Lazonick (1991)

Management > Comparative Management > Lectures > Independent Research > Lazonick > Managerial capitalism > Management vs. employees > Mass unionism > Erosion of capabilities

Erosion of capabilities

Since the 1960s, the US has undergone a period of relative decline, caused by the erosion of capabilities in firms.

Shop floor workers had been reduced to "appendages of the machines".

With the introduction of Japanese management systems, US firms have found it hard to adapt, as they worked to a different culture. For example, workers felt insecure in their jobs so did not work as hard as Japanese workers did. US workers felt indispensable and replaceable by machines.

Management attempted to gain employee commitment by offering a share in the profitability of the enterprise, but they "stumbled in the face of international competition". Before this time, US firms could pass on costs from high wages to consumers, but when Japanese firms entered the market and inflation increased, they realised that they had to do something.

Workers protested and reduced productivity by not working, which just aggravated the situation.

The main difference between Japanese and US firms was that the former empowered blue-collar workers with on-the-job training and gave them more responsibility. This means that educational systems in the US need to change to prepare them for more skilled shop floor work.

The concept of the worker as an "appendage of the machine" must also be eliminated. People need to feel valued if they are to work. Unfortunately, organisational structures still remove power and skills from the employee for fear of management losing control.

It is a shame that existing firms are living off the dreams of the past, rather than the threat of the future, meaning that they will not change their ways.