books and articles in brief

12
Books and Articles in Brief James W: Marcum James W. Mmm, Ph. D., is director of library services at Magak Library, Cente- nary College of Louisiana in Sbrmepm. BOOKS Keeping Clients Satisfied Make Your Service Business More Suc- cessful and Profitable by Robert W. Bly. Englewood Cllffs, 1yI: Prentice Hall, 1993.250 pages; $24.95. Labeling the 1990s “the age of the customer,” Bly offers practical guide- lines for keeping customers happy, and more. A widely published author and marketing consultant, Bly targets ser- vice companies, consultants, and inde- pendent contractors. His proposals and guidelines are numerous; the bottom line: Give customers more than they expect. The chapters and basic steps in Bly’s guidelines include selectivity in acquiring appropriate customers, un- derstanding what the customer really wants, securing client satisfaction through communication, and giving customers more than they pay for, or expect. There are also chapters on handling dissatisfied customers and resolving complaints. Today’s environment, requiring such great attention to customer satis- faction, is one in which customers are smaller and more sensitive to pricing, want to buy services in smaller incre- ments, lack loyalty, and want a lot more service than they can afford to pur- chase. Times are hard, says Bly, but he offers practical support for those will- ing to work hard to survive and pros- per. Individuals and small firms can be thankful for books like this. Leadership for the Common Good Tackling Public Problems in a Sbared-Power World by John M. Bryson and Barbara C. Crosby. San Francisco: Jossey-Bass, 1992. 436 pages; $32.95. This is an important book-at least for the swelling legions of policy wonks, public administrators, and others con- cerned about the seemingly insolvable problems in our communities. In the tradition of former dean Harlan Cleve- land, Bryson and Crosby-both associ- ated with the Hubert Humphrey Insti- tute of Public Affairs at the University of Minnesota-address the difficulties of effective leadership in a time of post- industrial uncertainty and shared power that requires different skills from those required by the rational organization described by Max Weber and long the prevailing paradigm for organizations in the industrial age. What skills are appropriate in a shared-power world where “no one is in charge”?Coalition-building, a vision for the future, and a willingness to tear through the “cultural envelope of exist- ing realities” to face the uncertainties of the unknown. A leader can no longer act alone, but must collaborate with others seeking compatible goals in the face of common obstacles. This is a scholarly book, requiring study and attention; it rewards the same with a broader-and more prac- tical-view of contemporary trends. It could help someone to become a bet- ter leader, and that is commendable ~ ~~ ~ National Productivity Review/Autumn 1993 581

Upload: james-w-marcum

Post on 11-Aug-2016

213 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Books and articles in brief

Books and Articles in Brief

James W: Marcum

James W. M m m , Ph. D., is director of library services at Magak Library, Cente- nary College of Louisiana in Sbrmepm.

BOOKS

Keeping Clients Satisfied Make Your Service Business More Suc- cessful and Profitable by Robert W. Bly. Englewood Cllffs, 1yI: Prentice Hall, 1993.250 pages; $24.95.

Labeling the 1990s “the age of the customer,” Bly offers practical guide- lines for keeping customers happy, and more. A widely published author and marketing consultant, Bly targets ser- vice companies, consultants, and inde- pendent contractors. His proposals and guidelines are numerous; the bottom line: Give customers more than they expect.

The chapters and basic steps in Bly’s guidelines include selectivity in acquiring appropriate customers, un- derstanding what the customer really wants, securing client satisfaction through communication, and giving customers more than they pay for, or expect. There are also chapters on handling dissatisfied customers and resolving complaints.

Today’s environment, requiring such great attention to customer satis- faction, is one in which customers are smaller and more sensitive to pricing, want to buy services in smaller incre- ments, lack loyalty, and want a lot more service than they can afford to pur- chase. Times are hard, says Bly, but he offers practical support for those will- ing to work hard to survive and pros- per. Individuals and small firms can be thankful for books like this.

