Brave new corporate world

Robert Kuttner

August 02, 1993|By Robert Kuttner

LAST Monday in Chicago, President Clinton moderated a conference on the "Workplace of the Future." The upbeat meeting, conceived by the departments of Labor and Commerce, celebrated companies and unions that thrive by "empowering workers," relying on "total quality management," and creating "new social contracts" at the workplace.

But at the very moment the president was praising these virtuous corporate citizens, the IBM Corp., long a pioneer in cultivating smart and loyal "knowledge workers," was announcing it would lay off an additional 35,000 of its employees. And there is the rub.

While more corporate executives recognize that employees are their most important assets, the strategies they use to produce leaner corporations also eliminate jobs. It is hard to sponsor a convincing social contract in which employees innovate when the next money-saving innovation eliminates their own jobs.

There is a paradox here. When one company becomes more competitive by doing more with less, the result is greater productivity. But when the entire economy competes that way, the income lost to displaced workers may outweigh the gains to productivity. Unless we devise complementary strategies to yield jobs for the displaced, the "competitiveness" craze is likely to worsen this problem.

On the eve of the Chicago session, I attended a similar conference of corporate executives and business gurus. This one, sponsored by the Aspen Institute, was titled, "Tomorrow's Corporation." Here, the schizophrenia was even more dramatic.

On the one hand, these executives acknowledged the value of empowered employees, long-term relationships and a more democratic workplace. On the other hand, most insisted that the corporation was entering a period of unprecedented turbulence, which few employees could count on holding a job overtime.

Many corporate executives view this new reality as a virtue. For it demands that managers and workers alike learn to be flexible, adaptable and, above all, "entrepreneurial."

At the Aspen meeting, the buzzwords suggested anything but long-term relationships between worker and company. One trendy idea is "the virtual corporation" -- a pun on the computer concept of "virtual reality."

In this conception, the company is no longer a physical entity with a stable mission or location, but a shifting set of temporary relationships connected by computer network, phone and fax. Only a small set of corporate managers have permanent jobs.

In this brave new corporate world, workers are not "employees" in the traditional sense, for the corporation may not need their services next year or next month. Rather, workers become free-lancers, whose fate in the marketplace is determined not by their loyalty or diligence but by their knowledge and their skill in marketing it to ever changing employers.

"Get used to the idea that we all must become our own marketing managers throughout our working lives," said one expert.

There are two problems with this utopian vision. One has to do with psychology, the other with economics.

Some people do thrive on insecurity. In this case, a small elite of successful executives, consultants and academic entrepreneurs rides these shifting waves deftly and imagines that everybody is, or should be, just like them.

But not every vocational virtue can be reduced to NTC entrepreneurship. Creativity, diligence, self-improvement and teamwork often require a more stable work environment. Many professions -- such as doctor, teacher, minister, researcher, public servant -- are debased when the individual thinks of himself primarily as an entrepreneur.

Most real people do not live in the "virtual reality" of computer cyberspace. We live in tangible, local communities with mortgages and relatives and PTAs. These cannot be instantly transformed by a keystroke. While some of our communities are no longer territorial, there is more to life than fax, phone and computer network.

Yes, more people are self-employed today. But for every well-paid independent contractor who is a computer technician or financial consultant, there are dozens working at crummy "temp" jobs who would rather have actual careers.

This raises the second problem, which is economic. The ruthless corporate downsizing of recent years has demonstrated that the economy cannot bootstrap its way to good jobs for all simply by running individual companies more efficiently.

If all of the new productivity is to add up to broadly shared prosperity, the human workers shed in corporate restructurings need the availability of other work. This reality requires national policies for:

* Full employment. Technological change is broadly beneficial only when other jobs replace the ones lost.

* Socialized fringe benefits. If more people work as independent contractors, then health insurance, pensions, retraining opportunities, child care and the like had better become perquisites of citizenship rather than benefits tied to a particular job.

* Better buffers. To humanize the new corporate turbulence, society needs to devise something better for workers between jobs than unemployment compensation and "temp" stints. Paid sabbaticals for retraining, parenting or public service could keep millions of workers productively occupied.

Our workplaces are indisputably in a brave new world, but not one that is a simple blessing. It will take broader innovations to make these shifts economically beneficial and socially bearable.

Robert Kuttner writes a syndicated column.

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