associated with chemical, biological, and electronic technologies. Unfortunately, few if any of these risks can be prevented by wearing hard hats and safety shoes. Public policies addressing these hazards, including the regulation of workplace safety and health, will require attention in the near future. Another area in which technological change is affecting the substance of policy debates, Lovell noted, is labor law. If the adversarial relationship
We have an interesting day in store for us tomorrow. The interplay of new technologies with labor and human resource policies is best contemplated in the totality of developIng workplace concerns. I look forward to joining all of you tomorrow as we begin our discussion of these most challenging issues.
t the opening of the day-long discussion, participants were welcomed by cochairmen
John Stepp and Richard Cyert. Stepp re
in management and labor and from academic life. . . . We can look at approaches that appear to assist in the cooperative adoption of new technologies, and . .. at the issues that impede or support the implementation of these approaches.
called the 1966 report of the Presidential Commission on Technology, Automation, and Economic Progress. He quoted with approval the report's statement that "technology is not a vessel into which people are to be poured and to which they must be molded,” and expressed the view that
... it is technology that must be molded to mesh with the capabilities, needs, and preferences of workers who must operate the machines of production. What we must strive for in the years ahead is a new means of reconciling the aims and purposes of labor and management in an arrangement whereby they can work together in fashioning new technologies that are as socially constructive as they are economically efficient.
A number of participants acknowledged the importance of establishing mutual trust between workers and management and the need to share the gains resulting from new technologies to maintain the international competitiveness of the American economy. Participants also expressed considerable interest in learning from the experiences of other companies and other unions. Discussing the importance of more rapid productivity growth and technology's role in achieving it, Thomas Donahue (Secretary-Treasurer, AFL-CIO) noted that
There is every reason to believe, he asserted, that men and women of good will can design and implement tomorrow's technology in ways that advance the interests and needs of all stakeholders. Adding his welcome, Richard Cyert pointed out that the U.S. is now part of a global economy. No longer does this nation have (if indeed it ever had) a monopoly on industrial knowledge, knowledge which now moves very rapidly around the world. Productivity growth, which relies on a strong technological foundation, is essential to competitiveness:
.. we need to see the prospect of gain sharing in the application of that technology and in the enhancement of that productivity. Wrapped into all of those problems for us, 1 think, is the question of cooperation. Certainly none of the trade unionists at this table would dispute the validity of that cooperation, but (we are concerned] about cooperating in ways in which we do not lose our identity or lose our effective bargaining power because, until the millennium and until we all have the same concepts of gain sharing, workers are going to need an effective force to represent them.
A number of these were associated with the largescale use of nonmetallic composite materials, while others were responses to federal airworthiness and product safety directives. Boeing workers had expressed growing concern about apparently adverse reactions to some of these chemicals. McKean noted the importance for Boeing of worker safety and expressed a strong desire to learn from others in dealing with the health and safety implications of rapid technological change. John Jordan (Senior Vice President, Corporate Development and Human Resources, Bethlehem Steel Corporation) emphasized the importance of the role and philosophy of the chief executive of
ficer in establishing the tone for corporate labor relations: “... it makes all the difference in the world in a corporation in terms of how you get things done. .” Responding to a number of comments about the development of knowledge among workers and managers of “best practice" methods for managing the adoption of new technologies, Robert Zager noted that many of these practices are not new, but have been around for nearly a century-a fundamental issue, which received attention throughout the course of the day and raised questions as to why they have not been adopted more widely.
New Technology and the
A Paper Prepared by Paul Osterman
Sloan School of Management M.I.T.
technology. Much of the employment system surrounding the technology is therefore simply derivative of that technology. The only real challenge is to discover that optimum arrangement and move toward it as quickly as possible. Also implicit in this view is that the technology in some sense drives its users toward the optimum, and so over time if we observe firms employing the same technology, we will also observe very similar employment systems and productivity. What evidence is there of the variable impact of technology? Numerous observers have noted that similar or identical technologies are used in dramatically different ways in different settings. For example:
veryone knows that new technologies will reshape work. Everyone also knows that this reconfiguration will have deep impacts upon the distribution of workers across occupations and firms and upon the skills which employees will be expected to bring to work. The rub comes when we move beyond these easy generalizations. What will be the "job description" of the white collar or production worker in the 1990s? Will their work become more or less skilled, broader or narrower? How will the organizational transformations induced by information technology feed back upon careers? This paper will attempt to answer these questions, but we will not pretend that there is any single identifiable impact which flows automatically from the nature of the technology and which the discerning researcher can extract and identify. Instead our view is that the impact is contingent upon decisions made by individuals and institutions. In some circumstances, technology will lead to one set of outcomes while in other settings the same technology will have quite different effects. We will also argue that efforts to implement new technologies in a manner which combines high productivity with broad skilled jobs and an acceptable degree of employment security will require innovation in labormanagement relations. Our perspective stands in contrast to the more traditional argument. In this view—which has long dominated both scholarly and popular thinkingthere is a single optimum way to configure a given
In recent studies of automobile production, researchers have been able to hold the level of technology constant and examine several measures of productivity. High technology strategies in the absence of human resource innovations do not achieve productivity gains. However, even modest investments in technology when combined with flexible labor practices lead to significant productivity improvements (Krafcik, 1988).
Another striking example is provided by a (1986). He compared similar FMS systems in firms in the United States and in Japan. In Japan, the time it took to develop the system
was half that of the United States, the number of different parts the Japanese set-ups produced was much higher, the labor requirements lower, the fraction of the day the machines ran was higher, and total output was higher. Jaikumar attributed these differences to the skill level of the labor force and the amount of training provided by firms, i.e., to human resource policy.
These, of course, are just examples, and we need more evidence before the point is established (and additional material provided throughout the paper). It is also important to remember that the point can be exaggerated: The nature of a technology does set limits or establish patterns. For example, Piore and Sabel (1984) distinguish between flexible and mass production technologies and argue that the possibilities of each are quite different with respect to a range of issues, including shopfloor relations and macro-economic policy. This point is similar to the long-standing discussion in the sociology literature concerning the relationship between technology and organizational form (Thompson, 1967; Woodward, 1965). Nonetheless, it is apparent that one cannot understand outcomes by reference to technology alone; additional considerations must be brought to bear. Because of this variation, the most useful role for a paper like this is to identify the range of the possible outcomes and attempt to explain what factors determine which path the impact will follow. In the first half of the paper, we examine the descriptive evidence and try to summarize the facts regarding how new information technologies alter job design. In the second half, we consider what lies behind the considerable variation in outcomes. We close with some questions which policy makers might consider.
be supplemented by a desire to limit employee knowledge of the production process and hence concentrate power in management hands. Although few people would identify themselves with as crude a view as the foregoing, it seems hard to deny that these attitudes underlie much of the American production system. In both union and non-union settings, narrow job categories, strict work rules, lack of sharing of information concerning new technology, and the general absence of involvement of workers in planning production all flow from a Tayloristic approach to organizing work. Implicit in this line of thought is the assumption that new technologies, by replacing human skill and judgment, deskill the labor force. Such deskilling is seen as technically efficient and as a nearly inevitable consequence of the technology. A good illustration of the kind of innovation which (seemingly) fits this logic is the advent of electronic switching in the telephone industry. Prior to the introduction of electronic digital switching, the repair of mechanical switching equipment was a highly skilled craft job in which an individual developed a substantial “feel” for the equipment. Wires would break, circuits would fail, foreign matter would get into the equipment, and the craftsperson's job was to find and fix the fault. By contrast, the new system is essentially a computer. The rate of mechanical failure is low, and repairs are more straightforward in that modular boards can be removed and inserted. Software failures are more likely to be the province of programmers than craftpeople. All of this is not to argue that the new repair jobs are not skilled. However, the nature of the skill has changed considerably, and it is arguably the case that from the former craft perspective the job has been deskilled. It is possible to argue that the move to electronic switching and the shift in job boundaries which ensued were due to the characteristics of the technology itself, in that the substitution of computers, or “boxes” as they are derisively termed by telephone people, inevitably implied a loss of skill on the part of the craftsmen. For this reason, the introduction of electronic switching can stand as an illustration of the “technological imperative” perspective (although even this proposition is open to some question, since it begs the issue of whether the old craftsmen were taught the new programming skills). Whereas the Tayloristic perspective held sway for many years, recently the burden of opinion has swung against it. Two points are notable about the shift. First, much of the impetus has come from observations of how work is organized in other countries, not just Japan but also European nations such as Germany and Sweden. In each of these nations, high quality, efficiency, and cost advantages
The Traditional Debate About Job Design Do new technologies lead to more narrow and deskilled work or to broader more complex jobs? Which course is the most desirable from the (differing) perspectives of the several interested parties? These two questions, the first empirical and the second normative, have dominated debate on this topic. Followers of Frederick Taylor believe that there is a single best way to accomplish any task. This “best way" can be discovered by management experts and then conveyed to the labor force. The key assumption is that the labor force has nothing to contribute to the production process. In effect, employees are simply appendages to machines, and therefore the most cost-effective approach is to drive skill out of work and operate with as lowcost a labor force as possible. This motivation may Page 15Page 16
between labor and management has indeed become outmoded as a result of technological and other sources of change, U.S. labor laws, drafted on the assumption that this relationship must be confrontational, are overdue for revision:
work force would require new thinking. Although workers with strong basic skills should not face serious difficulties in obtaining quality jobs, many of the individuals entering the U.S. labor force during the next decade will lack the foundation of basic skills on which employers can develop new jobrelated skills. The less-educated suffer higher rates of unemployment, are more apt to fall into poverty, and have substantially less social mobility and employment security:
As a society we will have to do better in our efforts to make adequate educational achievement a reality for all Americans. It makes no economic sense to spurn technological change and opt for low value-added work to meet the needs of the disadvantaged. It is far, far better to embark on the difficult but more rewarding venture of eliminating the causes of poor educational performance.
