Final From File 12

Question 1

Marglin’s interpretation of the origins of the factory

Answer 1

By moving to a factory workers could not keep leftovers material anymore, meaning that in some way their pay got cut but they were working harder.
Marglin argued this was done for distributional motivation.
PROBLEM: factories first emerged in industries other than textile.
The possibility that production organization changes may be distributionally motivated to some significant degree makes the issue of production organization salient in labour relations.

Question 2

Sub-Contracting

Answer 2

An owner hires them to do some parts of the job (like parts of the ship). This way the workers are less paid, the owner does not need to control labour, no contractual relationship between owner and workers, and there is no contact between the owner and technical difficulties.

Question 3

Frederick Winslow Taylor/ Taylorism

Answer 3

Born from a wealthy family, on his way to become a lawyer at Harvard he had medical problem. Later he joined a trade company as a worker. This was surprising for someone from his background.
Taylorism was designed to i) reallocate knowledge to reunite expertise and position; and ii) to replace skilled with unskilled labour. The consequences of this were:
closer and more effective management control of work;
lower pay;
‘spiritually impoverishing’ work.
Taylorism increased output, but only by increasing inputs (making employees work harder) and cutting the price of inputs (that is, pay).Taylorism, then, was not distributionally neutral.

Question 4

deskill

Answer 4

Reduce the number of tasks performed by each worker, including craftsmen’s responsibility for the care of their own tools.
The implications of this would be that: i) the relative supply of workers for each job would be increased; ii) workers would be more readily substitutable so that turnover would cause less of a problem.
All this should make it possible to pay workers less

Question 5

Incentive pay

Answer 5

Incentive pay is financial reward for performance rather than pay for the number of hours worked. The idea is the prospect of financial compensation will motivate the employee to hit certain performance figures or financial targets.
Simplified tasks usually make it easier to monitor work and to count output.
Where output can be counted, pay can be tied to output.

Question 6

Relocate knowledge

Answer 6

He allowed for shop floors knowledge to relocate to upper levels. There is now someone who understands both the higher needs of the company, and the lower needs and details of the work processes. Expertise and position have now been combined
Workers no longer monopolize knowledge about work processes

Question 7

Mechanization

Answer 7

Spread because:
Power prices fell more rapidly than prices in general.
A series of innovations made machines work better:
-improved lubrication;
the substitution of steel for wrought iron;
-greater precision in the manufacture of moving parts;
-the invention of ball bearings.
Mechanization contributed to the development of a new set of industries – in particular, assembly industries

Question 8

Logistical Strangulation

Answer 8

Improving only a part of the process (one of the machines and not the others) will leads to problems of balance.

Question 9

FORD

Answer 9

Introduced the Model T wanting to sell it for cheap (by making its production cheaper). Introduced the pre-moving assembly line for Chassis where big parts were put together and skilled workers walked around where they were needed. Then came the moving assembly line where the part were brought to the worker and not the opposite, the tasks were also broken down to more simple tasks.

Question 10

GM vs Ford

Answer 10

GM overtook Ford not because it revolutionized the production process but rather because it increased the size of the market.
GM offered a lot more options, better as the prices went up. They offered credits and trade ups for better cars as clients; income rose. GM developed a policy of relating the prices of used and new cars to market conditions

Question 11

Technological Innovation in Longshoring industry

Answer 11

Objectives:
- speed up loading/unloading processes and turnaround time
- reduce labour costs
Expectations:
- reduction in need of labour
- more extensive mechanical use
- less individual theft
- elimination of jobs (only need a few skilled workers instead of many unskilled workers)
- ports displaced to more spacious locations because of logistical strangulation
- less companies

Question 12

Reaction of unions

Answer 12

The first reaction of the unions was to reduce any productivity gains from the new technology: i) demand that containers be unloaded and reloaded on the dock; ii) preserve jobs through welt-like practices (say, in a work group of 8, 4 work, 4 watch); iii) attempt to maintain gang sizes irrespective the work to be done.