Leadership for the Common Good Tackling Public Problems in a Sbared-Power World by John M. Bryson and Barbara C. Crosby. San Francisco: Jossey-Bass, 1992. 436 pages; $32.95.

This is an important book-at least for the swelling legions of policy wonks, public administrators, and others con- cerned about the seemingly insolvable problems in our communities. In the tradition of former dean Harlan Cleve- land, Bryson and Crosby-both associ- ated with the Hubert Humphrey Insti- tute of Public Affairs at the University of Minnesota-address the difficulties of effective leadership in a time of post- industrial uncertainty and shared power that requires different skills from those required by the rational organization described by Max Weber and long the prevailing paradigm for organizations in the industrial age.

What skills are appropriate in a shared-power world where “no one is in charge”? Coalition-building, a vision for the future, and a willingness to tear through the “cultural envelope of exist- ing realities” to face the uncertainties of the unknown. A leader can no longer act alone, but must collaborate with others seeking compatible goals in the face of common obstacles.

This is a scholarly book, requiring study and attention; it rewards the same with a broader-and more prac- tical-view of contemporary trends. It could help someone to become a bet- ter leader, and that is commendable

~ ~~ ~

National Productivity Review/Autumn 1993 581

Page 2: Books and articles in brief

James W. M a m m

whether the goal is revitalizing an orga- nization or a neighborhood.

Process Innovatiom Redngineering Work tbrougb Information Tecb- nology by Thomas A. Davenport. Boston, MA: Harvard Business School Press, 1992. 336 pages; $29.95.

The literature of corporate restruc- turing is becoming overcrowded, with original thinking increasingly rare. This book is an exception. In a solid study, grounded in both academic rigor and practical experience, the author pro- poses that mere quality improvement without strategic purpose does not get a company out of its ditch. He distin- guishes process innovation (which is strategic and radical) from process im- provement (which is incremental and participatory). The former is top-down, clean slate, and cross-functional and requires the use of information tech- nology and better use of information itself. The latter is ongoing and limited to one function at a time. Actually both are required for dramatic transforma- tion to be maintained over time.

In other words, total quality man- agement is not enough: Cadillac won the Baldrige Award, but continued to lose market share to Lincoln. Process innovation must be based in a clear strategy that can be articulated and used organizationwide. A “process vi- sion” must link the new process to the strategy. The three key enablers of process innovation are information tech- nology, information itself, and human resources.

This is an important study that breathes new life and vision into a mature quality movement.

Tbe Teamwork Advantage: An In- side Look at Japanese Product and Tecbnology Development byJeffrey L Funk. Cambridge, MA: Productiv- ity Press, 1992.508 pages; $50.

This book is not easy to character- ize. It presents a case study of a depart- ment at Japan’s Mitsubishi corporation that dispels some myths about Japanese management successes even as it ex- plains their success in particular arenas, namely “discrete parts” industries, such as autos, machinery, and consumer electronics.

This is not a quick read, and few busy managers will wade through the entire work. But there is important in- formation here that could help guide American corporate strategy. Compa- nies like Mitsubishi excel at new prod- uct development because of the pro- ductivity of teamwork fostered through- out the organization. Elements of the corporate culture that nourish this co- operation include an orientation to- ward the product, a “visible” manage- ment style, oral communication, and extensive training. N o special genius is involved here; these characteristics are transferable. The underlying theme is the power of “teamwork.”

Kaixen Teian 2: Guiding Continu- ous Improvement Tbrougb Em- ployee Suggestions edited by Japan Human Relations Association. Cam- bridge, MA: Productivity Press, 1992. 221 pages; $39.95

Kaizen (continuous improvement) can be combined with teian (employee suggestions) to create an institutional- ized system-as demonstrated by this second volume in a series. Continuous

582 National Productivity RevitdAutzlmn 1993

Page 3: Books and articles in brief

Books and Articles in B&f

improvement through employee sug- gestions is the subject of a three-vol- ume series, of which this is number two.

