Employers’ use of technology and the impact on organisational structures

1. Employers’ use of technology and the impact on organisational structures WORKS conference, Rome, October 9 2008 N. Greenan, Y. Kocoglu, E. Walkowiak (CEE)P. Csizmadia, Cs. Mako (ISB)

2. WORKS evidence on technology use • quantitative research pillar: computer and Internet use, mechanisation • qualitative research pillar: 58 organisational case studies covering 5 business functions that feature prominently in the external restructuring of companies and 5 sectors reflecting the emergence of global value chains in different historic stagestechnologies involved in value chain restructuring are mainly waves of ICTs that have started their diffusion in the mid 1990s with the Internet revolutionVCR technologies

3. VCR technologies from 58 organisational cases studies

4. The diffusion of ICTs in Europe • A pattern opposing the north west of Europe with the south east for ICT expenditures and internet use at the workplace: Norway is front runner, followed by the Netherlands, Denmark, then Sweden, Germany, Austria and the UK. Lagging behind are Romania, Bulgaria, Poland, Greece, Italy and Portugal • Opposite geographical patterns for older waves of technology: a high intensity in use of automated machines is observed in Portugal, Slovenia, Hungary, Slovakia, Czech Republic and Estonia and a low intensity in Sweden, the Netherlands, Denmark or Ireland • A « technology free » situation in Greece and Bulgaria These patterns play as a constraint on the scope of choices in the restructuring of value chain

5. Main objectives of the report Describe the interplay between the use of ICTs/VCR technologies and • …Network organisation design • …Work organisation • …Skills

6. ICT use and Network organisation design In the theoretical literaturea consensus on the fact thatICTs transform communication and distant coordination costs and thus open new opportunities for organising economic activity  No consensus on how these costs change, in particular, according to the authors, communication costs are assumed as increasing or decreasing • No clear cut conclusion on network organisation design:ICTs can increase the information capacity of hierarchical networks or favour non hierarchical network organisation designs. The importance of knowledge in the activity, its codification and standardisation and the distribution of available competences are crucial

7. Evolution of networksWORK qualitative findings • Centralisation: 29 casescreation of a centralised network: 8 cases / public and SGI reorganisation of a network: 10 cases / clothing  restructuring of a network: 11 cases / food and clothing • Decentralisation : 13 cases autonomy of units: 4 cases / public / clothing / IT outsourcing of a peripheral function: 3 cases / SGI  decentralised coordination: 6 cases / IT services • Mutual dependence: 3 cases public and SGI • No evolution: 12 cases

8. Standardisation • It is present in most of cases involving ICTs • Standardisation of services, quality, routine tasks, work process • In cases of centralisation, the unit that generates the standards with ICTs reinforces its position in the network • Standardisation generally comes before and enables outsourcing or off shoring

9. ICT use and work organisation • In the literature, ICT use is often positively related to work complexity and to work intensity. • However, some authors qualify this positive link between ICTs and work complexity • The link between ICTs and autonomy partly comes from a selection process of computer users according to their social characteristics • “Routinization” hypothesis ICTs replace jobs with routine manual and cognitive skills and favours the development of jobs composed of non routine cognitive and non routine manual tasks • ICTs as a tool for monitoring low discretion tasks

10. ICT use and work organisationWORK qualitative findings • Standardisation: 37 cases work process: 34 cases / clothing, food, public, SGI, IT quality control: 4 cases / clothing, food with • outsourcing: 10 cases / clothing, public, SGI, IT • work enlargement: 12 cases / clothing, food, public, SGI • less autonomy, more monotony & control: 9 cases /food, public, SGI, IT • increase in workload, stress:5 cases / public, SGI • More flexibility in working time model :6 cases/ clothing, food • Nothing or no information …20 cases clothing, food, SGI, IT

11. ICT use and skills • Skilled biased technological change or complementarity between ICT / organisational practices / skills and training : coordination in technological and organisational choices that requires a more skilled workforce. What about new generations of technologies, namely VCR technologies ? • They could represent a power biased technological change : they allow monitoring low-skilled workers more closely and reduce their power of decision • Some empirical papers show : • a deskilling of managers working in operational function • an upskilling effect : the work of employees in less skilled occupations tends to converge towards that of employees with managerial positions. • a polarisation of jobs: ICTs create “lovely” jobs and at the same time displace workers from ‘middling’ jobs to ‘lousy’ jobs

12. ICT use and skillsWORKS qualitative findings • New skills: 32 cases  only ICT skills: 8 cases/ food, clothing, SGI ICT and customer oriented skills: 11 cases / public, SGI, IT, food, clothing • ICT and communication skills: 7 cases/ public, food, IT, public ICT professional skills: 6 cases / IT Not always perceived as upskilling by the employees • New jobs: 4 cases public, SGI, food • Polarisation: 5 casespublic, SGI, food • No skill effect mentioned: 19 cases public, SGI (mainly IT function), food, clothing or no use of new ICTs

13. Three examples • Citylife(Schönauer, 2007)public sector, consumer service, Austria, reorganisation of network, centralisationcall centre, workflow and ERP, polarisation • City Council (Dahlmann, 2007)public sector, IT, UKcreation of a network, centralisationcall centre, workflow, new required skills, but feeling of deskilling • Maltco, (De Bruyn & Ramioul, 2007)food industry, logistic, Benelux,restructuring of a network, centralisation, ERP, deskilling, feeling of insecurity

14. Conclusions • Summary of qualitative findings  ICT is a tool for structuring the flow of information across the value chain and for monitoring  standardisation  If these tasks were previously performed by occupations with intermediate skills, global ICT enabled value chain restructuring could contribute to a decreasing work complexity and to job polarisation • Need for a quantitative assessment at the European level / lack of data on value chain restructuring and organisational change • Further research: what consequences for the knowledge base of economic activity ?