The macro- and microeconomic social impact of advanced computer technology

260

THE MACRO- AND MICROECONOMIC SOCIAL IMPACT OF ADVANCED COMPUTER TECHNOLOGY Gunda

Schumann

The impact of advanced computer technologies on relationships between headquarters and affiliates in management, employment, work environment as well as the economic role of women and the economies of LDCs is investigated in this essay. Computers and information technologies under control of transnational corporations which try to gain competitive advantages, tend to provide concentration of power in headquarters. They increase the rate of unemployment, alienate employees from their work environment, reinforce traditional economic and social roles of women and widen the gap between developed countries and LDCs. Strategies need to be evolved to enable all human beings to participate in the benefits of the new technologies. Kgword~:

computer

technology;

economica;

social

impact

THE ADOPTION and implementation of advanced computer technology within transnational corporations (TNCs) would seem to change the whole world economy:

“The totally automated factory is not only a possibility, it is a reality.“’ Technological advances such as computer-aided design (CAD) and computer-aided manufacture (CAM)-developed for business-also have a tremendous influence on the question of power within a company. These new technologies enable top managers to utilize new techniques of centralization of decision making within a TNC, eg selective access to information stored in the computer provides power in an organization. Gunda Schumann is a lawyer and sociologist, and can be contacted at Leuthener Strasse 5, D-1000 Berlin 62, FR Germany. This study was written during the author’s internship at the United Nations Centrc on Transnarional Corporations, New York, during 1983. The author expresses thanks and appreciation to Dr Miriam Frank, New York, for her comments on the first draft.

0016.3287/84/030260-26$03.0001964

Butterworth&Co(PubIishers)

Ltd

FUTURES June 1984

Economic social impact ofaduanced computer technology

261

On the other hand, decision making can also become more decentralized on a local affiliate level. Thus far, the computer ‘revolution’ has raised the old issue of centralization u decentralization between headquarters and affiliates of TNCs. Competitive pressures and economic considerations will probably determine the direction of management policy towards centralization, eg strategic shifts require new data at the top management level which trigger changes in infosystems. Strategic

responses

to competitive

The industries which consumer electronics, been trying to adjust constant efforts have circumstances worsen. l

0 l

0 0

0

challenges

face global competition, such as automobiles, machines, chemicals, steel, rubber, textiles and shipbuilding,’ have to changing patterns of demand, input costs etc. These been increasing in the past decade as macroeconomic Instances of this development include:3

lower, more erratic growth, greater exchange and interest rate instability; continued pressure on prices and profit margins as a result of movements in raw material prices; growing competition from new Japanese companies and LDCs; approaching saturation in a number of previously growing product markets; the accelerated development of high sophisticated technologies such as electronics, information processing and ‘robotics’, changing entry barriers and technological strategies in main parts of industries; existing oligopolies have been destabilized by the growth of fringe producers (in microelectronics). 4

Some economic responses to the growing connection between business strategy and technology include management theories which take note of technology’s central position in successful corporate policy.5 Strengthening

the technological

base

In the face of an increasing range of technology for creating new products and new market shares, industries have promoted their own in-house R and D, access to external market sources for technology, and a rationalized product line. In order to use technology more effectively, they have either pursued strategies of vertical integration (closely related diversification on a common technological base) or have practised ‘quasi-integration’ (long-term contracts and joint ventures). These strategies have also led to an increasing number of divestments;‘j furthermore, close relationships between firms have become important for the pioneer sectors, eg ‘robotics’, in order to have a ‘tap’ into component technology and the know-how of other companies.’ Product

differentiation

and market segmentation

Firms in a competitive environment try to keep or improve their market share by using advanced technology to increase product quality, adjusting product features to the requirements of certain consumer groups (customization), and FUTURES June 1984

262

providing better after-sales service. s These policies put the supplying firm in closer contact with customers and distributors and create a greater dependency in terms of reducing price elasticity. In addition, these firms focus on R and D and marketing. They coordinate manufacturing with product policy.g ‘Focused manufacturing

and office automation

The most advanced attempt to combine technology with market strategy is found in the evolution of computerized production. The trend in computerization is towards more complex, large-scale and centralized production equipment. In general, this extends an entire process of conceptualizing, design and manufacture from management infosystems to design and simulation, redesign, material handling and maintenance, process control, quality control and inventory. The tendency is to ‘focus’ the production: large scale, high volumes in one set of plants, small scale, low volumes in another set.‘O (1) Computer-aided manufacturing (CAM). CAM as a sub-system of the automated factory is the latest evolution of ‘Numeric Controlled’ (NC) machine tools which were adopted after World War II and applied to milling and other metal-cutting operations in the production of jet aircraft. This was its applications include tube bending, supported by the air force. Recently, etc. NC tools increase accuracy, flexibility and sheaving, torch cutting, uniformity in complex manufacturing. They run according to a detailed set of coded instructions on punched paper tape.” In 1959, machine centres combined several NC tools to reduce setups and floorspace (by up to two-thirds). In 1969, Computer Numerical Control (CNC) replaced NC machines with a minicomputer program attached to an individual machine. Manufacturing then became more flexible. Current CAM also appeared around 1969. As ‘Direct Numerical Control’ (DNC), it embraces five to 20 NC/CNC machine tools which are controlled by a central computer. This enables managers to control shop operations. (2) Flexible manufacturing systems (FMS). FMS consists of several computers and machines. Its potential for radical change lies in the capacity to manufacture goods cheaply in smaller volumes (200 to 20000 pieces). This has always been a problem for batch production, because transfer lines lacked flexibility and nonautomated general-purpose machine tools were too costly.‘* These systems combine DNC’s capabilities with automated transfers of parts to the machines in the system. They can make parts in any sequence at any time and can automatically reroute parts to other machines when one breaks down. This reduces handling time, and the systems are flexible enough to produce more than one model of a vehicle on the same assembly line. I3 (3) Group technology. ‘Group technology’ means the “grouping of similar parts into families for easier manufacture and better inventory contro1”.14 This enables companies to reduce the number of tools and make the production of parts and their improvement more efficient. The idea was evolved in the 1920s in Germany and is mainly used as a manufacturing method today by Japanese companies. I5 FUTURES

June 1984

(4) Computer-ai~d design (CAD) and computer-aided testing (CAT). CAD and CAT emerged in the early 1960s when manufacturing engineers began to iink computer graphics with NC machines, and basically means designing, drafting, analysing and testing. Computer graphics are displayed on a screen; the designer studies various aspects of an object or assemblage by rotating and separating it into segments; he or she can then analyse and test things, subjecting them to electronically simulated temperature changes, mechanical stresses, etc. Even drugs can be designed without chemicals being transferred from laboratories to terminal screens. The merger of CAD/CAM is the most recent development in the aerospace industry (eg at McDonnell Douglas): The output in the form of CAD drawings speeds along special communication links to automatic drafting machines, metal-milling tools and inspection devices. Control programmes monitor and direct all these busy pieces of apparatus. A management system watches over the status of all machine tools and frequent status reports inform shop managers about the number of completed units, unit cost and operation productivity. l6 Another Windsor,

example

is the

CAD/CAM

system

of

Ford

Motor

Company

in

Ontario.

