New Management
Techniques: the
British experience
THE imposition of a coherent and wide-ranging set of "new management techniques" (NMT) has become one of the central issues facing trade unionists and socialists in Britain. Initially these techniques were associated with manufacturing, especially the motor industry, and with inward investment from Japan. Discussion centred on so-called "lean production" in Japanese automobile companies, and a well-known book appeared in 1988 entitled The Japanization of British Industry. ' Now it is clear that the impact of these techniques goes far beyond Japanese companies or the manufacturing sector.
They are being applied across the board, including in the public sector and in services. They are not of course specific to Britain and have been increasingly an issue in North America and Western Europe. However, the British government's policy of attracting inward investment by offering an environment of limitations on trade union rights and increased scope for management perogatives has made Britain, in some senses, a test case for applying NMT.
The Socialist Movement Trade Union Committee, the leading coordinating body for left trade unionists in Britain, organised a conference of 400 activists in July 1992 in which the techniques were a central theme. Even the more slow-moving official trade union structures have begun to respond
50 International Marxist Review with seminars on NMT being run by various unions, including the Transport and General Workers Union (TGWU).
This article attempts to open a debate about these techniques. It focuses on four main issues: what the techniques are; what their significance is; why it has proved possible to implement them and how they can best be resisted
One of the central problems for activists in fighting the imposition of these techniques is the sheer lack of information available about where and how they are being implemented. The conclusions here are tentative then and are intended to initiate discussion. What are the New Management Techniques?
The techniques vary in emphasis from industry to industry and sector to sector. However, they are built around four central, interlocking themes: an assault upon trade unions, the restructuring of the workforce, the reshaping of working practices, and an ideological offensive. We shall consider each of these in turn.
Attacks on trade unions are the most "conventional" of the techniques. What is new, is the scope of the measures being undertaken. These range from outright union derecognition to pressure for "single union" deals, no-strike agreements, or "pendulum arbitration"
Associated with these developments is a rise in the number of personal contracts and a shift towards greater reliance on "performance related" or "profit related" pay. These changes are often reinforced by more petty restrictions on trade union facilities or ending the use of the "check-off' system to collect subscriptions. And of course in the background stands the whole structure of anti-union laws erected since 1980, which is still growing. Straightforward derecognition of trade unions remains a minority strategy in this context; however, in certain sectors, most notably publishing and the printed media, it has become endemic. What is most significant is the derecognition of what were extremely well organised union branches and "chapels" , such as the National Union of Journalists (NUJ) chapel at IPC magazines, or the TGWU branch at the Unipart car components firm in Oxford. The establishment of new non-union plants like the Honda factory being built at Swindon is also important. But in most cases union recognition has been retained while being progressively emptied of content through the measures mentioned above. At the Nissan car plant set up in Sunderland in 1986 there is formal recognition for the
New Management Techniques: the British experience 51 Amalgamated Engineering and Electrical Workers Union (AEEU), but the agreement with the company states that
(a) To ensure the fullest use of facilities and manpower, there will be complete flexibility and mobility of employees.
(b) It is agreed that changes in technology, processes and practices will be introduced and that such changes will affect both productivity and manning levels.
(c) To ensure such flexibility and change, employees will undertake and/or undertake training for all work as required by the Company. All employees will train other employees as required. '
Such compliance by the union has brought about some company encouragement of union recruitment at Nissan, but unsurprisingly, Phil Garrahan and Paul Stewart report that,
Trade Unions usually articulate organised alternative positions in an industrial setting, but at
Nissan the union, the AEEU, stays clear of this. In any event, with an initial membership of less than one in five, which has grown to less than one in three with management encouragement, it is in no position to foster an oppositional perspective. 3
The second element of the NMT is the change in the nature of the workforce brought about through increased use of part time workers, workers on temporary contracts and subcontracting. Again, in certain sectors such as tourism, retailing and catering this has long been common. What is new is the extension of such practices to the public sector, aided by government legislation forcing the allocation of contracts for local government services by competitive tender, and in some cases to the manufacturing sector. At Nissan
The company takes on some workers on five-month fixed-term contracts to enable it to meet peak demands. The contract includes one month's training, and part-timers are paid at the same rate as full-timers. The best performers are selected to join the full-time workforce.