Our labor laws are a product of a former age, an outdated work construct, and a work force holding values and seeking goals difterent in many ways from those of today. These laws are based on the outmoded assumption that the parties have incompatible objectives and that they are condemned to a nover-ending adversarial relationship. Such a relationship is inconsistent with the nation's nood for competitive enterprise and its concurrent need for a more committed work force actively sharing in the process of corporate governance.
A final policy issue that stems from demographic and political factors and interacts with changing technology is national immigration policy. Should the legal immigrant mix be changed to favor more highly educated and skilled people, as is proposed in recently introduced federal legislation? Lovell noted that this issue has traditionally been a matter of conflict between business and labor. Lovell concluded his assessment by:
New technologies have both positive and negative implications for workplace health and safety. Although the workplace is a safer environment than it was earlier in this century, Lovell noted the presence of different and potentially serious health effects produced by new technologies. Perhaps of greatest concern are the uncertain, unknown, and often latent risks associated with chemical, biological, and electronic technologies. Unfortunately, few if any of these risks can be prevented by wearing hard hats and safety shoes. Public policies addressing these hazards, including the regulation of workplace safety and health, will require attention in the near future. Another area in which technological change is affecting the substance of policy debates, Lovell noted, is labor law. If the adversarial relationship
We have an interesting day in store for us tomorrow. The interplay of new technologies with labor and human resource policies is best contemplated in the totality of developIng workplace concerns. I look forward to joining all of you tomorrow as we begin our discussion of these most challenging issues.
t the opening of the day-long discussion, participants were welcomed by cochairmen
John Stepp and Richard Cyert. Stepp re
in management and labor and from academic life. . . . We can look at approaches that appear to assist in the cooperative adoption of new technologies, and . .. at the issues that impede or support the implementation of these approaches.
called the 1966 report of the Presidential Commission on Technology, Automation, and Economic Progress. He quoted with approval the report's statement that "technology is not a vessel into which people are to be poured and to which they must be molded,” and expressed the view that
... it is technology that must be molded to mesh with the capabilities, needs, and preferences of workers who must operate the machines of production. What we must strive for in the years ahead is a new means of reconciling the aims and purposes of labor and management in an arrangement whereby they can work together in fashioning new technologies that are as socially constructive as they are economically efficient.
A number of participants acknowledged the importance of establishing mutual trust between workers and management and the need to share the gains resulting from new technologies to maintain the international competitiveness of the American economy. Participants also expressed considerable interest in learning from the experiences of other companies and other unions. Discussing the importance of more rapid productivity growth and technology's role in achieving it, Thomas Donahue (Secretary-Treasurer, AFL-CIO) noted that
There is every reason to believe, he asserted, that men and women of good will can design and implement tomorrow's technology in ways that advance the interests and needs of all stakeholders. Adding his welcome, Richard Cyert pointed out that the U.S. is now part of a global economy. No longer does this nation have (if indeed it ever had) a monopoly on industrial knowledge, knowledge which now moves very rapidly around the world. Productivity growth, which relies on a strong technological foundation, is essential to competitiveness:
.. we need to see the prospect of gain sharing in the application of that technology and in the enhancement of that productivity. Wrapped into all of those problems for us, 1 think, is the question of cooperation. Certainly none of the trade unionists at this table would dispute the validity of that cooperation, but (we are concerned] about cooperating in ways in which we do not lose our identity or lose our effective bargaining power because, until the millennium and until we all have the same concepts of gain sharing, workers are going to need an effective force to represent them.
A number of these were associated with the largescale use of nonmetallic composite materials, while others were responses to federal airworthiness and product safety directives. Boeing workers had expressed growing concern about apparently adverse reactions to some of these chemicals. McKean noted the importance for Boeing of worker safety and expressed a strong desire to learn from others in dealing with the health and safety implications of rapid technological change. John Jordan (Senior Vice President, Corporate Development and Human Resources, Bethlehem Steel Corporation) emphasized the importance of the role and philosophy of the chief executive of
ficer in establishing the tone for corporate labor relations: “... it makes all the difference in the world in a corporation in terms of how you get things done. .” Responding to a number of comments about the development of knowledge among workers and managers of “best practice" methods for managing the adoption of new technologies, Robert Zager noted that many of these practices are not new, but have been around for nearly a century-a fundamental issue, which received attention throughout the course of the day and raised questions as to why they have not been adopted more widely.
New Technology and the
A Paper Prepared by Paul Osterman
Sloan School of Management M.I.T.
technology. Much of the employment system surrounding the technology is therefore simply derivative of that technology. The only real challenge is to discover that optimum arrangement and move toward it as quickly as possible. Also implicit in this view is that the technology in some sense drives its users toward the optimum, and so over time if we observe firms employing the same technology, we will also observe very similar employment systems and productivity. What evidence is there of the variable impact of technology? Numerous observers have noted that similar or identical technologies are used in dramatically different ways in different settings. For example:
veryone knows that new technologies will reshape work. Everyone also knows that this reconfiguration will have deep impacts upon the distribution of workers across occupations and firms and upon the skills which employees will be expected to bring to work. The rub comes when we move beyond these easy generalizations. What will be the "job description" of the white collar or production worker in the 1990s? Will their work become more or less skilled, broader or narrower? How will the organizational transformations induced by information technology feed back upon careers? This paper will attempt to answer these questions, but we will not pretend that there is any single identifiable impact which flows automatically from the nature of the technology and which the discerning researcher can extract and identify. Instead our view is that the impact is contingent upon decisions made by individuals and institutions. In some circumstances, technology will lead to one set of outcomes while in other settings the same technology will have quite different effects. We will also argue that efforts to implement new technologies in a manner which combines high productivity with broad skilled jobs and an acceptable degree of employment security will require innovation in labormanagement relations. Our perspective stands in contrast to the more traditional argument. In this view—which has long dominated both scholarly and popular thinkingthere is a single optimum way to configure a given
In recent studies of automobile production, researchers have been able to hold the level of technology constant and examine several measures of productivity. High technology strategies in the absence of human resource innovations do not achieve productivity gains. However, even modest investments in technology when combined with flexible labor practices lead to significant productivity improvements (Krafcik, 1988).
Another striking example is provided by a (1986). He compared similar FMS systems in firms in the United States and in Japan. In Japan, the time it took to develop the system
was half that of the United States, the number of different parts the Japanese set-ups produced was much higher, the labor requirements lower, the fraction of the day the machines ran was higher, and total output was higher. Jaikumar attributed these differences to the skill level of the labor force and the amount of training provided by firms, i.e., to human resource policy.
These, of course, are just examples, and we need more evidence before the point is established (and additional material provided throughout the paper). It is also important to remember that the point can be exaggerated: The nature of a technology does set limits or establish patterns. For example, Piore and Sabel (1984) distinguish between flexible and mass production technologies and argue that the possibilities of each are quite different with respect to a range of issues, including shopfloor relations and macro-economic policy. This point is similar to the long-standing discussion in the sociology literature concerning the relationship between technology and organizational form (Thompson, 1967; Woodward, 1965). Nonetheless, it is apparent that one cannot understand outcomes by reference to technology alone; additional considerations must be brought to bear. Because of this variation, the most useful role for a paper like this is to identify the range of the possible outcomes and attempt to explain what factors determine which path the impact will follow. In the first half of the paper, we examine the descriptive evidence and try to summarize the facts regarding how new information technologies alter job design. In the second half, we consider what lies behind the considerable variation in outcomes. We close with some questions which policy makers might consider.