Question 13

The Mechanization and Modernization Agreement

Answer 13

The provisions of the agreement included:
a management right to change working methods which implied almost total flexibility;
employers paid $5 million per year into an ILWU fund that provided retirement incentives: i) a longshoreman with 25 years seniority could retire with a $7920 cash payment and a pension of $100 per month; ii) longshoremen between 62 and 65 were paid $220 per month up to the age of 65, if they retired.

Question 14

Containerization

Answer 14

It did not like predicted reduce theft because there was now organized crimes against them. Contenerizarion process was slow because productivity benefits were reduced by inappropriate conformity rules.
Pricing by commodity reduced the efficiency of containers because once they are all together in a container it does not matter their individuals characteristics.

Question 15

Wood industry

Answer 15

Productivity depended on terrain.
It was hard to manage so they developed piece work (getting paid by the number of trees you cut), however this did not apply to machine workers because it would make them overuse the machines.

Question 16

Evolution in the use of mechanical wood cutters

Answer 16

They started selling the machines to individuals so they wouldn’t overuse them. They were now being paid piece rate like the others.

Question 17

The two explanations for the weak association

between computerization and productivity growth

Answer 17

On measurement:
standard growth accounting methods (summing expenditures or incomes) do not adequately
measure the benefits associated with: i) quality improvements; ii) product innovation; iii)
better customer service, including speed of delivery.
On the implications of GPT …
It is often argued that computers can only be used effectively if the right sorts of employees
are available and if production organization is suitably adjusted.
The use of computers has implications for the demand for skills. They could only contribute
to productivity growth if employees with the necessary skills are available.
Computers reduce the cost of smaller batch production. Producers had to recognize this to
use them effectively.
Related to the two points above, the efficient use of computers may require a substantial
reorganization of production, including shifting more responsibility in the work process to
workers themselves.

Question 18

Marglin and Braverman’s argument

Answer 18

Production was reorganized for distributional reasons:
to extract more effort from employees (subjecting workers to supervision, increasing management’s ability to supervise);
to effectively reduce pay (eliminating appropriation of raw materials, reducing skill levels);
to appropriate the benefits of innovation (in Marglin’s account).

These cases suggest, then, that changes in production organization have not come at the expense of productivity growth. They’ve contributed to it. (chainsaw, moving assembly line, ect)

Question 19

union effects on productivity growth

Answer 19

Unions usually don’t oppose the introduction of productivity-increasing new technology. Sometimes they urge it (e.g. the UMW in the 1950s and 1960s).
Union wage increases may speed up technological change. This happened in the ports.
There is no evidence of a temporal association between growth in productivity and unionization.
Unions do reduce flexibility (cf. the logging example). But they do not prevent the substitution of capital for labour. So the magnitude of the effect on flexibility and productivity is small.
Unions contribute to productivity growth in several ways. i) They provide a way of expressing discontent. In other words they make possible ‘voice’ rather than ‘exit’ as a way of responding to poor management. This reduces the costs of turnover. ii) Unionization and strikes may be responses to poor management. This means that unions may provide signals to owners that they should consider the replacement of the existing management. iii) Unions provide a structure through which management can discuss with employees ways to improve work practices and productivity.
Freeman and Medoff argue that, in aggregate, unions do not have a negative effect on productivity where there is product market competition

Question 20

Unemployement rate

Answer 20

Who are unemployed?
People who do not have employment.
And who are seeking employment (in Canada, unless they are on temporary lay-off).
The unemployment rate is the number unemployed/the number in the labour
force.
The labour force includes both employed and unemployed
Therefore, the unemployment rate is: unemployed/(employed+unemployed)
This leaves another category not in the labour force or inactive: those who are
neither employed nor unemployed.

Question 21

Discouraged worker effect

Answer 21

People may not seek jobs because they think there is no realistic prospect of finding one. This is
called a ‘discouraged worker effect’. Note that this may be offset by an ‘added worker effect’, when
the loss of a job by one member of a household induces another member to take a job.