(5) Corn~~t~-aided process planning (GAPP). needed for product ion :

CAPP

is the detailed listing of steps

Sitting before a screen, a manager characterizes the part to be made according to a standard classification table. Then a code is typed in and a standard routing plan appears on the screen which the manager can change to suit the specifics of the particular part. l7 A further development of this system is an advanced approach to ‘shop floor management’. This system takes data from a common manufacturing database and creates a process plan without human intervention. (6) Computer-integruted rnffn~~ct~ring (GYM). CIM depends on a common database which is available for all interested users. The database is an electronic collection of all relevant info~ation about design, production, and materials of the product. (7) Automated factory. The automated factory was recently developed by Yamasaki (Japan). It was established 20 miles from headquarters: 65 computer-controlled machine tools and 34 robots are linked via a fibre-optic cable with the computerized design centre back in headquarters. From these the flexible factory can be directed to manufacture all required parts by entering into the computer’s memory names of various machine tool models scheduled to be produced. A few buttons are pressed to get production going. It is the first factory that can be directed by telephone from corporate headquarters.” In addition, there is new research into the ‘intelligent’ robot which can perform tactile, aural, and visual tasks. ” Furthermore, the possibilities of factories in outer space, which would produce highly valued goods under gravity-free conditions (pharmaceuticals, medical equipment), are being FUTURES

June 1984

‘264 Economic

social impact

of advanced computer

investigated by, inter alia, the Blohm (FRG) and the European

technoloo

aerospace company, Messerschmitt-BiilkowSpace Agency (ESA).*O

Robotics Research by Creative Strategies International’l suggests that the automated factory will grow in its international market potential about tenfold above its current rate within the 1980s (see Tables 1 and 2). Robots are leaders because companies do not necessarily install the subsystems in factories when they implement manufacturing systems. Industrial and Sullivan German robot

robot installations by country are estimated (Table 3). FR Germany is the European

companies markets

Further,

are strongly

are shared

the TNCs

supported

among

in particular

several

in a study by Frost leader because West

by the government. TNCs

are described

as shown by Alan

the market (CAD etc)

The

in Tables

national 4 and

5.

Cane:

Who is who in thefield of robotics Unimation: Now part of Westinghouse, the recognised international robot pioneers. Manufactures the Puma robot family; the pace setter in robot development, the company is working on vision, force sensing and conveyor tracking. 5000 robots installed world-wide. ASEA: Large Swedish electrical engineering company, ASEA were the pioneers in allelectric drive robots. Some 1500 robots have been installed world-wide. Trullfa: Norwegian company with some 1 100 robots installed world-wide; built its first robot to spray paint the wheelbarrows it then manufactured. Went into commercial robot sales in 1969 and has not looked back.

TABLE

1. ESTIMATED

VALUE OF SHIPMENTS

($106)

Year Average annual growth rate, 1981-90 (%)

1990

1981

Shipments

(estimated)

Robotics CAD CAM FMS

12 839 3 749.5 i 885 693.6

Total

12 839

Source: Creative Strategies

International,

TABLE 2. ESTIMATED

Summary,

VOLUME

67 41 20 7

150.7 745.5 965 720.8

47 29.2 14.7 5.4

142 905 San Jo&,

30.4

17 April 1982, pages 3ff.

OF SHIPMENTS

(UNITS)

Year 1981

Shipments Robotics CAD Vision systems

1990

(estimated) 109 681 7 499 1 846

Average annual growth rate, 1981-90 (%)

1 220 922 83 491 20 556

90.9 6.2 1.5

Source: As Table 1.

FUTURES

June 1984

Economic social impact of advanced computer technolqy

TABLE

3.

INDUSTRIAL ROBOT INSTALLATIONS COUNTRY, ESTIMATED FOR MID-1982

BY

Industrial robots installed Number %

Country FR Germany Sweden UK Italy France Denmark Finland Norway Benelux Spain Switzerland/Austria

2 600 1 800 1 100 900 1 000 60 140 130 350 250 70

Total

8 400

Source:

Frost and Sullivan,

Financial

TABLE 4. TOP TEN POTENTIAL

31 21 13 11 12 0.5 2 2 4 3 0.5 100

Times, 5 April 1983.

MARKETS

FOR ROBOTSa

Numbers of units in use 1985

country

1981

USA Japan FR Germany France UK Italy Canada Mexico Netherlands Australia Other

12 743 11571 10 563 10 205 8 895 8 335 7 355 4130 4 348 4 325 27 151

82 164 61 377 47 824 44 606 35 853 32 323 27 350 14 780 15 189 14834 91 985

336 987 166 838 115 126 105 831 80 912 71717 59 928 32 016 31 670 30 193 189 704

109 621

468 285

1 220 922

Total

265

a In order of forecasted rankings in 1990. Source: Business International, 8 October

1990

1982, page 322.

Volkswagen: Built robots for use in its own automobile factories and has now licensed General Electric of the US to manufacture and market its machines. Some 800 installed world-wide. Kuku:

Swedish robot maker specialising

in spot welding-600

installed world-wide.

Cincinnati Milacron: Huge US machine tool manufacturer which penetrated the European market when Volvo placed an order for 40 robots in 1980. Major sales to Ford, British Leyland and Volvo. Acma-Cribier: Engineering subsidiary of Renault with some 400 robots installed. Primarily selling to a captive market but making their system commercially available to others. Others (with less than 6% of the European Fairey Automation, Hall Automation Yaskawa, and Jungheinrich.22

market) include: Comau, Kaufeldt, Nimak, ZF, DEA, Prab, Olivetti, Basfer, Reis,

In order to tap the know-how and automation, link-ups

firms, involving energy-saving processes TNCs have been increasing. Three

FUTURES

June 1984

of other between

TABLE 5. ROBOTICS

MARKET

SHARES --._-

US robot market=

Firm ARC (US) ASEA (Swedish) Captive (German/French) Cincinnati Milacron (US) Cybotech (French/US) De Vilbiss (Norwegian) Fanuc (Japanese) Hitachi (Japanese) Kawasaki (Japanese} Kuka (German) Mitsubishi (Japanese) Prab (US) WestinghouselUnimation (US) Yasukawa (Japanese) Other

l l l

World manufacturers, % of robots in usec

-

8 24 19.1 7.4

32 8 5 -

13 3

14.1 13 12 14 2 2 -

7 32 -

24

5

a Market share of 1981 sales of b Market share of 1981 sales of ’ Total number of robots in use Source: Business Infernationat,

examples of link-ups witness this tendency:

European robot maiket (%) b

11.4

about $250m about $230m worldwide in 1981 was about 8 October 1982, page 322.

between

major

16 7 18

US,

110 000

Japanese

and

European

TNCs

tinimation/Westinghouse-ASEA/Electrolux/Trallfa-Kawasaki; Hitachi-General Electric-Volkswagen; Fujitsu Fanuc-Siemens-General Motors-600 Group-Manurhin.

