I am currently completing my PhD in accounting at a UK University. I already hold a Bachelors degree and an MSc Research Methods both from UK universities. Over the past year I have conducted accounting seminars at a London University.
I am a Chartered Accountant with over 10 years experience working both in a private firm as an auditor and in commercial roles in industry for several companies that are household names in the UK. Recently I have turned my attention to supporting small businesses and social enterprises, helping them to get the most out of their accountants.
My practical experience combined with my academic knowledge gives me a unique perspective that is appreciated at both graduate and undergraduate level.
Critically examine the evidence which may claim that there has been a worldwide long-term decline in Fordist and Taylorist production systems.
Manufacturing in industrialised countries has been dominated for a significant part of the twentieth century by what are now known as Fordist and Taylorist production systems. In a response to economic and market changes there was an increase in the use of alternative Japanese production methods accompanied by a fall in manufacturing in the developed world (Womack, Jones and Roos 1990). This led some commentators to claim that there was a worldwide long-term decline in Fordist and Taylorist production systems ushering in an era of ‘Post Fordism’.
A number of theories are competing to explain these changes and predict what will happen next. As a result there is no consensus that the Post Fordism claim is true, however most are agreed that the changes in manufacturing marked the beginning of a new period of capitalism (Kiely 1998).
The first part of this essay is descriptive, outlining the key features of Fordism, Taylorism, Post Fordism and the economic circumstances in which they developed. To answer the question Post Fordism will be examined with respect to its ability to explain current trends, its theoretical basis and its implications for the future.
The essay will show there is little evidence to suggest that there is a long-term decline in Fordist and Taylorist production systems by providing counter evidence to suggest that contrary to Post Fordist claims, Fordist and Taylorist production systems persist and have found new homes outside of the manufacturing sector through the McDonaldization phenomenon (Ritzer 2008).
Much of the theory was developed analysing the motor industry because it has been central in fundamentally changing the way we make things. These principles have been adopted in practically every other industry in the USA and all over the world (Womack et al 1990). The implementation of these production systems have implications that include, and are not limited to, changes in customer relationship management (Womack et al 1990). Hetrick and Boje (1992) cited labour relations by Gorz and consumption, leisure and popular culture by Harvey as other areas that were impacted. This essay acknowledges these and other issues with a clear focus on the discussion of productivity.
Fordism and Taylorism
Fordism and Taylorism are often used synonymously to describe the twentieth century manifestations of the division of labour principle that Adam Smith introduced in his book the Wealth of Nations (Adam Smith Institute 2008).
Taylorism is the term used to describe the scientific management techniques developed by Frederick Taylor in the early twentieth century (Eldritch Press 2004). Taylor wished to increase productivity in the workplace and suggested that jobs should be divided into their constituent tasks and scientific analysis performed in order to find the “one best way” of performing each task.
An example of this scientific approach was applied by Taylor to shovelling pig iron at the Bethlehem steel factory: Shovellers were paid in proportion to the amount of iron that they shovelled, so a man who shovelled 50 tons in a day would be paid more than a man who shovelled 40 tons. Through observation it was found that a first-class man would do his biggest day’s work with a shovel load of about 21 pounds regardless of the material being shovelled.
To increase efficiency, Taylor provided 8 to 10 different kinds of shovels, each one appropriate to handling a given type of material to enable the men to handle an average load of 21 pounds. He also provided clear instructions on the task prior to execution. The result was to increase the average earnings of each shoveller from $1.15 to $1.88 per day and reduce the number of shovellers from approximately 600 to 140.
This exemplified the increases in productivity of the worker and eliminated any rule of thumb methods used previously. Individuals were scientifically trained and monitored by management to perform their specific tasks in a specific way (Eldritch Press 2004).
Henry Ford adopted the scientific management techniques of Taylor and implemented them in conjunction with the employment of machinery to assist in the manufacture process. By simplifying component parts, Ford was able to introduce factory assembly lines to bring simple parts to narrowly skilled workers who repeated a specific task. This increased efficiency. Ford’s Model T car was an example of a user-friendly homogenous product that was simply assembled with simple parts. The production system that later bore his name increased productivity and lowered costs, resulting in mass production of low quality but low cost cars. The cost savings of this mass production were passed onto consumers and resulted in mass consumption of motor vehicles (Womack et al 1990).