Question 22

Conclusions from unemployement gtaphs

Answer 22

unemployment goes up and down, displays no secular trend, but varies across countries.
male employment rates mostly don’t change much and, again, levels differ quite a bit
Female employment rates tend to rise but also differ across countries.

Question 23

given that we know that technology often eliminates jobs why is there not
an aggregate effect?

Answer 23

• Product versus process innovations
  Offsetting effects
  Adaptive versus rational expectations

Question 24

Product innovation

Answer 24

New products create new jobs (to make them)

Question 25

Process innovation (Offsetting effects)

Answer 25

The new equipment has to be constructed.
By lowering the price you increase demand.
New equipment raises income which might be put into new employment.
If there is labour displacement as a result of an innovation, and if there is a reasonably competitive labour
market, then wages in the labour market are likely to fall and that should lead to a rise in employment.

Question 26

technological unemployment is likely
where …

Answer 26

wages are rigid;
prices are rigid;
there is an absence of profitable investment opportunities (possibly linked to the
previous points) so that profits aren’t invested locally;
and expectations are adaptive rather than rational.

Question 27

Unemployement measurement difficulties

Answer 27

Looking for work questions -0.7
Assignment of “short-term future starts” -0.2
Assignment of full-time students looking for work +0.3
Exclusion of native peoples reserves +0.1
Differential imprisonment -0.2
Summing the effects of these measurement difficulties: if Statistics Canada had the same practices/context as the US Bureau of Labor Statistics its unemployment rate would be about 0.8 of a percentage point lower.

Question 28

Looking for work question:

Answer 28

In the US: People who are not actively looking for a job are not considered “unemployed”, meaning that these people are excluded for the labour force because they are not considered as having tried hard enough to find a job.
However in Canada they assume that everyone is trying hard enough and therefore everyone is counted as unemployed

Question 29

Short-term future starts

Answer 29

When a person does not have a job at the moment but will have one waiting for them in the future. In Canada these people are considered as unemployed but not in the US.

Question 30

Full time students:

Answer 30

In Canada full time students looking for a job are not considered as unemployed while they are in the US

Question 31

Native people:

Answer 31

The US does not have the problem of not having access to data from native groups therefore not calculating the high rates of unemployment (often the case in native reserve) like Canada does

Question 32

Imprisonment:

Answer 32

Because of the higher rates of imprisonment in the US it lowers their rates of unemployment (assuming that most people in jail would be unemployed if not in jail)

Question 33

The UI reform act of 1971:

Answer 33

extended coverage to about 96% of paid employees; special law for fishers; among other things
After 1971 there were a series of amendments to the law which reduced its generosity. But until the mid 1990s it remained clearly more generous than the US (recognizing that generosity of UI in the US varies by state)

Question 34

Polanyi’s Paradox

Answer 34

many tasks performed by humans draw on a very large reservoir of tacit rather than, or in addition to, formal knowledge. This is true, for example, of design, musical composition, quite a lot business decision-making.

Question 35

Moravec’s Paradox

Answer 35

computers/automated equipment have great difficulty doing some tasks that humans find easy - for example, folding a towel, setting a chess board, playing soccer.

Question 36

Amar’s Law

Answer 36

productivity gains from new technology depend on significant complementary investments. For example, tractors became available to replace horses in the early 20th century but their use diffused slowly. This is because i) their effective use required substantial expenditures on training operators and ii) ways had to be found to broaden the range of their uses. They were initially used only for tillage. Then people figured out how to extend their uses to sowing and harvesting - each often involving the development of additional fitting for the tractors.

Question 37

The 3 Laws on the effect of AI on unemployement

Answer 37

• The effects of artificial intelligence are to some extent limited by Polanyi’s Paradox - the fact that some jobs require tacit knowledge.
• Moravec’s Paradox is to some degree overcome by machine learning.
• Amara’s Law says that productivity gains from machine learning will be slowed by the need for complementary investments. Thus, it seems likely that acceptable autonomous vehicles will depend on investments in signalling along roadways – which will be costly and take a very long time to install.