The early chapters of the book review kuizen with examples of culti- vating abilities and resourcefulness, seeking root causes of problems (rather than dealing with symptoms), and un- derstanding when a process needs to be changed or eliminated. The latter sections explore how teiun builds dedi- cation and facilitates on-the-job train- ing effectiveness.

This is not just a book on how to elicit and utilize suggestions, but rather a resource for developing meaningful employee input-from a constantly improving workforce-into processes. This is a hands-on learning guide for quality managers and team leaders.

BtyondMass Production. Tbe Japa- nese System and Its Transfer to the US. by Martin KeMW and Richard Florida. New York: Oxford Univer- sity Press, 1993.410 pages; $29.95.

The Japanese aren’t coming; they are here. In recent years they have set up 1,275 manufacturing operations in the United States, heavily oriented to- ward the automotive industry. (A simi- lar process is underway in Europe.) As the Big Three close plants, new Japa- nese (or joint-venture) automakers have sprung up from coast to coast, with a heavy base in the rust-belt areas of the country. This is not a minor event, but evidence of a fundamental new system of global, innovation-mediated produc- tion taking form.

The heart of the process is the collaborative shop floor. Innovation and production are synthesized and intellectual labor is the most valuable

resource. The large complex is made obsolete by new networks of compa- nies feeding and living off the dynam- ics of interrelationships that organize technology, work, and innovation at the point of production. Capitalism is once again transforming itself (even as the liberal market system emerges as the prevailing economic system in the world).

Individual chapters address spe- cific components of the transfer of the Japanese production system: automo- tive assembly in the United States, a just-in-time automotive parts supply complex, Japanese investments in steel, and consumer and high-tech electron- ics. Various obstacles-such as Ameri- can unions-to the new production system are also discussed.

At the Sewice Quality Frontier: A Handbook; for Managers, Consul& ants, and Otber Pioneers by Mary M. LoSardo and Norma M. Rossi. Milwaukee, WI: ASQC Quality Press, 1993.129 pages; paper, $19.95.

The bulk of the literature for total quality management has been directed to manufacturing companies; the lit- erature directed to the service organi- zation is more limited. This guide does not live up to its inflated title, nor does it really address the “frontier” of the movement. But it does offer some user- friendly tools-actually worksheets- for gathering information on the differ- ences between customer expectations and customer perceptions, and for in- tegrating customer expectations into company processes and systems.

In short, the book offers some easy-to-use tools for the nonprofes- sional pressed into a leadership role for a quality exercise. It is an easy read and

National Productivity Review/Autumn 1993 J83

Page 4: Books and articles in brief

James W. Marcum

could be useful to those who have read TQM theory but need a little help with practical applications.

Process Management= Metbods f o r Improving Products and Services by Eugene H. Melan. New York: McGraw-Hill, 1993. 262 pages; $34.95.

Melan is a quality specialist, and his approach to company transformation is to focus on the management of “process,” defined as “a bounded group of interrelated work activities provid- ing output of greater value than the inputs by means of one or more trans- formations.” Feedback and repeatabil- ity are other essential elements of pro- cess.

With this narrow focus, then, one can identify a process, draw a flow- chart scheme of it, measure it, analyze it, and upgrade it as a part of a quality management effort. Curiously, there is a great deal of “systems” thinking and technique utilized by the author with- out acknowledgment, presumably be- cause systems thinking is now out of style. Process management also has much in common with reengineering, although this book focuses on pro- cesses as such, then discusses means of improvement in such activities as fi- nance, services, and laboratories.

The thrust of the work is that spe- cialization and departmentalization cre- ate lots of overlap and waste, and that focusing on improving processes can reduce staff and improve performance. The author’s prescriptions are more appropriate to the middle manager than the CEO and are solidly grounded in both theory and practice. There is little that is original here, but the pre- sentation is cogent and solid.

Tbe Toyota Management System: Linking tbe Seven Key Functional Areas by Yasuhiro Monden. Cam- bridge, MA: Productivity Press, 1993. 245 pages; $45.00.

