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Innovation and employment
Book Reviews one should be deterred from reading this stimulating account of one of the major issues of the time. There has not been such a thorough collection before and the meticulousness remains to the end in the excellent index. MICHAEL Z. BROOKE, Director of the International Unit, UMIST, Manchester (and at School of Kingston, Canada)
Business Business, (721)
Innovation and Employment, D. FOSTER, Pergamon, Oxford (1980). 193 pp. A5.00 (softback) and AlO. (hardback). This is an interesting book for it sees unemployment from the point of view of the employer, those individuals or groups of individuals who translate the ‘signals’ from the consumer into the product required and then pay employees out of the ‘saleproceeds’, to quote Keynes in the General Theory. The cost structure of manufacturing companies has received little attention in this country. The West German Government takes annual surveys of ‘Kostenstruktur’; and these reveal the true relationship between employment costs and sale-proceeds. And if the employees concerned with activities for the future (or investment) are excluded, it can be shown that, in a balanced cost structure, employment costs are a constant proportion. The importance of the author’s account lies with the exhaustive description of the theories regarding the growth of unemployment and the policies put forward for its amelioration. Even if the reader does not always agree with his conclusions, the list is invaluable. Unfortunately one element in the analysis is missing and, in the opinion of the reviewer, it could be the most important of all. This is the impact on employment of those social pressures to maintain a ‘fair’ wage; the element commonly enshrined in ‘minimum wages’ legislation or in agreements with unions. While a fall in demand (from lack of competitiveness world recession) is a major cause of unemployment, rigidity in the level of wages.
or from so too is
The analysis of experience of ‘out-of-balance’ labour costs and ratios occasions a form of job rejection which is dangerous since a country loses the services of the experienced and the skilled. Moreover, if there is delay in making the adjustment and the employment budget grows beyond the prudent level, then the cuts come in expenditure on investment, that is on planners, technologists and designers whose skills guarantee the future of the industry. Mr. Foster’s emphasis on innovation and small business is exactly right in that it gives scope to innovative employees made redundant by larger organizations. But the economic arithmetic ofemployment is not suspended because businesses are small. The commercially permissible budget for employment will be small while receipts are being built up and must be controlled. If all the emphasis is on ‘union rates of pay’-then the enterprise may fail either in short term through bankruptcy or in the longer term because no resources are left to maintain essential product development. JOAN Cox, Research Fellow, College, Henley-on-Thames
The
Administrative
Staff (709)
Managing Longman,
97
Technological Innov’ation, 2nd Edition, B. C. TWISS, London (1980), 240 pp. 610.95 (hardback).
The first edition of this book was a ‘best seller’ in its field and I have no doubt that the second edition will continue to attract readers. However, it is a little sad to find so few changes have been made. The author explains this away by posing the question ‘What of our understanding of the processes of technological innovation and the effective management of them?’ He answers this by saying ‘In reviewing what was written 7 years ago the author has been unable to identify many significant advances. Research into technological innovation has continued to increase but in general there has been little to modify what was written in the first edition.’ This same point was made by some of the people who participated in a recent conference sponsored by the journal R G D Management but not everybody agreed with this conclusion. In the more quantitative areas this is probably true but it surely isn’t in the ‘behavioural’ side where the interest, important, the need has increased activity and, more dramatically over the last decade. It is, therefore, disappointing to find that the comment made when reviewing the first edition of this book has obviously not had much influence. To quote ‘Unfortunately the weakest parts of the book are those concerned with the individual and the organizational structure in which he operates. . for example, the section headed “Staff motivation” contains only one page of material’. Exactly the same comment applies to the second edition-we still only have one page. Overall, therefore, one must conclude that this book will continue to be good value for people entering the R & D Management field but it would have been better if more changes had been made to certain of the key areas. ALAN W. Manchester
PEARSON, Director, Business School
R & D
Research
Unit, (745)
Financial Planning and Control: A Survey of Practices by U.K. Companies, C. J. JONES, Institute of Cost and Management Accountants, London (1980). 60 pp. (softback). No price quoted. This is an ICMA Occasional Paper describing the results of a survey in the field of Financial Planning Control of U.K. Companies, falling into four major industry groups: Clothing; Building and Construction; Food, Drink and Tobacco; Mechanical Engineering. The author’s intention was to seek industry groups with contrasting features in terms of the type of product and what he describes as ‘the volatility of business activity’. The author secured replies from 550 companies, a good response rate of 32 per cent, ranging over a considerable spectrum of size. The author couches his aims in modest terms and stresses that the Paper reports ‘on the results ofan exploratory study aimed at providing insights into company forecasting practices’. But he also states that ‘The questionnaire was designed to elicit answers to basic questions regarding planning and control practices’ and in the reviewer’s opinion the results are of far more interest in this context than in the context of forecasting per se. For example, he finds that ‘The most frequently specified planning objective related to planning for Cash Requirements and Liquidity’. In contrast, Planning for Investment and Growth was only represented by 10 per cent of the total number of planning objectives specified. Again, the
Business Business, (721)
Innovation and Employment, D. FOSTER, Pergamon, Oxford (1980). 193 pp. A5.00 (softback) and AlO. (hardback). This is an interesting book for it sees unemployment from the point of view of the employer, those individuals or groups of individuals who translate the ‘signals’ from the consumer into the product required and then pay employees out of the ‘saleproceeds’, to quote Keynes in the General Theory. The cost structure of manufacturing companies has received little attention in this country. The West German Government takes annual surveys of ‘Kostenstruktur’; and these reveal the true relationship between employment costs and sale-proceeds. And if the employees concerned with activities for the future (or investment) are excluded, it can be shown that, in a balanced cost structure, employment costs are a constant proportion. The importance of the author’s account lies with the exhaustive description of the theories regarding the growth of unemployment and the policies put forward for its amelioration. Even if the reader does not always agree with his conclusions, the list is invaluable. Unfortunately one element in the analysis is missing and, in the opinion of the reviewer, it could be the most important of all. This is the impact on employment of those social pressures to maintain a ‘fair’ wage; the element commonly enshrined in ‘minimum wages’ legislation or in agreements with unions. While a fall in demand (from lack of competitiveness world recession) is a major cause of unemployment, rigidity in the level of wages.
