Description

According to sociologists, economists and philosophers, a revolutionary social, political and economic transformation is taking place. Catchwords such as “third industrial revolution,” “second modern age,” “reflexive modern age,” “information society” and “knowledge society” describe the effects of the new technologies from different perspectives. Undisputedly we find ourselves at a historical turning point, which is revolutionising the work environment. In knowledge and information society, it is no longer capital and labour that generate surplus value; instead, “growth arises today from ‘productivity’ and ‘innovation’. Both mean the application of knowledge to labour.”[1] Knowledge is becoming an economic resource.

Ulrich Beck summarises in three points the innovations induced by information technology in knowledge society’s work environment:[2]

1. “Knowledge-dependent reflexive productivity” means the productivity spiral that comes into being when knowledge-based technological innovations in turn engender new generations of knowledge-based technologies and products.

2. “Trans-sectoral dynamics” describes the changes that are brought about by knowledge-dependent productivity enhancement in all sectors and the accompanying annulment of the distinction between ‘goods’ and ‘services.’

3. “De-territorialisation of work and the indeterminism of information technology” are brought about by world-wide networks, which enable the various activities of an enterprise (development, production, management, application and distribution) to be distributed globally and thus cancel out industrial society’s local work paradigm. “At the same time, a duplication of options that force decisions and require standardisation is coming into being, and the consequences of this are that technological determinism will be refuted with regard to information technology.” The sweeping effects on corporate transformation of the last two points will be examined in detail in the following.

The substitution of information technology for labour is not only taking place in the production sector through increasing automation. Branches of the economy are also coming into being that are no longer dependent on serial production as, for example, the automobile industry was. Television programs and computer software are only produced once and copied as often as desired. At the same time, the services in the production sector are increasingly being replaced by online ordering; the customer establishes the product specifications, thus becoming a producer himself/herself. In private and public administrative structures as well as in banks and insurance agencies, routine work is being increasingly automated (cash automats), work processes are being simplified by mobile computers and custom software, and tasks that were formerly offered as services are now being taken over by customers themselves (home banking, travel bookings, etc.) In consequence of these interventions, massive staff reductions are taking place, employees’ areas of responsibility are being redefined and corporations restructured.

In addition, the globalisation of markets, the individualisation of society and global networks are leading to fundamental corporate transformation. Under the pressure of global competition and the ever more rapid transformation of demand, size and market share no longer determine whether an enterprise is successful, but instead, innovation and the ability to react quickly. Hierarchically structured enterprises in which decision-making processes extend over several different levels are too ponderous for the new market. In contrast, star-shaped networked enterprises organised in teams have the necessary flexibility. The star-shaped networked enterprise allows the outsourcing of activities that are not within its core competence, such as bookkeeping, data processing, sales, service, switchboards, etc. Such necessary expertise can be bought in when required. Through this network of suppliers, subcontractors and external staff, the organisation is kept is as small and flexible as possible. The dimensions that this structure can grow to are shown by the example of the American subsidiary of the Finnish monitor manufacturers, NOKIA Display Products. The enterprise achieves an annual turnover of 160 million dollars with only five employees on permanent staff.[3] The outsourced functions are taken over by companies specialised in the corresponding areas or which function as autonomous economic units and in addition offer their services on the free market. “In this way the market (formerly the opposite of ‘company’) is being brought into the ‘company’ and the old boundaries between inside and outside – seemingly ironclad – are dissolving.”[4] ‘Virtual’ enterprises are coming into being. “The virtual enterprise (…) is a fabric of relationships, constantly forming and dissolving according to market demand, between different types of companies, a temporally limited, project-based union of independent specialists whose goal is to supply products in immediate reaction to demand.”[5] The new information and communications technologies enable the development of networks that extend beyond national borders, which leads to work being transferred to low-wage countries and a new distribution of labour and capital. The example of the municipal auth­orities of Leverkusen, which in the nineties transferred a central database to India, shows that it is not only the production sector that exploits these opportunities.[6]

In addition to the de-territorialisation of work, the networks are removing the obstacles imposed by time; work can be distributed around the world and performed around the clock. Thus do modern enterprises overcome the limits of time and space.

From hierarchically organised enterprises to enterprises organised like networks

The basis for the hierarchic organisational structures of the industrial era was established by Frederick W. Taylor with his book, The Principles of Scientific Management, published in 1915. By analysing and systematising the production processes, the work could be standardised and manpower optimised. The goal was to increase productivity by making human labour match the efficiency of machines. After a delay of only a few years, Taylorism was applied to office work as well. Bureaucratic administration as defined by Max Weber was the “most rational form of administration from a formal and technical perspective,” as it is “technically perfectible to maximum performance.”[7] It stands for professionalism and expertise. Like the principles of Taylorism, bureaucratic administration is distinguished by a centrally directed hierarchy of authority, with the competencies, rights and duties of the employees as well as their flow of work, ‘what they file and how they file’ being governed by fixed rules.

The segmentation of complex work processes led to the division of labour and specialisation. The result was that responsibility and the power to make decisions was shifted to corporate management, while the employees at lower levels in the hierarchy carried out monotonous routine tasks subject to directives. Corporate management collected knowledge and distributed the tasks. Distrust, controls and compulsory attendance are the results of the type of payment that was made according to working hours put in, rank or function and duration of employment.

For the markets of the time, which were oriented towards mass consumption and mass production and which depended on a worldview of a predictable, governable reality, hierarchically organised bureaucratic administration corresponded to an ideal system that offered employees a high degree of social and emotional security.