Nissan's use of temporary workers for the assembly of cars, which gives more security to the core workforce and contributes further to flexibility, is the first instance of this practice being employed in the UK motor industry since the 1940s. 4 In spring 1993 Rover Group's employment of 350 workers on six month contracts at its Cowley, Oxford factory further extended such developments.
The third strand of the techniques, and the one which has excited most discussion concerns changes in working practices. Here the differences between NMT in different settings are most acute. In manufacturing the central issue has been so-called "teamworking". Teams are presented as though workers
52 International Marxist Review do not have a separate interest from their employers with the implication that power is being devolved to the office or the shop floor. Team leaders are portrayed as one of the shop floor, sometimes elected by their work-mates and supposed to listen to them, as well as to feed them information or core messages from management at regular team briefings. What actually happens is that these messages are strictly limited to what the company wants workers to know and that workers' responses are on a "take it or leave it" basis.
Workers can let off steam, may or may not get a reply, but when it comes to a decision, the Nissan company manual on "What Is A Team" states that:
In difficult situations, where a consensus cannot be reached or where time is important [the leader is someone who is] leading from the front by deciding what needs to be done...
A leader also uses a range of different styles from participative through to consultative. Even tending to be autocratic depending on the situation.
Teams function both to encourage workers to make suggestions that the company might find useful and also as a means of drawing workers into identifying their interests with those of the company. The role of team leaders, especially if they are elected, can be used to bypass that of shop stewards or union representatives.
Employers realise that if they hold meetings via cell managment structures or team leaders, and restrict shop stewards' ability to call meetings then workers will gradually look to team leaders for information. If stewards are starved of information and everything goes either through team leaders or relatively remote union officials the team leaders become the workers' closest voice.
Teams are presented as unifying factors. But in this context they are nothing to do with working together. They are usually introduced alongside self development and education policies in which workers are encouraged or forced to learn new jobs and "develop themselves" . This goes with grading structures whereby workers doing the same job get different pay because of their differing knowledge of other jobs. So instead of the genuinely unifying "rate for the job" negotiated with trade unions we have a situation in which staff, skilled workers and different categories of manual workers are all working together but are in competition with one another as far as wages are concerned. Solidarity between workers doing the same job is broken down.
The crucial importance of teamworking lies partly in its ideological function and partly in the role of teams in quality control and maintainance. Teams are given the function of checking the work sent to them by other
teams and this ensures the reduction in defective parts which is necessary for
"just in time production" (JIT) with its low inventory levels and small num-
The effects on the intensity of work are graphic. At Mazda's Flat Rock car
Mazda's team system also encourages workers to pressure one another to maintain a rapid work pace. A worker's teammates must pay the consequences if he is too slow or mistakeprone, since this will disrupt the flow of work through the team's station. This, in turn, will nake it difficult for the team to complete its collective job assignment on time and will increase the likelihood that everyone will have to put in overtime to meet their production quotas. Because of Mazda's carefully synchronized JIT production schedule, the team's problems will quickly have a ripple effect on the next team down the line, preventing it from completing its work on time. The members of this team will then complain to their unit lead-
The result of Mazda's self-regulating team system is a plant where everyone minds every-
Or as the manager of a company using these techniques commented to Bar-
We're doing things in cells that we would never have negotiated with the whole factory in
While teams and JIT are central in manufacturing they are not always appropriate in service industries. However, the concept that one part of an organisation becomes the "customer" of another and that this customer has the right and the duty to check the quality of the "product" offered to them by their workmates and to pressurise for improvements if necessary, has become endemic, spreading through health, education, social services and
This is closely linked with the fourth element of the NMT, the ideology which binds the whole package together. This works on a number of levels.
Firstly, there are a number of key concepts which are repeated almost as incantations in the development of the techniques: "choice", "flexibility"
and, particularly "quality". If you resist the application of the techniques then almost by definition you stand for poor quality and inflexible production which will deny choice to your customers (this is often implied even more strongly in the public than the private sector). Built on these concepts are managerial specialisms such as "Human Resource Management" and "Total
Quality Management" and these are increasingly the basis of an explosion of ber of supervisory staff.
plant in the US one else's business.
ry Wilkinson and Nick Oliver
20 years.?
telecommunications.
er, who will then pressure the slow worker's entire team to move faster.