The economic environment that nurtured Fordism and Taylorism could be described as neo liberal market capitalism, where the market regulated most aspects of the economy with little regulation from the government. Maximising returns to owners of capital was a key driver in the economy and this often meant that short-term goals dominated decision-making strategies (Dicken 2002). In particular, liberal labour markets were essential for the growth of Fordism and Taylorism. The ability to hire new workers to work in a way dictated by management was central to its success. This had implications for union activity and membership. A complete treatment is beyond the scope of this essay however Ford himself was unable to fully implement his policies and eventually forced to shut down his Trafford Park plant due to ongoing problems with workers in the UK (Womack et al 1990).
Fordist and Taylorist production methods dominated the car industry into the 1950’s and it was during this period that the Japanese began experimenting with existing Fordist and Taylorist techniques to suit their own socio and economic circumstances.
With smaller domestic markets, scarce capital investment and a wider range of vehicles; Fordist mass production was unsuitable. Like Taylor they were interested in efficiency but they focused on eliminating muda (a term meaning waste) and increasing variety and quality. New labour laws meant that workers were able to ensure better conditions of employment. The assembly line was reorganised into flexible collaborative teams with less supervision and more responsibility for solving and anticipating problems.
After trial and error the “lean production” system was born, creating a variety of higher quality products. The system was considered lean because the supply chain used only what was necessary avoiding the huge inventories of unused parts or completed vehicle of Fordism. By ensuring that parts or cars were distributed efficiently, this created closer communication and geographical links between suppliers, producers and consumers (Womack et al 1990).
A complete discussion of the economic circumstances surrounding the increased adoption of lean production techniques is beyond the scope of the essay but regarding production two features are noteworthy: the apparent failure of the working class in advanced economies to consume at the rate and quantity required to sustain the Fordist model and the inability of the Fordist model to extract surplus value in the face of declining profits (Williams 2007). The Fordist mantra of “you can have any colour you want as long as it’s black” was becoming less relevant in a changing world where retailers had decided that the customer was always right.
Post Fordism examined
The Post Fordism argument claiming the long term decline of Fordist and Taylorist production systems is firmly focused on two phenomena: the fall in manufacturing in the developed world and the rise of lean production methods. The theoretical basis of these claims is examined below:
Post Fordism celebrated the ascension of lean production techniques borrowing heavily from postmodern theories (Winsor 1992). Figure 1 illustrates Winsor’s (1992) identification of Post Fordism as the third of three distinct stages of economic history.
The Pre Fordist stage refers to a nonexistent manufacturing sector, Fordism represents mass production in manufacturing and the third stage shows a long-term plateau of output as the manufacturing sector switches to using Lean production systems. Post Fordism comfortably explains the decline of Fordist production systems in the developed world and its requirement for a paradigm shift in manufacturing structures. Winsor (1992) clearly states that manufacturing should be fixed not discarded. This illustration of a manufacturing based future differs from the Neo Schumpeterian approach of Post Fordism presented by Amin (1994) where economic history is portrayed as a series of five Kondratievs’s or long term economic waves. The fourth Kondratiev closely resembles Fordism. The fifth Kondratiev is described as an innovation and knowledge intensive service driven “cybernetic macroeconomy”. An explanation comes from Amin (1994) who suggests that within the Post Fordism debate there is a dispute about the meaning of the term Post Fordism.
The Neo Schumpeterian model resembles the post-industrial paradigm and thus differs from the Post Fordism argument. Figure 2 illustrates the Post Industrial Paradigm; where economic history is considered to exist in 4 distinct stages: Pre Industrial, which is an agricultural-based economy with no manufacturing sector. The Industrialising period represents the introduction and growth of a manufacturing sector. The Industrial period is similar to the Fordist period in the Post Fordist Paradigm where mass production of consumer goods takes place. The Post Industrial period is where manufacturing production and exports decline to be replaced by growth in the service sector driven by advances in knowledge and technology.
Winsor’s definition of Post Fordism fails to explain the growth of the service sector in the developed world, representing 66% of GDP of high income (post industrial) countries compared to 35% of GDP of low income (industrialising) countries (World Bank 1995). Winsor (1992) looks to the Post Industrial paradigm to show that the world is in a post-industrial reality and the application of Post Fordist Solutions is hindering the development of the knowledge-based economy. In examining the claims of a worldwide decline in Fordist and Taylorist production systems this explains the decline in developed world manufacturing and the growth in the service industry. It also undermines the Post Fordist argument constructed upon the premise of a manufacturing based economy. This paradigm is also consistent with the persistence of Fordist and Taylorist production systems in the developing world as part of an international division of labour.