Toyota has been a world-class com- pany for at least fifteen years. Their production management system was explained a decade ago in another book by Monden, a recognized author- ity on cost accounting and just-in-time production methods.

Purporting to be a comprehensive view of Toyota management practices, and to provide a broader perspective of company effectiveness, this study links seven key areas into a total overview. The seven areas are not equal in impor- tance, even though the book’s organi- zation suggests that they are. Not all management strategies of any com- pany are as original and significant as some are; the strength of this study remains its explanation of Toyota’s fi- nancial management systems and pro- duction management. Other chapters cover costing (both target and kuzzen), functional management (with a heavy dose of total quality and total cost management), flat organizational struc- ture, international production strate- gies, sales management, and new prod- uct development systems. Financial of- ficers and production engineers will benefit most from this work.

Re-engineering Your Business by David Morris and Joel Brandon. New York: McGraw-Hill, 1993.247 pages; $24.95

Re-engineering is a current buzz- word for using techniques of change and reorganization to overhaul a busi- ness and make it competitive. Unfortu-

J84 National Productivity Review/Autumn 1993

Page 5: Books and articles in brief

Books and AtlifCes in Brief

nately, the term is seldom well-defined, and this work suffers from the same omission. At its basic level of meaning, engineering has to do with the design and operation of engines, an approach that might be applied usefully to busi- ness, but the task remains undone (un- less one considers the application of information systems to existing prac- tice as fulfilling the promise of re- engineering).

This work is about repositioning a company and reworking its procedures to become more competitive. The au- thors have a consistent approach that might be helpful to some practitioners. Old hands familiar with systems theory, total quality management, and other business revitalization processes will find little new here. The “tools” offered for the remodeling process are minor revisions of systems management tools. The book appears a bit too obviously promotional for the authors’ manage- ment consulting firm, and its lack of references and notes leaves only its quality publisher as evidence of cred- ibility.

The +10 Percent Principle: How to Get Extraordinary Results from Or- dinary People by Barrie Richardson with Mary Ann Castronovo Fusco. San Dkgo: Pfeiffer, 1993.243 pages; $24.95; paper, $12.95.

This is a very personal account, based on the author’s long career of study, teaching, consulting, and expe- rience; Richardson is an “old pro” col- lege professor and management con- sultant-who just happens to be a working magician on the side-and these are the gleanings of years of learning and insight. The book man- ages to work both management theory

and motivational techniques into a use- ful guide for building an effective team or outstanding organization.

The authors can be faulted for rambling a bit at times, or for not being as tightly organized as possible; but the reader will rarely be bored and the book offers useful tidbits and ideas that could make a difference in a quality or transformation project. The ideas-fo- cusing on working with people and using minds and talents more effec- tively-are presented with pithy illus- trations that tend to stick with you. The book is a refreshing change from tomes filled with flowcharts and graphs seek- ing zero defects.

Quality Education: Applying the Philosopby of Dr. W. Edwards Deming to Transform the Educa- tionalsystem by Gray Rinehart, Mil- waukee, WI: ASQC Quality Press, 1993.328 pages; paper, $21.95.

Rinehart answers the question he poses as to why he should write this book-being neither an expert in edu- cational policy nor TQM practices-by stating that no one else has done it and that experts in either field might well by daunted by the task. The author, an engineering professor at Clemson Uni- versity, has delivered on the goal he set for himself. He reviews the quality management process, how it can trans- form organizations and processes, and proposes how it might be applied in our public schools.

This will not be the classic that defines or inspires a revolution in our schools, but it is solid and readable and will suffice until that masterpiece comes along. It is a call for leadership to tackle a public education system that is en- trenched in state and local bureaucra-

National Productivity Review/Aummn I993 585

Page 6: Books and articles in brief

Tames W. Mamrm

cies and yet besieged by idealists and crusaders who would reshape its very nature to their own ends. The fate of the nation’s social well being and eco- nomic competitiveness depends on what happens in our classrooms in the next decade or two. Rinehart’s study will well serve those seeking a guide- book for bringing the kind of healthy transformation to our schools that the quality movement has brought to cor- porations that have embraced and implemented its teachings.