or from so too is
The analysis of experience of ‘out-of-balance’ labour costs and ratios occasions a form of job rejection which is dangerous since a country loses the services of the experienced and the skilled. Moreover, if there is delay in making the adjustment and the employment budget grows beyond the prudent level, then the cuts come in expenditure on investment, that is on planners, technologists and designers whose skills guarantee the future of the industry. Mr. Foster’s emphasis on innovation and small business is exactly right in that it gives scope to innovative employees made redundant by larger organizations. But the economic arithmetic ofemployment is not suspended because businesses are small. The commercially permissible budget for employment will be small while receipts are being built up and must be controlled. If all the emphasis is on ‘union rates of pay’-then the enterprise may fail either in short term through bankruptcy or in the longer term because no resources are left to maintain essential product development. JOAN Cox, Research Fellow, College, Henley-on-Thames
The
Administrative
Staff (709)
Managing Longman,
97
Technological Innov’ation, 2nd Edition, B. C. TWISS, London (1980), 240 pp. 610.95 (hardback).
The first edition of this book was a ‘best seller’ in its field and I have no doubt that the second edition will continue to attract readers. However, it is a little sad to find so few changes have been made. The author explains this away by posing the question ‘What of our understanding of the processes of technological innovation and the effective management of them?’ He answers this by saying ‘In reviewing what was written 7 years ago the author has been unable to identify many significant advances. Research into technological innovation has continued to increase but in general there has been little to modify what was written in the first edition.’ This same point was made by some of the people who participated in a recent conference sponsored by the journal R G D Management but not everybody agreed with this conclusion. In the more quantitative areas this is probably true but it surely isn’t in the ‘behavioural’ side where the interest, important, the need has increased activity and, more dramatically over the last decade. It is, therefore, disappointing to find that the comment made when reviewing the first edition of this book has obviously not had much influence. To quote ‘Unfortunately the weakest parts of the book are those concerned with the individual and the organizational structure in which he operates. . for example, the section headed “Staff motivation” contains only one page of material’. Exactly the same comment applies to the second edition-we still only have one page. Overall, therefore, one must conclude that this book will continue to be good value for people entering the R & D Management field but it would have been better if more changes had been made to certain of the key areas. ALAN W. Manchester
PEARSON, Director, Business School
R & D
Research
Unit, (745)
Financial Planning and Control: A Survey of Practices by U.K. Companies, C. J. JONES, Institute of Cost and Management Accountants, London (1980). 60 pp. (softback). No price quoted. This is an ICMA Occasional Paper describing the results of a survey in the field of Financial Planning Control of U.K. Companies, falling into four major industry groups: Clothing; Building and Construction; Food, Drink and Tobacco; Mechanical Engineering. The author’s intention was to seek industry groups with contrasting features in terms of the type of product and what he describes as ‘the volatility of business activity’. The author secured replies from 550 companies, a good response rate of 32 per cent, ranging over a considerable spectrum of size. The author couches his aims in modest terms and stresses that the Paper reports ‘on the results ofan exploratory study aimed at providing insights into company forecasting practices’. But he also states that ‘The questionnaire was designed to elicit answers to basic questions regarding planning and control practices’ and in the reviewer’s opinion the results are of far more interest in this context than in the context of forecasting per se. For example, he finds that ‘The most frequently specified planning objective related to planning for Cash Requirements and Liquidity’. In contrast, Planning for Investment and Growth was only represented by 10 per cent of the total number of planning objectives specified. Again, the