April 2002, Vol. 125, No. 4
Work in the new economy
Book reviews from past issues
Work in the new economy
Work in the Information Economy. By Stephen J. Frenkel, Marek Korczynski, Karen A. Shire, and May Tam. Cornell University Press, Ithaca, NY, 1999, 318 pp., $19.95.
On the Front Line: Organization of
In the industrial era, jobs were routine and coordinated by large bureaucracies, a situation made larger than life by Charlie Chaplin in his film classic, Modern Times. But in the information economy, new forms of work environments may be called for. On the Front Line: Organization of Work in the Information Economy is based on a 5-year study of more than a thousand employees and eight leading companies in the United States, Australia, and Japan, by four authors. By examining how work differs among service, sales, and knowledge-based work, this book also shows how bureaucratic, entrepreneurial, and network forms of organization co-exist in the information economy.
Front Line (informational) work is people oriented. Employees must interact constantly with customers in ways advantageous to the goals of the organization. It is rarely completely routinized, because social interaction is part of the product or service that is being supplied. Workers are usually given some discretion to tailor their behavior to the needs of the customer. Social and analytical skills and creativity are all needed. A routine service worker needs less than a sales worker, a knowledge worker needs even more, and the professional worker is likely to use the greatest degree of all three traits.
Among the occupations the authors include under "Front Line" work: waiters and waitresses, fast-food service attendants, retail and wholesale sales work, legal service workers, architecture and software designers, insurance, securities, and real estate salespeople, customer service workers, truck drivers, childcare workers, employees in call centers, home loan consultants, financial consultants, money market dealers, insurance claims adjusters, social workers and medical workers of all types, to name only a few.
Front Line work is especially sensitive to changes in internal and external organizational environments. Variations in demand for the product can cause on-the-job changes, including layoffs. Employees are expected to display emotional resilience and flexibility. There are usually no buffers to protect them.
Front Line work is often strategically important and spans boundaries. For example, a Front Line worker may generate revenue through selling, and at the same time, gather intelligence in order to develop a customer knowledge base for future innovation. Front Line work appears to be growing. Witness the rapid expansion of telephone-related services. According to a technology consultant, the 1996 sales of call-center systems in North America totaled $3 billion. This represents a tenfold increase since 1991, and a twofold increase since 1994. Occupational growth statistics projected for the United States, Australia, and Japan show that the increased percentage of the labor force in professional, technical, service and sales work—work that is usually Front Line, and Front Line support personnel—is likely to be higher than other categories of work. Work in many rapidly growing occupations in advanced societies appears to be service related and people centered.
In informational work, employers are likely to value worker willingness and ability to learn, say the authors. Management tends to develop policies that enhance employee knowledge and the skills necessary to ensure good customer relations. There is also likely to be increased numerical and temporal flexibility, shown by the recent growth of nonstandard employment, particularly part-time and self-employment.
In the United States, self-employment as a percent of total employment in nonagricultural sectors was 6.7 percent in 1973, but 17.5 percent in 1993. In Australia, it was 9.5 percent in 1973, compared with 12.9 percent in 1993. In Japan, self-employment was 14.0 percent in 1973, compared with 10.3 percent in 1993. Part-time employment as a percent of total employment in the United States was 15.6 percent in 1973 and 17.5 percent in 1993. In Australia, it was 11.9 percent compared with 23.9 percent; and in Japan, it was 13.9 percent compared with 21.1 percent in 1993.
Management uses various strategies to ensure that service is delivered efficiently and tailored to varying degrees to suit customer requirements. For example, fast-food service attendants follow relatively standardized work routines, and customer behavior is routinized through the physical layouts of the restaurants and instructions for ordering and queuing up for food. By contrast, insurance salespeople are routinized by being inculcated with a strong sense of responsibility to follow the work routines management deems superior. These have the effect of returning deviant prospective customers to normal customer status.
The trend toward higher skilled jobs and high-skill autonomous work systems encourages greater job satisfaction, the authors say. But other aspects of work—job security, effort, and promotional opportunities—have not kept pace with expectations. In addition, pay raises are rarely commensurate with increased job requirements, particularly in jobs in which women predominate. Inequalities in earnings add to worker dissatisfaction.
Relations between Front-Line workers and customers tend to be contradictory, because the workers are required to satisfy individual customer requirements on the one hand, while projecting a positive image of the organization on the other. The former invites less management control, while the latter encourages closer management attention. "Unions are one institution, whose impact on employment relations is sometimes profound," say the authors of On the Front Line. But active unions have positive effects regarding bread and butter issues, although not on other important matters to workers. For example, they rarely influence promotional opportunities and training.
Decisions about how to structure employment relations typically center on hiring, training, retraining, and rewarding employees. The organizational forms that are used include the bureaucratic, entrepreneurial, and knowledge intensive.
Bureaucratic forms of employment relations are associated with semiroutinized work. They may be unilaterally regulated by management or jointly regulated by collective bargaining agreements with unions. Seniority is likely to be important, and promotions come from within. These workers are expected to be dependable and committed to the organization’s goals. The company provides formal training.
Entrepreneurial forms of employment relations are associated with work in which the incentive for employers to train workers is limited. Pay is either time related (pay rises relative to time spent at work), or closely related to individual output, as in piecework, or payment-by-results systems. Tenure may be spotty. Knowledge-intensive forms emphasize lateral rather than vertical ties and are associated with jobs involving complex tasks based on specialized transferable knowledge and skills. Legally regulated professionals, such as doctors and architects, typically work in such settings. Professional licenses are important, as well as professional associations.
Considering the organization of staff in companies whose employees constantly deal with people both inside and outside their firm, On the Front Line discusses a management problem not often undertaken. But perhaps because the book involves the findings of four researchers rather than one, or because there is no standard definition of "Front Line work," the book is sometimes redundant. Its authors use varying definitions of the problems they outline and their solutions. But as the ranks of service-producing workers far outweigh those of goods-producing workers, greater attention must surely fall on informational or "Front Line" work. This is a worthwhile beginning.
—Mary Ellen Ayres
Office of Publications,
Bureau of Labor Statistics
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