Kaixen for Quick Cbangeover: Go- ing BeyondSMED by KenichiSekine and Kebuke Arai. Cambridge, MA: ProductivityPress, 1992.315 pages; $85.00.

The subject of this book is the rapid changeover of manufacturing equip- ment to facilitate customized produc- tion. SMEI) refers to the single-minute exchange of dies, a concept developed by Shigeo Shingo to help Toyota and other manufacturers develop one-piece flow manufacturing. This work pre- sents a systematic approach to the problem using kaizen (continuous im- provement) to work toward zero changeover time, an ambitious project.

A translation of a 1987 Japanese study, this large and extensive book is both comprehensive and simplistic, as tricky as that might sound. Diagrams, charts, graphs, and line drawings are used to clearly explain complex proce- dures. Separate chapters address steel forging, transfer machines, plastic mold- ing, sheet metal, die-cast machines, assembly lines, and using auto-insert- ers on printed circuit boards. The as- sumption of the authors is that line workers can make improvements in these processes once they, and their

managers, recognize that processes can be improved (or reengineered); they offer innumerable tips and tools to assist in that endeavor.

The book is a bit pricey, but it should be sitting on the workstations of foremen and work teams all over the country. Remember that Japanese com- panies have had access to this work for six years.

TPM for America Wbat It is and Wby You Need I t by Herbert R. Steinbacher and Norman L. Steinbacher. Cambridge, MA: Pro- ductivitypress, 1993.169 pages; $20.

TPM for Operators, compiled by Kunio Shirose. Cambridge, MA: Pro- ductivity Press, 1993.90 pages; $17.

These two books are apparently designed to be used together. The Steinbacher book provides an over- view of the TPM movement, proposing that TPM fits together with TQM, total employee involvement, and just-in-time inventory supply to form the basis for a world-class company.

Designed to be a first reader for manufacturing executives to alert them to the critical need for TPM, the authors rarely get beyond a summary of any element of the program. You might as well read one of the more comprehen- sive works by Suzaki or Tsuchiya and pick up some practical tools for imple- menting the program in the process.

P M for Operators is designed for the shop-floor employee. It is simply and directly written and offers enter- taining illustrations to help make points memorable. It assumes a literate reader, but any organization planning to achieve world-class status will have, by defini- tion, a literate workforce capable of

~ ~ ~ ~

586 National Productivity Review/Autumn 1993

Page 7: Books and articles in brief

Books and Articles in Brief

utilizing a guidebook like this. Many companies can use this book to advan- tage. In addition to explaining TPM and its importance, it focuses on enhancing equipment effectiveness and creating autonomous maintenance activities among employees.

Integrating Design and Manu fac- turing f o r Competitive Advantage, edited by Gerald I. Susman. New York OxfordUnfversily Press, 1992. 298 pages; $35.

Any readers who are skeptical about the centrality of information in the design and production of competitive products will read this book at their own peril. A group of scholars has come together to propose design for manufacturing (DFM) as the basis for a competitive strategy in a time of con- tinuous change.

Specific chapters focus on such topics as concept development, engi- neering design process prototypes, a model for predicting DFM effective- ness, organizational barriers to DFM, and getting beyond the production/ R&D dichotomy in design for manufac- turing. The development of tools and techniques for improving communica- tion and collaboration between design and manufacturing is the purpose here. This is a scholarly work, and most of the chapters assume some measure of engineering or technical expertise.

Susman concludes the anthology by pointing out once again the central- ity of information. An enterprise’s abil- ity to simplify information and improve its capabilities in processing informa- tion and learning will determine its capacity for developing competitive products.

Tbe New Shop F l i w r Managemmk Empowering People f o r Continu- ous Improvement by Kiyoshi Suzaki. New York Free Press, 1993. 454 pages; $35.

Suzaki is Americanized-or at least his work is-and comes to his subject by a path different from the pervasive TQM trend. The author orients himself, and the book, o n the shop floor and offers his pronouncements from that perspective. The publisher suggests that this is a radical departure from previous processes and attitudes.