Question 38

Jobs most vulnerable to AI

Answer 38

will require less tacit knowledge;
will involve tasks that can be easily simplified;
and require smaller complementary investments.
ie: food preparation and serving;
production (e.g., robots in auto plants);
construction, through prefabrication; and
farming, fishing and forestry (where much of the work involves lots of space so safety concerns are less salient)

Question 39

Possible explanations for rising inequality in

the U.S

Answer 39

Skill-biased technological change (SBTR)
The freezing of the minimum wage in the 1980s.
The effects of trade/direct foreign investment.
Immigration.
Changes in social norms (the acceptability of Gordon Gecko!).
“Winner-take-all as a basis for pay determination (or, in a milder version), a rise in
the importance of performance-related pay.
The first bullet is the technological determinist explanation. The others are all
institutional.

Question 40

What is the evidence for skill-biased

technological change?

Answer 40

A number of researchers argue that SBTC is the main explanation for
rising earnings inequality in the US and other countries, including Canada.
There is evidence in support of this: i) a rising premium to education; ii) the
association between computer use and earnings
- The fact of rising earnings inequality
A rise in the skill premium - the earnings of the average college
graduate divided by the earnings of the average secondary school
graduate.
People who use computers get paid more than those who don’t. It is
assumed that pay rises with skill.

Question 41

Limitations to skill biased technological change

Answer 41

The rise in the skill premium to a college education may be driven by only part of the distribution of those with a college education. There is evidence that some jobs for which a college education was required are being replaced by ICT.
The rise in inequality varies across countries. In some countries it seems not to have risen at all (e.g., France). But all countries have adopted ICT.
There is strong evidence that some of the rise in earnings inequality in the US was caused by freezing of the minimum wage.

Question 42

evidence consistent with

the skill-bias interpretation

Answer 42

It is unlikely that computers have had no effect on the demand for more highly
skilled labour. At the very least, there is the literacy effect.
The pay of electrical engineers and computer scientists rose rapidly in Canada
and the US in the late 1990s into the 2000s. The issue is the amount of the
increase accounted for by ICT. That there was an effect of the demand for ICT-
relevant skills is clear. How much of the rise in inequality is accounted for by the
rise in pay of these occupations isn’t clear.
The evidence on i) the median wage relative to GDP per capita and ii) some falls
in male labour force participation does suggest that some poorly educated males
have had difficulty adjusting to changes in the character of the demand for
labour.

Question 43

Music example of rising inequality

Answer 43

Winner takes all market: The result is that the pay gap between the best and other sopranos expands. It is much larger than it was before the spread
of recorded music in the first part of the 20th century when access to operatic singing mostly involved going to a concert,
and the best soprano could not be the sole performer across towns!

Question 44

The winner take all argument

Answer 44

In winner-take-all markets small differences in talent translate into large differences in earnings
So, the basis for rising earnings at the top of the distribution in winner-take-all markets is:
growth in the relative and absolute productivity of the top performers;
caused by broader bidding for services (markets are national or international rather than local);
which, in turn, is made possible by technology - recorded music, televised professional sports, home
computers;
and, in each case there is an increase in the earnings gap between the top earner and the average earner.

Question 45

mechanisms that offset the job-loss associated with an innovation:

Answer 45

i)
the construction of the labour-saving equipment; ii) price declines; iii) wage
declines; iv) ‘local’ spending of the extra profits made by the innovating
entrepreneur.

Question 46

Abegglen’s descriptions of the Japenese factories

Answer 46

There was ‘lifetime commitment’ to an employment relationship on the parts of both employers and employees.
There was hiring on the basis of educational qualification not necessarily into jobs that required significant amounts of education. Employees were recruited straight from school, with different schooling levels associated with different job levels.
Pay was determined as follows: i) about 30% was tied to age and education at the time of hiring; ii) there were a series of allowances related to family size, age, attendance. This produced a pay structure that was steeply graded by experience. (This characterization of the pay structure will be qualified later.)
There was an excess of supervisory positions - apparently people were promoted to supervisory positions as reward. Promotion was an alternative reward to merit pay.
There was very heavy social integration into the firm. Leisure activities were organized by the firm.

