Newspaper article The Christian Science Monitor

Counter Corporate Downsizing by Creating Conditions for Growth Evidence Shows That Small, Employee-Managed Units Can Avoid Layoffs by Restructuring Better Than Top Management

Newspaper article The Christian Science Monitor

Counter Corporate Downsizing by Creating Conditions for Growth Evidence Shows That Small, Employee-Managed Units Can Avoid Layoffs by Restructuring Better Than Top Management

Article excerpt

Big business's mania for downsizing seems to have receded temporarily, but a larger wave of traumatic change looms ahead as the rising forces of globalization begin to buffet all economies even more dramatically.

The relentless restructuring of the Knowledge Revolution is gathering speed, so additional layoffs are almost certain, wages will remain low, and more workers will lose health plans and pensions. In Europe, poor economic growth and large budget deficits exert pressure to dismantle government supports, privatize state monopolies, and begin the same round of downsizing now criticized in the United States. And the rapid industrialization of countries like China and India will further undermine the wages and jobs of American workers. With no solution in sight to all this coming economic challenge, it's little wonder that people feel insecure.

The danger was highlighted at last winter's meeting of the World Economic Forum in Switzerland attended by 1,200 top CEOs and politicians. William Bennett, President Bush's secretary of education, and Rosabeth Moss Kanter, a Harvard University business professor, cautioned the audience that the loss of public support is causing a "backlash against capitalism."

The problem is not that working conditions are unusually bad. It's that people now understand that the entire economic system is being transformed for a new era, and that these changes are being dictated by the hard logic of top-down corporate hierarchies. Nothing is more disturbing than realizing we have lost control over our lives.

Outmoded concepts

Many solutions have been proposed, but they are limited by outmoded concepts from the Industrial Age. Liberals urge various regulations for retraining, making benefits portable, and rewarding firms for good behavior - more big government. Conservatives favor lower taxes and deregulation to spur economic growth - but more dynamic markets may simply speed up the restructuring process. For a viable solution, look at the companies that are growing rather than downsizing. Well-run firms that have pioneered the new management practices needed to thrive in an Information Age have the opposite problem of not being able to fill jobs. The 11 companies in the Sematech consortium of computer-design research have 14,000 unfilled openings, even though they pay exceptionally high wages and offer employee stock options. While bureaucracies like AT&T and IBM shed unneeded workers, entrepreneurial employers are hiring them back:

*MCI is one of the most dynamic companies in the world because of a philosophy that urges all employees to take the lead in starting new projects. The company is growing so fast that it may overtake AT&T in a few years to become the world's central communications corporation.

*While IBM nearly became extinct, Hewlett-Packard assumed leadership of the computer industry by allowing small business units almost total control of their operations. The laser-jet line of printers that dominates its field was the product of such bottom-up management. …

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