The New American Workplace.

The New American Workplace

Authors: James O'Toole & Edward E. Lawler III Publisher: Palgrave Macmillan Ltd., NY ISBN: 1403969590

The New American Workplace follows up on the large-scale seminal study that was completed in the early 1970s to examine work in the United States. The first study found that "many Americans were engaged in narrow, repetitive, and routine jobs--especially in the manufacturing sector--and that was leading to a variety of mental and physical health problems" (p.3). These findings led many organizations to reorganize and redesign jobs to be more challenging. In the 30+ years since this study was conducted, the world of work has changed dramatically, with the largest driver being the "global economy." O'Toole and Lawler examine how this global economy has changed the nature of organizations, the nature of work, and the nature of workers, then they discuss the implications of these changes for the future.

In this new global economy, O'Toole and Lawler categorize organizations in one of three ways. The first is as low-cost operators whose focus in on continually reducing costs. Within these organizations, there are typically two classes of employees: high-level skilled experts and minimum wage front-line employees. The second type of organization is the global competitor corporation. According to the authors, these are the "glamour companies" of today. They hire the best and brightest talent and pay top dollar for it. The jobs tend to be the most interesting and exciting. The focus is not on career paths and loyalty, but immediate performance; employees know that if they do not perform, then they are gone.

The last category of organization is the high-involvement company. These companies offer employees challenging and interesting jobs as well as "good" places to work. They tend to use work teams in their organizational design and offer generous benefits as well as salaries and stock options. They value organizational commitment as well as performance. The authors are quick to say, however, that many organizations have elements of two or three of these types of organizations and that the breakdown is not a clean one.

Besides the global economy, the other drivers of change that O'Toole and Lawler identify from their research are the changing technology and demanding ownership. Technology, coupled with foreign competition, has dramatically changed the design, development, and production process such that there is no longer time for bureaucracy. Changes happen and are communicated instantly and competitors must adapt just as quickly or they are lost. This pace requires completely different types of organizational structures and completely different types of workers with different types of skills. The example given in the book is that when "Sony introduces a new version of its electronic PlayStation, Microsoft's current version of its competing Xbox becomes outmoded, and Microsoft must respond immediately with a new version of the Xbox or get out of that line of business" (p. 37).

Additionally, the nature of corporate ownership has changed the nature of work and the workplace. Previously, companies were either privately owned, or owned by groups of individual stockholders. More recently, large institutional investors have assumed corporate ownership. These investors are focused on the short-term performance of the company rather than the long-term plans and performance; therefore, these large investors pressure companies to focus on the short-term so executives have had to rethink their tasks, roles, and responsibilities; this, in turn, has also led to different organizational structures and practices that were unheard of in the 1970s.

Because of the changes in the nature of the work environment and the workplace, the nature of work has changed for the workers today. In general, jobs are more satisfying and challenging and less routine. People have more freedom to change jobs and companies and more freedom to design their own career paths. But that comes at a cost. Workers have less stability and less predictability in their jobs. In general, workers are faced with more risk in their jobs and their choices. They feel less connected to their work and their companies. Because they feel more pressure to perform, they have a more difficult time achieving a comfortable work/life balance. The work/life balance question is one of the most challenging ones facing workers and organizations today, according the authors.

In their analysis, O'Toole and Lawler are clear to point out that there are winners and losers in this massive social change. These changes have been good to senior executives: The path to becoming a CEO is shorter and the compensation is better. In some cases, being a CEO even includes achieving celebrity status. In addition, things are better for women. The wage gap has continued to close and the jobs women can attain are better. Another group of "winners" are college graduates. The link between educational achievement and income is stronger and college graduates are less likely to be unemployed and more likely to be satisfied with their job.

On the other side of the equation, things are worse for blue-collar workers, unionized workers, low-wage and low-skilled workers. In today's fast-paced, high-tech global economy there is not as much space for these groups of workers. Many of the jobs these workers would have been suited for have been off-shored or have become mechanized. Finally, many of these workers have "priced themselves out of the work" when the low-skilled work can be done by undocumented illegal immigrants for much less money. The authors point out, however, that this split of "winners and losers" cannot continue for the United States to remain competitive in this global economy. For the United States to remain competitive, O'Toole and Lawler suggest that these issues need to be considered by all parties and addressed in order to move forward.

In general, the authors' conclusions are not surprising. Although in many ways things are better now than they were in the 1970s, organizations and work can still be improved. The changes in the environment based on the global economy, fast-paced technology, and large-investor ownership are not likely to change. Given that situation, can organizations still be good places to work and can we care for the individuals who are currently being left behind in this new workplace? These are the questions that the authors pose at the end of this book. Their answer is an unequivocal yes and they suggest multiple ways to address these situations.

For example, one of the questions the authors pose at the end of the book in terms of future directions is whether more companies can adopt more elements of the high involvement companies' practices as a way to improve the quality of work life for employees. They use Costco versus Sam's Club as an example of two organizations that adopt different strategies in terms of how they treat their workers. Sam's Club (Wal-Mart owned) chooses a low-cost (LC) strategy whereas Costco chooses a high involvement (HI) strategy. The authors show that although on the surface it appears that the LC saves money, in the long run, that is not the case. They argue that adopting some or all of the HI strategies enhance rather than detract from the financial performance of companies.

But the focus of the authors regarding solutions is on the creation of "good jobs." According to O'Toole and Lawler, good jobs provide basic economic rewards and security to lead good lives, the ability to do meaningful work and grow and develop as a person, and provide supportive social relationships. The authors see solutions coming through public policy, training and education, and from the organizations themselves. But O'Toole and Lawler remind us that this is just the beginning and we need to keep adapting and changing to keep meeting future changes. The final question the authors pose is a difficult one: Where do the burden and responsibility fall? "How much of the burden of change is the responsibility of employers, how much is the responsibility of individuals, and how much is the responsibility of government?" (p. 244). Their conclusion is that it will require visionary leaders from all areas to meet the challenges of the future.

This book makes a compelling argument about where the workplace has been, where it is now, and where it is going. The authors do a good job mixing data and stories to support their arguments and provide clear examples and explanations for their suggestions. Overall, this book makes a valuable contribution to the literature and is an excellent choice for managers and scholars alike to think about the future of organizations and work in this ever-changing business environment. Although primarily descriptive rather than prescriptive, it raises questions and provides insight about what the US and organizational managers need to do to remain competitive.

Reviewer: Jonelle Roth, PhD, The Eli Broad Graduate School of Management, Michigan State University