Japanese advantage

in

‘robotics’

Most US firms are tapping the technology skills of Japanese firms, preferably those companies with whom they already have a relationship-a licensing contract or a marketing arrangement. They may arrange a technology swap, a capital injection or improved market plant exports, equity participation, access as part of the deal.‘” Japan’s advantage in the international market has undoubte~y increased. They use the available equipment in a more extensive way and have better management strategies than US and European firms: instead of reducing short-run costs, they use ‘group technology’ and the ‘just-in-time-concept’. They store less raw materials, apply preventive maintenance of machine tools, and have fewer human workers. 24 They also have a high degree of vertical integration (robotics, machine tools, minicomputers). Even AEG-Telefunken has installed six Japanese robot assemblies in Celle (FRG) for its TV production plant.25 Microelectronics

and office automation

In Europe and Japan the microprocessor market is dominated by Hitachi, Nippon Electrics, Siemens and Philips. IBM, AT&T and GM have their own integrated circuits for their own use. However, several US semi-conductor FUTURES

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Economic social impact of advanced computer technology

267

companies have been taken over by large corporations. 15% of US semiconductor firms have been bought up by foreign firms. Some leading Japanese semi-conductor firms have already established affiliates in the USA.26 In the past few years, information services in the white collar sector have completely changed the traditional office of the past 80 years. Typewriters, filing cabinets and telephones have been slowly disappearing and are being replaced by word processing (WP), data processing (DP) and telecommunications. The office of the future includes “word processors that type more than 600 words per minute, electronic mail and answering services, high-speed copies and printers, and desk top computers designed for professionals”.” data processors and telecommunications are becoming Word processors, increasingly integrated. Altogether, they are being offered increasingly by the same vendors (IBM, AT&T, Xerox). ‘s Telecommunications are no longer the sole province of a public utility. Rather multiple vendors are entering the business: “Kodak is ready to move in on British Telecom”.2g Telematics provides the traditional telephone system with data processing, word processing and computer connection capabilities.30 Communication

technologies

and power relationships

within

TNCs

Modern communications systems have a tremendous influence on power relationships within TNCs. As noted above, they raise the old question of centralization u decentralization between headquarters and affiliates. Top managers are now able to improve control of overseas facilities by using the new ‘value-added services’-video teleconferencing, higher-speed data, facsimile and electronic mail. Travel costs can be reduced while market conditions can be quickly assessed. 31 The Global Product structure, introduced during the 1970s by a number of companies to centralize manufacturing and marketing of products and to forge closer ties between the domestic product divisions and international operations, has become possible through these tools. Its growing influence extends mainly to audit, compensation, environment, finance, organizational strategies planning, and technology committees.32 The former autonomy of subsidiaries, based on strategic resources such as technology (R and D), capital, management know-how and access to markets, tends to diminish.33 Some authors think that there may be a chance to dissolve hierarchies through increasing information for lower staff levels.34 Other experts assume that introduction of information technology will reduce corporate staff and lead to more decentralization or an increase in communication between firms.35 Decision making could become decentralized because new programmable ‘intelligent’ computer terminals will become available so that users at the periphery could perform a variety of tasks autonomously.36 Others see management pressures in both directions: centralization helps managers control staff, while decentralization reduces costs because microcomputers are cheaper than centralized computer equipment and because not all data have strategic importance for users’ desires; a further variable is what suits highly distributed affiliates and multinational structures.37 However, there is a higher probability of centralization, because knowledge

FUTURES

June 1984

is power and power is not always rationally used. Some managers may feel threatened by the new computer generation3’ and prefer ‘substantive control’ by using ‘data management mechanisms’.39 (Or, once a TNC has decided to install a Global Product Structure, the establishment of an international division with control functions and technology transfer might become necessary because coordination is lacking between the specialized affiliates.)*” For instance, centralized personnel data are a powerful tool for gaining control over affiliates. According to a study by Kilian,41 88.9% of the personnel data of a sample of 220 German companies are stored at headquarters. The computer division in some companies is a.legally independent affiliate or is associated with headquarters or with each subsidiary. The purpose of storage at headquarters was found to be: 0 * l

service contract-27 % ; common personnel data system-56.2% ; headquarters use the data also for their own purposes-16.7%.

Data sources system: l

0 l

0

the the the the

are automatic

systems

which

put data

in the personnel

data

schedule of the working hours system; schedule of the plant data system; alternative work supervisory system; telephone supervision system.

The accessibility of personnel data is partially restricted. 80.6% of the corporations investigated had specific restrictions. Access to all programs under special circumstances was possible in a third of cases. In 13.4% of all cases all clerks in the personnel office had access, and in 9% of all firms interviewed the clerks of the payroll department could use all personnel data. The personnel data system was often (20.9%) connected to other subsystems -purchasing, manufacturing, storage, delivery, marketing, finance etc. These were all part of a central management information system. The data could be used for the following personnel profiles -selection, requests for, skills, leisure interests, and placement of workers-and also for quantity and purpose of selection, degree of precision, clarity, expediting results and other purposes. Transborder data flows (TDFs) of personnel information are emphasized in countries with less rigid laws but are often a violation of national laws. TDFs serve six purposes in West German TN&: l

8 * l

0 @

accounting and financial administration; directing manufacture and storage; purchase, sale and delivery; statistics and economic prospects; research and development; data about customers, supplies and personnel.

Advantages technologies The general reproduction

and disadvantages

of CAM systems

and information

purpose of CAD/CAM could be described as the complete of manufacturing in programmable terms and of the various FUTURES

June 1984

Economic social impact

interactions between all subsystems. communication obstacles by minimizing Incentives

and regulations

ofadvanced compuler technology

Infosystems in the distances and time.

office

269

reduce

of CAD/CAM

A study by Gerwin and Tarondeau 42 shows that the main reasons for adopting computerized systems by TNCs are: (a) cost reduction through reduced labour requirements and (b) increased productivity by reducing overall production time. Machine maximization is utilized to lower the price of the product by at least doubling output per man-hour. This ratio can go up as high as 50 to 1 when CAD/CAM is linked,43 despite the implementation costs of CAD/CAM systems being much higher than those of less complex machines. A full-scale system can cost from $25 million to $300 million. A rudimentary system can cost $1.75 million, while a NC machine costs only $175000.44 (c) Furthermore, FMS provides risk reduction through a quick response to market uncertainties (changes in supply and demand) because of its ability to adapt product design changes; in addition, it improves product quality through greater accuracy. (d) Finally, centralized production control is required. The expected advantages differ between corporations, but all include at least one of the above-mentioned reasons. sophisticated computerized manufacturing systems lack By contrast, factories’ socio-technical structures. Thus, implementation problems result from the scarcity of theoretical knowledge about how to integrate advanced control systems with the existing production process.45 l

l

l

Quality control: because there are not natural pauses in the work flow, quality checks can be made only at the end of the labour process. In order not to damage machine tools or confuse the order of production, artificial pauses are necessary and these again decrease machine utilization. Accounting: because direct man-hours in the production of a special piece have been decreased, managers have to develop a new cost system based on machining hours. They lack the skills required for this change. Furthermore, computing cost standards could not be established because the necessary data were not available. Maintenance problems: if firms rely on maintenance companies from outside, the procedure takes hours or days; if they do maintenance inhouse, it takes a long time to train workers. Trained maintenance workers often resist full shift work.

Other implementation problems relate to production scheduling, eg a reduction in substitutable production alternative, and problems in integrating CIM scheduling with the rest of the plant. All these problems lead to the conclusion that sophisticated technology will not automatically increase productivity if the infrastructure is not well developed.46 FUTURES

June 1984

Incentines and regulations in oJ&e uu~Q~~~ion

The minicomputer not only facilitates ‘back office operations’, it also makes it possible for an employee not to go into the office but work at home. Benefits of alternative work schedules for-firms are: l