New Management Techniques: the British experience 53
54 International Marxist Review management courses and qualifications in Britain. On a broader canvas the politics of the NMT fit in with the philosophy of the Tory party and with policies such as the "Citizens Charter" which has spawned a whole variety of charters supposedly ensuring quality throughout the public sector - though with no corresponding increase in resources.
The customer is king/queen, you are providing a service and the producer or provider of a service has constantly to think of the customer and put that person above their own interests. In other words workers are to put the product of their employer first and therefore his or her profits first. The leadership of the Labour Party has followed this path with Party leader John Smith's talk of socialism simply being about asserting individual rights against vested interests. This fits in very well with the individualist message of the government's charters.
One fitting symbol of this whole ideological edifice is the role of (British Standard) BS 5750. The British Standard classifications are normally technical safety standards. This one however is a certificate of quality assurance. It certifies that there are "organized procedures and methods of implementation to ensure the capability of the organization to meet quality requirements". It is now mandatory for companies bidding for British government contracts to have obtained BS5750. In this way the government reinforces and lends its approval to the use of quality as an ideological cement for the NMT.
These four aspects of the NMT do not always, as mentioned above, always occur together, and emphases differ in different industries. However, they are linked. The low inventories and savings on inspection staff associated with JIT can make companies extremely vulnerable to any industrial action that does occur, and to fluctuations in demand. In this way they lead naturally to the attempt to minimise trade union influence and create a flexible workforce. This in turn encourages the ideological aspects of the techniques. How significant are the New Management Techniques?
A key question about the NMT is the extent to which they actually represent a new way of organising capitalist exploitation, or whether, on the other hand they are simply a superficial packaging of older theories and practices ot managerial control. Two extreme reactions need to be guarded against. One, more commonly associated with defenders of the techniques, is the view that they represent a fundamental rupture with existing capitalist struc-
New Management Techniques: the British experience 55 tures, or with capitalism itself. This viewpoint links up with recently fashionable concepts of "post-fordism" or "flexible specialisation". On the contrary the techniques embody important elements of continuity with traditional managerial strategies, both in terms of their effect on the workforce through intensification of labour and in terms of their general approach. Karel Williams, Colin Haslam and their co-workers have shown how Ford's Highland Park factory pioneered something like JIT production as far back as 1915:
By 1915 Ford was running with 3-5 days stocks of major components, like engines and gear boxes, a few hours stock between departments and zero stocks inside departments. When we remember that Ford built 60 percent of the car, compared with 20 percent at Toyota, Ford
(Highland Park) is probably the supreme twentieth century achievement in high flow, low sia Ciproduction which was discovered and lost in America before it was reinvented in Toy.
At the same time, however, it is important to realise what is new and dangerous about these techniques. The central point is the coherence and scope with which they are being introduced. Individual strategies like derecognition, or even JIT as shown above, are not new. What is new is the scope of the package now being put forward, the way the individual elements reinforce one another and the back up provided by government ideology and management training. Again, this does not mean that all elements of the NMT will be introduced in any one workplace, certainly not that they will be introduced simultaneously. However, it is more and more the case that they will all be considered by managment, and that a conscious decision will be taken and strategy adopted about which elements to introduce and when.
A second important question concerns the extent to which these techniques can actually raise productivity and profitability. The managment bible of "lean production" Womack, Jones and Roos' The Machine That Changed The World makes the most startling claims for the methods it describes:
Our findings were eye-opening. The Japanese plant requires one-half the effort of the American luxury-car plants, half the effort of the best European plant, a quarter of the effort of the average European plant, and one-sixth the effort of the worst European luxury-car producer.
At the same time, the Japanese plant greatly exceeds the quality level of all plants except one in Europe - and this European plant requires four times the effort of the Japanese plant to assemble a comparable product.
Phil Garrahan and Paul Stewart, in their extremely critical study of the Nissan plant in Sunderland as an example of management subordination, take these claims largely as given and then examine their cost in terms of the
56 International Marxist Review effect on the workforce. Williams and Haslam, however, while agreeing with the account of what the techniques mean for workers, also subject the productivity claims to a detailed critique, arguing that the model of a superproductive lean production system is an illusion created by an unjustified generalisation from the experience of one company, Toyota.
