New technology, work organizations and industrial relations

OMEGA Int. J. of Mgmt Sci., Vol. 12, No. 3, pp. 203 210, 1984 0305-0483!84 53.00 +0.00 Printed in Great Britain, All rights reserved Copyright 1984 Pergamon Press Ltd

New Technology, Work Organizations and

Industrial Relations

MALCOLM WARNER

The Management College, Henley; and Brunel University, UK

(Received May 1983; in ret'isedjorm November 1983)

This paper argues that the effects of the new microprocessor technology such as FMS, CAD/CAM, CNC systems and so on, on industrial relations are relatively indeterminate, given that new production-systems may permit a range of organizational and manpower solutions. Examples are cited from a number of cross-national empirical studies, relating to selected countries in Western Europe. The first deals with the impact of technology on industrial democracy; the second, with the effect on skill-polarization and hence on employee-involvement. The problems of assessing causal relations are then discussed and the paper concludes that whatever the impact of technology on industrial behaviour, the impact of formal participative norms appears to be greater.

I N T R O D U C T I O N

IN THIS PAPER, the possible links between technology and organizations will be tackled and the difficulties faced in inferring conclusions from existing data will be examined. After this, the effects of 'new technology' (as we shall call it for short, although we are aware that it refers to a number of diverse technologies) on employee behaviour will be evaluated. Last, we will ask if the implications for industrial relations and employee involvement are likely to be in a predictable direction, and if it is as yet too early to ascertain the strength of the relationship [28].

The effect of microprocessors on workplace relations is already regarded as problematic and it is clear that the faster the rate of technological change, the greater the need for organizationally adaptive mechanisms may be. If new technology is introduced into firms which do not adopt new structures, then the costs of implementation may be high and the potential benefits diminished. It is at least arguable that organizations which have participative mechanisms may have fewer problems of initial acceptance of new technological developments than those which do not.

A fear of some concerned observers in this

debate is that the infi~rmation-revolution brought about by the new technology may create major imbalances of' access to information, both in organizations and society [6]. If this is the case, they argue that it might lead to greater oligarchic control over information in major institutions, both private and public. If, on the other hand, information becomes less difficult to 'hoard ' because of system-openness in networks, then the social implications may well be less restrictive, and it may indeed be difficult to control and restrict information in multi-access networks, based on linked micro- computers [8].

As time goes on, it is tempting to argue that more decisions over which workers seek influence will involve new technology, both as means and/or ends. Furthermore, it must also be said that if in due course changes in technology will cease to be less of a novelty, and hence controversial, the subjective perception of the 'problem' changes.

T E C H N O L O G Y A N D O R G A N I Z A T I O N

Let us now look at the issue in its broadest context. ~Contingency theory', as we know it received a great boost from the work of the late

203

204 Warner--New Technology, Work Organization and Industrial Relations

Joan Woodward [31] as well as Burns and Stalker's [4] contribution at that time. Such an approach believes that technology shapes the way firms are organized, although later work such as the 'Aston' research, carried out by Pugh et al. [22] suggested that size of organization is no less important. Technological complexity may, however, be only one of the forces affecting the structure of firms. Child has for instance noted that "There has been a great deal of controversy as to the implications technological development has for organization design" [5]. If it is implied that organizational characteristics are linked to such complexity, change the latter and there is an effect on organizational design--number of levels of authority and so on [5]. The way we measure technological variables may however influence our findings [28].

