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September 1984, Vol. 107, No. 9
and productivity change
In the past several years, there has been increasing speculation that the decisionmaking patterns of foreign business firms hold the key to improving U.S. productivity performance; reflecting greater recognition of institutional and cultural influences on productivity. In particular, the industrial practices found in West Germany and Japan, the United States' strongest competitors, have been cited as models to be emulated to achieve optimal productivity. Pointing to the traditional relationship between U.S. management and labor as well as the failure of many business leaders to properly manage and motivate their employees, proponents of reforming the workplace have stressed the potential of raising productivity through better labor-management communications and the establishment of programs of greater worker participation.1
Rejecting the prevailing U.S. economic doctrine, which tends to view the firm as a machine that maximizes short-run profits, students of organizational behavior regard an enterprise as a social system with gaps between actual and optimum performance. An organization may be resistant or unresponsive to management goals. Jobs may be incompatibly designed, given the existing skills of employees, or they may be inappropriately meshed. Information may be lacking, thereby forestalling smooth and coordinated work processes. The consequence is deficient control over the quality and quantity of production. Management can set its goals in broad terms, but at the lower levels there is considerable room for variation both in the interpretation of goals and in the effort made to meet them. To achieve greater productivity, according to this view, management needs to share authority with workers by giving the employees a greater voice in determining production processes.
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1 John F. Tomer, "Worker Motivation: A Neglected Element in Micro-Micro Theory," Journal of Economic Issues, June 1981, pp. 351-62; Richard D. Rosenberg and Eliezer Rosenstein, "Participation and Productivity: An Empirical Study," Industrial and Labor Relations Review, April 1980, pp. 355-67; and Kenneth Walker, "Workers' Participation in Management," International Institute for Labour Studies Bulletin, no. 12, 1974.
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