Reticular or net-shaped enterprises function quite differently. A variety of organisational models from the seventies supply the theoretical basis for these corporate structures.[8] In practice, Japanese production companies – first and foremost, the automobile manufacturer Toyota – were the trailblazers in the eighties with a new management method that was described as “lean production” or post-Fordian production.[9] By creating teams of multitalented individuals who produce large numbers of different products at every stage of production, lean production combines “the advantages of craft skills and mass production, while avoiding the high costs of the former and the inflexibility of the latter.”[10] Using teams directly at the production site moved decision-making competence as close to the production process as possible, so that the ideas and improvements developed in common could be continuously and directly implemented in the manufacturing process. This system, oriented as it was towards processes as opposed to structures and functions, enabled optimum integration of the new information technologies, and enhanced effectiveness and adaptability to the changing requirements of the market. The sweeping success of the Japanese enterprises led to world-wide corporate restructuring at the beginning of the nineties, the so-called “business process re-engineering.” These “new” reticular enterprises are distinguished by flat hierarchies, decentralised, polycentric[11] decision-making and organisation in interdisciplinary project teams. Teamwork is task-based, process-oriented and result-oriented, with team members working together for the duration of a project. Empowered to make decisions, these units can react directly to problems and customers’ requirements without having to waste time going through functionaries higher up in the hierarchy. The flow of information is no longer vertical, but horizontal. In de-standardised work, human qualities such as intelligence and fantasy regain the importance that Taylorism had suppressed. Social competence, the ability to communicate, initiative and flexibility as important and necessary employee capabilities supersede diligence and obedience. The boss is no longer an authority, but is instead a team member, moderator of the group process. By transferring responsibility and risk to teams and thereby to the individual workers, the employee becomes an entrepreneur who determines working hours and work site himself/herself. The loss of control by management that arises with increasing telework is replaced by the social control exercised by the team members, through result-oriented remuneration or by means of computer-supported control systems.

“Business process re-engineering” as a method of transforming the conventional Tayloristic type of enterprise into the new type of enterprise became the focus of criticism at the end of the nineties not only because of the mass redundancies. Many enterprises came to grief in the restructuring process. Gerhard Wohland ascribes these failures to undue adherence to methods. “BPR is today considered to be a practicable method and is thus condemned to failure just like Taylorism, because as methods, they cannot react to a flexible environment.”[12]

“The Flexible Man”

“Risk society”[13] is characterised by ecological crises, individualisation of habitats and work environments, globalisation and digitalisation. A great variety of work situations and living situations, the breakdown of gender identities, forced mobility and the pace of market changes cause insecurity and incertitude. The ‘virtual’ enterprises with their reticular structures are part of this intertwined system, and they amplify the risks. Closer observation of the seemingly democratic organisational model, with its promise of freedom, self-determination, and self-realisation for the individual and success for the enterprise clearly reveals the negative effects on society as a whole.

Reticular corporate structures as unions of relatively loosely bonded small (team) units theoretically enable the splitting-off of inefficient units or those that market changes have rendered superfluous without destroying the whole fabric. These irreversible changes, described by Sennett as “discontinuous renovation,” are erratic and for the employees, unforeseeable.[14] The connection between past and present – which is perceived as continuity – is severed. At the same time, the work processes that are governed by market changes are themselves marked by discontinuity. The team members must have the capability to destroy that which they have themselves created when the situation requires it; and the inevitable decisions made at short notice lead again and again into cul-de-sacs, are contradictory or have an experimental character. In this new work environment whose most prized values are speed, mobility and creativity, the value of experience is negated. Age is equated with rigidity, youth with flexibility.¹⁵ A disorderly, chaotic corporate structure on the one hand fosters creativity and on the other, is perceived by the employees as disorganisation, giving rise to anxiety due to loss of control. The lack of a spatial bond – because of teleworking and the loss of a personal workplace in the enterprise (non-territorial office concepts) – intensifies this effect. In addition, the simultaneity of presence in two places leads to isolation, while frequent moves and job changes make developing social networks and longer-term bonds almost impossible.

The lack of a clearly defined area of responsibility makes identification through belonging to a professional association and positioning inside and outside the enterprise more difficult. While in hierarchically organised enterprises every position is perceived as a rung on the career ladder, in the team structures, the usual evaluation through ranking is dropped. Therefore long-term career planning becomes impossible and the individual can no longer assess what his or her income might be in the coming years. Changing jobs within the enterprise often means a lateral movement instead of a vertical one, which leads to demotivation and frustration.

The employee who is turned into an unwilling entrepreneur – by being forced to assume the risk and responsibility that the enterprise delegates to the individual team members – is caught in the field of tension between self-realisation and self-endangerment. The self-entrepreneurs (as opposed to the self-employed) are “a cross between entrepreneurs and day labourers, between slave-drivers to themselves and their own bosses… [who] perform in isolation – indeed, continents away – work that requires a great deal of social sensitivity and the ability to co-operate to a high degree, all this in bondage directly to the customer. They toil away at the work of art of their own lives and at the same time, under the dictates of the competition and the globalised power of corporations.”¹⁶ Stability through a regular salary, statutes to protect against unlawful dismissal, working hours and the right to holidays and secured old-age pension schemes are things of the past.

The new work environments unite opportunities and risks in their extreme form of freedom and self-determination, instability, incertitude and self-endangerment.

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Originally published in: Rainer Hascher, Simone Jeska, Birgit Klauck, Office Buildings: A Design Manual, Birkhäuser, 2002.