Participation,Productivity,and the Firm's Environment

Koike Kazuo , “Human Resource Development and Labor-Management Relations,” in Yamamura Kozo Yasuha Yasukichi , eds., The Political Economy of Japan, vol. 1: The Domestic Transformation (Stanford, CA: Stanford University Press, 1987), pp. 298–330; and Lincoln James R. McBride Kerry , “Japanese Industrial Organization in Comparative Perspective,” Annual Review of Sociology, 13 (1987): 298–312.

Accounting for the slow progress of work redesign, Bradley and Gelb consider that “apart from technical advantages there is less incentive for such experiment in Mondragon. Worker ownership provides an alternative means to generate consensus and integrate the workforce.” Bradley Keith Gelb Alan , Cooperation at Work: The Mondragon Experience (Heinemann Educational Books, 1983), p. 36. Whyte Whyte , on the other hand, emphasize incidental external economic pressures that divert management's efforts and implementation problems due to inexperience. Whyte William Foote Whyte Kathleen King , Making Mondragon: The Growth and Dynamics of the Worker Cooperative Complex (Ithaca, NY: ILR Press, 1988), pp. 125–127.

Jonsson Berth Lank Alden G. , “Volvo: A Report on the Workshop on Production Technology and Quality of Working Life,” Human Resource Management, 24 (Winter 1985): 455–465.

Peters Thomas J. Waterman Robert H. , Jr., In Search of Excellence: Lessons from America's Best-Run Companies (New York, NY: Harper and Row, 1982), p. 137.

Peters Waterman , op. cit., pp. 175–177.

Koike , op. cit., pp. 319–321.

Lincoln McBride , op. cit., p. 300.

Bradley Gelb , op. cit., p. 16.

For a comprehensive discussion of worker participation in Mondragon, see Whyte Whyte , op. cit., pp. 113–127 and 209–213.

Forseback Lennart , Industrial Relations and Employment in Sweden (Stockholm: Swedish Institute, 1980).

von Werssowetz Richard O. Beer Michael , “Human Resources at Hewlett-Packard,” Case Study 9-482-125, Harvard Business School, 1982.

Lincoln James R. Kalleberg Arne L. , “Work Organizations and Workforce Commitment: A Study of Plants and Employees in the U.S. and Japan,” American Sociological Review, 50 (December 1985): 738–760.

Bradley Keith Gelb Alan , “Cooperative Labour Relations: Mondragon's Response to Recession,” British Journal of Industrial Relations, 25 (January 1985): 77–97.

Sato Kazuo , “Saving and Investment,” in Yamamura Kozo Yasuba Yasukichi , eds., The Political Economy of Japan, vol. 1: The Domestic Transformation (Stanford, CA: Stanford University Press, 1987), pp. 137–185.

Clark Rodney , The Japanese Company (New Haven, CT: Yale University Press, 1979).

Bradley Gelb , Cooperation at Work, p. 34; Bradley Gelb , “Cooperative Labour Relations,” pp. 88–90.

Hauck Warren C. Ross Timothy L. , “Sweden's Experiments in Productivity Gainsharing: A Second Look,” Personnel, 64 (January 1987): 61–67.

Levering Robert Moskowitz Milton Katz Michael , The 100 Best Companies to Work for in America (Reading, MA: Addison-Wesley, 1984), p. 144.

Aoki Masahiko , “The Japanese Firm in Transition,” in Yamamura Kozo Yasuba Yasukichi , eds., Political Economy of Japan, pp. 263–288.

Bradley Gelb , “Cooperative Labour Relations,” p. 18.

Levering , op. cit., p. 144.

“The company had distributed $64 million in cash profit-sharing bonuses in the previous five years, and about half the employees were participating in a stock-purchase program.” Atherton Roger M. Crites Dennis M. , Hewlett-Packard Company (A): Problems of Rapid Growth, Case 0208 (Dover, MA: Lord Publishing, 1976), p. 7.

Lincoln McBride , op. cit., pp. 296–297.

Kolke , op. cit., pp. 308–309.

Volvo personnel department, personal communication, Feburary 1989.

Jangenäs Bo , The Swedish Approach to Labor Market Policy (Stockholm: Swedish Institute, 1985).

“Rather than run the risk of ‘big’ layoffs, Hewlett-Packard has declined to bid on short-run government contracts. It has also avoided getting into product lines where there are wide fluctuations in sales volume, such as in many consumer products.” “Since the company had policies of keeping employment steady and operating on a pay-as-you-go basis, both Hewlett and Packard believed minimal debt would be more consistent with these policies and the weakening U.S. economy.” “Their financial strategy has been to use profits, employee stock purchases, and other internally generated funds to finance growth. They have avoided long-term debt and have resorted to short-term debt only when sales growth exceeded the return on net worth.” Atherton Crites , op. cit., pp. 7, 4, 4.