New technology now covers automation from process industries like chemicals, to manufacturing and services [23]. The application to assembly-line work is noteworthy. The development of the automated office is another example [9]. In batch-engineering, partial automation is visible via the use of computer numerically-controlled (CNC) machine-tools [27]. Whilst the new systems can be 'integrated' in terms of being potentially centrally controlled, the flexibility of such systems can also be used on a decentralized basis. Rather than the higher levels computers taking all the decisions, the lower level microprocessor sub-systems can carry out the rest of the functions, whilst acces- sible to those on the shop-floor. The term 'technologist' perhaps can be applied to such operators, but 'technician' he or she will most likely be. Advanced methods such as Flexible Manufacturing Systems (FMS) are, however, the exception [1]. None the less, there are now many embryonic advanced production-systems being implemented [3], and a lesser number of pilot-sites too, at least outside Japan and possibly the USA. Another term to be found is Computer-Aided Manufacture (CAM), often integrated with Computer-Aided Design (CAD) [l].

This is not to say that such advanced CAD/CAM--systems will not soon rapidly spread. One recent estimate spoke of three times as many robots in Japan, vis-h-vis the number in the USA and Western-Europe, respectively [29]. At present, four out of five are welding

machines, but by 1985, 80~o will be involved in assembly-work [29].

The diffusion of such systems starts initially with Numerically-Controlled machine tools (NC), described as 'hard-wired'; through to later CNC machines, which are dubbed 'soft- wired'; to Direct Numerical-Control (DNC) where these are connected to a central computer; then FMS, where automatic pallet delivery-systems despatch components to the machining-centres and return them, often with robot-assistance for selected tasks; even to a more advanced system with 'total' automation potential [3]. In industry, NC and CNC are now widely used [27], but beyond this, other systems must be still seen as 'experimental' in Western Europe [1].

New technology, from the production managers' point of view, not only improves cash- flows and uses machines more intensively, but brings "the people side under control" [10]. On the other hand, there are socio-technical design alternatives [17], but whether social scientists understand technology adequately, any more than engineers take in its wider consequences, is debatable. By this, criticism of generalizations is implied, rather than descriptions of machines or effects on society. Even managements trying to deal with "more complex, large-scale, centralized integrated and capital intensive equipment" [1], find that rather than increasing management's grip, they "show signs of being beyond the capabilities of most companies to control" [1].

A point to emphasize is that the modality of technologies in organizations is not unrelated to their diffusion in societies. Suppose new machines were extremely expensive, they might only be concentrated in large firms; the converse may be true of inexpensive systems. Some machines may be purpose-built; other systems may be developmental. By and large, the newer the technology, the less likely it is to be modal for the firm and consequently in a national context. Even if modal for a handful of companies, it may still be experimental. Even so, the minia- turization of computer-circuitry, and the dra- matic fall in cost, has greatly enhanced the possibility of very much wider levels of diffusion, which now extend to the small firm, whether on a shop-floor and/or office basis [9].

Automation has to date been approached by measuring workflow-integration and product-

Omega, Vol. 12, No. 3 205

complexity [14], but this does not tell us about all the technology in the organization, only that relating to production operations. An important strand of research [14] postulates that the proportion of workflow employees decreases with increasing workflow integration, with relatively more indirect workers. If this is true, it has important implications for the problem we hope to discuss. If not, what then?

If not, what then?

First, the 'Aston research' [14] covered the period of the 'sixties and early "seventies, with the trend to more indirect staff, stemming from the post-war period at least. Second, the British data from that study may have had special characteristics, with a greater administrative/specialist component [19], although the researchers involved did recognize some vari- ation on workflow-integration [13]. Last, the technology measures developed by the 'Aston school' and later used by many other researchers are not un-problematic.

The weaknesses of such technology measures are not unique to such studies; they bedevil most previous and indeed later research. The first major problem is that the scale of automaticity does not characterize the whole organization or sufficiently distinguish between sub-systems: the second is that it does not distinguish between levels of automaticity as such. The 'Aston ' scale here [13] is a six-point scale with hand tools scoring 0 and computer control (automatic cog- nition) scoring 5.