be supplemented by a desire to limit employee knowledge of the production process and hence concentrate power in management hands. Although few people would identify themselves with as crude a view as the foregoing, it seems hard to deny that these attitudes underlie much of the American production system. In both union and non-union settings, narrow job categories, strict work rules, lack of sharing of information concerning new technology, and the general absence of involvement of workers in planning production all flow from a Tayloristic approach to organizing work. Implicit in this line of thought is the assumption that new technologies, by replacing human skill and judgment, deskill the labor force. Such deskilling is seen as technically efficient and as a nearly inevitable consequence of the technology. A good illustration of the kind of innovation which (seemingly) fits this logic is the advent of electronic switching in the telephone industry. Prior to the introduction of electronic digital switching, the repair of mechanical switching equipment was a highly skilled craft job in which an individual developed a substantial “feel” for the equipment. Wires would break, circuits would fail, foreign matter would get into the equipment, and the craftsperson's job was to find and fix the fault. By contrast, the new system is essentially a computer. The rate of mechanical failure is low, and repairs are more straightforward in that modular boards can be removed and inserted. Software failures are more likely to be the province of programmers than craftpeople. All of this is not to argue that the new repair jobs are not skilled. However, the nature of the skill has changed considerably, and it is arguably the case that from the former craft perspective the job has been deskilled. It is possible to argue that the move to electronic switching and the shift in job boundaries which ensued were due to the characteristics of the technology itself, in that the substitution of computers, or “boxes” as they are derisively termed by telephone people, inevitably implied a loss of skill on the part of the craftsmen. For this reason, the introduction of electronic switching can stand as an illustration of the “technological imperative” perspective (although even this proposition is open to some question, since it begs the issue of whether the old craftsmen were taught the new programming skills). Whereas the Tayloristic perspective held sway for many years, recently the burden of opinion has swung against it. Two points are notable about the shift. First, much of the impetus has come from observations of how work is organized in other countries, not just Japan but also European nations such as Germany and Sweden. In each of these nations, high quality, efficiency, and cost advantages
The Traditional Debate About Job Design Do new technologies lead to more narrow and deskilled work or to broader more complex jobs? Which course is the most desirable from the (differing) perspectives of the several interested parties? These two questions, the first empirical and the second normative, have dominated debate on this topic. Followers of Frederick Taylor believe that there is a single best way to accomplish any task. This “best way" can be discovered by management experts and then conveyed to the labor force. The key assumption is that the labor force has nothing to contribute to the production process. In effect, employees are simply appendages to machines, and therefore the most cost-effective approach is to drive skill out of work and operate with as lowcost a labor force as possible. This motivation may Page 17Page 18
between labor and management has indeed become outmoded as a result of technological and other sources of change, U.S. labor laws, drafted on the assumption that this relationship must be confrontational, are overdue for revision:
work force would require new thinking. Although workers with strong basic skills should not face serious difficulties in obtaining quality jobs, many of the individuals entering the U.S. labor force during the next decade will lack the foundation of basic skills on which employers can develop new jobrelated skills. The less-educated suffer higher rates of unemployment, are more apt to fall into poverty, and have substantially less social mobility and employment security:
As a society we will have to do better in our efforts to make adequate educational achievement a reality for all Americans. It makes no economic sense to spurn technological change and opt for low value-added work to meet the needs of the disadvantaged. It is far, far better to embark on the difficult but more rewarding venture of eliminating the causes of poor educational performance.
Our labor laws are a product of a former age, an outdated work construct, and a work force holding values and seeking goals difterent in many ways from those of today. These laws are based on the outmoded assumption that the parties have incompatible objectives and that they are condemned to a nover-ending adversarial relationship. Such a relationship is inconsistent with the nation's nood for competitive enterprise and its concurrent need for a more committed work force actively sharing in the process of corporate governance.
A final policy issue that stems from demographic and political factors and interacts with changing technology is national immigration policy. Should the legal immigrant mix be changed to favor more highly educated and skilled people, as is proposed in recently introduced federal legislation? Lovell noted that this issue has traditionally been a matter of conflict between business and labor. Lovell concluded his assessment by:
New technologies have both positive and negative implications for workplace health and safety. Although the workplace is a safer environment than it was earlier in this century, Lovell noted the presence of different and potentially serious health effects produced by new technologies. Perhaps of greatest concern are the uncertain, unknown, and often latent risks associated with chemical, biological, and electronic technologies. Unfortunately, few if any of these risks can be prevented by wearing hard hats and safety shoes. Public policies addressing these hazards, including the regulation of workplace safety and health, will require attention in the near future. Another area in which technological change is affecting the substance of policy debates, Lovell noted, is labor law. If the adversarial relationship
We have an interesting day in store for us tomorrow. The interplay of new technologies with labor and human resource policies is best contemplated in the totality of developIng workplace concerns. I look forward to joining all of you tomorrow as we begin our discussion of these most challenging issues.
t the opening of the day-long discussion, participants were welcomed by cochairmen
John Stepp and Richard Cyert. Stepp re
in management and labor and from academic life. . . . We can look at approaches that appear to assist in the cooperative adoption of new technologies, and . .. at the issues that impede or support the implementation of these approaches.
called the 1966 report of the Presidential Commission on Technology, Automation, and Economic Progress. He quoted with approval the report's statement that "technology is not a vessel into which people are to be poured and to which they must be molded,” and expressed the view that
... it is technology that must be molded to mesh with the capabilities, needs, and preferences of workers who must operate the machines of production. What we must strive for in the years ahead is a new means of reconciling the aims and purposes of labor and management in an arrangement whereby they can work together in fashioning new technologies that are as socially constructive as they are economically efficient.
A number of participants acknowledged the importance of establishing mutual trust between workers and management and the need to share the gains resulting from new technologies to maintain the international competitiveness of the American economy. Participants also expressed considerable interest in learning from the experiences of other companies and other unions. Discussing the importance of more rapid productivity growth and technology's role in achieving it, Thomas Donahue (Secretary-Treasurer, AFL-CIO) noted that
There is every reason to believe, he asserted, that men and women of good will can design and implement tomorrow's technology in ways that advance the interests and needs of all stakeholders. Adding his welcome, Richard Cyert pointed out that the U.S. is now part of a global economy. No longer does this nation have (if indeed it ever had) a monopoly on industrial knowledge, knowledge which now moves very rapidly around the world. Productivity growth, which relies on a strong technological foundation, is essential to competitiveness:
.. we need to see the prospect of gain sharing in the application of that technology and in the enhancement of that productivity. Wrapped into all of those problems for us, 1 think, is the question of cooperation. Certainly none of the trade unionists at this table would dispute the validity of that cooperation, but (we are concerned] about cooperating in ways in which we do not lose our identity or lose our effective bargaining power because, until the millennium and until we all have the same concepts of gain sharing, workers are going to need an effective force to represent them.
A number of these were associated with the largescale use of nonmetallic composite materials, while others were responses to federal airworthiness and product safety directives. Boeing workers had expressed growing concern about apparently adverse reactions to some of these chemicals. McKean noted the importance for Boeing of worker safety and expressed a strong desire to learn from others in dealing with the health and safety implications of rapid technological change. John Jordan (Senior Vice President, Corporate Development and Human Resources, Bethlehem Steel Corporation) emphasized the importance of the role and philosophy of the chief executive of
ficer in establishing the tone for corporate labor relations: “... it makes all the difference in the world in a corporation in terms of how you get things done. .” Responding to a number of comments about the development of knowledge among workers and managers of “best practice" methods for managing the adoption of new technologies, Robert Zager noted that many of these practices are not new, but have been around for nearly a century-a fundamental issue, which received attention throughout the course of the day and raised questions as to why they have not been adopted more widely.
New Technology and the
A Paper Prepared by Paul Osterman
Sloan School of Management M.I.T.
technology. Much of the employment system surrounding the technology is therefore simply derivative of that technology. The only real challenge is to discover that optimum arrangement and move toward it as quickly as possible. Also implicit in this view is that the technology in some sense drives its users toward the optimum, and so over time if we observe firms employing the same technology, we will also observe very similar employment systems and productivity. What evidence is there of the variable impact of technology? Numerous observers have noted that similar or identical technologies are used in dramatically different ways in different settings. For example:
veryone knows that new technologies will reshape work. Everyone also knows that this reconfiguration will have deep impacts upon the distribution of workers across occupations and firms and upon the skills which employees will be expected to bring to work. The rub comes when we move beyond these easy generalizations. What will be the "job description" of the white collar or production worker in the 1990s? Will their work become more or less skilled, broader or narrower? How will the organizational transformations induced by information technology feed back upon careers? This paper will attempt to answer these questions, but we will not pretend that there is any single identifiable impact which flows automatically from the nature of the technology and which the discerning researcher can extract and identify. Instead our view is that the impact is contingent upon decisions made by individuals and institutions. In some circumstances, technology will lead to one set of outcomes while in other settings the same technology will have quite different effects. We will also argue that efforts to implement new technologies in a manner which combines high productivity with broad skilled jobs and an acceptable degree of employment security will require innovation in labormanagement relations. Our perspective stands in contrast to the more traditional argument. In this view—which has long dominated both scholarly and popular thinkingthere is a single optimum way to configure a given
In recent studies of automobile production, researchers have been able to hold the level of technology constant and examine several measures of productivity. High technology strategies in the absence of human resource innovations do not achieve productivity gains. However, even modest investments in technology when combined with flexible labor practices lead to significant productivity improvements (Krafcik, 1988).
Another striking example is provided by a (1986). He compared similar FMS systems in firms in the United States and in Japan. In Japan, the time it took to develop the system
was half that of the United States, the number of different parts the Japanese set-ups produced was much higher, the labor requirements lower, the fraction of the day the machines ran was higher, and total output was higher. Jaikumar attributed these differences to the skill level of the labor force and the amount of training provided by firms, i.e., to human resource policy.