It is important for Marxists to try to achieve a balanced analysis of these issues. The NMT do represent a significant and fairly coherent strategy on the part of capital to increase exploitation and raise profits. This strategy builds on, generalises and important ways modifies previous managerial strategies and is in several ways distinctive. It does not fundamentally challenge existing relations of production, but it does make problematic quite long-established institutional structures of bargaining between employers and workers and it does have serious implications for workers' resistance. The NMT cannot abolish capitalist crisis, either globally or at the level of individual national economies or corporations. However, in certain circumstances, and in conjunction with other factors outside firms, they can increase the rate of profit and so intensify competitive pressures. In this way once the NMT are adopted in one area other workers become more and more vulnerable. Why has it been possible to implement the Techniques
The Techniques have been implemented as much as they have been because of two main factors; the ideological force behind them and the failure of the leaders of the labour movement to offer a convincing show of opposition to them. The Techniques offer many ideological promises, both generally and to workers in particular. They promise an end to class struggle in which you have an identity of interest with your employer as part of one team. They promise an end to national contradictions in which the system and its envoys spread through the world in an unfettered manner, with employers thinking only of quality and service and with productivity simply an aid to helping the customer. Through detailed understanding of customer requirements with the ability to produce flexibly, they promise an end to, or at least an amelioration of, cyclical markets. Organisations become "customer driven" with the customer as part of the team. Perhaps most centrally, they promise a nonbureaucratic way of organising production. Employee involvement methods and dissemination of information back up the claim that the most important
New Management Techniques: the British experience 57 people in a factory are supposed to be the production workers, and so on.
These promises are of course false, not just the claim to be "nonbureaucratic" and "participatory", as shown above, but also the promise of being able to evade cyclical booms and slumps, or national antagonisms. Continuing arguments over tariff barriers and competition for foreign investment go together with Nissan, for example, being forced to close its plant in Australia and shed jobs even at home in Japan. Nonetheless they are seductive and the contradictions to which the NMT promise answers are real ones to which socialism addresses itself, and which continue to motivate socialists. In fact, it is socialism which can actually provide a real end to national antagonism through workers' solidarity, and a real end to bureaucracy and hierarchy in the production process through workers control. In this way the NMT offer a distorted and illusory answer to the very problems which have motivated socialists.
Even taking all of this into account, however, one cannot explain the adoption of the techniques without looking at the lack of resistance from the official labour movement. To set this in context one has to recognise that the techniques have been introduced immediately following a period in which British management, backed up by the government, had been at its most vicious. This was typified through the 1980s by confrontation with steelworkers, miners, printworkers and others, as well as sackings and victimisations throughout industry. The effects of this were contradictory. On the one hand the rhetoric of the NMT, with the promise of speaking and listening to workers as human beings, gained attractiveness against this background. On the other hand, workers very often facing the same management as before, but now armed with the NMT, feel that they have not changed their spots and are naturally distrustful. When the Rover Group's package of new working practices, "Rover Tommorrow" was proposed by the management in 1992, with the unanimous agreement of the trade union negotiators, it was carried in a ballot of 22,000 workers with a majority of 16. It has taken the company three years to get team leaders in place and they still do not function in the manner required by management.
