Exporting of jobs
Jet co a Britain’s leading blue chip manufacturing company reduced the plant workforce from 8000 to 4300 because of the customer demand in cost reduction with new concept of outsourcing. Jet Co’s gradual transformation in outsourcing of design and manufacturing capability was the new cost cutting regime. ICT helped to interchange the necessary data with subcontractors to achieve collaborative result. Till 1990 all the manufacturing was in house and by 2001, 65 percent of the manufacturing processes were out sourced. The major reason behind this strategy was to secure export order by joint ventures and licensed overseas production for gaining influence in the global markets.
Due to this transformation around 3700 employees had to lose their jobs where the actual dismissal was rare and the reduction met by redeployment, early retirement and voluntary retirement schemes. Organisation must adopt and change in response to general environment around them in order to survive and thrive in the dynamic environment. A country’s general environment is affected by economic, cultural, technological and political forces. So the organisation has to be sensitive to these forces.
According to Alan Griffiths, 1996 in order to meet the complex demands organisations have the possibilities to redesign it’s functional structure, product structure or geographic structure. Moreover if the organisation becomes too large and very complex, management will not be able to control the organisation effectively company may create Strategic Business Units, each with its own operations.
Alan Griffiths states in order to solve specific tasks for example launching a new product which needs different skills of various numbers of organisation called taskforces. And another way is to externalise production which involves moving its responsibility and function to outside companies. Whichever the way the organisations decide to restructure its operation involves internal change affects employment and work habits. Many companies have had to adapt to the changing environment in order to survive.
In mid 1980s, IBM was virtually immune from competition in the computer industry until a change involved the emergence of new technology in the form of microprocessor which affected the nature and organisation of the industry. New technology enabled manufacturers to produce cheap microprocessors which could be used in personal computers (PC). IBM launched its first PC in 1981, using parts from outside, i.e. microprocessors from INTEL and operating system from Microsoft. Because IBM didn’t have exclusive deals with these two companies. But other companies could use the products of Intel and Microsoft.
IBM lost market share in both mainframe and in the PC market due to intense competition. The problem was that IBM had become complacent, asset heavy, people laden and bureaucratic. In order to respond this IBM divided into 13 SBUs and tended to be more mechanistic in its operation compare to other companies such as Apple and Hewlett Packard. This involved decrease of employees from 407,000 in 1986 to 220,000 in 1995 and due to the increase in stress on marketing meant that management had to shift employees from administration and other areas towards marketing.
From the above we can observe that organisations affected by the advancement in technology tends them to change their operation to survive and the change affects employment and work habits with in the company. Harry Browne, 2004 says that the burning issue of the day is “exporting of jobs” to foreign countries by corporations by taking advantages of lower wages in foreign countries. New ICT which are promoted by mobility of finance capital and changing patterns of international trade in what some have called the borderless world (Ohmae,1995).