These, of course, are just examples, and we need more evidence before the point is established (and additional material provided throughout the paper). It is also important to remember that the point can be exaggerated: The nature of a technology does set limits or establish patterns. For example, Piore and Sabel (1984) distinguish between flexible and mass production technologies and argue that the possibilities of each are quite different with respect to a range of issues, including shopfloor relations and macro-economic policy. This point is similar to the long-standing discussion in the sociology literature concerning the relationship between technology and organizational form (Thompson, 1967; Woodward, 1965). Nonetheless, it is apparent that one cannot understand outcomes by reference to technology alone; additional considerations must be brought to bear. Because of this variation, the most useful role for a paper like this is to identify the range of the possible outcomes and attempt to explain what factors determine which path the impact will follow. In the first half of the paper, we examine the descriptive evidence and try to summarize the facts regarding how new information technologies alter job design. In the second half, we consider what lies behind the considerable variation in outcomes. We close with some questions which policy makers might consider.
be supplemented by a desire to limit employee knowledge of the production process and hence concentrate power in management hands. Although few people would identify themselves with as crude a view as the foregoing, it seems hard to deny that these attitudes underlie much of the American production system. In both union and non-union settings, narrow job categories, strict work rules, lack of sharing of information concerning new technology, and the general absence of involvement of workers in planning production all flow from a Tayloristic approach to organizing work. Implicit in this line of thought is the assumption that new technologies, by replacing human skill and judgment, deskill the labor force. Such deskilling is seen as technically efficient and as a nearly inevitable consequence of the technology. A good illustration of the kind of innovation which (seemingly) fits this logic is the advent of electronic switching in the telephone industry. Prior to the introduction of electronic digital switching, the repair of mechanical switching equipment was a highly skilled craft job in which an individual developed a substantial “feel” for the equipment. Wires would break, circuits would fail, foreign matter would get into the equipment, and the craftsperson's job was to find and fix the fault. By contrast, the new system is essentially a computer. The rate of mechanical failure is low, and repairs are more straightforward in that modular boards can be removed and inserted. Software failures are more likely to be the province of programmers than craftpeople. All of this is not to argue that the new repair jobs are not skilled. However, the nature of the skill has changed considerably, and it is arguably the case that from the former craft perspective the job has been deskilled. It is possible to argue that the move to electronic switching and the shift in job boundaries which ensued were due to the characteristics of the technology itself, in that the substitution of computers, or “boxes” as they are derisively termed by telephone people, inevitably implied a loss of skill on the part of the craftsmen. For this reason, the introduction of electronic switching can stand as an illustration of the “technological imperative” perspective (although even this proposition is open to some question, since it begs the issue of whether the old craftsmen were taught the new programming skills). Whereas the Tayloristic perspective held sway for many years, recently the burden of opinion has swung against it. Two points are notable about the shift. First, much of the impetus has come from observations of how work is organized in other countries, not just Japan but also European nations such as Germany and Sweden. In each of these nations, high quality, efficiency, and cost advantages
The Traditional Debate About Job Design Do new technologies lead to more narrow and deskilled work or to broader more complex jobs? Which course is the most desirable from the (differing) perspectives of the several interested parties? These two questions, the first empirical and the second normative, have dominated debate on this topic. Followers of Frederick Taylor believe that there is a single best way to accomplish any task. This “best way" can be discovered by management experts and then conveyed to the labor force. The key assumption is that the labor force has nothing to contribute to the production process. In effect, employees are simply appendages to machines, and therefore the most cost-effective approach is to drive skill out of work and operate with as lowcost a labor force as possible. This motivation may Page 19Page 20
between labor and management has indeed become outmoded as a result of technological and other sources of change, U.S. labor laws, drafted on the assumption that this relationship must be confrontational, are overdue for revision:
work force would require new thinking. Although workers with strong basic skills should not face serious difficulties in obtaining quality jobs, many of the individuals entering the U.S. labor force during the next decade will lack the foundation of basic skills on which employers can develop new jobrelated skills. The less-educated suffer higher rates of unemployment, are more apt to fall into poverty, and have substantially less social mobility and employment security:
As a society we will have to do better in our efforts to make adequate educational achievement a reality for all Americans. It makes no economic sense to spurn technological change and opt for low value-added work to meet the needs of the disadvantaged. It is far, far better to embark on the difficult but more rewarding venture of eliminating the causes of poor educational performance.
Our labor laws are a product of a former age, an outdated work construct, and a work force holding values and seeking goals difterent in many ways from those of today. These laws are based on the outmoded assumption that the parties have incompatible objectives and that they are condemned to a nover-ending adversarial relationship. Such a relationship is inconsistent with the nation's nood for competitive enterprise and its concurrent need for a more committed work force actively sharing in the process of corporate governance.
A final policy issue that stems from demographic and political factors and interacts with changing technology is national immigration policy. Should the legal immigrant mix be changed to favor more highly educated and skilled people, as is proposed in recently introduced federal legislation? Lovell noted that this issue has traditionally been a matter of conflict between business and labor. Lovell concluded his assessment by:
New technologies have both positive and negative implications for workplace health and safety. Although the workplace is a safer environment than it was earlier in this century, Lovell noted the presence of different and potentially serious health effects produced by new technologies. Perhaps of greatest concern are the uncertain, unknown, and often latent risks associated with chemical, biological, and electronic technologies. Unfortunately, few if any of these risks can be prevented by wearing hard hats and safety shoes. Public policies addressing these hazards, including the regulation of workplace safety and health, will require attention in the near future. Another area in which technological change is affecting the substance of policy debates, Lovell noted, is labor law. If the adversarial relationship
We have an interesting day in store for us tomorrow. The interplay of new technologies with labor and human resource policies is best contemplated in the totality of developIng workplace concerns. I look forward to joining all of you tomorrow as we begin our discussion of these most challenging issues.
t the opening of the day-long discussion, participants were welcomed by cochairmen
John Stepp and Richard Cyert. Stepp re
in management and labor and from academic life. . . . We can look at approaches that appear to assist in the cooperative adoption of new technologies, and . .. at the issues that impede or support the implementation of these approaches.
called the 1966 report of the Presidential Commission on Technology, Automation, and Economic Progress. He quoted with approval the report's statement that "technology is not a vessel into which people are to be poured and to which they must be molded,” and expressed the view that
... it is technology that must be molded to mesh with the capabilities, needs, and preferences of workers who must operate the machines of production. What we must strive for in the years ahead is a new means of reconciling the aims and purposes of labor and management in an arrangement whereby they can work together in fashioning new technologies that are as socially constructive as they are economically efficient.
A number of participants acknowledged the importance of establishing mutual trust between workers and management and the need to share the gains resulting from new technologies to maintain the international competitiveness of the American economy. Participants also expressed considerable interest in learning from the experiences of other companies and other unions. Discussing the importance of more rapid productivity growth and technology's role in achieving it, Thomas Donahue (Secretary-Treasurer, AFL-CIO) noted that
There is every reason to believe, he asserted, that men and women of good will can design and implement tomorrow's technology in ways that advance the interests and needs of all stakeholders. Adding his welcome, Richard Cyert pointed out that the U.S. is now part of a global economy. No longer does this nation have (if indeed it ever had) a monopoly on industrial knowledge, knowledge which now moves very rapidly around the world. Productivity growth, which relies on a strong technological foundation, is essential to competitiveness:
.. we need to see the prospect of gain sharing in the application of that technology and in the enhancement of that productivity. Wrapped into all of those problems for us, 1 think, is the question of cooperation. Certainly none of the trade unionists at this table would dispute the validity of that cooperation, but (we are concerned] about cooperating in ways in which we do not lose our identity or lose our effective bargaining power because, until the millennium and until we all have the same concepts of gain sharing, workers are going to need an effective force to represent them.
A number of these were associated with the largescale use of nonmetallic composite materials, while others were responses to federal airworthiness and product safety directives. Boeing workers had expressed growing concern about apparently adverse reactions to some of these chemicals. McKean noted the importance for Boeing of worker safety and expressed a strong desire to learn from others in dealing with the health and safety implications of rapid technological change. John Jordan (Senior Vice President, Corporate Development and Human Resources, Bethlehem Steel Corporation) emphasized the importance of the role and philosophy of the chief executive of
ficer in establishing the tone for corporate labor relations: “... it makes all the difference in the world in a corporation in terms of how you get things done. .” Responding to a number of comments about the development of knowledge among workers and managers of “best practice" methods for managing the adoption of new technologies, Robert Zager noted that many of these practices are not new, but have been around for nearly a century-a fundamental issue, which received attention throughout the course of the day and raised questions as to why they have not been adopted more widely.
New Technology and the
A Paper Prepared by Paul Osterman
Sloan School of Management M.I.T.
technology. Much of the employment system surrounding the technology is therefore simply derivative of that technology. The only real challenge is to discover that optimum arrangement and move toward it as quickly as possible. Also implicit in this view is that the technology in some sense drives its users toward the optimum, and so over time if we observe firms employing the same technology, we will also observe very similar employment systems and productivity. What evidence is there of the variable impact of technology? Numerous observers have noted that similar or identical technologies are used in dramatically different ways in different settings. For example:
veryone knows that new technologies will reshape work. Everyone also knows that this reconfiguration will have deep impacts upon the distribution of workers across occupations and firms and upon the skills which employees will be expected to bring to work. The rub comes when we move beyond these easy generalizations. What will be the "job description" of the white collar or production worker in the 1990s? Will their work become more or less skilled, broader or narrower? How will the organizational transformations induced by information technology feed back upon careers? This paper will attempt to answer these questions, but we will not pretend that there is any single identifiable impact which flows automatically from the nature of the technology and which the discerning researcher can extract and identify. Instead our view is that the impact is contingent upon decisions made by individuals and institutions. In some circumstances, technology will lead to one set of outcomes while in other settings the same technology will have quite different effects. We will also argue that efforts to implement new technologies in a manner which combines high productivity with broad skilled jobs and an acceptable degree of employment security will require innovation in labormanagement relations. Our perspective stands in contrast to the more traditional argument. In this view—which has long dominated both scholarly and popular thinkingthere is a single optimum way to configure a given
In recent studies of automobile production, researchers have been able to hold the level of technology constant and examine several measures of productivity. High technology strategies in the absence of human resource innovations do not achieve productivity gains. However, even modest investments in technology when combined with flexible labor practices lead to significant productivity improvements (Krafcik, 1988).
