- Series: Century Foundation Books (Oxford University Press)
- Hardcover: 240 pages
- Publisher: Oxford University Press (November 6, 2003)
- Language: English
- ISBN-10: 0195166019
- ISBN-13: 978-0195166019
- Product Dimensions: 9.3 x 1.1 x 6.1 inches
- Shipping Weight: 1.1 pounds (View shipping rates and policies)
- Average Customer Review: 4.4 out of 5 stars See all reviews (9 customer reviews)
- Amazon Best Sellers Rank: #3,009,589 in Books (See Top 100 in Books)
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The New Ruthless Economy: Work and Power in the Digital Age Hardcover – November 6, 2003
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This is a provocative call for the rehumanization of business and society, revolting against the impact of reengineering and massive information technology systems. Journalist Head rationally gathers the evidence and presents the case against mass production: from 1990 to 2003, inflation-adjusted wages and benefits of American workers stagnated, rising less than 1 percent yearly on average. It all started, Head claims, with Frederick Taylor's Principles of Scientific Management (1911), which advocated use of engineering methods to improve productivity. Change continued with Michael Hammer's promotion of streamlining the way service industries (e.g., call centers and modern medicine) do business, accompanied by the installation of huge enterprise resource planning systems. The results? Poor to nonexistent, as the doctor-patient consultation relationship fades, as supervisors micromanage every minute of employees' work, and as once-valued workplace skills and specialties are lost. A dramatic presentation that, unfortunately, includes few specific recommendations for change. Barbara Jacobs
Copyright © American Library Association. All rights reserved
"A welcome caution against believing all the claptrap we have heard about 'empowered' workplaces."--The New Leader
"As this hard-hitting book shows, most American companies have used information technology not to liberate workers from drudgery but to further their regimentation.... A sobering view of the new workplace."--Harvard Business Review
"If you're interested in the U.S. economy, you must read this book. It is full of fresh insights, meticulous reporting, and historical resonance. Simon Head shows us why the new economy is less new than we thought. Investors and policy makers will find reading this well-written analysis a memorable experience."--Bill Bradley
"This extraordinary book puts together the culture of modern capitalism with numbers and hard facts. Simon Head has written a disturbing and brilliant analysis of what ails the modern economy."--Richard Sennett, London School of Economics
"Head's acute and clearly presented book shows how innovations in software are making work more onerous and closely controlled. In each chapter, Head takes the reader to actual work sites employing 'technologies that are essentially human-proof,' i.e., in which personal choice is practically eliminated.... Head provides detailed and disturbing glimpses of how, to take only three examples, digital programs can be applied to assembling automobiles, running telephone centers, and managing medical care, with the result that wages decline and work becomes more tightly controlled."--Andrew Hacker, New York Review of Books
"A provocative call for the rehumanization of business and society, revolting against the impact of reengineering and massive information technology systems. Journalist Simon Head rationally gathers the evidence and presents the case against mass production."--Booklist
"Simon Head rightly criticizes the glib gurus who promote the mechanization of medical care. He appreciates that health care is full of inefficiencies, but that the quirky complexities of illness demand that each individual must always remain our central focus."--Jerome P. Kassirer, M.D., Editor in Chief Emeritus, New England Journal of Medicine
"Provocative and thoughtful."--Library Journal
"Simon Head's important book is sure to provoke a heated debate on the methods of modern enterprise. Can humans be programmed like machines? Head demolishes many of our illusions about information technology and argues powerfully that everyone loses when corporations try to use technology to conquer human nature."--Philip K. Howard, author of The Death of Common Sense: How Law Is Suffocating America and Chairman of Common Good
"Head is similarly tough on another New Economy conceit that underpins advocates' libertarian politics: the notion that high technology is democratizing the American workplace by flattening corporate hierarchies and boosting the knowledge content of jobs. Head's argument takes off from the simple but powerful observation that conditions in many tech-heavy workplaces look a lot more like those on the factory assembly lines of the 19th and early 20th centuries than like the sunny 21st century think tanks of the New Economy. Head asserts that corporate America's ambition to use technology to expand factory floor-like conditions extends well beyond the computer software mills and telephone call centers to the highest reaches of white-collar employment, including health care."--Los Angeles Times Book Review
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Top Customer Reviews
I can see why workers resisted Taylor's schemes to get them to be more productive. It is much more desirable for the workers to set the pace without having supervision, rather than having a supervisor tell you to speed up. Besides, not everyone works at the same pace, unless you force them to.
Even health care has become a dehumanizing experience for patients as they too have to endure a managed care system geared toward production, rather than caring for the patient. It seems to be a very male-oriented philosophy to coldly concentrate only on production and beating out the less productive competition, as opposed to other values that could be emphasized.
By increasing the productivity of workers, an employer reduces the labor cost of making the product, ultimately trimming down the number of people employed. With Taylorism, the worker participates in his own eventual replacement by suggesting ways to do the work more efficiently.
Although there had been some talk of the increase of worker autonomy and empowerment with rise of Japanese auto production, actually management practiced a more refined Taylorism. Workers were both bored by simple tasks and stressed to keep up with the speed of the line. This decreased the quality of working life. Unions were unable to penetrate into Japanese run plants worldwide to attempt to slow down the line and give workers more power.
It's amazing that the engineers of the Casepoint software thought that it would work. Customers who call in about equipment they don't understand are often rambling and incoherent. Such unpredictability would ruin such a system. You need to use the human computer to figure out such problems. No artificial computers have been created yet that would fix such problems.