0 l

0

less absenteeism and tardiness; ease in meshing personnel with work flow; compressed workdays and more days off boost DP productivity cut turnover in companies; costs of terminals and telephone lines are offset by the decreased for office facilities and parking space.4’

and need

Through teleconferencing, decision-support systems (DSS), sophisticated modelling procedures and new on-line management information systems, the managers’ decision making can become quicker and more effective through time-saving. Computers, terminals, word processors and copiers can be connected into a The advantages of such systems are network by cable and glass-fibres. evident-firms share databases and computing power while reducing time costs. In particular, the introduction of a computer-supported personnel infosystem provides comparability, unity, accuracy and the highest possible capacity for personnel planning by top management. This rationalizes personnel administration. Despite a number of benefits that are perceived in the adoption of computerized infosystems ,4e the problems i n regulating these new systems are as huge as the incentives. (1) With centralized data collection and numerous exchanges among agencies, many more people have access to private records. can greatly magnify human error by constantly Because computers compounding it, there is a greater possibility of harm to the individual from inaccurate or incomplete records. Computer crime has now even reached the schools: school children in New York City gained access to two international networks, took over control of the computer system, used by Canada Cement Lafarge, and destroyed some of its data.‘” (2) Infosystems allow greater control of the workforce and individu~s in general. This endangers the general purpose of cost reduction and effectiveness, eg if the corporate division requires data from affiliates which have no strategic importance, they waste work time. One company, interviewed by Business International, approves all internal and external recruiting worldwide. Another put salary ranges and individual compensation history worldwide onto computers. The result is increased costs for the company, because these duties detract, corporate staff from their normal responsibilities.“” Further, personnel data are not recognized as being subject to the property rights of employees in terms of exclusivity and transferability. As the study of Kilian reported,‘” many employees (38.8% of his sample) get no information about the flow of their personal data among affiliates and headquarters over national boundaries. Even medical data are not protected. This creates legal labour problems. (3) Further disadvantage for the firms of alternative work schedules include: FUTURES

June 1984

271

hindrance of communication with West Coast facilities (within the USA); higher costs for terminals and telephone calls; no benefits for additional work hours if interaction with users is increased; conflicts with union contracts and labour law provisions (Fair Labour Standards Act in the USA) through a compressed work schedule.52

Implementation

strategies

and impacts

of computer

technologies

In this section, examples are given to illustrate how the decision-making procedure of implementing advanced computer technologies operate and how it affects management functions and work relationships. Decision-making

process

at headquarters

(1) CO4 systems. According to the study by Gerwin and Tarondeau,53 the decision about and the responsibility for implementing CIM were taken by a single individual in the company (corporate president (USA), chief of manufacturing development (UK)), or by special ad hoc task forces, who were advised by staff departments in corporate headquarters (FRG, France). Five main considerations in facilitating implementation were emphasized: l

0 l

0 l

the significance of human and technical infrastructures had to be highlighted for the installation of CIM (training programmes etc); installation of complex manufacturing in stages; participation of operating managers in adoption and implementation to increase commitment; employment of semi-skilled workers in order to reduce wage costs and decrease the chance that operators feel deskilled (USA, France); selection of a particular plant to be affected by other plants (FRG) to reduce resistance to the new installation. This policy seems to be used often. Singer adopted the same strategy by installing the electronic sewing machine ‘Athena 2000’.54

One key strategy in centralizing decision making by installing new systems in general seems to be securing the participation of subsidiary managers to facilitate adjustment. Exercising direct central authority does not ensure the corporate goal of a global product structure.55 As Doz and Prahalad mention,56 successful changes in centralization of management functions are dependent on the close involvement of subsidiary managers and administratiue power shifts. These consist of a series of relatively minor reallocations of decision and implementation strategy, eg central export coordination or relocation of overseas operations to staff at headquarters. Other attempts failed because they lacked one of these preconditions-they did not co-opt the reluctant managers into the new structure by giving them special responsibilities; or, the subsidiaries required extensive national responsiveness and close government relationships such as in pharmaceuticals, data processing and instrumentation.

FUTURES

June 1994

(2) Infosystems. The case-studies given below, presented by Harvard Business School,57 demonstrate the above in detail and illustrate the process of decision making. American President Lines, Ltd (APL). APL schedules an ocean cargo service between the Pacific coast of the USA and 23 ports in north and south Asia, annual sales exceeding $0.5- 1 billion. APL had to decide between a centralized or distributed approach for equipment tracking and management. In the past, the functional organization of the company had been decentralized to provide greater flexibility to local markets when the profits decreased in the late 1970s. A report by a consultancy firm advised the integration and centralization of service and management functions-the need was to develop an integrated land-sea container shipping network, and a baste udm~~~strutiuesa~~ort system in order to know where containers were located, where they should be going, and what merchandise was desired for a given container type. Management agreed with the advice of the consultants and gave one information systems manager the overall authority over APL’s computer equipment. He immediately began to rationalize it. Thus, one management information system (CMS-I) became the standard system for the USA. It included basic data on each ship, type, size, identification number, registration of origin, destination, current location and status. But CMS-I did not detail container tracking in Asia. The Asian ports had their own computer systems (System 34). Data in Asia were telexed to Hong Kong and Singapore and then entered on to CMS-I. There were then three alternatives to further rationalization and centralization: l

l l

CMS-I could be extended to Asia; the incentives were -early warning to US managers of problems and opportunities arising from equipment distribution; -provide APL headquarters with an important planning tool by making assets more visible on a real-time basis, both to the company’s managers and to its banks; --lower borrowing costs; -up-to-the-minute information and telecommunications are important for inaccessible parts. System 34 could be installed in each Asian port; some combination of CMS-I and System 34.

APL’s Asian managers opposed the proposal because their own systems met local needs and they expected few benefits and higher costs from CMS-I. Through administrative power shifts, the senior vice-president at least became responsible for ACP’s operations in Asia as well as in the USA. The company’s headquarters organized an excursion of several top US managers to Asian ports to facilitate the centralization process. During the excursion, they conferred with the local staff and especially with the DP (data processing) manager and the equipment control supervisor of each part. They listened to local problems and asked for recommendations. Without exception, the local staff recommended System 34. In the final discussion, the benefits of CMS-I were acknowledged-the FUTURES

June 1984

delivery of telecommunications services and a central network in general. APL headquarters submitted this proposal as a corporate service provided to the ports in the interest of company-wide coordination, not as a means of centralized control. Above all, the excursion team and the Asian managers understood the importance of the decision, although some Asian employees viewed the whole study “as a sham designed to sugar-coat a predetermined decision’ ’ . Western Continental Bunk (WCB). WCB is a continental organization which provides financial services to individuals and business, eg deposits, lending and investment management. The company earned $9 1 million in 198 1, had 14 000 employees and a Western-based international operation with over 37 overseas offices. The task at hand was to consider investment alternatives and to focus on new forms of communication. This had become important, because WCB was competition (American Express) and confronted with new, nonbanking alternative sources of funds. The communications industry offered new ‘valueadded services’-switching of information through the use of computer message senders and specialized carriers (microwaves and satellites). The affiliates had been quite autonomous in the past. They depended partly on the centrally managed Operations Group (responsible for cheque purchasing and real property processing, data processing, security, management), but there was a huge network of computer-based systems. Until recently, the communications systems had been decentralized so that three major divisions had their own systems development staff. The plan was to standardize the main communication bases and decentralize required information to regional centres in order to avoid unnecessary traffic. “ 1, The regional system would communicate to all It had three functions: users in a standard protocol. 2. All initiation/receiving stations would have a micro/miniprocessor that would translate between the standard protocol to the protocol of the local service. 3. There would be a series of regional databases designed to respond to 80% to 90% of normal queries, which could be updated nightly. The regional centres would be connected to an interregional communication net as well as to the San Francisco (headquarters) system.” several managers made general During the decision-making process, comments and voiced organizational concerns about developing a standard communications plan. l

l

l

Banking areas, such as retail and wholesale, had different problems (local v worldwide communication) and required decentralized autonomy for their operations unit on a base of standardized communication. Managing a complex communications process between various units of the bank would create new problems because of the lack of an infrastructure. As the vice-president of personnel mentioned, there would be the problem of centralization of personnel processing. The personnel database should be distributed to the responsible local managers to provide privacy for personnel records. Centralized personnel processing in one group for promotions, transfers etc would function so as to limit the

