In this seminar we consider the impact of Japanisation and look at how LP and TQM techniques have actually been applied in Britain. We then examine the problems and issues that have emerged. We also explore the benefits and difficulties experienced in the implementation of BPR programmes in recent years and attempt to measure the extent of success that such programmes have met with in practice.
List as many recent changes as you can think of in your Organisation which you think likely to have been influenced by Japanese-style management practices. (You will be asked to reconsider this fist at the end of the seminar.)
Total Quality Management begins with the realisation that it is relationships which need to be managed - not systems; there is nothing systematic about people. They are not made of inter-changeable parts; they relate to others. Thus, in order to introduce TQM, it is the relationships between finance, production, marketing, research and development, and the firm's entire supply chain which has to be managed. Total Quality Management is about managing relationships; this makes it difficult, costly, time-consuming and rewarding.
TQM is not a product; it cannot be imported from Japan and disseminated successfully in an alien culture (UK). For example, the introduction of TQM requires patience, tenacity and sustained commitment from every level of the Organisation; starting at the top, the CEO and the board. The cost (in the UK, TQM is frequently seen as a cost rather than as a value) of which will have to be justified. But UK organisations and their managements are judged over relatively short time-periods; so committing vast investment expenditures to quality improvement, without some measure of cost effectiveness, might be considered an act of blind faith and contrary to Western business culture.
In Japan the cultural situation is quite different. Investments in TQM are initiatives taken over long time-periods without thought of immediate benefits. The Japanese have considerable tangible evidence of the wisdom of taking a long view; improvement - the cultural modification of work practices - is a slow, incremental process. Additionally, large Japanese organisations enjoy practices of long-term employment, so changes are introduced by secure, bureaucratised personnel; conditions which are not available to UK organisations. Moreover, performance under TQM in the UK tends to focus on formalised standards and processes, often neglecting staffing issues and linked to individual performances and individual rewards, whereas in Japan TQM emphasises the collective, not individual responsibility for performance.
To what extent has British industry and commerce become Japanised? Since the early 1980s direct Japanisation has proceeded rapidly, although from the early 1990s on there has been a reduction in inward investment in the West. However, the proportion of investment going to Asia has increased (see Box 8. 1).
(Source: Oliver and Wilkinson, 1992; Oliver, 1993)
As one might expect, Japanese-owned 'transplants' have adopted a quality
management approach and have been instrumental in the diffusion of these and
related techniques to their suppliers. Oliver and Wilkinson's (1992) survey
of 31 Japanese manufacturing firms located in the UK found that all used or
were developing TQM and all used Quality Circles. Typically these arrangements
extended into the supply chain.
Mediated Japanisation is also widely evidenced in British organisations, stimulated both by the gaining of 'supplier' status to Japanese transplants and attempts to emulate by those British firms in direct competition with the inward investors. This type of emulation has been reported by numerous studies across a wide range of sectors. However, the use of the Japanese example to legitimate non-Japanese-style changes has also been reported .
Has your company been in any way affected by mediated Japanisation?
Can you think of any other UK companies so affected?
Oliver and Wilkinson (1992) surveyed 66 UK- and US-owned firms. They found most seeking to emulate Japanese competitors. TQM and Quality Circles had been or were being widely adopted, whilst other methods such as JIT were in use in one third of cases and planned in a further third. However, further adoption of Quality Circles was planned in only 5% of cases.
The UK car industry provides examples of employers making appeals to the Japanese example. Ford's 'After Japan Campaign' was begun after a fact finding visit to Japan by executives in the early 1980s. It was concluded that fundamental changes would have to be made by Ford in order to compete. However, whilst drawing heavily on the image of the competitive threat posed by Japan, Ford's own change programmes involved little or no attempt to adopt UK Quality Circles or JIT. Downsizing, increased productivity, erosion of demarcation lines and employee involvement were preferred strategies.
(Sources: Oliver and Wilkinson, 1992; Beynon, 1982)
In the mid-1980s Quality Circles attracted the most attention of British managers
as the approach achieved 'fashionable fad' status. However, by the end of the
decade considerable disillusionment had set in. Quality Circles were rapidly
replaced by TQM as the favoured approach to quality management, although in
many instances it was the 'hard' quality assurance side of the approach which
was to the fore.