UK manufacturing company Dyson moved its manufacturing plant to Malaysia because of lower labour costs (BBC News 2002). The research and design elements of the company remained in the UK creating more service sector jobs to replace the manufacturing jobs lost. This is part of a growing trend: OECD Foreign Direct Investment Outflows rose to a record US$1.7 trillion (OECD Investment News June 2007) while the ratio of exports among OECD countries increased from 9.5% in 1960 to 20.5% in 1990 (Kiely 1998).
Post Fordist production techniques require closer proximity between producers, suppliers and consumers, which is difficult to reconcile to the globalising tendencies of transnational companies. Kiely (1998) suggests that Post Fordism is incompatible with the globalisation thesis.
Post Fordism has difficulty explaining the increase foreign direct investment in developing countries through lean production techniques when the international division of labour can ensure that Taylorist production methods may persist in countries with a competitive advantage in labour intensive production (Rustin cited by Hetrick & Boje (1992), Kiely 1998).
The persistence of Fordist and Taylorist production methods is not confined to developing countries through foreign direct investment. McDonaldization is a term coined by Ritzer (2008) to describe “the process by which the principles of the fast food restaurant are coming to dominate more and more sectors of American society as well as the rest of the world” (Ritzer 2008 p1). The four dimensions of McDonaldization are Efficiency, Calculability, Predictability and Control; these are applied to both the product and the worker. Ritzer identifies Fordism and Taylorism as the precursors of McDonaldization and suggests that standardised routines, homogeneous products and workers, deskilling and efforts to increase productivity are characteristics of all three. McDonalds, a transnational company with globalising tendencies operates more than 31,000 restaurants in 119 countries employing more than 1.5 million people (McDonalds 2007) and coexists with Post Industrialisation by applying these methods to both the manufacturing and service sectors where simple non creative scripted tasks are performed. (Ritzer 2008). Aglietta cited by Amin (1994) discusses the application of Fordist Methods in the service sector to raise productivity. Contrary to a Post Fordist claim of a decline in Fordist and Taylorist production systems, McDonaldization suggests that Taylorism has moved “from shovelling pig iron to shovelling chips” (Williams 2007) in the fast food sector and the principles have been adopted in increasing sectors throughout the world.
Figure 3 outlines some of the similarities between the Accountancy profession and McDonalds. The writer is familiar with the accounting profession and has chosen it to illustrate how Fordist and Taylorist methods have found homes within the growing service sector. The Accountancy profession has benefited from the growth in the service sector that has accompanied the demise of Fordism in the manufacturing sector (Hanlon 1996).
|Task||Flipping Burgers||Checking Bank statement to Account Records|
|Guidance||McDonalds Bible||Audit Manual|
|Timekeeping||Clocking in Card||Approved Timesheets|
|Division of Labour||Yes||Yes|
|Enforced Dress Code||McDonalds Uniform||Suit|
|Emphasis on selling additional products/services||“Would you like fries with that?”||“We can provide additional services”|
Figure 3 Comparison of McDonalds/Audit Practice (Source (McDonaldization of Society 2008, Personal Experience ))
Like the fast food sector the industry is dominated by a small number of transnational companies (known as the Big 4) with established neo Weberian bureaucracies and rigid hierarchies enforcing sophisticated forms of control to standardise behaviour including and not limited to the use of a professional language (Anderson –Gough, Grey and Robson 1998), the construction of a professional identity (Kirkham & Loft 1993) and ongoing performance surveillance. An example is the use of weekly task summaries requiring approval by a supervising member of staff.
McDonaldization succeeds where Post Fordism fails by reflecting reality that is consistent with the Globalisation and Post Industrial phenomenon in the world accommodating the growth of Lean Production methods where applicable.
Post Fordism as Winsor (1992) portrayed it explains the decline in Fordism and Taylorism in the developed world and the rise in lean production techniques that accompanied it. Its use beyond that is considered by many commentators to be limited: Hetrick and Boje (1992) say that “engaging in anything remotely resembling a theoretical or conceptual closure should be avoided” (1992 p50). Kiely (1998) argues that with no clear analysis it is prescriptive instead of an analytical theory. Amin (1994) rejects the literature as a universally accepted theory of transition considering it to be a debate.