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274

Economic

social

tmpact

ofadvanced computer

technoloa

and would foster an excuse for delay in the central bureaucracy. Decentralizing databanks would allow responsible managers to review alternative personnel selection and transfers. Finally, she did not make objections to a centralized network as a cheaper precondition for decentralization of personnel data at the managerial level. Decentralizing would be less efficient in utilizing equipment, but because of the high rate of complication in banking transactions, (decentralization) would be preferable to efficiency effectiveness (centralization). bank

0

The Hanover Management Company (HMC). HMC is one of the larger mutual fund complexes within the USA with assets of over $1.3 billion under management. The task was to estimate the organization’s investment policies and controls -whether volatility measurements served as an adequate set of guidelines for controlling risks to assets under management. Until 1969, almost all decisions in the investment organization were decentralized by managers on the single fund level with limited control from the central division. In 1968, the ‘Computer Investment Research Department’ was founded to “explore the use of quantitative techniques and computers to both the day-to-day operations of Hanover and to possible systems for predicting price movements in the equities markets”. It had to compute and analyse the volatilities (beta) of the various funds: Beta

=

0 (NYSE)

daily net per cent of fund =

daily net per cent of the whole stock market

This system was developed in 1969 for all the funds of Hanover and those of systems responded faster to portfolio other competitive groups; monitoring changes. In the beginning, these volatility measures had little impact on the investment policy of the fund managers. They were sceptical about the beta system, eg they claimed that the inflationary environment demanded a special policy. In 1972, when the outlook for equity markets became worse, top management set so-called ‘average-risk-levels’, dependent on a special beta factor. These guidelines pressured the fund managers, whether they agreed or not. They began a deliberate effort to scale down their volatilities. Some comments of the fund managers: The beta system tends to minimize the importance of a fund manager’s feel for the market. In doing so, I think it threatens an important part of the investment business and creates an unnecessary tension between the Investment Strategy Committee and the fund manager. The volatility system itself monitors an important dimension of investment strategy. How else are you going to measure risk? But the real problem is that it isn’t applied symmetrically. . Suppose I wanted to buy a block of AT&T today. . My beta is already a little too low, and people would really frown on my picking up a stock like that with a lower volatility yet. Once it has moved, its volatility goes back up again and then you can buy it; but then you’ve missed it, it’s too late.

FUTURES

June 1994

Because our volatility has such tremendous lags fund managers tend to over-adjust. Fund managers should be given a lot more time to change their betas, and there’d be less temptation to over-manage the portfolio. However,

important

the fund managers at least tool for controlling risks.

agreed

with the beta

system

as an

Effects on management 1~~1 The accessibi!ly qf ruw~~~~~G~~~~ data from a processing plant in another state is not only a chance for worldwide control, it also creates problems for a company: # 8 a

top managers get overloaded with raw data they do not understand; they emphasize past and present rather than planning for the future; subordinate managers reduce their risk levels according to the expansion access to the same data and the increased visibility of top managers’ of their decisions.

Plant managers have to accept that their local personnel has strong dotted-line relationships to division or corporate staff. The tasks of middle managers themselves will change. The availability of mare tools to solve managerial problems seems not to lead to more creativity but rather to information overload .58 Finafly, the threat of being displaced by automation is iess important than increased demands on these managers to become computer-literate professionals who can satisfy top managers> information needs.53 As one European subsidiary manager mentioned: “Local managers must still gather the data, interpret them and take action or give advice on the appropriate courses ta follow. “60 Through automation, they have to perform many tasks that others previously did for them. Impact on employment and on the work environment Automation of factory and office have been the primary goal of TNCs, but at the same time changes in the job market have been dramatic. First, microprocessors and robots clrptre~.~e ~~~oyrn~t because labour used per unit of output is reduced and fewer assembly parts are needed. For instance, AT&T reduced its operator force by 28% (~~0~ jobs) in the six-year period 1973-79, and laid off 24000 workers in the manufacturing division during the 1970s. The Japanese firm Matsushita attached a central computer to its vacuum cleaner production line and only four of the original 116 workers were still needed.61 In its new $32 million automated factory, Yamazaki Machinery Works Ltd, another Japanese firm, required only 215 men helping produce what would take 2500 in a conventional factory. (Besides, production is organized so that sales can be reduced without laying off workers.) Another $20 million flexible automation Yamazaki plant employs only 12 workers in the daytime

and one at night. A conventional

factory would require

study of eight international microelectronic-based products had an average employment between 1969 and 1978.63J a p anese television companies saw in labour requirements in a rapid period when output The

Olivetti

Corporation’s

FUTtJRES June 1984

215 workers.@

firms producing decrease of 20% a 50% reduction rose by 25% .@

According to a study, by Lund et al of MIT,“’ the industries which apply microprocessors for their products may cover this trend through market expansion, thus requiring greater employment on the whole for a short period. However, firms using microprocessor products have either a decrease in employment or no change. On the other hand, the demand for software requires a large number of new programming jobs, .66 the needs for more efficiency in managing information demand more ‘knowledge workers’ (managers, administrators, professional and technical workers), so-called ‘paper entrepreneurs’. Because they are trained in law, finance and accounting, they become especially valuable to organizations for their ability to manipulate complex legal and financial rules and statistics.@ Second, automation generally affects workers’ job content. According to Lund’s study,h8 on the manufacturing level, production and service jobs tend to be deskilled when metal-working jobs are replaced by simpler light electronic assembly. Engineers’ and supervisors’ jobs have become more demanding and their analytic skill level is increasing because of the required literacy in computer technology. Buyers, salesmen and service personnel need retraining to cope with the new sophisticated products and components they are using. In order to reduce the resistance of workers to this development, companies have also established ‘employee-involvement programmes’ (Ford) along Japanese lines. This means a closer working relationship between top managers, engineers and designers in creating a new mode1.6q There have been major changes in labour relations. The meaning of ‘skill’ has had to be redefined, as S. Zuboff discovered in her study:” computer systems become substitutes for algorithms and individual decision making, and it is possible to rationalize all the skills of many jobs. For some jobs, the word ‘decision’ no longer implies an act of human judgment, but an informationprocessing activity that occurs according to rules embedded in a computer program. Programmed decision making emphasizes routine jobs with highvolume activities. (This includes the hiring and control of less skilled employees.) But deskilling of labour also relates to more highly qualified jobs, eg in the banking sector. Credit analysts did not use their ‘decision support system’, the reason being: “I think, then I write down my calculations directly. I know the company and the problem. With this system, I am supposed to type into the machine and let it think. Why should I let it do my thinking for me?” Further, the personal relationship of the employee to computer-mediated work is different. In comparison with craft jobs or jobs dealing with intellectual services (eg teaching), the employee manipulates symbols electronically. The object of the task has disappeared ‘behind the screen’. In fact, he or she has lost the feedback of direct physical experience. A bill collector said: “In our old system, come the end of the month, you knew what you were faced with. With the automated system, you don’t know how to get in there to get certain accounts out. You have to work the way the system wants you to”. Similar experiences are found even in more highly skilled jobs. People can be more ‘skilled’ in a technical way -they can program instructions but that does not mean that they understand the basic business operation. An auditor, for