Where workers have accepted the techniques it is usually because they feel they have no choice, either because to reject them would put at risk the survival of the firm, or because they see no way of winning a fight against their adoption. Nonetheless opposition to the techniques is still widespread. The vehicle for mobilising this opposition should be the trade unions. But they have been introduced at a time when many workers are disillusioned with their trade unions. The lack of a fight against the anti-union laws, job losses
and in defence of living standards and working conditions means that there is not a strong counter to the propaganda of the NMT. Allied to this is the lack of any strong rank and file movement, meaning that the organised opposition
Within the motor industry the main union is the TGWU, and up until its
1989 Biennial Delegate Conference (BDC) it had a policy of opposition to
General Secretary) Bill Morris introduced a pamphlet which argued in the first case for opposition to the techniques, but also proposed that where opposition was impossible they should be tolerated provided there existed certain methods of controlling their impact. In the 1991 conference these methods were supported as a policy and now the national officers of the union use the same arguments as the Automotive Officer, Tony Woodley, that the union has to do whatever is necessary to make firms competitive and safeguard member's jobs and to oppose what does not do this. Since the TGWU was the main opposition to the NMT in the motor industry, it goes without saying that the more right wing AEEU, the second most important union in the
Such was the case in Rover, where the "new deal" was introduced outside a wage review, and all that workers received for changing working conditions drastically was a £50 lump sum a year later. This was enthusiastically pushed by the trade unions. It is true that they argue that some principles were kept to; union recognition, no reduction of shop steward levels without agreement, no automatic use of temporary labour, no compulsory redundancies, no removal of the "last in first out" policy on redundancy and no Company
Councils. However, considering how much the employer has gained in return for nothing these concessions are relatively minor, and now that they have the commitment of the trade unions they will have little hesitation in
In Ford UK agreements were made at national level about team leaders and other changes to which there has been some resistance at plant level. It is clear that the enthusiasm of the officers is never mirrored in the workforce. In some unions the officers have opposed some aspects of the techniques but supported others. The issues on which they usually take the strongest stand are union recognition and collection of subscriptions. The problem is that even where some opposition arises within the official structures of unions the people involved usually weaken the fight of those opposed by accepting the
"competitiveness" argument. For example, two good events have been organised by the TGWU nationally concerning NMT. One was a seminar
58 International Marxist Review
"employee involvement"
industry, is enthusiastic.
demanding them in the future.
is weak and that there is virtually no counter propaganda.
'. At that conference Deputy General Secretary (now
New Management Techniques: the British experience 59 with delegates from the British motor and components industry, the other a week long event on Works Councils and NMT, organised with delegations from all over Europe. Although these strengthened the understanding of the techniques the TGWU leadership still used these events to push its support for maintaining "competitiveness" and therefore de facto acceptance of NMT. The fact is that within the unions there is no organisation that has done serious work on the techniques. Some have fought aspects of them, but nearly always in isolation. The only really useful material on NMT has been produced by academics like Stewart and Garrahan. Individual militants are swimming in a very receptive pool. When team meetings are held it is easy to expose the hypocrisy of management, the lack of real information, the increases in workload and so on, but this opposition needs organising. In the current atmosphere militants can be picked off, and they are usually speaking against official union policy, thus it is quite hard to get support from union structures. Opposing the Techniques
At every conference and meeting where NMTs are discussed people from every sphere of work find themselves faced with the same problems. Many millions of workers are facing these techniques. Yet because of media and management propaganda they feel isolated and that they are the only people affected
What is needed is an organised response to the techniques from rank and file movements. We have to organise a fight in the official structures of the unions, but in order to do this we need to be convinced of the importance of the issues raised by the techniques. The oppositional groups within the unions need to be convinced of this and to organise both within and across unions through seminars, day schools, conferences and propaganda, using sympathetic academics where appropriate. Workers are forced to fight the techniques every day of their lives because they involve speed-up, discipline, dictatorship. We can at least give them a voice and might possibly organise them.
The basis for this has to be outright opposition to the techniques. In fighting for this the propaganda and arguments we use will help workers to understand what NMT will mean. If we lose the fight and an agreement is made then of course we have to fight from within, but we are in a stronger position to do this if we have opposed the techniques from the beginning. Workers
60 International Marxist Review will come to understand from their own experience what the techniques mean and since they have to live with them the fight will go on even after an agreement is signed. Similarly the capitalists continue to face their competitive pressures and even if an agreement is not signed they will come back. The struggle over the NMT in this way is a microcosm of the class struggle, of the struggle for real and independent trade unions. The retreat of the trade union leadership weakens and disillusions workers, but the world in which they live counterracts this and shows that they need an alternative.
At the same time it is important to recognise that workers are under tremendous pressure to accept these techniques. In a period of industrial and economic decline employers' threats of closure are a real possibility. The argument that the techniques are necessary to improve "competitiveness" has to be answered, especially in a context of a crisis of overproduction and overcapacity where a large car company, or steel company, or insurance company might well go to the wall. The threat of unemployment is a real weapon on the employers side. Even the argument that in a firm like DAF the adoption of the techniques did not stop closures and job losses can simply increase workers' insecurity.
All this means that any fightback against the NMT has to be organised both nationally and internationally. In the British context at least a Europe wide campaign is necessary to combat the threat of closures or the transfer of work. For example, the techniques were brought into the Vauxhall plant at Ellesmere Port on the basis of a promise to build a new engine plant there rather than in Belgium. This shows how crucial it is to transform traditional animosity between plants and workplaces of the same firm into a unity across industry.