Guest (1992) argues that 'the traditional and still dominant system of control throughout UK industry is based on compliance' (p. 1 12). Other writers (see, for example, Wilkinson and Willmott, 1995) suggest that quality management and similar schemes, although purportedly aiming to empower workers and generate team-based working, still serve this agenda insofar as they result in:
Legge argues that TQM seems to suggest empowerment and delegation on the one hand but centralisation and control on the other. The consequence of TQM for employees is a greater intensification of work and exploitation.
Moreover this is emphasised by the use of ICTs to engage in the electronic monitoring of worker performance - for example through the tape recording of conversations between employees and customers in telephone-base service industries such as direct insurance sales or home banking services. The use of what Zuboff (1988) terms the 'panoptic gaze' of electronic technologies conjures up for some commentators an apocalyptic vision of the future of work where employees simultaneously control and discipline themselves whilst under the unseen but watchful technological gaze of their management masters (see, for example, Wilkinson & Sewell, 1992.
Who is Controlling Whom?
Compare the following comments made by employees.
Quote 1 (a response made during research in the early 1970s in response to work redesign in a chemical plant.):
You move from one boring, dirty monotonous job to another boring, dirty, monotonous job. And then to another boring, dirty monotonous job. And somehow you're supposed to come out of it all 'enriched'. But I never feel 'enriched' - I just feel knackered.
Quote 2 (from a study in the late 1980s of an employees response to the
introduction of TQM.):
I'm forty-six and I've been doing this new job for nearly two years and I've been completely turned around. It has given me a new lease of life. I'd rather work this way. It' hard work with more responsibility and more worry, but there is a lot more job satisfaction.
Quote 3 (from a journalistic account of work at Nissan's UK plant.):
We're quite subservient. In fact very subservient. If Nissan says shit's toffee, we chew it.
(Sources: Q3 Popham P., 1992; Q 1 & 2 McArdle et al, 1995)
These continents point to the dual face of empowerment and team working. On the one hand employees may be given more tasks, responsibility and discretion which conventional job design theory suggests would increase their commitment, motivation and productivity. On the other, the employees' experience may be of work intensification and greater flexibility (working harder for the same or less reward); high levels of stress through additional and perhaps unwanted responsibility and new accountability; and social pressure from fellow team members to conform and achieve team goals and objectives.
The next time your post-person says good morning, ask them what they think of the Post Office's plan to introduce, or introduction of, team working!
Others have pointed out that Japanese and other Far Eastern inward investors have exploited situations such as high unemployment and favorable government assistance programmes to 'force' their approach on indigenous workforces and management (Garahan and Stewart, 1992). One recent report suggests, for example, that average wages in South Wales - a major site of Far East inward investment - are now lower than those found in Korea. (Independent on Sunday 20 May 1996). Further controversy has emerged over the problems felt by British managers with their Japanese counterparts. Along with general problems of failure to adapt to each other's cultures, British managers have lodged claims of unfair dismissal, racial discrimination and sexual discrimination against their Japanese employers. (Independent on Sunday, 19 May 1995). However, such claims have also been lodged against British employers.
Please now re-read Buchanan & Huczynski, Introduction, pp. 4-6, and Chapter 19, pp. 572-576. Then read The Guardian, 25 May, 1996. 'The Company We Keep'.
Was ASDA an example of 'lean' or 'mean' production under the pre-WalMart-takeover regime of Archie Norman?
How far is this reflected in the human resource policies and practices of Japanese owned transplants in Britain and do they differ from their British-owned counterparts? A range of research studies suggests that there is a clear and significant distinction. There has also been a perception, based upon the practices of high-profile inward investors such as Nissan, Toshiba and Sony, that novel employee relations policies have been pioneered based on single-union agreements. Many of these have been presumed to include clauses which prevent stoppages of work - so-called 'no-strike' agreements (Basset, 1986). These agreements have attracted controversy as they arise from attempts by unions to recruit new employers via so-called 'beauty contests' rather than directly attract their employees into membership. Examples can be found at Nissan's plant near Sunderland, Toyota's plant in Derby and several Japanese owned electronics plants in South Wales.