The Post Fordist debate forms part of the explanation but not all of it. Rustin is cited Hetrick and Boje (1992) as saying “Post Fordism is better seen as a one ideal typical model or strategy of production and regulation co-present with others in a complex historical ensemble” (p61)
Post Fordism is useful as one of many models within an ensemble of theories used to explain the globalised post-industrial landscape of the twenty first century. The inability of Post Fordism to accommodate the persistence of Fordist and Taylorist practices exemplified in McDonaldization limits its use as transition theory.
The recent financial crisis exemplifies how the short-term strategies designed to maximise returns to capital can have adverse affects on long term growth. The Post Fordist argument is important because of its call to action in changing the way that work is done. Advances in information and communication technology provide more scope for this flexibility. However as long as an economy is organised within a free market system there will always be incentives for increased efficiency and productivity. Fordist and Taylorist production methods will have a role. Perhaps this period should be called Neo Fordism (Amin 1994) to stress the strong continuity with Fordism and to reflect the ability of Fordism and Taylorism to coexist with other production systems. McDonaldization demonstrates the enduring qualities of Fordism and Taylorism to traverse sectors and economies.
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In this section, we turn to what others call ‘classical’ work organization – Taylorism and Fordism. They are considered classical partly because they represent the earliest contributions to modern management theory, but they are also classical because they iden-tify ideas and issues that keep occurring in contemporary organizational behaviour and management literature, although writers now tend to use a different vocabulary. We will now consider each of these influential classical approaches to work organization.
Taylorism The American Frederick W. Taylor (1856–1915) pioneered the scientific management approach to work organization, hence the term Taylorism. Taylor developed his ideas on work organization while working as superintendent at the Midvale Steel Company in Pennsylvania, USA. Taylorism represents both a set of management practices and a system of ideological assumptions. Taylorism: a process of determining the division of work into its smallest possible skill elements, and how the process of completing each task can be standardized to achieve maximum efficiency. Also referred to as scientific management
Taylorism: a process of determining the division of work into its smallest possible skill elements, and how the process of completing each task can be standardized to achieve maximum efficiency. Also referred to as scientific management The autonomy (freedom from control) of craft workers was potentially a threat to managerial control. For the craft worker, the exercise of control over work practices was closely linked to his personality, as this description of ‘craft pride’, taken from the trade journal Machinery in 1915, suggests:
As a first-line manager, Taylor not surprisingly viewed the position of skilled shop-floor workers differently. He was appalled by what he regarded as inefficient working practices and the tendency of his subordinates not to put in a full day’s work, what Taylor called ‘natural soldiering’. He believed that workers who did manual work were motivated solely by money – the image of the ‘greedy robot’ – and were too stupid to develop the most efficient way of performing a task – the ‘one best way’.
The role of management was to analyse ‘scientifically’ all the tasks to be undertaken, and then to design jobs to eliminate time and motion waste. Taylor’s approach to work organization and employment relations was based on the following five principles:
- maximum job fragmentation
- separate planning and doing
- separate ‘direct’ and ‘indirect’ labour
- a minimization of skill requirements
- a minimization of handling component parts and material.
The centrepiece of scientific management is the separation of tasks into their simplest constituent elements – ‘routinization of work’ (the first principle). Most manual workers were viewed as sinful and stupid, and therefore all decision-making functions had to be removed from their hands (the second principle). All prepa-ration and servicing tasks should be taken away from the skilled worker (direct labour), and, drawing on Charles Babbage’s principle, performed by unskilled and cheaper labour (indirect labour, in the third principle). Minimizing the skill requirements to perform a task would reduce the worker’s control over work activities or the labour process (the fourth principle).
Finally, management should ensure that the layout of the machines on the factory floor minimized the movement of people and materials to shorten the time taken (the fifth principle). While the logic of work fragmentation and routinization is simple and compelling, the principles of Taylorism reflect the class antagonism that is found in employment relations. When Taylor’s principles were applied to work organization, they led to the intensification of work: to ‘speeding up’, ‘deskilling’ and new techniques to control workers, as shown in Figure 3.
2. And since gender, as we have dis-cussed, is both a system of classification and a structure of power relations, it should not surprise us that Taylorism contributed to the shift in the gender composition of engineering firms. As millions of men were recruited into the armed forces for the First World War (1914–18), job fragmentation and the production of standardized items such as rifles, guns and munitions enabled women ‘dilutees’ to be employed in what had previously been skilled jobs reserved exclusively for men.