Another striking example is provided by a (1986). He compared similar FMS systems in firms in the United States and in Japan. In Japan, the time it took to develop the system
was half that of the United States, the number of different parts the Japanese set-ups produced was much higher, the labor requirements lower, the fraction of the day the machines ran was higher, and total output was higher. Jaikumar attributed these differences to the skill level of the labor force and the amount of training provided by firms, i.e., to human resource policy.
These, of course, are just examples, and we need more evidence before the point is established (and additional material provided throughout the paper). It is also important to remember that the point can be exaggerated: The nature of a technology does set limits or establish patterns. For example, Piore and Sabel (1984) distinguish between flexible and mass production technologies and argue that the possibilities of each are quite different with respect to a range of issues, including shopfloor relations and macro-economic policy. This point is similar to the long-standing discussion in the sociology literature concerning the relationship between technology and organizational form (Thompson, 1967; Woodward, 1965). Nonetheless, it is apparent that one cannot understand outcomes by reference to technology alone; additional considerations must be brought to bear. Because of this variation, the most useful role for a paper like this is to identify the range of the possible outcomes and attempt to explain what factors determine which path the impact will follow. In the first half of the paper, we examine the descriptive evidence and try to summarize the facts regarding how new information technologies alter job design. In the second half, we consider what lies behind the considerable variation in outcomes. We close with some questions which policy makers might consider.
be supplemented by a desire to limit employee knowledge of the production process and hence concentrate power in management hands. Although few people would identify themselves with as crude a view as the foregoing, it seems hard to deny that these attitudes underlie much of the American production system. In both union and non-union settings, narrow job categories, strict work rules, lack of sharing of information concerning new technology, and the general absence of involvement of workers in planning production all flow from a Tayloristic approach to organizing work. Implicit in this line of thought is the assumption that new technologies, by replacing human skill and judgment, deskill the labor force. Such deskilling is seen as technically efficient and as a nearly inevitable consequence of the technology. A good illustration of the kind of innovation which (seemingly) fits this logic is the advent of electronic switching in the telephone industry. Prior to the introduction of electronic digital switching, the repair of mechanical switching equipment was a highly skilled craft job in which an individual developed a substantial “feel” for the equipment. Wires would break, circuits would fail, foreign matter would get into the equipment, and the craftsperson's job was to find and fix the fault. By contrast, the new system is essentially a computer. The rate of mechanical failure is low, and repairs are more straightforward in that modular boards can be removed and inserted. Software failures are more likely to be the province of programmers than craftpeople. All of this is not to argue that the new repair jobs are not skilled. However, the nature of the skill has changed considerably, and it is arguably the case that from the former craft perspective the job has been deskilled. It is possible to argue that the move to electronic switching and the shift in job boundaries which ensued were due to the characteristics of the technology itself, in that the substitution of computers, or “boxes” as they are derisively termed by telephone people, inevitably implied a loss of skill on the part of the craftsmen. For this reason, the introduction of electronic switching can stand as an illustration of the “technological imperative” perspective (although even this proposition is open to some question, since it begs the issue of whether the old craftsmen were taught the new programming skills). Whereas the Tayloristic perspective held sway for many years, recently the burden of opinion has swung against it. Two points are notable about the shift. First, much of the impetus has come from observations of how work is organized in other countries, not just Japan but also European nations such as Germany and Sweden. In each of these nations, high quality, efficiency, and cost advantages
The Traditional Debate About Job Design Do new technologies lead to more narrow and deskilled work or to broader more complex jobs? Which course is the most desirable from the (differing) perspectives of the several interested parties? These two questions, the first empirical and the second normative, have dominated debate on this topic. Followers of Frederick Taylor believe that there is a single best way to accomplish any task. This “best way" can be discovered by management experts and then conveyed to the labor force. The key assumption is that the labor force has nothing to contribute to the production process. In effect, employees are simply appendages to machines, and therefore the most cost-effective approach is to drive skill out of work and operate with as lowcost a labor force as possible. This motivation may Page 21Page 22
between labor and management has indeed become outmoded as a result of technological and other sources of change, U.S. labor laws, drafted on the assumption that this relationship must be confrontational, are overdue for revision:
work force would require new thinking. Although workers with strong basic skills should not face serious difficulties in obtaining quality jobs, many of the individuals entering the U.S. labor force during the next decade will lack the foundation of basic skills on which employers can develop new jobrelated skills. The less-educated suffer higher rates of unemployment, are more apt to fall into poverty, and have substantially less social mobility and employment security:
As a society we will have to do better in our efforts to make adequate educational achievement a reality for all Americans. It makes no economic sense to spurn technological change and opt for low value-added work to meet the needs of the disadvantaged. It is far, far better to embark on the difficult but more rewarding venture of eliminating the causes of poor educational performance.
Our labor laws are a product of a former age, an outdated work construct, and a work force holding values and seeking goals difterent in many ways from those of today. These laws are based on the outmoded assumption that the parties have incompatible objectives and that they are condemned to a nover-ending adversarial relationship. Such a relationship is inconsistent with the nation's nood for competitive enterprise and its concurrent need for a more committed work force actively sharing in the process of corporate governance.
A final policy issue that stems from demographic and political factors and interacts with changing technology is national immigration policy. Should the legal immigrant mix be changed to favor more highly educated and skilled people, as is proposed in recently introduced federal legislation? Lovell noted that this issue has traditionally been a matter of conflict between business and labor. Lovell concluded his assessment by:
New technologies have both positive and negative implications for workplace health and safety. Although the workplace is a safer environment than it was earlier in this century, Lovell noted the presence of different and potentially serious health effects produced by new technologies. Perhaps of greatest concern are the uncertain, unknown, and often latent risks associated with chemical, biological, and electronic technologies. Unfortunately, few if any of these risks can be prevented by wearing hard hats and safety shoes. Public policies addressing these hazards, including the regulation of workplace safety and health, will require attention in the near future. Another area in which technological change is affecting the substance of policy debates, Lovell noted, is labor law. If the adversarial relationship
We have an interesting day in store for us tomorrow. The interplay of new technologies with labor and human resource policies is best contemplated in the totality of developIng workplace concerns. I look forward to joining all of you tomorrow as we begin our discussion of these most challenging issues.
t the opening of the day-long discussion, participants were welcomed by cochairmen
John Stepp and Richard Cyert. Stepp re
in management and labor and from academic life. . . . We can look at approaches that appear to assist in the cooperative adoption of new technologies, and . .. at the issues that impede or support the implementation of these approaches.
called the 1966 report of the Presidential Commission on Technology, Automation, and Economic Progress. He quoted with approval the report's statement that "technology is not a vessel into which people are to be poured and to which they must be molded,” and expressed the view that
... it is technology that must be molded to mesh with the capabilities, needs, and preferences of workers who must operate the machines of production. What we must strive for in the years ahead is a new means of reconciling the aims and purposes of labor and management in an arrangement whereby they can work together in fashioning new technologies that are as socially constructive as they are economically efficient.
A number of participants acknowledged the importance of establishing mutual trust between workers and management and the need to share the gains resulting from new technologies to maintain the international competitiveness of the American economy. Participants also expressed considerable interest in learning from the experiences of other companies and other unions. Discussing the importance of more rapid productivity growth and technology's role in achieving it, Thomas Donahue (Secretary-Treasurer, AFL-CIO) noted that
There is every reason to believe, he asserted, that men and women of good will can design and implement tomorrow's technology in ways that advance the interests and needs of all stakeholders. Adding his welcome, Richard Cyert pointed out that the U.S. is now part of a global economy. No longer does this nation have (if indeed it ever had) a monopoly on industrial knowledge, knowledge which now moves very rapidly around the world. Productivity growth, which relies on a strong technological foundation, is essential to competitiveness:
.. we need to see the prospect of gain sharing in the application of that technology and in the enhancement of that productivity. Wrapped into all of those problems for us, 1 think, is the question of cooperation. Certainly none of the trade unionists at this table would dispute the validity of that cooperation, but (we are concerned] about cooperating in ways in which we do not lose our identity or lose our effective bargaining power because, until the millennium and until we all have the same concepts of gain sharing, workers are going to need an effective force to represent them.
A number of these were associated with the largescale use of nonmetallic composite materials, while others were responses to federal airworthiness and product safety directives. Boeing workers had expressed growing concern about apparently adverse reactions to some of these chemicals. McKean noted the importance for Boeing of worker safety and expressed a strong desire to learn from others in dealing with the health and safety implications of rapid technological change. John Jordan (Senior Vice President, Corporate Development and Human Resources, Bethlehem Steel Corporation) emphasized the importance of the role and philosophy of the chief executive of
ficer in establishing the tone for corporate labor relations: “... it makes all the difference in the world in a corporation in terms of how you get things done. .” Responding to a number of comments about the development of knowledge among workers and managers of “best practice" methods for managing the adoption of new technologies, Robert Zager noted that many of these practices are not new, but have been around for nearly a century-a fundamental issue, which received attention throughout the course of the day and raised questions as to why they have not been adopted more widely.