In the case of Japanese transplants evidence suggests that a range of HRM policies and practices appear to be used that, whilst not distinctive in themselves, are novel in the sense that they are combined in an integrated approach. Moreover, these 'bundles' of HRM policy and practice appear to be put in place as a precursor to the adoption of quality management and/or other Japanese-style techniques. This contrasts with the approach of British-owned organisations who seek to emulate Japanese-style quality management and other practices. It appears that, whilst many of the HRM policies are present, these are rarely as well integrated, and in most instances emerge at best in parallel and often after techniques such as TQM have been introduced.
Nissan
Union membership up to Senior Engineer
Rover - 1980s:
1990s:
1996
Rover taken over by BMW - the beginning of the end?
(Sources: Wickens, 1987; Smith, 1988; Oliver and Hunter, 1994; Taylor, 1996; Stephenson, 1996, Burnes, 2000)
Please now read the Rover Case Study in Burnes, Chapter 10,
pp. 3 71-3 79 and the author's comments on p. 3 5 8 and in Chapter 12, pp. 444-447.
Oliver and Wilkinson's research (1992)
draws attention to the lack of synchronisation
between the adoption of quality management and other techniques and innovations
in HRM in British firms, as witnessed in Rover and Nissan. They also point to
the persistence of conventional multi-union arrangements and collective agreements
in British plants. This contrasted with the Japanese transplants studied which
typically had a range of well-integrated HRM policies such as single status,
direct communications, staff-type benefits for all employees, high job security
policies and company representative bodies. Further, nearly a third were non-union
and over half had single union-agreements. Only one was a multi-union firm (although
most of the unionised firms did not have no-strike agreements).
The human resource and employee relations approaches of Nissan
and Rover Group drawn in the late 1980s and 1990s are contrasted above.
How far do the HR policies and practices of Japanese transplants and their British-owned competitors address the issues of mutual dependency; resource abundance, and homogeneity of goals and interests?
In the UK motor industry JIT production has been found to make firms and suppliers very vulnerable to industrial action anywhere in the supply chain (see Turnbull, 1988; Smith, 1988; also Marsden, 1985).
The appropriateness of conventional bargaining and trade union representation in the motor industry is challenged by JIT and other Japanese-style techniques. However, the costs associated with changing this structure (effectively replacing a multi-union system based on collective bargaining with a single or non-union system where the role of collective bargaining in pay determination is minimal or non-existent) are too great for existing firms to contemplate (except in new greenfield investments).
What they're trying to do is to introduce a Japanese way of working but without the benefits you have in Japan. If this was a Japanese factory in Japan you would have a job for life; your wife would work for the same firm; there'd be crèches, whatever.
(Foreman, Ford Dagenham, Independent 8 February 1992)
Do you share the foreman's view?
What key factors do you think likely to hinder successful introduction of Japanese-style work methods?
The implication of these findings is that many UK emulators may have inappropriate human resource and industrial relations arrangements for the full benefits of quality management and other Japanese-style techniques to be felt. Indeed, in the absence of appropriate HRM policies and practice, the adoption of these techniques may even be counter-productive . As Oliver and Wilkinson (1992) conclude:
In the absence of personnel and industrial relations systems which make such action unlikely, companies adopting Japanese style manufacturing practices may be inviting trouble ... Workers are not slow to identify choke points. (pp. 89-90)
This latter point begs the important question of what are the 'appropriate' HRM policies for TQM and the like and whether these are the same for au organisational circumstances.
What would you consider to be appropriate HR policies and practice to complement Japanese-style management practices?
Recent research in the USA suggests that there are common 'bundles' of HR policy and practice (training and development; bottom-up and top-down communications; team work and flexibility; employee participation; incentive systems) which if increased together do have a positive affect on competitive performance regardless of the circumstances and context of the firm (Pfeffer, 1994). Godfrey et al (1996) report preliminary findings from a UK study of the adoption of TQM which suggests similar findings. They argue that TQM works most effectively from a business viewpoint when accompanied by the following bundle of HR policies and practice:
The one area that did seem highly dependent upon contingent circumstances, such as market and financial position, was incentive or reward systems. However, this does not mean that the quality of working life of employees was improved, since HR policies and practices associated with this (such as work redesign, abolition of clocking-in; payment of high wages and narrowing of the gap between the highest and lowest paid in the Organisation) were in the main being ignored. This raises the issue of how beneficial TQM and 'Lean Production' in general are from an employee viewpoint (see below).
