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Benchmarking Heroism

Benchmarking refers to identifying and applying best demonstrated practices to operations and sales in order to achieve all out performance-hike (Toolshero, Undated). However, how this takes place by diffusion of hard and soft technological innovations is a gray area of investigation. It is not an easy inquiry. Organisational innovations are deemed as soft technological progress and microelectronic-based agile or flexible automation as hard technological innovations. It is hypothesized, heroically though, that firms benchmark by innovation or most often by innovative imitation to beat price and non-price competition they face (see Bose, 2018; Levitt, 1966). The very fat 5-million-dollar, and the rather long 5-year-International Motor Vehicle Programme (IMVP) research project at the Massachusetts Institute of Technology had, for example, produced a new benchmarking religion by way of a short catechism of lean production—a best practice organisational innovation—as “the one best way to organize the production of automobiles”, and that the whole world should adopt it as quickly as possible since the fundamental ideas of lean production are universal, applicable anywhere by anyone.

Everyone must love lean and agile thinking and the associated techniques and prosper by their power and glory. This prescription for efficiency on all fronts was like prescribing a Holy Grail industrial restructuring shower to get rid of the sinful bitchiness of production in the dry-as-dust, X-inefficient real-world factories a la the Harvard Economist Harvey Leibenstein and the British sociologist Ronald Dore. This was also a kind of new biblical discovery of what Jesus meant by Peter as “rock” or pre-Biblical revelation of ‘ten commandments’ exactly like the IMF’s “shock treatment” as universal cure for the ailing economies or the most banal, philistine and shameless “ivy league” universal neoclassical economic theory of unemployment that workers prefer leisure to work. The prescription can also be musically regaled with The Doors’ rock-song, Break on Through to the Other Side, of cutthroat efficiency. There is bountiful literature on benchmarking (Bose, 2018) in the name of “Japanization” and “Easternization” in respect of the diffusion of lean production or Japanese industrial practices. Japanization refers to the benchmarking quest through the adoption of the Toyota model of production in the Western, developed countries. And easternization refers to the spread of the same in the less developed countries. In this regard, some scholars, who had also become mouthpieces for the spread of lean production by way of Just-in-Time Production and Inventory Control, Total Quality Management, and Continuous Incremental Improvement have made the case for the “hybridization” notion. This means that the new production systems develop in pre-existing contexts which shape the development of the new.

That is to say, the case is made that the new combines with the old rather than replacing it. Related to this is the idea and observation that Japanese management techniques as also flexible automation can be transferred to alien contexts without replicating exactly the Japanese type compatible labour relations as found in the Japanese lead firms (life-time employment, seniority-cum-merit payment, employee commitment, enterprise unionism) but by finding suitable equivalent substitute labour practices and institutions for them, for example, in the name of harmonious New Industrial Relations or Human Resource Management. These substitute labour practices refer to employee empowerment, team work, job rotation and cross training, supportive personnel practices including open-ended employment contracts, skills upgradation and multi-skilling, high wages, profits sharing, etc., and labour-management relations—preferably without unions—based on consultation, information sharing, consensus, individual grievance redressal and cooperation. A most wonderful demystifying finding is that all this is not required; lean production and/or flexible automation can be executed with alternative “Californian system of labour relations”—weak union or no union at all with a particular type of labour (cheap, often migrant, and without previous factory or union experience) and individualized control and incentive systems based on assessment of performance. Lean and agile can be mean and awful.

In any case, research curiosities were aroused over more than the last three decades to test whether labour relations issues in the context of soft and hard technological innovations are likely to exhibit ‘local isomorphism’—i.e. to resemble the practices of local environment—or ‘cross-national isomorphism’—i.e. introduction of country-of-origin patterns into host country operations—or a synthesis or ‘hybrid’ in which host country norms mediate the influence of the home country ‘blueprint’. As regards the application of soft and hard technological fixes, there is literature to suggest that there exists a wide variation in the implementation of Japanese manufacturing techniques, which, in part, is due to the differences in production processes, quite contrary to what the protagonists of lean manufacturing have evangelised that it is a universally applicable best practice and, moreover, that it is not only inexpensive but also easy to adopt in the developing country context. For example, a heroic case for the transfer of lean production techniques was made thus: “Four aspects of the new practices provide strong apriori grounds for our hypothesis concerning their applicability in developing countries.