New Technology and the
A Paper Prepared by Paul Osterman
Sloan School of Management M.I.T.
technology. Much of the employment system surrounding the technology is therefore simply derivative of that technology. The only real challenge is to discover that optimum arrangement and move toward it as quickly as possible. Also implicit in this view is that the technology in some sense drives its users toward the optimum, and so over time if we observe firms employing the same technology, we will also observe very similar employment systems and productivity. What evidence is there of the variable impact of technology? Numerous observers have noted that similar or identical technologies are used in dramatically different ways in different settings. For example:
veryone knows that new technologies will reshape work. Everyone also knows that this reconfiguration will have deep impacts upon the distribution of workers across occupations and firms and upon the skills which employees will be expected to bring to work. The rub comes when we move beyond these easy generalizations. What will be the "job description" of the white collar or production worker in the 1990s? Will their work become more or less skilled, broader or narrower? How will the organizational transformations induced by information technology feed back upon careers? This paper will attempt to answer these questions, but we will not pretend that there is any single identifiable impact which flows automatically from the nature of the technology and which the discerning researcher can extract and identify. Instead our view is that the impact is contingent upon decisions made by individuals and institutions. In some circumstances, technology will lead to one set of outcomes while in other settings the same technology will have quite different effects. We will also argue that efforts to implement new technologies in a manner which combines high productivity with broad skilled jobs and an acceptable degree of employment security will require innovation in labormanagement relations. Our perspective stands in contrast to the more traditional argument. In this view—which has long dominated both scholarly and popular thinkingthere is a single optimum way to configure a given
In recent studies of automobile production, researchers have been able to hold the level of technology constant and examine several measures of productivity. High technology strategies in the absence of human resource innovations do not achieve productivity gains. However, even modest investments in technology when combined with flexible labor practices lead to significant productivity improvements (Krafcik, 1988).
Another striking example is provided by a (1986). He compared similar FMS systems in firms in the United States and in Japan. In Japan, the time it took to develop the system
was half that of the United States, the number of different parts the Japanese set-ups produced was much higher, the labor requirements lower, the fraction of the day the machines ran was higher, and total output was higher. Jaikumar attributed these differences to the skill level of the labor force and the amount of training provided by firms, i.e., to human resource policy.
These, of course, are just examples, and we need more evidence before the point is established (and additional material provided throughout the paper). It is also important to remember that the point can be exaggerated: The nature of a technology does set limits or establish patterns. For example, Piore and Sabel (1984) distinguish between flexible and mass production technologies and argue that the possibilities of each are quite different with respect to a range of issues, including shopfloor relations and macro-economic policy. This point is similar to the long-standing discussion in the sociology literature concerning the relationship between technology and organizational form (Thompson, 1967; Woodward, 1965). Nonetheless, it is apparent that one cannot understand outcomes by reference to technology alone; additional considerations must be brought to bear. Because of this variation, the most useful role for a paper like this is to identify the range of the possible outcomes and attempt to explain what factors determine which path the impact will follow. In the first half of the paper, we examine the descriptive evidence and try to summarize the facts regarding how new information technologies alter job design. In the second half, we consider what lies behind the considerable variation in outcomes. We close with some questions which policy makers might consider.
be supplemented by a desire to limit employee knowledge of the production process and hence concentrate power in management hands. Although few people would identify themselves with as crude a view as the foregoing, it seems hard to deny that these attitudes underlie much of the American production system. In both union and non-union settings, narrow job categories, strict work rules, lack of sharing of information concerning new technology, and the general absence of involvement of workers in planning production all flow from a Tayloristic approach to organizing work. Implicit in this line of thought is the assumption that new technologies, by replacing human skill and judgment, deskill the labor force. Such deskilling is seen as technically efficient and as a nearly inevitable consequence of the technology. A good illustration of the kind of innovation which (seemingly) fits this logic is the advent of electronic switching in the telephone industry. Prior to the introduction of electronic digital switching, the repair of mechanical switching equipment was a highly skilled craft job in which an individual developed a substantial “feel” for the equipment. Wires would break, circuits would fail, foreign matter would get into the equipment, and the craftsperson's job was to find and fix the fault. By contrast, the new system is essentially a computer. The rate of mechanical failure is low, and repairs are more straightforward in that modular boards can be removed and inserted. Software failures are more likely to be the province of programmers than craftpeople. All of this is not to argue that the new repair jobs are not skilled. However, the nature of the skill has changed considerably, and it is arguably the case that from the former craft perspective the job has been deskilled. It is possible to argue that the move to electronic switching and the shift in job boundaries which ensued were due to the characteristics of the technology itself, in that the substitution of computers, or “boxes” as they are derisively termed by telephone people, inevitably implied a loss of skill on the part of the craftsmen. For this reason, the introduction of electronic switching can stand as an illustration of the “technological imperative” perspective (although even this proposition is open to some question, since it begs the issue of whether the old craftsmen were taught the new programming skills). Whereas the Tayloristic perspective held sway for many years, recently the burden of opinion has swung against it. Two points are notable about the shift. First, much of the impetus has come from observations of how work is organized in other countries, not just Japan but also European nations such as Germany and Sweden. In each of these nations, high quality, efficiency, and cost advantages
The Traditional Debate About Job Design Do new technologies lead to more narrow and deskilled work or to broader more complex jobs? Which course is the most desirable from the (differing) perspectives of the several interested parties? These two questions, the first empirical and the second normative, have dominated debate on this topic. Followers of Frederick Taylor believe that there is a single best way to accomplish any task. This “best way" can be discovered by management experts and then conveyed to the labor force. The key assumption is that the labor force has nothing to contribute to the production process. In effect, employees are simply appendages to machines, and therefore the most cost-effective approach is to drive skill out of work and operate with as lowcost a labor force as possible. This motivation may Page 23Page 24
between labor and management has indeed become outmoded as a result of technological and other sources of change, U.S. labor laws, drafted on the assumption that this relationship must be confrontational, are overdue for revision:
work force would require new thinking. Although workers with strong basic skills should not face serious difficulties in obtaining quality jobs, many of the individuals entering the U.S. labor force during the next decade will lack the foundation of basic skills on which employers can develop new jobrelated skills. The less-educated suffer higher rates of unemployment, are more apt to fall into poverty, and have substantially less social mobility and employment security:
As a society we will have to do better in our efforts to make adequate educational achievement a reality for all Americans. It makes no economic sense to spurn technological change and opt for low value-added work to meet the needs of the disadvantaged. It is far, far better to embark on the difficult but more rewarding venture of eliminating the causes of poor educational performance.
Our labor laws are a product of a former age, an outdated work construct, and a work force holding values and seeking goals difterent in many ways from those of today. These laws are based on the outmoded assumption that the parties have incompatible objectives and that they are condemned to a nover-ending adversarial relationship. Such a relationship is inconsistent with the nation's nood for competitive enterprise and its concurrent need for a more committed work force actively sharing in the process of corporate governance.
A final policy issue that stems from demographic and political factors and interacts with changing technology is national immigration policy. Should the legal immigrant mix be changed to favor more highly educated and skilled people, as is proposed in recently introduced federal legislation? Lovell noted that this issue has traditionally been a matter of conflict between business and labor. Lovell concluded his assessment by:
New technologies have both positive and negative implications for workplace health and safety. Although the workplace is a safer environment than it was earlier in this century, Lovell noted the presence of different and potentially serious health effects produced by new technologies. Perhaps of greatest concern are the uncertain, unknown, and often latent risks associated with chemical, biological, and electronic technologies. Unfortunately, few if any of these risks can be prevented by wearing hard hats and safety shoes. Public policies addressing these hazards, including the regulation of workplace safety and health, will require attention in the near future. Another area in which technological change is affecting the substance of policy debates, Lovell noted, is labor law. If the adversarial relationship
We have an interesting day in store for us tomorrow. The interplay of new technologies with labor and human resource policies is best contemplated in the totality of developIng workplace concerns. I look forward to joining all of you tomorrow as we begin our discussion of these most challenging issues.
t the opening of the day-long discussion, participants were welcomed by cochairmen
John Stepp and Richard Cyert. Stepp re
in management and labor and from academic life. . . . We can look at approaches that appear to assist in the cooperative adoption of new technologies, and . .. at the issues that impede or support the implementation of these approaches.
called the 1966 report of the Presidential Commission on Technology, Automation, and Economic Progress. He quoted with approval the report's statement that "technology is not a vessel into which people are to be poured and to which they must be molded,” and expressed the view that
... it is technology that must be molded to mesh with the capabilities, needs, and preferences of workers who must operate the machines of production. What we must strive for in the years ahead is a new means of reconciling the aims and purposes of labor and management in an arrangement whereby they can work together in fashioning new technologies that are as socially constructive as they are economically efficient.