I agree with Reichheld that if you treat employees well and retain their loyalty and service, then the business runs much more smoothly and profitably, without having to resort to such immoral tactics as management by excessive and stressful monitoring. Management, employees, and customers benefit from having a humane work environment. Businesses should focus on this, rather on just production. Unfortunately, businesses often view their employees with contempt and think that they can be easily replaced. Businesses listen more to scientific managers, rather than to humane ones.
With Head's review of scientific management, I get the impression that Taylor and his followers really do belong in the lowest parts of hell. But focusing on higher production is not a bad pursuit as long as it doesn't become the only goal.
There are many problems with scientifically managed healthcare. Patients are "medical losses" in managed care; the term is used to describe the loss of profit when the patient cost the MCO to much money. Such patients are unprofitable clients to the reengineers following the principles of scientific management to try to reduce the cost of healthcare. The invasion of this philosophy into the healthcare system has not gone over well with doctors or patients. Patients don't want to be treated like products; doctors want to make their own decisions about the patient's care without having to go by the rigid guidelines of managed care. Because physicians are no longer making flexible decisions during the diagnosis of patients, medical errors are opening them up to lawsuits, which further increase the cost of healthcare. MCO's are more interested in making a profit, than merely holding down costs. Since there has been an increase of bureaucracy because of the contentious negotiations between doctors, hospitals, and HMO's, costs are increasing probably more so than they were before managed care. To bring costs down they must deny care to patients, particularly if they are unprofitable patients with severe and chronic health problems. This market solution to rising health care costs has not been that successful; the author suggests that all could be covered under nationalized health care. Drucker would probably object with the usual argument about people waiting years for a serious operation to be done under nationalized care.
Although companies talk of employee empowerment with the advent of IT technologies, the opposite has actually occurred. There is a chance for empowerment, but not with the way the technology is being used now. The technology actually gets in the way of employees becoming more experienced at solving problems, which could lead to job satisfaction. While scientific management has had some success in manufacturing as far as higher production goes, it has not been successful in services that deal with humans, which requires more complexity and caring. There are other values that are more important than production in the services. Head disagrees with Drucker that higher production necessarily leads to higher wages. The fruits of increased productivity often go to the CEOs and shareholders, and senior managers, not employees.
Yet, even before the tech stock crash, 9/11, and a series of corporate scandals starting with Enron, the 80% of Americans in the service industry were experiencing stagnation of real world wages and benefits. And rising were levels of worker insecurity and dissatisfaction.
Simon Head set out with a goal, and that goal was to discover why. Supported by The Century Foundation, Head set out to observe businesses of the "new" economy in action. He observed manufacturing businesses traveling to auto plants and machine shops. He observed service businesses like call centers, hospitals, and clinics. He observed knowledge businesses spending months in the Silicon Valley and Cambridge. And he reported back what he found. That report took the shape of a book, The New Ruthless Economy: Work & Power in the Digital Age (Oxford 2003).
What Head discovered happening was not a new type of management at all. Scientific management had been developed by F.W. Taylor more than a century before and applied to manufacturing to increase productivity of unskilled workers. But now this theory intended for industrial mass production was being applied to supposedly skilled white-collar workers. To high-income workers like architiects and engineers, it was to compliment their skills, like a colleague looking over their shoulder. To middle- and lower-level workers like telephone operators, bank tellers, and call center agents, it was to substitute their skills, even scripting every word they were to say. And to college-educated workers like managers and physicians, it was to debilitate skills, dictating action, tying their hands. Managed care organizations, rather than leave such decisions up to the so-called professionals, would now tell doctors the length of time to spend with a patient and what treatments a patient should or shouldn't receive.
White-collar Taylorism, as Head tells us, had been attempted before, but it had failed. What suddenly made it become possible for the first time in the 1990s was the networked computer and its workflow software, the very information technology that was supposed to bring about the "new" workplace.
But possible doesn't mean inevitable. What made it happen?
Head argues that there is a gray area "where outcomes depend upon decisions taken by executives and managers as to how technologies will actually be used in the workplace." He puts forth that it was a conscious decision to take reengineering and ERP (enterprise resource planning) of companies beyond just mundane activities involving goods and numbers (ordering, storing, transporting, billing of goods) and expand it to areas involving people (sales, marketing, customer relations, accounting, personnel management, and, as mentioned, even medicine).
Head spotlights a central paradox of the information age. Software companys like Germany's SAP could be considered a poster child for the "new" economy, businesses that are flexible and flattened in their structure, with little or no hierarchy, with a truly skilled workforce, and with a prolific record of technological innovation. Yet when their product was put in place within companies of the "old" economy, it strengthened a business culture embodying values of that are the opposite.
To explain how SAP's ERP software allows a manager to control a business's operations, advocates might make the analogy of how a pilot flies a modern jetliner "by wire." But what is being controlled is not machinery but people. Head argues that perhaps a better analogy would be that of Foucault's Tower, a panopic means by which powers observe without being observed. That it was intended for prisons perhaps is Head's strongest condemnation of what information technology has done to the workplace.
The casualty of ERP is the employee's accumulated skill, knowledge, and experience which enables employees to do their jobs well. And industry has been evolving in ways unfavorable to labor unions, once the worker's best defense, which might have helped counter this trend. So the changeover lumbers on with the considerable time and expense shifting to ERP takes, despite the overwhelming majority of companies moving to ERP having experienced no productivity improvement. Instead they have only increased worker dissatisfaction and insecurity.
Simon Head's observations in The New Ruthless Economy are not optimistic. Instead of a golden age of respect, trust, and freedom for workers leading to previously unimaginable levels of increased productivity, the world Head describes may just as easily be called the "new" serfdom as the "new" economy.