Suzaki proposes that employees consider themselves the president of their mini-company, specifically their area of responsibility. They are to ar- range their workstation to be most productive. They are also to make periodic reports on their productivity and problems. According to Suzaki, the goal of first-line managers should be to make themselves superfluous by de- volving their responsibilities down to the line operators.

It is tempting to categorize the author as an idealist and dismiss his work, but that would be a mistake. To support his proposal, he offers solid evidence of successful implementation of these ideas by companies like Honda and Matsushita. His extensive appendi- ces offer checklists and guidelines for problem solving, brainstorming, team building, surveying, job training, and other functions.

If you are looking for ways to involve production people in company transformation, you should take a look at this book.

New Directions f o r TPM by Tokutaro Suzaki. Cambridge, MA:

National Productivity Review/Autumn 1993 587

Page 8: Books and articles in brief

James W. M a m m

Productivity Press, 1992.303 pages; $59.95

This work provides an overview and context for the growing movement of quality maintenance. Tracing the history of the movement back to inno- vations by Toyota, the author catalogs the effect of TPM in reducing break- downs, costs, defects, inventory, work hours, and work-related accidents. The message that TPM is essential for com- panies planning to survive and com- pete in the next century comes through in a subtle but commanding fashion.

Probably the greatest contribution of this work is the application of TPM to the process industry, ranging from oil refineries to pharmaceutical compa- nies. The author also illustrates the surprising extent to which TPM is spreading from the shop floor to ad- ministration, sales, and other functions. The reduction of forms and inventory and the improvement of productivity and employee suggestions can have a significant impact on the bottom line.

Productivity Press’s translation is superb; the book reads well and con- tains pictures, graphs, and charts to bring the message home. This is a significant work that should be studied by managers overseeing production and maintenance functions for their companies.

Teamwork f o r Customers: Build- ing Organixations that Take Pride in Serving by Dean Tjosvold. San Francisco: Jossey Bass, 1993. 193 pages; $29.95.

We all recognize an outstanding organization when we see it or experi- ence its effectiveness. Formulas for creating such an organization vary from TQM to reengineering to creating a

learning or teamwork organization. For Tjosvold, who has written widely about conflict resolution, participation, and cooperation, the secret is in teamwork. He spells out such an approach with this nicely done study that relies on a narrative of the management of a fic- tional bank tackling its shrinking mar- ket share and focusing on customer service as its road to revitalization, while team building across the entire corporation. The study is useful for its service-organization orientation.

For Tjosvold, the key is creating a “pull organization” that pulls out the resources of the entire company and its staff to serve the customer, as opposed to the traditional “push” management style of most organizations that rely on directions and standards administered from the top down. The approach cen- ters on developing long-term relation- ships with customers as the focus to keep the organization oriented to its primary purposes. Chapters on resolv- ing conflicts with customers and man- aging anger and frustration offer useful guidelines. This book could be helpful to managers seeking practical tips for improving organizational effectiveness.

QuaUty Maintenance: Zero Defects through Equipment Maintenance by Seiji Tsuchiya. Cambridge, MA: Pro- ductivity Press, 1992. 223 pages; $59.95.

This is a thorough, comprehensive, and practical treatment of the principles of quality equipment maintenance. Based on the lessons learned from the comprehensive and successful total pro- ductive maintenance (TPM) program at Furukawa Electric, the book details a step-by-step plan for instituting TPM. The standardization of shop-floor effort

588 National Productivity Review/Autzrmn 1993

Page 9: Books and articles in brief

Books and Articles in Brief

and the autonomization of shop main- tenance by workers are components of this program.

An important element of TPM is autonomous maintenance. The person on the line working with the equip- ment every day is the person who should know something about the op- eration of the machine and early warn- ing signs of developing problems. An eight-step plan for getting there is of- fered.