Ouchi William G. , Theory Z: How American Business Can Meet the Japanese Challenge (Reading, MA: Addison-Wesley, 1981), p. 188.

Koike , op. cit., pp. 319–321; Mincer Jacob Higuchi Yoshio , “Wage Structures and Laber Turnover in the United States and Japan,” Journal of the Japanese and international Economies, vol. 2 (June 1988), pp. 97–133.

Bradley Gelb , Cooperation at Work, p. 17.

“Even though their Individual stock holdings in 1975 were worth some $700 million, Hewlett and Packard still ran an egalitarian company. They drew salaries of only $156,000 each, and few top officers made more than $100,000.” Atherton Crites , op. cit., p. 7.

Wiegner K. K. , “John Young's New Jogging Shoes,” Forbes, November 4, 1985, pp. 42–44.

Standing Guy , Unemployment and Labour Market Flexibility: Sweden (Geneva: International Labour Office, 1988).

Wiegner , op. cit.

There are important non-economic factors that can inhibit participation such as habit, history, and culture. In addition, there are some technologies where the costs of participation will always outweigh the gains, and some workers who are not interested in participating. The additional factors required to maintain management and union support are discussed in Levine David I. Strauss George , “Employee Participation and Involvement,” in Investing in People, Report for the Commission on Workforce Quality and Labor Market Efficiency, Background papers, Vol. II, paper 35b, U.S. Department of Labor, September 1989, pp. 1893–1948.

Aoki Masahiko , “The Japanese Firm in Transition,” in Yamamura Kozo Yasuba Yasukichi , ed., The Political Economy of Japan; Volume 1: The Domestic Transformation (Stanford, CA: Stanford University Press, 1987), p. 265.

Jones Derek C. Pliskin Jeffrey , “The Effects of Worker Participation, Employee Ownership and Profit Sharing on Economic Performance: A Partial Review,” Working Paper 88/13, Department of Economics, Hamilton College, NY, 1988, p. 26.

On the other hand, there have been several cases when the fear of layoffs has inhibited the success of participation. Kochan Thomas Katz Harry Mower Nancy , “Worker Participation and American Unions,” in Kochan Thomas , ed., Challenges and Choices Facing American Labor (Cambridge, MA: MIT Press, 1985), p. 290.

Bluestone Irving , “Comments on Job Enrichment,” Organizational Dynamics, 2 (Winter 1974): 47.

Quote from Deutsch Morton , “Is there a tradeoff between economic efficiency and equity?” Asilomar Conference, April 17, 1988. This evidence is summarized in Levine David , “Cohesiveness, Productivity, and Wage Dispersion,” Working Paper 14, Institute of Industrial Relations, University of California, Berkeley, January 1989.

Witte John F. , Democracy, Authority, and Alienation in Work (Chicago, IL: University of Chicago Press, 1980), p. 162; Berman Katrina , “The Worker-Owned Plywood Cooperatives,” in Lindenfeld Frank Rothschild-Whitt Joyce , eds., Workplace Democracy and Social Change (Boston, MA: Porter Sargent Publishers, 1982), p. 171; Bradley Keith Gelb Alan , Cooperation at Work: The Mondragon Experience (London: Heinemann Educational Books, 1983); on Japan, see Ouchi William , Theory Z, (New York, NY: Avon, 1981), Vogel Ezra , Japan as Number 1 (New York, NY: Harper and Row, 1979), pp. 120, 140–141, and Rohlen Thomas , “The Company Work Group,” in Vogel Ezra , ed., Japanese Organization and Decision-making (Berkeley, CA: University of California Press, 1975); Lawler Edward E. III , Pay and Organizational Development (Reading, MA: Addison-Welsley, 1981), p. 225; Beer Michael Spector Bert , Managing Human Assets (New York, NY: The Free Press, 1984), p. 145.

Bernstein Paul , Workplace Democratization (New Brunswick, NJ: Transaction Books, 1980), p. 75.

Ibid.

Freeman Richard Medoff James , What Do Unions Do? (New York, NY: Basic Books, 1984).

Steiber Jack , “Employment-At-Will: An Issue for the 1980's” 1983 IRRA Proceedings (1984), p. 2.

There is evidence that economic crises can prod management, workers, and unions to initiate participatory experiments; nevertheless, demand stability reduces the costs of maintaining participation.

The results of this section are elaborated in Stern David , Managing Human Resources: The Art of Full Employment (Boston, MA: Auburn House Publishing, 1982).

Shleifer Andrei Summers Lawrence , “Breach of Trust in Hostile Takeovers,” in Auerbach Alan , ed., Corporate Takeovers: Causes and Consequences (Chicago, IL: University of Chicago Press, 1988), pp. 33–56.

In Japan, for example, there is an average of over two conferences on quality circles every day. Cole Robert , Strategies for Change (Berkeley, CA: University of California Press, 1989).