These problems show the necessity of working through official union structures as well as at the rank and file level. The enormity of the task requires some form of official support to win, even if this involves some union bureaucrats splitting from their bosses in the unions. This can only be achieved through the pressure of the working class, channelled through shop stewards committees, branches and other bodies, as well as through unofficial action. Experience in the USA and Canada gives some pointers to the kind of resistance that might be expected to develop to NMT and its strengths and weaknesses. The Mazda plant at Flat Rock, near Detroit was set up with a very cooperative union leadership. By May 1989, however, local union elections had been won by a more militant leadership based in the New Directions caucus of the Union of Automobile Workers (UAW). In 1991 this new leader-
New Management Techniques: the British experience 61 ship negotiated a new contract with Mazda with significant concessions on temporary employees, health and safety, attendance rules, and use of outside contractors. However, the central issues of the intensification of work remained untouched. Later in 1991 Mazda unilaterally changed the agreement on attendance policy. The plant is now half owned by Ford, who have control of industrial relations policy. At the General Motors/Toyota joint venture NUMMI union oppositionists in "The Peoples' Caucus" won the majority in local elections in 1991, but, according to a visiting Swedish metalworkers delegation in 1992, have been unable significantly to alter workpace or working conditions.
The first major strike in a North American Japanese transplant employing lean production techniques was at the GM/Suzuki joint venture in Ontario, Canada, CAMI. This plant has been the subject of a two year research programme involving researchers and trade unionists grouped in the "Canadian Auto Workers Research Group on CAMI". The research team's first year of enquiries in 1990 detected a growing disillusionment with NMT. The proportion of workers viewing teams as a device to get people to pressure one another increased from 19% to 41% in the space of just eight months. Of those workers interviewed 78% argued that CAMI was a factory where management still had all the power. From September to October 1992 there was a five week strike at CAMI, which resulted in important wage gains and concessions on absences and health and safety - as well as the effective end of management's attempt to enforce company uniforms.
While these developments improve union credibility and the prospects for unionisation elsewhere they do not yet add up to a fundamental challenge to the NMT. While the effects of the techniques have been mitigated by new agreements they remain essentially in place. Some "concessions" such as the election, rather than appointment of team leaders at CAMI, can in fact hold new dangers, since elected team leaders are that much more likely to be counterposed to independent union activists. The potential and need for a wide ranging opposition movement in the unions which will challenge the techniques root and branch remains clear.
Finally, it is important not to see the techniques as a static monolith. They are constantly being developed by management in order to meet new challenges. Nowhere is this more true than in Japan itself where, for example, car companies are facing the twin problem of worker disillusionment and falling profits, or losses in the case of Nissan. Surveys carried out in 1991 by the Japanese car workers union federation, the JAW, found only 4% of employees who would recommend their children to get a job in the industry and 67%
who were not satisfied with their working environment. Toyota, in its newest plant is qualifying a number of the techniques. It is questioning "jobs for life", carrying buffer stocks, cutting down on the number of model changes and derivatives and using specialist engineers rather than team leaders on new projects. As the techniques develop they will inevitably bring forward new contradictions and new opportunities for resistance. The important thing now is to spread the information and develop the networks that can capitalise on these opportunities and create a movement which will defeat the
1. N Oliver and B Wilkinson The Japanization of British Industry (Blackwell, Ist edition 1988,
2. P Garrahan and P Stewart The Nissan Enigma: Flexibility at Work in a Local Economy
6. J Fucini and S Fucini Working For The Japanese: Inside Mazda's American Auto Plant
8. K Williams and C Haslam et al. 'Against Lean Production' (mimeo) p.7
9. J Womack, D Jones and D Roos The Machine That Changed The World (Rawson Asso-
62 International Marxist Review techniques.
Notes
2nd edition 1992)
(Mansell, 1992) pp.81-82
3. Garrahan and Stewart p. 128
5. Garrahan and Stewart p. 100
(Free Press 1992) p. 137 ciates 1990) p.89
4. Oliver and Wilkinson (2nd edition) pp.220-1
7. Oliver and Wilkinson (2nd edition) p. 154