According to Hickson and McMillan [13]:

"Data are collected to determine "mode', i.e. an estimate of the automaticity of the bulk of the equipment used by the organization in its workflow activities--'bulk' meaning the modal or most frequently occurring piece of equipment (e.g. lathes in engineering batch production, or containers and retorts in liquid processing): and to determine 'range', i.e. the most automated equipment used, it being assumed that all organizations score the lowest point by using hand tools" [13].

The at tempt to find a modal form of technology becomes more problematic the larger the unit of analysis becomes and the higher up the scale it is sought. Indeed, most advanced work- places or offices would be assessed with the top score of the 'Aston ' scale [13] referred to and it would not be possible to distinguish between these. The complexity of technology has bypassed the 'Aston ' scale [13], and therefore a

further set of steps needs developing, extending it. In this respect:

"'it is open to question whether the number of input- output units and central processing units has any meaning. Where in the sociological theory of organizations does it say anything about the number of machines? It is probably more appropriate to relate machine-technology to job change via organizational variables such as work flow or specialization." [24]

Furthermore:

"'The effects of automation on human relations should be assessed only after taking into account the changes in organizational processes which automation itself engen- ders." [24]

C O M P U T E R S A N D O R G A N I Z A T I O N

There is a continuum of possible views regarding the impact of computer technology. Many writers appear to have a determinist slant whether in terms of organization [7] and/or with greater computerization and automation, there will be greater numbers of employees wi th - - higher education, skill and technical-training levels [28].

In these circumstances, are there greater chances for decentralization of decision-making, and~or greater involvement of employees in this process?

The impact on industrial relations is not easily ascertained. There are different consequences which result from more decentralization, or conversely greater decentralization. It depends on where critical decision-making levels in the firm are located. If more decisions are pushed upwards, the role of worker-directors for example becomes more crucial; if they are pushed downwards, the role of the works councils or shop-stewards' bodies, for example, may become more influential [28].

One view of the work-organization of the future [25] predicts greater au tonomy for workers, less pacing by the machines, removal of the dirtier jobs, job enlargement via adding of clerical work to the operative's task, safety im- provements in safety and a more flexible day, week or year. Against all these potential bo- nuses, de-skilling may result from greater mo- notony involved in the loading and setting of the jobs serving automatically cycling machines. This last view should not be easily accepted. Given a growing body of field-evidence [27].

206 Warner New Technology, Work Organization and butustrial Relations

Granted the new technology may not necessarily result in de-skilling [27], it follows that the lowest level o f employee need not necessarily be 'alienated' by technical changes and this may have impor tant employment [23], a l though we basically concentrate on the former o f these in the sections to follow [28].

As far as enterprises are affected:

"This impact of computers on organizational design and behaviour has fascinated management, computer scientists and researchers for some time. In earlier days of computing some quite spectacular claims and predictions were made: organization structures would change shape, many managerial tasks would be automated and organizational cultures would become faceless. Experi- ence has mellowed such thoughts." [27]

One review of the field [24], has evaluated many of the major empirical findings available on computers and organization, particularly con- cerning " the dimension of centralization vs decentral ization" [24].

Four possible paths are described in the literature

(l) new technology leads to greater centralization

(2) new technology leads decentralization

to more

(3) new technology has no impact

(4) new technology's impact is moderated.

This over-view [24] concludes that:

"conditions in organizational task environments do affect the degree of centralization or decentralization. Since computers were evident in all the organizations, one may safely conclude that computerization does not explain the variance in structure. Instead, we may regard computer- ized information technology as a flexible mechanism which can facilitate either form of structure, depending on the more basic requirements which the task environment imposes." [24]

Indeed, easy generalizations are confusing because there are different kinds o f innovations. We must indeed be cautious for "it is dangerous to consider an overall impact o f computerization because there are so many different kinds o f functions which computers can per- fo rm" [24]. The impact o f computers on organizational decision-making can thus still be seen as problematic. Some writers have o f

course argued that technology inevitably leads organizat ions in an unambiguous direction [2]. One instance o f this view is that the computer only reinforces conventional decision-making structures by turning them in a more centralized fashion. Another less deterministic position might argue that the new technology is neutral in its consequences [16]. Finally, some might argue it basically decentralizes and devolves authori ty, which is a view the present writer would basically endorse [27].