Question 47

Why Japenese inflexible arrangements are inefficient

Answer 47

money that could have been used to fund investment was consumed by the salaries of people who weren’t generating revenue.
Hiring the most talented straight from school means that, often, job demands and employee capabilities don’t match. People with lots of talent are occupying jobs that don’t demand those talents. That will sometimes mean that they are being paid more than is strictly speaking necessary to fill the jobs.
Tying pay to seniority and family responsibilities reduces the incentive to work hard - especially where the risk of dismissal is low.

Question 48

Distinguish static from dynamic efficiency

Answer 48

Static efficiency is efficiency in terms of the refinement of existing products, processes or capabilities. On the contrary, dynamic efficiency takes into account the development of new products, processes, and capabilities. The production organization described by Abegglen might, then, be statically inefficient (at any given time labour is more costly than it needs to be to meet current production/work obligations) but dynamically efficient. That is to say, it provides an environment conducive to technological innovation.

Question 49

Focussed manufacturing in Japan

Answer 49

Japanese firms:
focussed on market niches where Western products were absent or
on parts of the product range where market demand was greatest and access to customers easiest.
ie: Toyota focusing on 6 model of forklift instead of 20 like its competitiors. by focussing on a smaller range of products Toyota lost the marketing advantage provided by a larger range but reduced unit costs of production.

Question 50

The principle of comparative advantage

Answer 50

countries are better off if they specialize in what they do best and then trade.
Associated with this world view is the judgment that (for the most part) unrestricted markets produce the best outcomes, so failure to implement or enforce antitrust law would also be against the interests of a country’s population.
And, the market should be allowed to set interest rates too; if governments deliberately push them down then there will be less saving to fund investment than there would otherwise be and demand will be higher than useful

Question 51

How Japan violated all of these policies and it worked

Answer 51

They had a long history of protectionism. They used economic planning. They never implemented antitrust policies. They kept their interests rates low. Japan did well specifically because it rejected western policies. They could not have done this without government investment.
They were protecting industries of chemicals and steel from foreigners, and supporting exporters, they forced japenese firms to work with each other rather than with foreign firms. . So this successful protectionism plus its different production appraoches can ecplain its success

Question 52

Some distinct features of Japense economy

Answer 52

High degree of concentration within industries
Strong ties between small firms and particular larger ones rather than perfect competition between small firms;
Despite anti-trust law, significant cartelization in practice
Keiretsu

Question 53

Keiretsu

Answer 53

Large groupings of firms that to
some degree coordinate their policies. It is directed by a council that discusses each month common interests. It has no legal status so issues are settles by negotiation rather than authority. They have ties with banks. It is a network of mutual obligation and cooperation within the group.
There is also preferential trade within the group.

Question 54

Japan in the computer industry

Answer 54

Japan was very weak compare to other countries, especially the US and IBM. The government and MITI worked hard to prevent IBM from entering Japan while working harder to get Japenese firms to evolve better technologies than them. In the end groups were formed to cooperate. This had for objective to secure scale economies (through specialization) and to improve R&D performance by pooling resources. But the companies weren’t entirely cooperative. They were not sharing labs or sharing the important informations they found. However the gap between Japan and IBM still narrowed during that period. They then created a 4 year project to develop the very large scale integrated circuit (VLSI) where cooperation was forced. This worked and Japan was now a decent competitor to IBM. The main reasons for the success were protectionism and subsidies

Question 55

The two standard explanations for Japan’s economic

success from the end of WWII to the 1980s

Answer 55

a set of employment relations that provided a congenial environment for
innovation within workplaces;
trade and industrial policies which favoured the development of industries which
provided better than average profits and high wages.

