Management theories actually work, sometimes

But they turned Levi into Mr. Mean Jeans

August 01, 1999|By William Patalon III | William Patalon III,SUN STAFF

Clorox Corp.'s bleach-making plant in Harford County, conceived in 1990, has established itself as a corporate model because of one management philosophy that creates a near-fanatical focus on customer satisfaction and another that gives much of the responsibility for running the plant to workers on the factory floor.

But when Levi Strauss & Co., the admired jeans-maker, announced plant closings and layoffs this year, it was partly because a management strategy that shifted factory workers into "teams" didn't work, leaving the company nearly defenseless against low-cost imports.

Such cases illustrate the immense potential -- and pitfalls -- of corporate self-help programs such as "Total Quality Management" or "Knowledge Management" that many experts line up behind but cynics sneer at as "management fads."

Because these programs can cause job cuts and are sometimes poorly executed, they spur controversy and lead to skepticism and workplace resentment. But in making scores of U.S. companies nimble and efficient, some experts believe, these management strategies have helped rebuild the economy, "fad" by fad.

"Ten years ago, the Japanese were about to put us in our grave," said Richard D. Freedman, professor of management and organizational behavior at New York University's Stern School of Business.

"It seems to me that we're [now] doing pretty darn well. I have to wonder why we assume that the people who are running these businesses are idiots."

That view isn't universal. Many experts deride these programs as "flavor-of-the-month" fads because companies flock to the latest theories espoused by big business schools or this month's popular consultant. That can waste money, fail to give good plans time to work, and alienate employees.

"The truth is, very few of these phenomena have staying power," said Michael Hammer, the consultant and author who himself kicked off the formerly white-hot "Re-engineering" revolution in the early 1990s. Re-engineering was controversial: By rethinking the way they approached key tasks, companies increased productivity, but often at the cost of jobs.

Studies show that some companies are juggling too many theories, and are often dissatisfied with the results.

"The slate of management tools and techniques is confounding and compounding," Darrell Rigby, a management expert and director of Bain & Co., a consultancy based in New England, quipped in a report. "Unfortunately, there has been little objective evidence on whether [a tool's use] is good or bad, or which tools have produced what results over what period of time. There has been no Consumer Reports on management tools to help managers sort facts from fictions."

But experts such as Freedman say the healthy U.S. economy and higher corporate profits speak for themselves, and they contend that Japan's continuing economic troubles show that Japanese firms did not make needed changes while U.S. firms did.

In the early 1990s, the U.S. economy trailed Japan's and Germany's as the most competitive in the world. Japanese companies -- which increased their muscle partly through the teachings of the late quality guru W. Edwards Deming, an American statistician -- had made their products better and cheaper, taking market share here.

The "Japanese Superman" was viewed as forever invincible. But Freedman and others note that Japan -- partly because of a "job-for-life" mentality -- didn't progress to the newer philosophies. U.S. firms did, adding technology and cutting costs and excess jobs. Thanks partly to these strategies, the pendulum has swung. The U.S. economy is the world's most competitive.

And while the results attained by these self-help programs are often difficult to measure, and payoffs come in unexpected ways, U.S. companies are increasingly spending tens of millions each year on these corporate-makeover programs. Many carry daunting names: "Re-engineering," "Total Quality Management," "Six-Sigma Quality."

Baltimore-area companies are part of that trend. At Sparrows Point, Bethlehem Steel Corp. employed the theories of an Israeli physicist-turned management guru to remove production bottlenecks. Towson-based Black & Decker Corp. has hired an executive from General Electric Co. to spearhead its foray into "Six-Sigma," a quality effort where a firm tries to make key procedures 99.997 percent perfect. And Clorox is using worker involvement to become more effective by giving employees a greater voice.

"We have a lot of input in the design and location of equipment -- the location of the tanks, the location of the pumps -- and also decide how we work and when we work," said Debi Maeby, a production worker at the Clorox plant.

Just how much is being spent on these management makeovers is unknown, though "a small fortune is a good estimate," said Eric Rolfe Greenberg, director of management studies for the New York City-based American Management Association.

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