It is vital that any analysis o f the effect o f new technology on management structures and hence on industrial democracy, should introduce a greater degree o f precision into if not the 'measurement ' o f the technology involved, an assessment o f its representativeness [28].

N E W T E C H N O L O G Y A N D P A R T I C I P A T I O N

It may be said that the more the new technology diffuses, the more the characteristics o f organizat ions will alter in a comparable direction, to adapt to such changes. The more adapta t ion occurs, begin to resemble organizations. This industrial relations

the more firms may then existing 'knowledge-based ' will mean consequences for [28].

Da ta critical to the ' l abour process' thesis regarding de-skilling [3], may be adduced from the results o f the Industrial Democracy in Europe study, to which the present writer contributed [15]. The fieldwork covered 134 organizat ions in 12 countries with over 8000 respondents [15]. It argued that skill-level and automat ion level are higher in service ones than in metal firms [15]. Indeed, when Sector is disregarded however, skill and au tomat ion levels seem unrelated, but rather more linked to product complexity (see Table 1) [15].

We can argue that the data does not imply that " the more advanced technologies increase the propor t ion o f dull jobs among workers as long as skill-level is accepted as an indication o f content o f jobs" [15]. Service-sector workers appear to have higher skill-levels, are almost wholly white-collar and are propor t ionate ly more likely to be women [15]. The above IDE study, for example, then related skill-level to influence-patterns [15], but found ~'that higher educat ion and/or skill does not by i tsel f repre- sent a sufficient, but only a necessao', condition


Table 1. Correlat ions between sector and the other technological variables

Sector a (Service = high) Partial correlation/sector constant

Skill-level o f workers 0.41 Automation-level 0.21 - 0.05 b Technological Interdependence - 0 . 1 7 0.10 0.25 Product-complexity - 0.17 0.24 0.30 0.16

"Dummy-var iab le Manufac tur ing = 1, Service = 2. blntercorrelations between the variables of technological complexity when Sector is partialled o u t (Adapted f rom

[15]).

.for higher influence (italics added); if an employee does not have the relevant status in the organization, his skill does not contribute significantly to greater influence" [15]. Even so, skill is important " i f we look only at workers' influence on long-term decisions" [15], where there was a small but positive correlation. As far as representative bodies influence was concerned, this was fairly similar for short-term decisions and for all decisions.

Sector has a surer predictive effect; "in non- industrial organizations there are more oppor- tunities for democratization than in industrial organizations" [15], even if we were not sure why, with a positive, but moderately low, correlation for short-term decisions involving workers and medium-term decisions of representative bodies (see Table 2) [15].

The study concludes that "the institutional model is the most appropriate for the expla- nations of the relationships between institutional norms, influence and involvement related to medium-term decisions. The behavioural model is the most appropriate for long-term decisions" [15].

If skill level is a major variable to consider with respect to potential participation in decision-making [12], then the findings above

are relevant for the reasons stated earlier. It is important to stress that technological change is going to affect skill level and reproduce in part, but only partly and gradually, sectoral characteristics, which in turn may affect employee influence and involvement. In addition, the effect of institutionalized participative norms on technological change (and vice versa) are worth summarizing [15].

First, the impact of technology on employees' say must be examined; to put it into perspective, the effect of 'country' on workers' influence is rather strong compared with sector if this is taken as a proxy for technology [15]. The findings for proxy-effects of technology on involvement (e.g. skill, sector and automatization) have also been noted earlier, but appear to be also counter-balanced by the effects of ~country' variables [15].