Question 56

Changes in Japanese work organization

before and after the early 1990s slowdown

Answer 56

The role of seniority in pay and promotion was reduced.
The share of performance judgments in pay increased.
The reliance on temporary and part-time employees increased.
The practice of shukhō spread which means the transfer of employees between firms. This took place for different reasons: i) technology transfer (to customers
and joint venture partners); ii) but also to deal with surplus employees.
There was increased mid career hiring.
But layoffs remained rare.

Question 57

Why you can except such practices in Japan

Answer 57

Lifetime commitment encourages firm investment in human capital - both generaland specific training.
The workplace performance-related
component of the pay system encourages efforts.
Job rotation combined with general
competence (remember the commitment to hire the best) allows local problem solving

Question 58

Why you can’t expect such practices in the West

Answer 58

Layoffs and quits reduce the attractiveness of investments in training.
Unions/employees tend to resist
compensation systems where there is a risk that pay will fall.
Unions tend to oppose job rotation unless there are pay increases to compensate for extra responsibilities.

Question 59

Comparing Japan to Western companies found that:

Answer 59

there was less supervisory involvement in quality circles;
there was less job rotation - employees were familiarized with the broader
workplace through “intensive workplace orientation”;
where there was job rotation it was across a narrower range of jobs;
‘no layoff’ policies were less binding than in Japan.
However there were differences in between western countries. For example, the US adopted more practives than in any other country, France adopted more transplants than the rest,…
transferability depends on institutional context

Question 60

Why did Japan decline after the 90s?

Answer 60

Banking crisis
Japanese institutions like Keiretsu, lifetime employment, and seniority-based pay may have been helpful in the
early postwar period. However, the patient capital associated with Keiretsu reduces the rate of replacement of less productive by more productive firms. And seniority combined with lifetime employment reduces the
extent to which younger, talented, employees can be moved ahead rapidly. Industries that have grown rapidly
over the last couple of decades - like software - may well require less patient capital and better career
opportunities for young people.

Question 61

Human capital theory

Answer 61

human capital theory says that i) education and training increase labour productivity; and ii) education and training require investment.

Question 62

Evidence and Reservations of the theory

Answer 62

Evidence:
There is a strong association between education and earnings.
Cross-nationally, there is an association between the level of GDP per capita and
enrolments in educational institutions.
Reservations:
It could be that as countries get richer their populations choose to consume more education.
The evidence on the association between earnings and education could sometimes be produced
by rent seeking through occupational licensure

Question 63

Education in Canada

Answer 63

Canada mostly prepares people for the labour market by providing them
with a general education.
Programs more directly engaging the labour market (within secondary schools, in the form of colleges, as
apprenticeships) are to some degree grafted onto this system.
Other countries do things differently.
Quite a lot of Canadian governments think that the Canadian system is not sufficiently vocational (consider
the Ontario government’s extension of apprenticeships into secondary schools).

Question 64

Any system of employer-provided training has to deal with the following problem

Answer 64

there is a cost to training which is sometimes quite high;
if an employer incurs the cost of training there is the possibility that the employee trained may go to
another, free-riding, employer after the training is completed;
not having spent anything on training the hiring employer can probably pay a higher wage - that
employer free-rides because he or she profits from the training provided by the first employer but incurs
none of the cost of its provision.

Question 65

General and specific skills

Answer 65

General skills are portable - much of what plumbers, engineers, and human
resource managers do. These then are the sorts of skills that free-riding
employers are likely to poach.
Specific skills are tied to a particular job or employer. As well as having general
skills plumbers and engineers may know about the particular equipment used in
a particular workplace.

