corporate restructuring and employment flexibility chapter 12
DESCRIPTION
Corporate restructuring and employment flexibility Chapter 12. by Line Steenberg and Christelle Schamber January, the 9 th 2008. Roger Hayter: The factory, the firm and the production System. Introduction. 1950’s-60’s = long boom of fordism period of sustained growth (MNCs domination) - PowerPoint PPT PresentationTRANSCRIPT
Corporate restructuring and employment flexibility
Chapter 12
by Line Steenberg and Christelle Schamber
January, the 9th 2008
Roger Hayter: The factory, the firm and the production System
Introduction
1950’s-60’s = long boom of fordism period of sustained growth (MNCs domination)
Early 70’s = volatile global economy restructuring of technology, production, organization, markets, location and employment
Corporate restructuring is a search for “flexibilities”, especially employment flexibility
Contents
Corporate dimensions of restructuring
New locations and flexible workforces
In situ change and flexible workforces
Conclusion: the illusion of the spatial division of labour
I. Corporate dimensions of restructuring
1970’s: winds of economic changeNew technologies: CAD, CAM, NC
Create new products (markets more volatile, competitive and differentiated)
Japan: not based on low labour costs but in the nature of production organisation
Western economies and firms: competitiveness Large-scale lay-offs Core as well as peripheral regions Exple : UK 1976-81 By the mid-1990’s: recession, downsizing(Exple: GM)
In recessionary situations of declining market performance and competitiveness, firms have traditionally sought to reduce costs, especially labour costs (Frederiksson and Lindmark 1979)
Restructuring processes Fordist firm More competitive economy of the ICT techno-
economy
The interrelated faces of restructuring Restructuring = lower costs, enhance productivity, improve market
position Multiple dimensions (restructuring plans differ among corporations):
Labour Reduce costs lay-offs Increase productivity intensifying work practices
Production and technology Close down facilities, rationalization Alternative: introduce new technology (CAD-CAM)
Organization Restructure operations by vertical disintegration (contracting-out…) Joint-ventures, strategic alliances
Product Markets Shift towards more valuable, design intensive, higher quality pdts Shift towards higher income market areas
Relations between the various dimensions of restructuring depend from corporation to corporation
Successful or not : many faces, many case studies (GM, Ford, IBM)
Core firms and segmented labour
Neoclassical vs. dual labour or segmentation theory Segmentation
Dynamic Variation from place to place Taylorism = scientific management (20th)
Fordist-Taylorism vs. Flexible principles labour market segmentation (80’s)
Labour markets in the fordist firm
Doeringer and Piore (1971)
:seniority + job demarcation
Labour segmentation in the flexible firm
Atkinson 1985,87 UK
Flexible labour and geographical strategies
To create a flexible labour force Two basic geographical strategy
New location strategy In situ strategy
Two polar strategies Emphasize the creation of core workforces Emphasize the creation of peripheral workforces
Reality is more complicated Not easy to distinguish the different types of flexibility
(new locations with functional or numerical/financial flexibility; in situ with functional or…)
Flexibility designed to ensure that workers are always working, but there is not always enough skills when tasks are simple
II. New locations and flexible workforces Importance of women
Women are often more attractive to companies due to:
Lower wagesOften they are not unionizedEasier to control womenThese women are mostly within the
secondary sector
Married women
After the second world war women wanted to return to the labour market
Growth and low unemployment rates created a need for female labour force
Supplement family incomes Women as an important location factor:
When firms move to the suburb they are able to find cheap labour force
When located in the suburb it is easier to attract women labour force
Spatial entrapment hypothesis
Focus on the women in the suburbs Women prefer to work close to their homes in
stead of high income Women find jobs after choosing where they want
to live Women are spatially entrapped within specific
labour markets and within specific societies Other studies: England (90ies): be careful of
generalizing because of too many variations
Single women
Focus on developing countries and the female labour force available there
Female workers in the export processing zone Young, single women that are often not
protected by unions Bad working conditions and extremely low
wages Immediate productivity Temporary workers – easy to replace
Child labour
Developing countries (India and China) Reason for high level of child labour: working of
parent’s loans Employed by government and MNC (often
through subcontracting) Nike’s off-shore leaps:
Numerical and financially flexible labour by subcontracting to regions with low wages
Japanese manufacturer through partnerships Has developed a flexible system where minimizing cost
but still keeping a good quality
III. In situ change ans flexible workforces
Employment flexibility easier in new locations
The Chemainus sawmill
Struggle at existing sites to shift towards more flexible operating cultures
Close a mill and replace it with a new one at the same location – new principles
The Powell River papermill:
In case of employment downsizing bargaining over flexibility between firms and unions is necessary
In the 80ies employment conditions kept falling and jobs were lost. Still there was increase in productivity.
Four main point for difficulties in flexibility: Flexibility will always be contentious and unions will fight for
seniority and no wage competition Formal negotiations between the firm and union are important. If
lowering conditions the firm needs to offer something else in return
Changes towards more flexibility can affect the trust, moral and effectiveness of the workers
Not all workers have the qualifications for more flexible operating cultures. Training the workers and replacement of workers are time requiring
Maintaining peripheral work forces In situ change
Decline in union power increases the flexible workforce
Communities without union traditions often have low wages and good possibilities in increasing flexibility
Kitchen knife manufacturer: low wages, young non-unionized female labour force and almost no job training
Skill formation of peripheral work forces:
In developing countries skill formation sometimes occur which calls for a flexible labour force.
Wages going up is a sign of increasing demand for labour force – limits off-the-job-training
Advantages in skill formation of workers through on-the-job-training: Productivity will be bigger than sending workers to off-the job training Workers will be capable of handling both routine problems and new changes The intellect of the workers will increase according to the Enterprise Specific Skill Formation figure
Conclusion: the illusion of the spatial division of labour
The spatial division of labour is a problematical concept Corporate restructuring can involve a variety of
forms Employment flexibility is developing along
different lines in the same place and between places
Reality is always more complex than theory
Thank you for your attention ! ! !
Questions ?