Next the impact of employees' say on technology; the clues are contained above, but it is hard to ascertain which affects which. Greater worker influence may be obstructive a priori, as it may be helpful. Another cross-national study [16] failed to discover a link between technology and participative behaviour; it seems to depend on the context. Where there is substantial unionization [12], workers' representatives may

Table 2. Multiple regressions of contextual variables on workers ' influence d

Influence

Workers

Contextual variables ST b M T LT

Marke t dominat ion of enterprise - 0.19 Sector 0.27 Skill 0.23 Automat iza t ion 0.22 Product complexity 0.18 Functional differentiation 0.29 0.25 Span of top managemen t - 0 . 1 6 Stability of work force - 0 . 1 9 Mobil izat ion 0.19 0.45 0.42 Multiple R 0.396 0.613 0.617

P 0.50 0.000 0.000

"Values in the table are s tandarized beta coefficients with p.07. bST = short- term decisions, M T = medium- te rm decisions, LT = long-term deci-

sions. (Adapted f rom [15]).


strike a tougher bargain where new technology is proposed. Unions want to have a say at the pre-implementation stage. In some cases, they have concluded what are known as Technology Agreements; even so;

"trade unions appear to have made less bargaining headway on the issues of job design than on the question of equipment design. The former is an area over which systematic knowledge is much less precise. However, since this area is one in which worker experience is paramount, it could be argued that the trade unions would be in the best position to evaluate different options in work organisation, without deferring to the 'experts'." [30]

Third, the impact technology has on formal participative norms; it is possible to suggest that technology may affect formal norms only in a circuitous way, if G D P is taken as a proxy for capital-intensity and hence a high level of technological advance [15]. Excluding Yugoslavia, formal participation and G D P are probably linked together [15].

Last, the influence of formal norms on technology; 'country ' effects would by definition affect most of the industrial behaviour there [15], so that we might conjecture that technological change would be easier. Where there are laws relating to participation, there are formal arenas and laid-down procedures for joint problem-solving, which may be the 'appropriate structures' for handling the complex new ways of managing technology and the "possibly conffictual relations these new forms of organizational structure imply" [11]. It is likely that in this way, employee involvement and technological change may be most linked together [28].

F U T U R E SKILL-LEVELS A N D P A R T I C I P A T I O N

One effect of greater automation may be, for example, that there are fewer shop-floor employees in absolute terms, but whether the relative proportions will change vis-h-vis indirect workers will depend on the relative speeds of job loss between the bench and the office and is less determinate. If office automation diffuses at a faster rate, then the factory might one day consist of managers and shop-floor technicians and maintenance craftsmen, with no 'office' as such to speak of. I f this occurs, the consequences for industrial relations may be different than if the ratio of shop-floor is low

v•-gt-vis a large administrative/clerical component [28].

Whether this will happen is less likely, as offices may possibly be slimmed-down faster. As a recent view suggested:

"In industry, the employment impact may not be so severe overall, but it will vary greatly from sector to sector. Rather than creating new products or completely displacing old ones, the introduction of rnicroelectronic technology will mean that it will take less time to produce existing products. This is partly because production lines can be automated or speeded up, but mainly because the number of components in a product--and thus the time taken to assemble it--van be greatly reduced by the incorporation of chips." [9]

I f there are now proportionately more direct workers, there may be different repercussions if they have a higher skill level than if the status

quo prevails. Even so, there may still be assembly-work left to do, if advanced parts- production and robots still carry out most of the work without human intervention. A great deal depends on the size of the plant and the size of batches produced. There are different consequences in each case, and the technology may allow smaller firms market-advantages [27].

In a cross-national study carried out by the present writer (with colleagues at Henley and Berlin) on microelectronics and manpower in manufacturing [27], we wanted to ascertain the effects of CNC machine-tools on organizational, and related manpower variables, such as personnel, training and industrial relations [27].