Question 66

Germany vs Canada apprenticeship

Answer 66

Much younger in Germany with an average age of 17 (27 in Canada).
In Germany:
They are disproportionately offered by large employers - but many are also
offered by small employers.
There are local associations of employers that monitor the performance of
apprenticeship-offering members.
Regional governments fund vocational schools.
There are industrial unions and works councils which participate in the management and placement of apprentices.
- Without a German-like apprenticeship
system …
the link between schooling and jobs is weakened;
firms have a harder time finding skilled employees;
many young people don’t work as hard in school.
Companies, it is argued, pursue long-run profit maximization rather than short-
run cost minimization. (Compare Japan!)
Apprenticeships substantially provide general skills but their attractiveness to
employers is increased by the fact that they also transmit specific skills.
Small firms use apprenticeships to smooth cyclical fluctuations. The apprentices
work when business is brisk and are trained when it is slower.

Question 67

Prais’ study on Germany compare to UK

Answer 67

they tended to produce more technically advanced or higher quality products (engineering, wood
furniture);
they required lower labour input (engineering);
there were less frequent equipment breakdowns (across several industries);
machines were manned by fewer employees (wood furniture);
fewer managers were needed because employees could take care of a broader range of tasks (hotels);
better designed furniture reduced labour costs (hotels).

Question 68

Behemoth reading on Ford

Answer 68

Fordism built on two manufacturing innovations, interchangeable parts and continuous flow
Speed, dexterity, and endurance, not knowledge and skill, were the attributes needed for assembly-line work. Men aged quickly on the line, no longer considered desirable workers weil before middle age
Ford responded to its labor problems with a program of higher pay and shorter hours, “The Five Dollar Day.”

Question 69

Second Machine Age reading

Answer 69

More often than not, when improvements in digital technologies make it more and more attractive to digitize something, superstars in various markets see a boost in their incomes while second-bests have a harder time competing
Why are winner-take-all markets more common now? Shifts in the technology for production and distribution, particularly these three changes: a) the digitization of more and more information, goods, and services, b) the vast improvements in telecommunications and, to a lesser extent, transportation, and c) the increased importance of networks and standards.
Even as the technology destroys geography-a barrier that used to protect authors from worldwide competition-it opens up specialization as a source of differentiation.

Question 70

Japenese Factories reading

Answer 70

new high-performance management practices (flexible work organization, intensive training, self-managed teams, involve production workers to solve problems)
These are practices coming from Japan and have proven to work better than old ones but they are being very slow to spread to the west.
National differences in public policy and in the exercise of labour power through trade unions and informal workplace customs help to explain the existence of different hybrid combinations of Japenese and traditional practices in different countries
Theories of economic organization see management practices as instruments for improving microeconomic efficiency and they imply a convergence in management practices among countries with similar technologies and factor endowments
In contrast, theories of industrial relations systems see management practices as embodying considerations of economic power, as well as efficiency
National differences among management regimes are therefore likely to persist as long as the balance of power between labour and management varies between countries
Four keys components that have recognizable counterparts that are intended to serve similar functions among Japanese affiliates in the west: job rotation, quality circles, self-managing teams and employee responsibility for quality control
The adoption of these practices is higher in the US then in Europe

Question 71

Winds of Change reading

Answer 71

A prized skill for leaders in Japan lies in being able to “read the air”, or to sense what is important but unstated. What is in the air now, reckon foreign and Japanese investors alike, is nothing less than a revolution in companies’ attitude to both shareholders and returns.
For years, Japanese firms of all kinds have lagged behind those in the West on such measures as profitability and return on equity
Instead of investing their modest profits wisely, to expand their businesses—or at least handing them back to investors so they can reinvest the money elsewhere—many companies have sat on growing piles of cash.

Question 72

Productivity and its determinants reading

Answer 72

We need to know which levels of productive personnel (operatives, foremen, supervisors,…) are particularly deficient in training and the extent of these deficiencies, and we need to consider whether productivity advantages might simply be the result of choosing better machinery
International competition in manufactures today very often consists of competition in the reliability of products and their longevity together with whatever contributes to a product’s fitness for purpose, rather than simply competition in the delivered price of identical varieties.
Higher-quality products tend to be produced in wealthier countries, as a result of higher local demands by those who can afford expensive varieties and the development of specialized local skills to meet those demands.
The more important reason why such a range of industries is of interest is that different average skill levels are typically required by each of them.