FUTURES

June 1904

example, is working with a new infosystem that elimhites travef to regional branches and frees him from looking into the books, The financial data from the branches are fed into the infosystem: ‘ ‘The job of auditing is very different now. More imagination is required . . . I don’t go to the branches if I don’t want to. I don’t see any book. What do I audit in this situation? I always have to think what is in the system. I may be auditing but it doesn’t feel like it”. The auditor now has access ta more complex data. In order to use them, he or she needs theoretical insight. Judging a given task in the light of experience thus becomes less important than imagining how the task can be reorganized based on new technical capabilities. Some people feel frustration and loss of control as a result of abstract work. They try to create physical analogies for their tasks, eg by using detours rather than entering data directly into terminals. It is clear that human beings need physical action for accomplishing their tasks. In addition, the social interaction between employees is affected because the main components of the task are stored in the computer. A clerical worker can accomplish a task by communication with the terminal only. Workers may thus feel isolated in the workplace. This could result in a disturbed social network. One of the main corporate strategies to step up productivity increases sltpemisiun and control over employees. Remote supervision, automatic control information becomes possible with and greater access to subordinates’ computer-mediated work. The results are, however, ambiguous: employees limit their own risk-taking behaviour. They avoid taking the initiative because of difficulties in justifying any ‘deviation’ from the computer model. Others perceive technology as a personal source of authority, separated from the controlling manager ‘behind the screen’. Some get the feeling that they must or explain, because the fight the system. They cannot argue, negotiate ‘communication’ is unilateral. Some employees in Zuboff’s study refused to be controlled by monitored assembly operations and preferred to answer to a human being. 71 The information environment requires more speed of access, retrieval, and info-processing. It may provide a feeling of power through data access and orderliness. But some workers even managers, sense ~e~~~~~~~~~~~ of the workplace and reduced creativity. They prefer limited information but “free space’ for inspiration. In one case to experience a ~~~~~~ over their work, employees keyed fictitious data into the system of account files. Naturally managers respond with more control, which may inspire more subversion. This perhaps positive form of resistance shows how employees identify with the job.72 Impact

on women

Computers

in the workforce

and information technologies have a great impact on the working women in the Western industrialized countries. The same industries that employ large numbers of women are also the major growth industries in the USA. During the period 1973 to the early f980s, three service business services, and health servicesindustries-food and beverages, provided more than 40% of the new jobs created in the private sector. By 1979,

&~nd~~~~n~of

FUTURES

June IS84

2 78

Economic socml impact

cf advanced computer technolyv

women represented a major proportion of all people employed three service industries (56%) 63 %, and 81% respectively).”

in each of these

These work sectors are the most vulnerable to microelectronics and automation. As a result, there will be a great shift in the job market in the coming decade. Even if women move from the service to the manufacturing sector, they cannot avoid the influence of microprocessors. Female workers today constitute nearly 3 1% of types of jobs are jeopardized by pe,rform dangerous and heavy computer-linked ‘smart jobs’ will primarily affect women. ‘* Office job category central work

the US manufacturing workforce and these automation. Robots were at first installed to ‘men’s’ jobs, but now the generation of also take place in light industry, and this will

automation reduces the secretary’s skills in a which is almost 100% female. Word processing is located in stations. This involves routine, keyboard-based data entry tasks

in order to support ‘knowledge-workers’.75 growth jobs is likely to become a women’s

On the professional level, one of the job category: programming.76 This

job has been deskilled in recent years as a result of advances in high-level computer languages and structural programming. Another reason might be the increasing offering of college programmes and thus the flood of entry-level programmers. are predicting reducing

The new programmers ease the task of software managers who that software systems will generate new software systems,

the need

for human

programmers

altogether.”

This gloomy outlook on the working conditions of women developed in terms of their present economic and social roles: l

l

l

Traditionally, work at low workers. Women’s and thus

been

women are used as a surplus labour to provide high quality pay in industries which demand temporary or part-time

unpaid labour in home considered non-essential.

In advanced production contribution

has

capitalism women’s with female-driven

. .

is

.

to

and

child

care

is invisible

in the GNP

role is to balance male-powered consumption.7R Their “decisive

facilitate

an

.

unlimited

increase

in

consumption”.” Women face a number of major problems. First, there is a lack of skills. To enter new job categories such as the ‘information-middle-‘man”, who reduces duplication of intra-organizational communications between specialists and clients, women have to get training in microelectronics.*” Second, when women as a group get the opportunity to enter other complex jobs it is a question of political power. As long as women are not involved in adoption and implementation of the new technologies, computers will’ be double-edged: they can promise liberation, but also stronger, more invisible, oppression. For instance, it has become possible to install a computer terminal at home and create more flexible alternative work schedules. This allows (mostly white, middle-class) women to combine personal and professional commitments (parenthood and career). Working at home could be a great benefit for workers in rural areas, for those without access to cheap, convenient transportation and for physically disabled persons. It could reduce gasoline air pollution and could eliminate thousands consumption, freeway congestion,

FUTURES

June 1984

could be more of hours of wasted commuting time. s+*Ideally, child-rearing easily shared by both parents. Control Data Company has already developed a work-at-home programme for disabled people. The political question is, who gets these jobs? As 0. Ku11 reports,‘* the programme is focused on mothers, not on parents. As a result, the computer at home could facilitate the combination of paid and unpaid female work, that is to do not one but two jobs at the same time. In addition to the problem of compressed work days, which may also conflict with union contracts and labour-law provisions, this could mean, very simply, an increased rate of invisible exploitation and the danger of continued isolation in the form of abstract, computer-mediated work contact with the outside world. Another example of this technological ambiguity is that cable systems combined with computers offer the possibility of several non-programming services, such as reference, news and shopping. Viewers can ‘dial up’ and display reference materials from the public library’s information retrieval system, read their daily newspaper, or purchase items off a video-selection list, all by using either telephone lines or a special key pad for two-way communication. Tele-shopping and tele-banking appear to save time, money and energy for women who are consistently required to perform these household support tasks. On the other hand, in terms of a market-conscious consumer economy with these opportunities can isolate a highly selected audience for advertisers, women at home, scattering their nascent organizational efforts, reducing their ability to gain non-selected information about the outside world, and alienating them from direct experiences which have been a source of female strength.*” Changes are thus being brought about not only in operating conditions, but in the economic and social role of women who are dependent on participation in decision making from the beginning. Third, the entry of women into these fields requires a lot of financial investment and encouragement which is often neglected or rejected by established institutions. There have so far been only two projects for women to gain technological access. Zimmerman, who initiated and directed the first project, reports : The National Women’s Agenda Satellite Service Project sought to use a governmentowned, experimental satellite to connect 100 women’s organizations in six cities around the US. In 1977 the Agenda received ‘experimenter’ status from . . . NASA to use CTS, a joint Canadian/American satellite for audio teleconferencing, telex, facsimile, and data transmission (the same services Xerox, IBM and Satellite Business Systems will provide their multinational customers). Just prior to their first demonstration, the Agenda was forced off the satellite by NASA for refusing conditions that the women not discuss lesbianism and abortion via satellite,s4 The second project was to produce international teleconferences by satellite for the UN World Conference of Women in Copenhagen in July 1980. The Women’s Institute for Freedom of Press, Washington, DC, got financial support from the US International Telecommunications Agency. Two conferences were held linking women in Copenhagen and six US cities, using the satellite equipment of the US Corporation for Public Broadcasting.

FUTURES

June 1984

280

Economic social impacf ofadvanced computer technolqpy

Zimmerman only

further

reported

notes

that media

the conflicts

coverage

was negative

and distorted,

and

in Copenhagen.