A number of participants acknowledged the importance of establishing mutual trust between workers and management and the need to share the gains resulting from new technologies to maintain the international competitiveness of the American economy. Participants also expressed considerable interest in learning from the experiences of other companies and other unions. Discussing the importance of more rapid productivity growth and technology's role in achieving it, Thomas Donahue (Secretary-Treasurer, AFL-CIO) noted that
There is every reason to believe, he asserted, that men and women of good will can design and implement tomorrow's technology in ways that advance the interests and needs of all stakeholders. Adding his welcome, Richard Cyert pointed out that the U.S. is now part of a global economy. No longer does this nation have (if indeed it ever had) a monopoly on industrial knowledge, knowledge which now moves very rapidly around the world. Productivity growth, which relies on a strong technological foundation, is essential to competitiveness:
.. we need to see the prospect of gain sharing in the application of that technology and in the enhancement of that productivity. Wrapped into all of those problems for us, 1 think, is the question of cooperation. Certainly none of the trade unionists at this table would dispute the validity of that cooperation, but (we are concerned] about cooperating in ways in which we do not lose our identity or lose our effective bargaining power because, until the millennium and until we all have the same concepts of gain sharing, workers are going to need an effective force to represent them.
A number of these were associated with the largescale use of nonmetallic composite materials, while others were responses to federal airworthiness and product safety directives. Boeing workers had expressed growing concern about apparently adverse reactions to some of these chemicals. McKean noted the importance for Boeing of worker safety and expressed a strong desire to learn from others in dealing with the health and safety implications of rapid technological change. John Jordan (Senior Vice President, Corporate Development and Human Resources, Bethlehem Steel Corporation) emphasized the importance of the role and philosophy of the chief executive of
ficer in establishing the tone for corporate labor relations: “... it makes all the difference in the world in a corporation in terms of how you get things done. .” Responding to a number of comments about the development of knowledge among workers and managers of “best practice" methods for managing the adoption of new technologies, Robert Zager noted that many of these practices are not new, but have been around for nearly a century-a fundamental issue, which received attention throughout the course of the day and raised questions as to why they have not been adopted more widely.
New Technology and the
A Paper Prepared by Paul Osterman
Sloan School of Management M.I.T.
technology. Much of the employment system surrounding the technology is therefore simply derivative of that technology. The only real challenge is to discover that optimum arrangement and move toward it as quickly as possible. Also implicit in this view is that the technology in some sense drives its users toward the optimum, and so over time if we observe firms employing the same technology, we will also observe very similar employment systems and productivity. What evidence is there of the variable impact of technology? Numerous observers have noted that similar or identical technologies are used in dramatically different ways in different settings. For example:
veryone knows that new technologies will reshape work. Everyone also knows that this reconfiguration will have deep impacts upon the distribution of workers across occupations and firms and upon the skills which employees will be expected to bring to work. The rub comes when we move beyond these easy generalizations. What will be the "job description" of the white collar or production worker in the 1990s? Will their work become more or less skilled, broader or narrower? How will the organizational transformations induced by information technology feed back upon careers? This paper will attempt to answer these questions, but we will not pretend that there is any single identifiable impact which flows automatically from the nature of the technology and which the discerning researcher can extract and identify. Instead our view is that the impact is contingent upon decisions made by individuals and institutions. In some circumstances, technology will lead to one set of outcomes while in other settings the same technology will have quite different effects. We will also argue that efforts to implement new technologies in a manner which combines high productivity with broad skilled jobs and an acceptable degree of employment security will require innovation in labormanagement relations. Our perspective stands in contrast to the more traditional argument. In this view—which has long dominated both scholarly and popular thinkingthere is a single optimum way to configure a given
In recent studies of automobile production, researchers have been able to hold the level of technology constant and examine several measures of productivity. High technology strategies in the absence of human resource innovations do not achieve productivity gains. However, even modest investments in technology when combined with flexible labor practices lead to significant productivity improvements (Krafcik, 1988).
Another striking example is provided by a (1986). He compared similar FMS systems in firms in the United States and in Japan. In Japan, the time it took to develop the system
was half that of the United States, the number of different parts the Japanese set-ups produced was much higher, the labor requirements lower, the fraction of the day the machines ran was higher, and total output was higher. Jaikumar attributed these differences to the skill level of the labor force and the amount of training provided by firms, i.e., to human resource policy.
These, of course, are just examples, and we need more evidence before the point is established (and additional material provided throughout the paper). It is also important to remember that the point can be exaggerated: The nature of a technology does set limits or establish patterns. For example, Piore and Sabel (1984) distinguish between flexible and mass production technologies and argue that the possibilities of each are quite different with respect to a range of issues, including shopfloor relations and macro-economic policy. This point is similar to the long-standing discussion in the sociology literature concerning the relationship between technology and organizational form (Thompson, 1967; Woodward, 1965). Nonetheless, it is apparent that one cannot understand outcomes by reference to technology alone; additional considerations must be brought to bear. Because of this variation, the most useful role for a paper like this is to identify the range of the possible outcomes and attempt to explain what factors determine which path the impact will follow. In the first half of the paper, we examine the descriptive evidence and try to summarize the facts regarding how new information technologies alter job design. In the second half, we consider what lies behind the considerable variation in outcomes. We close with some questions which policy makers might consider.
be supplemented by a desire to limit employee knowledge of the production process and hence concentrate power in management hands. Although few people would identify themselves with as crude a view as the foregoing, it seems hard to deny that these attitudes underlie much of the American production system. In both union and non-union settings, narrow job categories, strict work rules, lack of sharing of information concerning new technology, and the general absence of involvement of workers in planning production all flow from a Tayloristic approach to organizing work. Implicit in this line of thought is the assumption that new technologies, by replacing human skill and judgment, deskill the labor force. Such deskilling is seen as technically efficient and as a nearly inevitable consequence of the technology. A good illustration of the kind of innovation which (seemingly) fits this logic is the advent of electronic switching in the telephone industry. Prior to the introduction of electronic digital switching, the repair of mechanical switching equipment was a highly skilled craft job in which an individual developed a substantial “feel” for the equipment. Wires would break, circuits would fail, foreign matter would get into the equipment, and the craftsperson's job was to find and fix the fault. By contrast, the new system is essentially a computer. The rate of mechanical failure is low, and repairs are more straightforward in that modular boards can be removed and inserted. Software failures are more likely to be the province of programmers than craftpeople. All of this is not to argue that the new repair jobs are not skilled. However, the nature of the skill has changed considerably, and it is arguably the case that from the former craft perspective the job has been deskilled. It is possible to argue that the move to electronic switching and the shift in job boundaries which ensued were due to the characteristics of the technology itself, in that the substitution of computers, or “boxes” as they are derisively termed by telephone people, inevitably implied a loss of skill on the part of the craftsmen. For this reason, the introduction of electronic switching can stand as an illustration of the “technological imperative” perspective (although even this proposition is open to some question, since it begs the issue of whether the old craftsmen were taught the new programming skills). Whereas the Tayloristic perspective held sway for many years, recently the burden of opinion has swung against it. Two points are notable about the shift. First, much of the impetus has come from observations of how work is organized in other countries, not just Japan but also European nations such as Germany and Sweden. In each of these nations, high quality, efficiency, and cost advantages
The Traditional Debate About Job Design Do new technologies lead to more narrow and deskilled work or to broader more complex jobs? Which course is the most desirable from the (differing) perspectives of the several interested parties? These two questions, the first empirical and the second normative, have dominated debate on this topic. Followers of Frederick Taylor believe that there is a single best way to accomplish any task. This “best way" can be discovered by management experts and then conveyed to the labor force. The key assumption is that the labor force has nothing to contribute to the production process. In effect, employees are simply appendages to machines, and therefore the most cost-effective approach is to drive skill out of work and operate with as lowcost a labor force as possible. This motivation may Page 25Page 26
between labor and management has indeed become outmoded as a result of technological and other sources of change, U.S. labor laws, drafted on the assumption that this relationship must be confrontational, are overdue for revision:
work force would require new thinking. Although workers with strong basic skills should not face serious difficulties in obtaining quality jobs, many of the individuals entering the U.S. labor force during the next decade will lack the foundation of basic skills on which employers can develop new jobrelated skills. The less-educated suffer higher rates of unemployment, are more apt to fall into poverty, and have substantially less social mobility and employment security:
As a society we will have to do better in our efforts to make adequate educational achievement a reality for all Americans. It makes no economic sense to spurn technological change and opt for low value-added work to meet the needs of the disadvantaged. It is far, far better to embark on the difficult but more rewarding venture of eliminating the causes of poor educational performance.
Our labor laws are a product of a former age, an outdated work construct, and a work force holding values and seeking goals difterent in many ways from those of today. These laws are based on the outmoded assumption that the parties have incompatible objectives and that they are condemned to a nover-ending adversarial relationship. Such a relationship is inconsistent with the nation's nood for competitive enterprise and its concurrent need for a more committed work force actively sharing in the process of corporate governance.