Some writers argue that Taylorism was a relatively short-lived phenomenon, which died in the economic depression of the 1930s. However, others have argued that this view underestimates the spread and influence of Taylor’s principles: ‘the popular notion that Taylorism has been “superseded” by later schools of “human relations”, that it “failed” … represents a woeful misreading of the actual dynamics of the development of management’.
Similarly, others have made a persuasive case that, ‘In general the direct and indirect influence of Taylorism on factory jobs has been extensive, so that in Britain job design and technology design have become imbued with neo-Taylorism’ (ref. 10, p. 73). Fordism Henry Ford (1863–1947) applied the major principles of scientific management in his car plant, as well as installing specialized machines and adding a crucial innovation to Taylorism: the flow-line principle of assembly work.
This kind of work organization has come to be called Fordism. The moving assembly line had a major impact on employment relations. It exerted greater control over how workers per-formed their tasks, and it involved the intensification of work and labour productivity through ever-greater job fragmentation and short task-cycle times. In 1922, Henry Ford stated his approach to managing shop-floor workers: ‘The idea is that man ... must have every second necessary but not a single unnecessary second’ (ref. 46, p. 33).
Fordism: a term used to describe mass production using assembly-line technology that allowed for greater division of labour and time and motion management, techniques pioneered by the American car manufacturer Henry Ford in the early twentieth century Fordism: a term used to describe mass production using assembly-line technology that allowed for greater division of labour and time and motion management, techniques pioneered by the American car manufacturer Henry Ford in the early twentieth century The speed of work on the assembly line is determined by the technology itself rather than by a series of written instructions.
Management’s control of the work process was also enhanced by a detailed time and motion study inaugurated by Taylor. Work study engineers attempted to discover the shortest possible task-cycle time. Recording job times meant that managers could monitor more closely their subordinates’ effort levels and performance. Task measurement therefore acted as the basis of a new structure of control. Fordism is also characterized by two other essential features.
The first was the introduction of an interlinking system of conveyor lines that fed components to different work stations to be worked on, and the second was the standardization of commodities to gain economies of scale. Thus, Fordism established the long-term principle of the mass production of standardized commodities at a reduced cost. Ford’s production system was, however, not without its problems. Workers found the repetitive work boring and unchallenging, and their job dissatisfaction was expressed in high rates of absenteeism and turnover.
In 1913, for example, the turn-over of Ford workers was more than 50,000. The management techniques developed by Ford in response to these employment problems serve further to differentiate Fordism from Taylorism. Henry Ford introduced the ‘five dollar day’ – double the pay and shorter hours for those who qualified. Benefits depended on a factory worker’s lifestyle being deemed satisfactory, which included abstaining from alcohol. Ford’s style of paternalism attempted to inculcate new social habits, as well as new labour habits, that would facilitate job performance.
Taylorism and Fordism became the predominant approaches to job design in vehicle and electrical engineering – the large-batch production industries – in the USA and Britain. Post-Fordism As a strategy of organizing work and people, Taylorism and Fordism had their limitations. First, work simplification led to boredom and dissatisfaction, and tended to encourage adversarial relations and conflict, including frequent work stoppages. Second, Taylor-style work involves control and coordination costs.
As specialization increases, so do indirect labour costs as more production planners, supervisors and quality control inspectors are employed. The economies associated with the division of labour tend to be offset by the diseconomies of management control costs. Third, Taylorism and Fordism affect what might be called ‘cooperation costs’. As management’s control over the quantity and quality of workers’ performance increases, workers experience increased frustration and dissatisfaction, which leads to a withdrawal of their commitment to the organization.
The relationship between controller and controlled can deteriorate so much that it results in a further increase in management control. The principles of Taylorism and Fordism thus reveal a basic paradox, ‘that the tighter the control of labour power, the more control is needed’ (ref. 10, pp. 36–7). The adverse reactions to the extreme division of labour led to the development of new approaches to work organization that attempted to address these problems.
The ‘human relations’ movement attempted to address the limitations of Taylorism and Fordism by shifting attention to the perceived psychological and social needs of workers. The movement grew out of the Hawthorne experiments con-ducted by Elton Mayo in the 1920s. Mayo set up an experiment in the relay assembly room at the Hawthorne Works in Chicago, USA, which was designed to test the effects on productivity of variations in working conditions (lighting, temperature and ventilation). The Hawthorne research team found no clear relationship between any of these factors and productivity.
However, the study led the researchers to develop concepts that might explain the factors affecting worker motivation. They concluded that more than just economic incentives and the work environment motivated workers: recognition and social cohesion were important too. The message for management was also quite clear: rather than depending on management controls and financial incentives, it needed to influence the work group by cultivating a culture that met the social needs of workers.