Now read HiII, S. (1995) 'From Quality Circles to Total Quality Management'.
The role that it is appropriate for the HR function to play depends upon several factors, in particular the stage in TQM implementation where they become involved. Similarly the type of role that the function can play is also dictated to some degree by circumstances, in particular the existing role and status of the personnel function and whether a hard or soft TQM approach is being pursued by the Organisation. There are also pitfalls. The change maker role might be attractive from the point of view of the status and power of the specialism in an Organisation, but it also carries high risks and penalties should the initiative go wrong.
Contrary to the views of some who have suggested TQM is 'instant pudding' for the HR function in the sense that it will give it new legitimacy, status and power, Wilkinson and Marchington (op. cit) present a more complex picture of the opportunities and threats posed.
Have UK organisations really found it difficult to come to terms with quality management? The practice of Quality Circles seemed to fail with possible reasons being:
Hill (1991 p. 353) concluded that quality circles became an irritation. Their interventions disrupted managers' routines. There was no 'pay-off' for the latter or reason to make them work. The returns were small - lots of talk, little progress. The activities, membership, processes of the circles:
For TQM programmes as a whole adoption has been widespread and general programmes have been less problematic. It is probably right to conclude that all organisations would claim to have high level commitments to quality and a sustainable quality assurance system in place. But to conclude that 'change' has been sustained in the long term is a more difficult proposition.
Wilkinson et al (1992 op. cit), suggested that a typical TQM project proceeded through several stages:
What evidence is there that TQM programmes encountered problems of sustainability? Wilkinson (op.cit) points to cases of disappointments reported by some organisations. He summarises reasons for this as follows:
Legge (1995 p.227) sums up:
... from a managerial viewpoint, the verdict points to much enthusiasm variable success in implementation and, as with most change initiatives in UK industry, the suspicion that in all but the exemplar companies, the underlying philosophies...are compromised by economic exigencies and an endemic short termism that both seeks a quick-fix and lacks the stamina for the long haul.
The failure of large-scale adoption of TQM by British organisations, which have allowed themselves to be 'compromised by economic exigencies, endemic short termism', the search for quick fixes and the lack of stamina for the long haul is a reminder of the powerful role of culture in society and organisations.
Culture is a reflection of shared values, shared beliefs, shared meaning, shared understanding and a shared 'sense-making' of our world. The formation of culture is a slow, evolutionary, incremental process of reality construction. It facilitates a better grasp of particular events, actions and situations in a distinctive way. It helps us to make sense of our world.
Gareth Morgan points to the Sociologist Harold Garfinkel who highlighted our taken for-granted skills by pointing out what happens if we deliberately set out to disrupt normal patterns of life:
Look a fellow subway passenger in the eye for a prolonged period of time. He or she will no doubt look away at first but get increasingly uncomfortable as your gaze continues. Perhaps he will eventually enquire what's wrong, change seats or get off at the next stop. Behave in your neighbour's house as if you live there. Disrupt the smooth and continuous lines of your walk down a crowded street with a series of random stops and turns or with the shifty manner of a suspicious character. In each case you will gradually discover how life within a given culture flows smoothly only in so far as one's behaviour conforms with unwritten codes. Disrupt these norms and the ordered reality of life inevitability breaks down.
Similarly, at the micro level of the Organisation, we discover the enactment of a shared reality. This enactment view of culture has enormous implications for our understanding of organisations as cultural phenomena; which means that to understand why British organisations failed to adopt TQM we must focus our understanding of organisations on the processes that create systems of shared meanings: culture, in short. This fruitful insight has been developed by Tom Peters and Nancy Austin in A Passion for Excellence, 1995, which emphasised that successful organisations build cohesive cultures (vast areas of shared meanings) to create an appropriate focus for doing business.