A final policy issue that stems from demographic and political factors and interacts with changing technology is national immigration policy. Should the legal immigrant mix be changed to favor more highly educated and skilled people, as is proposed in recently introduced federal legislation? Lovell noted that this issue has traditionally been a matter of conflict between business and labor. Lovell concluded his assessment by:
New technologies have both positive and negative implications for workplace health and safety. Although the workplace is a safer environment than it was earlier in this century, Lovell noted the presence of different and potentially serious health effects produced by new technologies. Perhaps of greatest concern are the uncertain, unknown, and often latent risks associated with chemical, biological, and electronic technologies. Unfortunately, few if any of these risks can be prevented by wearing hard hats and safety shoes. Public policies addressing these hazards, including the regulation of workplace safety and health, will require attention in the near future. Another area in which technological change is affecting the substance of policy debates, Lovell noted, is labor law. If the adversarial relationship
We have an interesting day in store for us tomorrow. The interplay of new technologies with labor and human resource policies is best contemplated in the totality of developIng workplace concerns. I look forward to joining all of you tomorrow as we begin our discussion of these most challenging issues.
t the opening of the day-long discussion, participants were welcomed by cochairmen
John Stepp and Richard Cyert. Stepp re
in management and labor and from academic life. . . . We can look at approaches that appear to assist in the cooperative adoption of new technologies, and . .. at the issues that impede or support the implementation of these approaches.
called the 1966 report of the Presidential Commission on Technology, Automation, and Economic Progress. He quoted with approval the report's statement that "technology is not a vessel into which people are to be poured and to which they must be molded,” and expressed the view that
... it is technology that must be molded to mesh with the capabilities, needs, and preferences of workers who must operate the machines of production. What we must strive for in the years ahead is a new means of reconciling the aims and purposes of labor and management in an arrangement whereby they can work together in fashioning new technologies that are as socially constructive as they are economically efficient.
A number of participants acknowledged the importance of establishing mutual trust between workers and management and the need to share the gains resulting from new technologies to maintain the international competitiveness of the American economy. Participants also expressed considerable interest in learning from the experiences of other companies and other unions. Discussing the importance of more rapid productivity growth and technology's role in achieving it, Thomas Donahue (Secretary-Treasurer, AFL-CIO) noted that
There is every reason to believe, he asserted, that men and women of good will can design and implement tomorrow's technology in ways that advance the interests and needs of all stakeholders. Adding his welcome, Richard Cyert pointed out that the U.S. is now part of a global economy. No longer does this nation have (if indeed it ever had) a monopoly on industrial knowledge, knowledge which now moves very rapidly around the world. Productivity growth, which relies on a strong technological foundation, is essential to competitiveness:
.. we need to see the prospect of gain sharing in the application of that technology and in the enhancement of that productivity. Wrapped into all of those problems for us, 1 think, is the question of cooperation. Certainly none of the trade unionists at this table would dispute the validity of that cooperation, but (we are concerned] about cooperating in ways in which we do not lose our identity or lose our effective bargaining power because, until the millennium and until we all have the same concepts of gain sharing, workers are going to need an effective force to represent them.
A number of these were associated with the largescale use of nonmetallic composite materials, while others were responses to federal airworthiness and product safety directives. Boeing workers had expressed growing concern about apparently adverse reactions to some of these chemicals. McKean noted the importance for Boeing of worker safety and expressed a strong desire to learn from others in dealing with the health and safety implications of rapid technological change. John Jordan (Senior Vice President, Corporate Development and Human Resources, Bethlehem Steel Corporation) emphasized the importance of the role and philosophy of the chief executive of
ficer in establishing the tone for corporate labor relations: “... it makes all the difference in the world in a corporation in terms of how you get things done. .” Responding to a number of comments about the development of knowledge among workers and managers of “best practice" methods for managing the adoption of new technologies, Robert Zager noted that many of these practices are not new, but have been around for nearly a century-a fundamental issue, which received attention throughout the course of the day and raised questions as to why they have not been adopted more widely.
New Technology and the
A Paper Prepared by Paul Osterman
Sloan School of Management M.I.T.
technology. Much of the employment system surrounding the technology is therefore simply derivative of that technology. The only real challenge is to discover that optimum arrangement and move toward it as quickly as possible. Also implicit in this view is that the technology in some sense drives its users toward the optimum, and so over time if we observe firms employing the same technology, we will also observe very similar employment systems and productivity. What evidence is there of the variable impact of technology? Numerous observers have noted that similar or identical technologies are used in dramatically different ways in different settings. For example:
veryone knows that new technologies will reshape work. Everyone also knows that this reconfiguration will have deep impacts upon the distribution of workers across occupations and firms and upon the skills which employees will be expected to bring to work. The rub comes when we move beyond these easy generalizations. What will be the "job description" of the white collar or production worker in the 1990s? Will their work become more or less skilled, broader or narrower? How will the organizational transformations induced by information technology feed back upon careers? This paper will attempt to answer these questions, but we will not pretend that there is any single identifiable impact which flows automatically from the nature of the technology and which the discerning researcher can extract and identify. Instead our view is that the impact is contingent upon decisions made by individuals and institutions. In some circumstances, technology will lead to one set of outcomes while in other settings the same technology will have quite different effects. We will also argue that efforts to implement new technologies in a manner which combines high productivity with broad skilled jobs and an acceptable degree of employment security will require innovation in labormanagement relations. Our perspective stands in contrast to the more traditional argument. In this view—which has long dominated both scholarly and popular thinkingthere is a single optimum way to configure a given
In recent studies of automobile production, researchers have been able to hold the level of technology constant and examine several measures of productivity. High technology strategies in the absence of human resource innovations do not achieve productivity gains. However, even modest investments in technology when combined with flexible labor practices lead to significant productivity improvements (Krafcik, 1988).
Another striking example is provided by a (1986). He compared similar FMS systems in firms in the United States and in Japan. In Japan, the time it took to develop the system
was half that of the United States, the number of different parts the Japanese set-ups produced was much higher, the labor requirements lower, the fraction of the day the machines ran was higher, and total output was higher. Jaikumar attributed these differences to the skill level of the labor force and the amount of training provided by firms, i.e., to human resource policy.
These, of course, are just examples, and we need more evidence before the point is established (and additional material provided throughout the paper). It is also important to remember that the point can be exaggerated: The nature of a technology does set limits or establish patterns. For example, Piore and Sabel (1984) distinguish between flexible and mass production technologies and argue that the possibilities of each are quite different with respect to a range of issues, including shopfloor relations and macro-economic policy. This point is similar to the long-standing discussion in the sociology literature concerning the relationship between technology and organizational form (Thompson, 1967; Woodward, 1965). Nonetheless, it is apparent that one cannot understand outcomes by reference to technology alone; additional considerations must be brought to bear. Because of this variation, the most useful role for a paper like this is to identify the range of the possible outcomes and attempt to explain what factors determine which path the impact will follow. In the first half of the paper, we examine the descriptive evidence and try to summarize the facts regarding how new information technologies alter job design. In the second half, we consider what lies behind the considerable variation in outcomes. We close with some questions which policy makers might consider.
be supplemented by a desire to limit employee knowledge of the production process and hence concentrate power in management hands. Although few people would identify themselves with as crude a view as the foregoing, it seems hard to deny that these attitudes underlie much of the American production system. In both union and non-union settings, narrow job categories, strict work rules, lack of sharing of information concerning new technology, and the general absence of involvement of workers in planning production all flow from a Tayloristic approach to organizing work. Implicit in this line of thought is the assumption that new technologies, by replacing human skill and judgment, deskill the labor force. Such deskilling is seen as technically efficient and as a nearly inevitable consequence of the technology. A good illustration of the kind of innovation which (seemingly) fits this logic is the advent of electronic switching in the telephone industry. Prior to the introduction of electronic digital switching, the repair of mechanical switching equipment was a highly skilled craft job in which an individual developed a substantial “feel” for the equipment. Wires would break, circuits would fail, foreign matter would get into the equipment, and the craftsperson's job was to find and fix the fault. By contrast, the new system is essentially a computer. The rate of mechanical failure is low, and repairs are more straightforward in that modular boards can be removed and inserted. Software failures are more likely to be the province of programmers than craftpeople. All of this is not to argue that the new repair jobs are not skilled. However, the nature of the skill has changed considerably, and it is arguably the case that from the former craft perspective the job has been deskilled. It is possible to argue that the move to electronic switching and the shift in job boundaries which ensued were due to the characteristics of the technology itself, in that the substitution of computers, or “boxes” as they are derisively termed by telephone people, inevitably implied a loss of skill on the part of the craftsmen. For this reason, the introduction of electronic switching can stand as an illustration of the “technological imperative” perspective (although even this proposition is open to some question, since it begs the issue of whether the old craftsmen were taught the new programming skills). Whereas the Tayloristic perspective held sway for many years, recently the burden of opinion has swung against it. Two points are notable about the shift. First, much of the impetus has come from observations of how work is organized in other countries, not just Japan but also European nations such as Germany and Sweden. In each of these nations, high quality, efficiency, and cost advantages
The Traditional Debate About Job Design Do new technologies lead to more narrow and deskilled work or to broader more complex jobs? Which course is the most desirable from the (differing) perspectives of the several interested parties? These two questions, the first empirical and the second normative, have dominated debate on this topic. Followers of Frederick Taylor believe that there is a single best way to accomplish any task. This “best way" can be discovered by management experts and then conveyed to the labor force. The key assumption is that the labor force has nothing to contribute to the production process. In effect, employees are simply appendages to machines, and therefore the most cost-effective approach is to drive skill out of work and operate with as lowcost a labor force as possible. This motivation may |
Which of the following often replace human labor when new technologies are introduced?
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