Future prospects Inzuence The

of TNCs

market

shares

of factory

automation

equipment

of the USA

and Japan

will

increase during the 198Os, while the West German share will remain constant and other Western countries will decrease, although all Western countries will display large annual growth rates in production (Tables 6 and 7). During the 1980s the number of computers and terminals in business offices is projected to increase at a compound rate of 30% ,85 and the global microelectronics markets is expected to grow by $400 billion/year.*‘j We discussed above the tendency towards centralization of important management functions in TNCs deriving from increased intra-firm flows and the installation of new technologies. Further, centralized data storage and retrieval systems within TNCs strengthen headquarters control and jeopardize the autonomy and privacy of employees. Accessibility to data is arbitrary and differs

between

companies. will probably widen their markets. Decision-making

data and

management will cooperate data to a network concerning

with state agencies by integrating general market job distribution and labour market direction.

TABLE

6.

systems, external

TNCs labour

By means of personnel influence on the internal

ESTIMATED INTERNATIONAL SHARE, 1981 UNTIL 1990(%)

MARKET

Year 1981

1990 (estimated)

Country FR Germany Japan USA

9.6 10.6 11.6

9.4 13.4 27.6

Source: Creative Strategies International, San Jo.&, April 1982, pages 4ff.

TABLE

7. ESTIMATED ANNUAL GROWTH (1981-1990)

Country FR Germany France Japan UK USA

Summary,

RATE OF

% 30.4 29.7 34.5 27.8 43.9

Source: As Table 6.

FUTURES

June

1984

Fuse

impact on lm deuelopedcountries (LDCs)

As a result of the Global Product Structure of TNCs the gap between developed countries (DCs) and LDCs will probably widen. The tendency towards an increase in intra-group transactions within TNCs will decrease adoption of local needs, eg the transfer of technology will be minimized, because: l l l

R and D is carried out by the parent company; technology itself is closely guarded; training of nationals in host countries for management

is neglected.87

Thus, an ‘internationalization of p~duction’88 is not really pursued. Data centres will be centralized in the developed countries which enables the TNC to cope with special difficulties in host countries by shifting their production to other countries and thus weakening the bargaining power of LDCs. The disadvantages of investment in developed countries-increased scarcity of environment and declining productivity of capital due to the excess supply of capital in these countries disappear with advanced technologies such as robotics and microcomputers. For LDCs this means that they lose the competitive advantages of low labour costs for foreign direct investment through reallocation and concentration of industries in developed countries. As a result, there is less incentive to locate or to keep assembly pIants in LDCs. In addition, computerized manufacturing systems require a skilled labour force and a highly automated infrastructure which is less met by LDCs than by developed countries. The effects of less foreign direct investment and less recognition of local market needs of LDCs wili probably be: l

0 l

0 l l

a

decrease of international trade balance; increase of debt involvements of LDCs; forced imports; compensating price increases in raw materials; political counterreactions of host countries concerning laws, patent laws, etc; decrease in world trade; decrease in markets for FMS goods.

changes

in trade

Future of work The shape of the business office structure will gradually shift from a pyramid to a diamond shape: the clerical support staff will diminish, numbers of professionals and middle managers will increase and a continually, more remote, elite, policy-making group of senior managers will rule at the top.8g In the factory jobs will probably polarize: middle-level workers will no longer be needed for skilled machine operations.g0 Computers and automation alter the relation of the human being to his or her work. The act of ‘accomplishing a task’ is fundamentally transformed: individual commitment as well as the importance of work and non-work activities will change. New forms of collective behaviour arise when work becomes fragmented. ‘Communication’ between the operator and an electronic system replaces communication between colleagues. The

FUTURES

June 1984

organization itself Personal confidence Future

e65namic

becomes abstract-who communicates is jeopardized in doing computer work.

and social

with

whom?

role of w5men

Women could use computers to ease housekeeping responsibilities and reduce time spent running errands; lower transportation and energy costs would be incurred; and the adoption of flexible working hours would be encouraged. Shared parenting responsibilities would be supported and women would gain access to information resources crucial to political change. But computers would also use women, just as other technologies have. They could push of women into even more alienating, low-paid jobs. g’ With the implementation production monitors, time and motion studies will be a tempting possibility, and at the very least, the machine could serve as a time clock for the job.‘” Thus, automation would not reduce repetitive work. Women could be eliminated from the workplace altogether; automation could intensify women’s bond to the home and make it impossible for them to control the information being used by others to make decisions about their own lives.% Strategies

In this study a number of the most important emerging and future impacts of advanced computer technology have been examined. It is clear that there are dangers as well as opportunities associated with the adoption of these technologies, and that strategies need to be evolved to enable all human beings to participate in their benefits, as weI as counter-strategies to diminish deleterious impacts. A number of such strategies developed by this author are outlined in the report submitted to the UN Centre on Transnational Corporations, on which this article is based.

Notes and references 1. John E. Davis, Robots and Reindustrialization (International Market Analysis Executive Summary, San Jose, Creative Strategies International, April 1982), page 1. 2. C. K. Prahalad and Yves L. Doz, “ An approach to strategic control in MNCs”, Sloan Management R&w, 22 (4), Summer 1981, page 6; and William E-l. Davidson and Philippe Haruard Hurines.c h&w, 6’0 (4), July/ Haspeslagh, “Shaping a global product organization”, August 1982, page 126. 3. Henry Ergas, “Corporate strategies in transition”, January 1983, to appear in A. Jaguemin. ed, ~~d~s~ria~Policy and rn~~n~~~o~u~ Trade, pages Zff. and productivity: cashing in our chips”, Tec~~ulo~ 4. Robert T. Lund, “Microprocessors Rmiew, 83 (3), January 1981, page 44. 5. Alan M. Kantrow, “The strategy-technology connection”, Howard Bwiness R&w, 58 (4), July/August 1980, page 7. 6. Ergas, op tit, reference 3, page 8. 7. “Questions and issues: In using Japanese expertise to modernize plants”, Business Znternational, 10 April 1981, pages 116ff; and “Multinationals robot link-up”, Multinational Business, 2, 1982, page 43. 8. Microprocessors may reduce again the opportunity for product differentiation; see Lund, op tit, reference 4, page 44. 9. Ergas, op tit, reference 3, pages 9ff; and see Charles G. Burck, “Can Detroit catch up?“, Fortune, 105 (3), 8 February 1982, page 38. 10. Ergas, up tit, reference 3, page 11.