First, ...most new practices are neither scale, product, sector nor function specific....Second, there is no mystery behind how these practices work. Indeed there are numerous ‘how to’ books that describe practically how firms should go about introducing the new practices. Moreover, most management consulting firms provide specific advice on the practices. In short, the new practices are codifiable and accessible.” However, studies show that the implementation is not an easy technical issue independent of the way social relations are managed within and between firms. Barriers to implementation could arise on many counts, in terms of labour supply characteristics, noncommitment of top management and/or middle management despite workers’ interest, adversarial industrial relations, small firms not having even the minimal managerial systems required to analyse processes and keep track of performance and costs, absence of managerial restructuring and proper policy deployment, etc.

Moreover, the “all or nothing” approach fails to appreciate how piecemeal and selective adaptations are undertaken to yield significant results by firms to suit their local conditions or how innovative strategies involving upgradation of product quality and production techniques are combined with the low road treatment of labour (i.e. cheap labour strategy) in order to be competitive. Thus, there is no single correct way of implementing benchmarking via modernisation policies in industrial landscapes. While the ideologues of lean production confidently professed, in 1990, commendable labour relations outcomes associated with its adoption without any empirically observed evidence to support the proposition, in less than a decade afterwards, empirical investigations came out with the findings that despite the widespread application of lean production principles, significant variation existed in the employment practices! The global auto industry was, thus, portrayed as a case of “converging divergence” in terms of widespread but differentiated diffusion of lean production alongside wide-ranging labour relations outcomes. This was a good enough demystification of the undifferentiated view of the ideologues of lean production about universal possibility of implementing lean production as the only best way and, thereby, arriving at generous and commendable labour relations outcomes everywhere.

Two decades further through the twenty-first century, with benchmarking in terms of lean production/flexible automation peaking everywhere, including China, due to competitive pressures in the era of neoliberalistic globalization, labour researchers have found out insecure labour associated with it. This has led to the universal thesis of the diffusion of homogenised precarious labour conditions of lean production for manufacturing excellence. Employers of all varieties of capitalism, including state capitalism in China, have sought low-wage docile slaves, and often sought to avoid union or other labour regulations, to increase their bottom lines. Today’s labouring classes have very little protection from the tides of competition. Just-in-time production makes goods available at short notice and avoids stockpiling excess inventory, but it also requires a surplus of available labour that can be deployed at short notice. The so-called ‘zero-hours’ labour contracts place employees on call, often not knowing when or how many hours they will work in a given week. With short-term and temporary contracts, employers need not maintain large payrolls when such a volume of labour is not needed. Labour has universally become disposable as it’s use has been instrumentalised with arbitrary and violent rhythms in the main firms and their supply chain firms.

To conclude, lean production in conjunction with flexible automation as the best practice technological fix has got precarity of labour as its worst practice, more so with the roll-back of welfare safety nets almost everywhere, so much so that best is worst, worst is best like the Shakespearian fair is foul, foul is fair! So, a moot question for research can be framed thus: What and where are the “win-win” benchmarking best practices that are beneficial to employers and their employees as well as to the supply chain vendors and their employees? I have not yet found anybody in the academia or the business world anywhere to frankly throw light on the ideal or mystical benchmarking implied in the above question, notwithstanding the ongoing peppy managerial baptism into benchmarking like the crazy baptism into best rock music by Deep Purple’s hit, “Smoke on the Water”. How competitive pressures and/or government’s role in promoting modernisation (Abhyankar, 2014) lead to innovation-led, win-win industrial development is nevertheless a topical concern, especially for working people, in India and elsewhere. To put it differently, are there any mutual gains enterprises as normatively professed by Osterman and Kochan (1994) anywhere in the world? Has heroic benchmarking ever happened with munificent beneficence for all the stakeholders of an enterprise?

Annavajhula J.C. Bose,
PhD Department of Economics, SRCC

Reference

Annavajhula J.C. Bose. 2018. An Inquiry into the Nature and Causes of Contemporary Labour Relations. eBook. Blue Rose Publishers.

New Delhi. Paul Osterman and Thomas Kochan. 1994. The Mutual Gains Enterprise: Forging a Winning Partnership among Labour, Management, and Government. Harvard Business School Press. Cambridge. MA. Ravindra Abhyankar. 2014.

The Government of India’s Role in Promoting Innovation through Policy Initiatives for Entrepreneurship Development. Technology Innovation Management Review. August. Theodore Levitt. 1966. Innovative Imitation. Harvard Business Review.

September. Toolshero. Undated. https://www.toolshero.com/marketing/benchmarking/

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