The human relations movement advocated various techniques such as worker participation and non-authoritarian supervisors, which would, it was thought, promote a climate of good (neo)-human relations in which the quantity and quality needs of management could be met. This largely forgotten history, which examined concepts such as atmosphere, informal structures and organizational climate, reminds us that twenty-first-century culturalist scholarship is not a completely new development in the thinking about organizations.
Page 75 Work in organizations: an integration of ideas McDonaldization (also known as ‘McWork’ or ‘McJobs’): a term used to symbolize the new realities of corporate-driven globalization that engulf young people in the twenty-first century, including simple work patterns, electronic controls, low pay and part-time and temporary employment McDonaldization (also known as ‘McWork’ or ‘McJobs’): a term used to symbolize the new realities of corporate-driven globalization that engulf young people in the twenty-first century, including simple work patterns, electronic controls, low pay and part-time and temporary employment In discussing post-Fordism, we emphasized competing claims over whether new forms of work lead to an enrichment of work or the degradation of work.
Managerial optimists argue that new work structures empower employees, and celebrate the claim that managerial behaviour has shifted its focus from ‘control’ to ‘commitment’. Critical analysts contend that some new work regimes are ‘electronic sweatshops’, and are basically a euphemism for work intensification.
To capture the new realities of the modern workplace, critics often use the term ‘McWorld’ or ‘McDonaldization’, meaning that a vast amount of work experience, especially for young people, women and workers of colour, involves menial tasks, part-time contracts, close monitoring of performance and entrenched job insecurity.
In Figure 3. 3, we draw together the developments in work and employment practices over the last 200 years, by highlighting four paradigms or distinctive approaches: craft/artisan, Taylorism /Fordism, neo-Fordism and post-Fordism. Work is shown to vary along two dimensions: the variety of work – the extent to which employees have an opportunity to do a range of tasks using their various skills and knowledge – and the autonomy in work – the degree of initiative that employees can exercise over how their immediate work is performed. Here, craft/artisan means the types of work organization that are based on craft-based skills and often associated with a narrow range of specialized tasks, a high level of skill and a high degree of autonomy.
Taylorism /Fordism means the adoption of basic scientific management principles and the assembly-line methods pioneered by Henry Ford, and neo-Fordism refers to a work configuration that has modified the core principles of Fordism through flexible working practices to fit contemporary operations. In contrast to the craft/artisan paradigm, the Taylorism /Fordism and neo-Fordism paradigms are often associated with a narrow variety of tasks, a low level of skill and a low degree of autonomy in work. Post-Fordism refers to organizations that do not rely on the principles of Taylorism or Fordism, and is often associated with ‘high-performance work systems’, with self-management and with a high degree of autonomy in work.
As others have mentioned, the strength of this conceptual model is as a heuristic device – a teaching aid – to help us summarise the complex development of work organization and employment relations. The research on the trends in work design suggests that Taylorism and Fordism have dominated the managerial approaches to work organization. In addition to the four broad classifications of work organization, the model shows two trends proposed by the proponents of the ‘deskilling’ and ‘upskilling’ theses. The deskilling thesis maintains that, in Western capitalist economies, there is a general trend in paid work towards a narrow variety of tasks and low autonomy; the arrows marked ‘A’ represent this trend in the diagram.
The upskilling thesis suggests an opposite trend towards a wide variety of tasks and high autonomy in work; the arrows marked ‘B’ represents this trend. It is important to understand that different regimes of work organization affect the nature of the employment relationship, whether or not this is explicitly acknowledged in the writings of organizational theorists.
For example, if work is reorganized to deskill or upskill employees, this will change the degree of interdependency, and typically the power dynamics, between the employer and employee. To sum up, some of the more recent empirically based literature offers a context-sensitive understanding of the development of work, and rejects a general tendency towards either deskilling or upskilling.
The ‘context-sensitive’ view makes the point that new work structures do not have uniform outcomes, but are likely to be ‘mixed’ and contingent on a number of variables, such as business strategy, the nature of new technology, the degree of employee involvement in decision making, union involvement in the change process, and the extent to which ‘bundles’ of employment practices support the new work regime. In sum, the identification of potential benefits and costs for workers from new work configurations provides a more complex picture, one that strongly supports the hypothesis that changes in the nature of work can strengthen or threaten the ‘psychological contract’.