The situation in Wisconsin A major confrontation between the governor and labor leaders in the state has generally gone the governor’s way, as the legislature has passed several bills limiting the influence and power of organized labor. How is this possible and does this reflect a growing national trend? A subheading gives the following view:
‘It is only a question of who makes the money — the workers or the owners.’
But it is not that simple. The companies are competing in a world market where workers make much less than in the US, and in which outsourcing and offshoring production is increasingly important in the design of corporate functions.
The balance of workers and managers must be seen in the broader context of the changing nature of corporations, and the changing values of management. When managers actually managed the direct production of workers there was a mutual interdependence which still exists in some areas like the auto industry. Here the production of a complex product with requirements for consumer reliability demands effective worker performance and managers must find a way to ensure worker performance, including managing the complex robotic devices that assist the workers. But in most industries, the production responsibilities are outsourced and the managers are only responsible for seeing that the outsourced work is completed according to spec. With a world full of potential employees, foreign labor production companies are highly motivated to fulfill contracts effectively, (though in reality they don’t, and product reliability usually suffers). The consumer opts for the lowest price and then gets frustrated when the product is partially defective and has few options for remediation.
It is not so much an issue of upper management taking money from workers, but eliminating the direct role of workers in the company entirely! And this has spread to accounting, lawyers, designers, almost every facet of production but finance and marketing. Nike pioneered the model in which companies are effectively shells in which the managers coordinate a series of complex outsourced functions, pushing control of production costs, while designing marketing strategies to increase “brand enhancement” and therefore commanding higher prices for cheaper goods! From the corporate viewpoint this is a logical strategy and to the extent that marketing can convince consumers to buy products of marginal quality the company is successful. The irony of the black market in “knock off” designer labeled products exactly captures the situation: why should the consumer prefer the expensive “real brand” product to the “knock off” with false logo, when there is little difference in the actual product (and may be secretly produced by the same offshore company!). Workers and the quality of production have little role in such a business environment and therefore little leverage to command better share of the profits.
In the recent surge in unemployment, a trend has accelerated that had already begun: the solo worker with special skills who is contracted on a project basis for various technically skilled tasks. This is called the “Hollywood model” in recognition of how films have been independently contracted since the collapse of the studio system in the 50s. Networking, personal skills, reliability, and ability to work well in groups with others all contribute to the value of such employees. Lawyers and engineers have long experienced this sort of employment pattern and it has spread widely through the economy. This pattern of employment is more efficient of the use of time of skilled workers, and puts them on more personal demand to manage their finances and security independently. The role of the large corporation as a lifetime job and basis for retirement is rapidly disappearing for all but a tiny group who reach the highest levels of the organization. (In the discussions about pay differentials of senior executives, little is said about the differential from middle managers, but this is expanding also, and the pyramid to a secure upper level position has become steeper over time as well.)
Seen in this context, Walker is less of a creator of change, but rather someone who capitalized, for his own political agenda, changes already underway. It therefore seems likely that similar losses in the power of organized labor throughout the country will occur over the next administration, whoever it is. Behind the scenes, a process of self career marketing, and aggregating financial services for self employed persons are the tends most likely to be new directions in labor. And there will be a strong emphasis on entrepreneurial skills. All these changes have been underway for some time.
What is not so clear is how these changes impact on the career development process of the individuals. With less need for “middle managers” how do the future “producers = major executives” get trained? What education prepares people to be independent entrepreneurial agents, and do current universities with their giant enrollments and impersonal education foster these skills? To be continued…
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