Strong organisational cultures: 'IBM means service'; 'Sell it to the sales staff' (Hewlett-Packard), are built around such core values. The more these values are operationalised and held, the more difficult they are to change. Total Quality Management never became a core value, a cultural disposition, a shared conception in British organisations. What was required was a paradigm change - a new way of looking at things - and this was not forthcoming from British senior management. The adoption of TQM would have required a cultural revolution which can be led only from the top. This did not take place. Cultural revolutions are slow, painstaking processes, requiring 'stamina over the long haul', which was lacking. This is unsurprising; as many as 70 per cent of firms that set off on this particular cultural renewal, failed. They failed because they were unable to breach the dominant culture (current constructed realities) and the political distribution of power upon which it rests. The successful adoption of TQM by British firms would have required a transformation of prevailing mind-sets and a redistribution of political power. In short, the creation of a new reality, which would in itself have been counter-cultural. Unlike Japanese firms which see TQM as a long-term investment, British organisations reside in a cultural milieu of short-termism and the search for quick fixes; success in the here and now.
Now check back to the list of Japanese-style changes you drew up for your organisation at the start of the seminar (p.2).
List any additions or modifications.
Have appropriate BR policy and practice changes been introduced in tandem?
From the American perspective, Cameron & Quinn (I 999) argue that 'organizations that have implemented quality initiatives in order to enhance effectiveness ... have, by and large, fallen short' (p.7). They cite a 1997 survey of the Fortune 500 companies carried out by Rath and Strong, an American consulting firm, which found that only 20 per cent achieved their quality objectives. A McKinsey study of 30 quality programmes found that over 66 per cent had 'stalled, fallen short, or failed' (p. 8). On an even wider scale they cite Ernst and Young who studied 584 companies in four industries surveyed in the US, Japan, Canada and Germany and found that most considered TQM a failure and were reducing quality budgets.
What do you think the problems of introducing BPR might be in your own Organisation?
A survey of 168 UK-based medium and large organisations conducted in the mid-1990s reported by Willcocks and Grint (1996) found that - despite the exhortations by BPR gurus - high risk, radical BPR approaches were generally not being taken by organisations in Britain. This was despite the fact that 59% of the sample were already undertaking or planning to undertake BPR. Perhaps as a result, very few organisations were found to be achieving what could be called 'breakthrough' results from their BPR programmes. When Willcocks and Grint looked at the organisations that had completed BPR programmes, using a relatively conservative 'breakthrough' benchmark of 20% profitability gain, 20% revenue gain and 10% decrease in costs of doing business, only 18% of these organisations had achieved significant financial benefits from BPR on all three measures. The reasons for these failings were:
Both point strongly to the policies of change management as a critical factor determining success.
Beyond basic principles, it is difficult to pin down in practice what re-engineering is. Consider an example of BPR in practice .
Peppard and Rowland 1995 provide the often-cited example of Ford's North American accounts department as an example of what radical BPR can achieve. Before the BPR programme commenced, Ford employed 500 people in its accounts payable department. Initially management thought this could be reduced to 400 by rationalisation and automisation. However, it was then noticed that Mazda (part owned by Ford in Japan) had an accounts workforce of only five people doing essentially the same task. By re-engineering the process much of the paper work and cross-checking associated with the department's task were either eliminated or automated. As a result a 75% not 20% reduction in headcount was achieved.
One problem is that many BPR proponents claimed that organisations who engage in restructuring, with its attendant labour shedding activities of downsizing, delayering, displacement and so forth, are not engaged in 're-engineering' at all, despite their frequent claims to the contrary. This is because restructuring is viewed as a reactive response to existing organisational conditions rather than an aspirational leap to a new kind of organisational future based upon customer requirements.
Amidst this confusion, a re-engineering backlash was soon in evidence:
There is a new look menu over at The Consultant's Cafe. Good old soupe du TQM and change management pate are off. Perhaps you would care to try some business process re-engineering (BPR) instead? Corporate diners beware. BPR, that nouvellest of consultant cuisine, bears no resemblance to a standard Saturday night take-away. Except in one respect. Like the curry house special, no one knows exactly what it is. (Oliver, 1993, p. 18).
