Case 1 (source David Needle, 2000. pg:78)
Thomson holidays a part of international Thomson organisation introduced Thomas open line programme, a computerised reservation system, where people are able to book their holiday and immediate confirmation. By 1998 they have introduced BACWAY for windows, new computerized system for collecting direct debit payments. Thomson estimated that savings directly to the new system were £28 million and there was 400 per cent increase in the business.
Before introduction of this system booking was done either by telephone or on the basis of booking form. Where after introduction of computerized system all people who involved in that booking lost their jobs. Thompson computerised booking resulted in reduction when it was first introduced. However over the time increase the volume of booking meant that staffing was resorted to its former level.
Information and telecommunication technologies threaten the loss of million jobs and steady decline of work in many industries and employment categories. However the service and products of the new technology will generate additional employment thus create millions of new jobs.
As concluded by Kevin Danaher, 2004 between 1983 and 1993 banks in the U.S replaced 179000 human tellers with automated teller machines. It is not that technology is bad, but when technological innovation used to get rid of workers, with no systematic programme to create meaningful replacement jobs, the result is widespread insecurity that saps worker morale.
Kevin Danaher,2004 states that if the management had their own way of robots doing everything in the plant, but they have to remember that robots don’t buy anything. Because if the individual corporation continuously focused on climbing on the profit ladder global market place which make sense in micro economic level. But when all these micro economic decisions to cut workers are add up, the macro economic impact is stagnation all the social ills that go with it.
Downsizing
Downsizing involves large scale of labour rationalisation and transformation of conventional manufacturing enterprise into system integrators which involves subcontracting the manufacturing of large parts and assemblies to different firms. According to Danford, et al 2001 Technological advances create competition which catalyses new directions in corporate strategy. David Needle, 2000 says that increasingly technology and, more information technology are used as strategies for competitive advantage. As concluded by David Farnham, 1999 as a result of developments in ICT boundaries of organisation becoming more permeable.
Case 2 (new technology work and employment volume 19 no 1 march 2004. pg:17)
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.
Case 3 ( source:British Economical survey, volume 26 no 1, 1996;pg:41)
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.
Exporting of jobs
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).
David Farnham,1999 says due to ICT unit cost of coordination have reduced significantly and economics of scale have been changed. ICT technology reduces the time needed for coordination of activities and reduces time needed for specific operations. More over computer technology lower the communication costs. Improving technologies, such as transportation and communications, have enabled companies to expand themselves into global markets. This competitive environment organisation has more pressure for profit. They find it is much cheaper to send work to contract overseas where the labour cost is low.
This competitive world most businesses are in pressure to operate it business to provide its service round the clock and year round.i.e.24 x 365 service. Using the advantages offered by information technology such as global networks and the capacity to reroute telephone calls the same job can be done in Delhi as well as London. So businesses find locations to done this kind of operation where it can be done cheap concern of cheap labour. As concluded by David Needle,(2000) where the job involves telephone sales and telephone information, it matters little where the jobs are located. A call centre is sometimes defined as a telephone based shared service centre for specific customer activities and are used for number of customer related functions like marketing, selling, information dispensing, advice, technical support etc. According to Davis,(1999) in 1997 it was estimated that there were 3500 call centres in UK alone, employing 163000 people(David Needle, 2000;pg:84). If these entire jobs go to overseas there will be a question mark for these employees.
British business is facing increasing pressure to move jobs to abroad to cut costs. According to online business news nherald report, more than one half of the companies the CBI surveyed said pressure to move business overseas. More over the report says although this had cost jobs, the economy had been able to replace jobs elsewhere. But job created in Britain tended to be for skilled and graduate degree workers. Also with in 10 years Britain has no work for unskilled workers. The impact of new technology has been shown to vary according to the type of job. In general the demand for unskilled has fallen while that for skilled labour has risen. According to Wilkinson , (1986) the introduction of computer controlled manufacturing equipment shifted work from the craft jobs on the shop floor to computer programmers and analysts( David Needle, 2000 ; pg:84). Many acknowledged that job loses could be felt in firms by not employing new technology and thus losing competitive edge and market sharing.
Conclusion
Business exits to make profits. There is no need for business to act ethically with their stakeholders because the responsibility of the business in not to act ethically but to make money. According to Friedman, (1970) the only responsibility of business is to use its resource as efficiently as possible and undertake its business to profits with in rules of the game. For him this means free competition, with out deception and fraud. Here he meant moral responsibility as a rule of the game. But there are some Moral responsibilities in the business which are duty to the people in the business such as managers to workers, duties to their customers and suppliers, duties to environment and society and duty to the group which owes the business. As concluded in David Farnham, 1999 major issue facing by organisations are expectation of stakeholders. And he adds customer expects effective supply of goods and service, creditors and suppliers want timely payment, community wants jobs and safe environment and government want employment for its people and to fulfil laws and taxation rules. In some cases organisations can’t full fill the above expectations when technology drives the changes in organisation. The history of technological innovation over the past years tells us that new does not destroy the old, rather it transform it. Technological change is benefit to every one. Problems occur only because the changing process is poorly managed. According to Wood Hall,(1996) “the worst thing government can do is try to slow down the process of transformation through regulation or protectio0nism. It may save some people from pain. But they will depress living standards and employment growth fro the country as whole” (David Needle, 2000; pg: 86).