FUTURES

June 1984

Economic social impact of aduancedcomputer technolo~

283

“Do’s and don’ts of computerized manufacturing”, Harvard Business Donald Gerwin, Revzew, 60 (2), March/April 1982, page 108; see also Melvin Blumberg and Donald Gerwin, “Coping with advanced manufacturing technology”, January 1983, Journal of Occupational Behavior, forthcoming, pages l-5. 12. Get-win, op tit, reference 11, page 108. 13. See also the description of an FM system in: Blumberg and Gerwin, op tit, reference 11, “Pushing the state of the art”, Dutamation, 28 (2), February page 28; and Jan Johnson, 1982, pages 112ff. Fortune, 107 (4), 4 February 1983, “The race to the automatic factory”, 14. G. Bylinski, page 59. 15. G. Bylinski, “A new industrial revolution is on the way”, Fortune, 104 (7), 5 October 1981, page 109; and Bylinski, op tit, reference 14, page 59. systems 16. Ibid pages 113ff, and see also pages 106 and 114; further examples of CAD/CAM systems: tolerating change”, Znfoare given in Wayne L. Rhodes, Jr, “Manufacturing systems, 29 (4), 1982, page 72. 17. Johnson, op tit, reference 13, page 112; for further development of this system see ibid, pages 112ff. 18. Bylinski, op tit, reference 14, page 57. 19. David Fishlock, “Dawn of the intelligent robot”, Financial Times, 31 March 1983. 20. David Marsh, “Future factories may orbit in space”, Financiul Times, 9 March 1983. 21. Davis, op tit, reference 1, pages 3ff. Financial Times, 5 April 1983. 22. A. Cane, “ Scara a pointer to the future”, 23. Business International, op tit, reference 7, pages 116ff. John 24. See Bylinski, op tit, reference 14, page 58; Burck, op tit, reference 9, pages 34-39; New York Times, 28 March 1982. Holusha, “Robots toil in car plants”, 1, page 7; and “Significant corporate moves”, Business Znter25. See Davis op tit, reference national, 17 April 1981, page 128. stakes in microelectronics”, Technology Review, 83 (3), 26. Colin Norman, “The international January 1981, pages 40ff. “Telematics are here”, Europe, 225, May-June 1981, page 5. 27. Michael Mossetiq, “The information archipelago-maps and and Warren McFarlan, 28. James L. McKenney 1982, pages lllff. bridges’ ’ , Harvard Business Review, 60 (5), September/October “Kodak ready to move in on British Telecom”, Financial Times, 18 March 29. Elaine Williams, 1983. up with the computer revolution”, Harvard Business Review, 30. Lynn M. Salerno, “Catching 59(6), November/December 198I, page 10; and Morris Edwards, “International datacom: linking up”, Znfosystems, 29 (3), 1982, pages 40-46. op tit, reference 29. 31 See Edwards, ibid, page 42; and Williams, staffs are playing greater role in control of the MNC”, Business Znta&ional, 32 “Corporate 3 April 1981, page 107. 33 See Prahalad and Doz, op tit, reference 2, page 7. Besides, the extent of adopting these new infosystems depends on the importance for the company’s goals themselves. If the firms are dependent on infosystems like airlines, banks or insurance companies, adoption of the newest technologies will be faster than in some manufacturing corporations: F. Warren “The information achipelagoMcFarlan, James L. McKennev and Philip Ryburn, plotting a course”, Harvard Business Review, 61 (l), J anuary/February 1983, pages 150, 152. 34. Salerno, op tit, reference 30, page 16. Business Znter35. “How tightly should a widespread MNC be run? Questions and answers”, national, 20 March 1981, page 90. “Microprocessors, women, and future employment opportunities”, 36. Dennis R. Eckart, InternationalJournal of Women’s Studies, 5 (l), 1982. 37. McKenney and McFarlan, op tit, reference 28, pages 116ff. 38. Salerno, op tit, reference 30, pages 16, 23. 39. Prahalad and Doz, op tit, reference 2, page 10. 40. Davidson and Haspeslagh, op tit, reference 2, pages 128ff. 41. W. Kilian, Personalinformationssysteme in deutschen Grossuntemehmen, Berlin-Heidelberg-New York, 1982, pages 4Off. “Case studies of computer integrated manufacturing 42. D. Gerwin and J. C. Tarondeau, 11

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June 1984

284

43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57.

58. 59. 60. 61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75. 76. 77. 78. 79. 80. 81. 82. 83. 84.

Economicsocial impactofadvancedcomputertechnolou

systems: a view of uncertainty and innovation processes”, Journal of Operations Management, 2 (2), February 1982, pages 9Off. Bylinski, op tit, reference 15, page 108. Bylinski, op tit, reference 14, page 53. Blumberg and Gerwin, op tit, reference 11, page 2. Ibid, page 21. David Kull, “No more 9 to 5?“, Computer Decisions, I4 (6), June 1982, pages 161ff. See Kilian, op tit, reference 41, pages 283ff. Salerno, op tit, reference 30, page 16. Business Znemational, op ctt, reference 32, page 107. Kilian, op tit, reference 41, pages 71ff, 1Olff. Kull, op tit, reference 47, pages 168ff. Gerwin and Tarondeau,. op tit, reference 42, pages 91ff. Lund, op tit, reference 4, page 38. Klaus W. Grewlich, Transnational Enterprises in a New In&national System, the Netherlands, 1980, page 47. influence and strategic control in MNCs”, Y. L. Doz and C. K. Prahalad, “Headquarters Sloan Management Review, 23 (l), Fall 1981, pages 20ff. President Lines, Ltd”, Harvard Business School Harvard Business School, “American pages l-24; Harvard Business School, Case Services, Boston, MA 0.2163, mimeo, “Western Continental Bank”, Harvard Business School Case Services, Boston, MA 02163, Company”, mimeo, pages l-24; Harvard Business School, “The Hanover Management Harvard Business School Case Services, Boston, MA 02163, mimeo, pages l-24. Quotations relating to the case studies are from these reports. Michael Hammer, cited by Salerno, op tit, reference 30, page 12. See discussion in ibid. Business International, op tit, reference 32, pages 105ff. “Exploding population of automatic workers”, Technology Review, 83 (3), 1981, page 43, cited by Eckart, op tit, reference 36, page 49. Bylinski, op tit, reference 14, pages 56ff. and labor: whose bargaining chips?“, Technology Review, Harley Shaiken, “Microprocessors 83 (3), January 1981, page 37. Norman, op tit, reference 26, page 43. Lund, op tit, reference 4, pages 39, 44. Ibid, page 44. industry: what ails it, how to save it”, The Atlantic, 246(3), 1980, James Fallows, “American pages 35-50, cited by Eckart, op tit, reference 36, pages 50ff. Lund, op tit, reference 4, page 39. Burck, op tit, reference 9, pages 35, 38ff. work”, Harvard Business Reuiew, 60 (5), S. Zuboff, “New worlds of computer-mediated September/October 1982, pages 143ff. Quotes below are from this source. Ibid, page 148; opposite experiences are listed for bank customers in Salerno, op tit, reference 30, page 16. Zuboff, op tit, reference 70, page 150. Eckart, op tit, reference 36, page 48. Ibid, page 49. “The office of the future: information management for the new age”, See Paul Strassman, Technology Reuiew, 82 (3), 1980, page 56, cited by ibid, pages 50ff. “Technology and the future of women: haven’t we met somewhere Jan Zimmerman, Women’s Studies International Quarterb, 4 (3), 1981, page 358. before?“, Ibid. Ibid, page 356. John Kenneth Galbraith, cited by Zimmerman, ibid. Eckart, op cd, reference 36, page 51. Zimmerman, op tit, reference 76, page 358. Kull, op tit, reference 47, page 166. Zimmerman, op tit, reference 76, page 361. Ibid, page 360.

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June 1994

Economic socuzl tmpact of advanced computer technology

285

See P. Strassman, cited by Eckart, op tit, reference 36, page 51. Norman, op tit, reference 26, page 40. See Grewlich, op cd, reference 55, page 60. “Transnationale Info- und Datenkommunikation”, Aussenpolitik, See Klaus W. Grewlich, 34 (l), 1983, page 67. 89. See Zuboff, op tit, reference 70, page 152; but see also Eckart, 0,6 tit, reference 36, page 51 who follows Strassman, claiming that the number of clerical workers will grow in the future. 90. Salerno, op tit, reference 30, page 10. 91. Zimmerman, op cil, reference 76, page 359. 92. Salerno, op tit, reference 30, page 12. 93. Zimmerman, op tit, reference 76, page 359. 85. 86. 87. 88.

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June 1994