Now read Burnes, Chapter 7, pp. 250-253.
According to Burnes (op. cit), the failure rate of business process re-engineering as a change strategy is estimated at about 70 per cent in the USA and about 60 per cent in Europe (p.253). Three particular facets of BPR programmes may be argued to be particularly< problematical:
Cameron & Quinn (I 999) describe re-engineering as 'the attempt to redesign completely the processes and procedures of Organization' (p.8). However, despite the focus on process which processual approaches to change would advocate, but BPR is not a 'context-sensitive' approach, in a wide sense. The 'fresh start' idea ignores both history and context and organisational politics are seen as irrelevant. This runs counter to the process model of change which views organisational politics as central. It therefore may be argued as failing to address a key agenda that the competent change agent must address: the process agenda which demands interpersonal and political skills in negotiating and selling change.
According to Cameron & Quinn (op. cit.) 'nearly every organization of moderate size or larger has engaged in downsizing in the last decade' (p.8). As a policy for improving organisational effectiveness, they argue that downsizing has generally proved unsatisfactory, and claim that only 9 per cent of companies who have introduced downsizing achieved improvement in quality, while the majority acknowledged having failed to achieve desired results. Downsizing was found to lead to loss of organisational experience and learning and widespread deterioration in employee morale. Cameron & Quinn cite a survey carried out in six industrialised countries which 'found that less than half had achieved their cost-cutting goals' (p.8).
We've already looked at the problems raised by neglect of cultural factors in the context of TQM initiatives. Cameron & Quinn (1999 op. cit) cite a survey conducted by the American originators of the BPR concept of 497 US companies and 1245 European companies. 69 per cent had initiated at least one BPR project. 85 per cent of these found little or no gain resulted. A key finding of the consultants was that re- engineering needed to be integrated with culture change initiatives. According to Cameron & Quinn (op. cit),
... the failure of reengineering (as well as TQM and downsizing) occurred in most cases because the culture of the organization remained the same. The procedure was treated as a technique or program of change, not as a fundamental shift in the organization's direction, values, and culture (p.9).
We have located theories of change management in the broad context of global shifts in the organisation of production. Theories of change are necessarily rooted in existing organisational theories and schools of managerial thought. We have seen that theories of organisational change have developed away from rationalist assumptions about how change should be managed towards a new management paradigm.
The OD and the strategic choice perspectives on managing change represent the most influential challenges to rationalist approaches to emerge over the last thirty years or so. It is apparent that OD can be used to good effect in particular circumstances. However, it lacks conceptual sophistication and breadth. The strategic choice concept has been used to explain organisational and institutional outcomes in a very broad range of situations. Strategic choice is seen as important in organisational theory, a view which may lead to more theoretical understanding. Pettigrew's expanded focus approach represents such a departure in that it is concerned with exploring the ways in which questions of legitimation and 'the management of meaning' have a direct bearing on change outcomes.
The closing seminars of the module focused on some of the main organisational change initiatives of the last twenty years: LP, TQM and BPR. We considered the management of technical change and the influence of Japanese management techniques leading to the new, 'post-Fordist' production paradigm of Lean Production (LP). We explored the related human resource issues and TQM techniques involved. We summarised the most widespread BPR practices, while acknowledging the degree of uncertainty and disagreement about what exactly is involved.
We also looked at the history of some well-known attempts to introduce the new working methods and manage the changes involved and tried to assess the degree of success these different change initiatives have met with. We found that the threats to employment through downsizing, increases in employee stress and lack of attention to the need for concomitant cultural change have played a major part in difficulties experienced by companies in achieving the desired outcomes.
Resource abundance: this would suggest single status-terms and conditions; high wage policies (relative to industry and/or local labour market).
Homogeneity of goals and interests: strong company culture (e.g. mission statements or other symbolic statements or representations of company values); highly developed top-down and bottom up communication systems; consultative task participation.
It should be clear that most British organisations have not as yet developed bundles of human resource policy and practice which support these principles. Japanese and other Far Eastern competitors on the other hand, appear to shape their approach along these lines.
This document (© Chris Jarvis) was