In this investigation [27], we argued that skill-polarization depends on batch size. Plant size was in turn, held to be associated with greater bureaucratization and a greater differentiation of programming functions into separate departments. Making batch size larger was then seen as linked with the differentiation of programming away from machine-operating, although not necessarily splitting it up into separate departments. We distinguished between bureaucratization within the firm and the polarization of skills; making plants larger was seen as linked with the former, while larger batch sizes were related to the latter [27].

The investigation described did not look at employee participation and industrial democracy per se. In so far as technology affected control-systems it did however find relatively indeterminate organizational consequences. For


example, contrary to the findings of the study on worker participation cited earlier, the pres- ence of institutionalized norms in West Ger- many did not lead to the works council (where indeed there was one) becoming involved in decisions affecting the technological policy of the enterprise and the decision to introduce new technology; nor did the absence of such norms in the British case have any discernible contrary effects. Even the trade unions did not get involved positively or negatively, often regarding technological progress 'as a good thing' [11].

The relative changes of occupational roles within the plant may have different implications for control-structures and hence industrial relations. A higher proportion of skilled employees in maintenance, for example, may affect the pattern of influence and involvement.

Another study in a similar vein [26] argued that:

"It is reasonable to expect the proportion of total employment represented by maintenance functions in batch production to rise nearer to the levels prevalent in mass production. Given that a principal incentive for manufacturers to install advanced batch production systems is to improve labour productivity (also to reduce work in progress), the numbers or setters and operators employed are likely to decline sharply. The evidence at present is that CNC machine manufacturers are unable to reduce the need for diverse maintenance skills. The large output of each complex machine means that the total number of maintenance people required may not continue to rise; but maintenance staffs are likely to increase as a proportion of total employment." [26]

This may mean that with greater computerization and automation, there will be greater numbers of employees with, for example, higher skill- and technical-training levels, with lower employment prospects for those without such skills. There are greater chances for decentralization of decisionmaking and/or greater involvement of employees in this process, if the future work-force were to increasingly take on this shape.

C O N C L U D I N G REMARKS

Given the evidence reviewed, we can ten- tatively conclude that the effects of technology on industrial relations are indeed relatively indeterminate, given that new ways of working may permit a range of organizational and manpower solutions, which may vary from country to country, depending on national contexts. We have great difficulty in teasing out causal

relations, but whatever the impact of technology on industrial democracy, the impact of formally prescribed participative norms cannot be disregarded [15].

It would, in any case, be wrong to suggest that workers' representatives can play no role in decision-making on new technology. They are often best-placed to know the options which are relevant because they have first-hand contact with shop-floor conditions over very long peri- ods. Shop-stewards particularly have often worked with the production-system involved, and have a pragmatic rather than text-book perspective on potential problems [6]; they may often be constructive if consulted at the pre- implementation stage. Given the recent high levels of unemployment, it is surprising that they have not led greater resistance to technological change than has been apparent, but as a recent study commented:

"On the whole, workers in Britain have been relatively successful in resisting the harmful effects of new technologies: job loss, the loss of traditional skills, speed-up of work with increased physical and mental stress, the loss of immediate job control. Perhaps this is because the British working class had a much stronger dose of technological change very early on, during the industrial revolution." [6]

We cannot endorse this statement un- equivocally, but there is more than a grain of truth in it.

In the long-run, the new communication technology could possibly be intrinsically 'democratic' in its influence on the work-place, as it could potentially enhance the greatest access of the greatest numbers, to paraphrase Bentham. In a way, this could parallel an earlier technological development, namely the printing- press, which by reducing communication-costs increased the potential for democratic involvement. Greater industrial democracy could result from the new technology via greater access to information within organizations, both for employees and their representatives as well as management. It is however early days: we must wait and see.

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ADDRESS FOR CORRESPONDENCE: Pro[essor Malcolm Warner, Research Coordinator, The Management College, Henley; and Brunel University, Greenlands, Henley-on-Thames, RG9 3AU, UK.

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New technology, work organizations and industrial relations