An excellent translation provides a readable text; illustrative drawings, charts, and graphs provide practical tools for shop foremen and plan implementers. The book is worth the stiff price and serious maintenance over- seers will consult this work repeatedly.

Tbe Learning Edge: How Smart Man- agers and Smart Companies Stay Abead by Calhoun W . Wick and Lu Stanton Leon. New York: McGraw- Hill, 1993.233 pages; $22.95.

One of the themes in today’s books and articles on the application of total quality management is the “learning organization” as the key to transform- ing the corporation into a successfully competitive one. Wick, a management consultant and chief author, presents a practical guide to making that happen. The book is thin on theory and, there- fore, disappointing to someone seek- ing that level of information, but offers some tools, supported by quotes from corporate officials working with the approach, to inspire and initiate action on the part of the reader, presumably a manager or corporate head. It is a quick read and should be helpful to those seeking such information.

One clear message in this work is that the kind of learning under consid-

eration does not take place in the classroom. Great speakers do not cre- ate transformations. All the examples offered involve group learning and most of it is organizational task-ori- ented: to develop a strategic plan or enter a new overseas market. The ex- amples come from large corporations capable of flying twenty-five vice presi- dents to Budapest for a seminar or building a $1.5 million ranch retreat. Interestingly, some of the programs were led by training departments, but many were not; usually CEOs were centrally involved in successful organi- zational transformation projects.

ARTICLES

Customer Service

Frederick F. Reichheld. “Loyalty- Based Management,” Harvard Bust ness Retriew, 71:2 (March-April 1993k64-73-

Building a loyal customer base-of good customers, not easy-to-attract cus- tomers-should be at the heart of a company’s strategy. Investments to improve customer service should be aimed at good, long-term customers, not those whose business proves un- profitable.

High employee turnover causes high customer turnover; it is the em- ployee that the customer deals with, building trust (or distrust), not the executive. Turnover carries many other costs that are not always quantifiable.

The bottom line is that companies should strive to build employee loy- alty, which enables the development of customer loyalty. Empfoyee loyalty can be best cemented with high pay. That requires commitment from the

National Productivity Rmiew/Autumn 1993 589

Page 10: Books and articles in brief

James W. M a m m

company, but it is the sure road to customer loyalty and profitability.

Management

T. George Harris. “The Post-Capital- ist Executive: An Interview with Pe- ter F. Drucker,” Haward Business Review, 71:3 (May-June 1993), 114- 122.

As usual, Drucker’s insights and predictions are thought-provoking, even if some do not prove valid. He sees the crucial skills of managing (a term he finds less and less useful be- cause it implies that there are subordi- nates) in conditions of uncertainty as including knowing when you need information, respecting the people you work with, communicating effectively, and sharing responsibility.

According to Drucker, the multina- tional corporation is becoming an en- dangered species. Business today must grow by means of alliances and joint ventures, not by acquisition; “You are going to work permanently with people who work for you but are not your employees,” says Drucker. Outsourcing and temporaries are becoming the norm.

The days of joining a company right out of college and spending a career there are over. People must take charge of their own careers, under- standing their strengths and weaknesses and relying more on themselves than on large organizations.

Andrea Larson and Jennifer A. Starr. “A Network Model of Organization Formation,” Entrepreneurship: Theory and Practice, 17:2 (Winter 19931, 5-15

Calls for network organizations to replace hierarchical organizations are commonplace today; exactly how that can be done is often left vague. The authors of this article offer a model for consideration. The model has three stages.

Stage I: Focusing on essential dy- ads. This involves searching for pro- spective resource partners and then screening them for fit and feasibility. These often include family and friends, voluntary connections, and community ties, Working relationships are devel- oped and the enterprise is initiated.

Stage 11: Converting dyadic ties into socioeconomic exchanges. The tie be- comes both social and economic; the friend becomes an investor. Social ex- change and reciprocity are necessary here, not just economic exchange.

Stage 111: Layering the exchanges. New functions now are incorporated. Information is shared; preferred pay- ment and customer status are incorpo- rated. Personal relationships are formal- ized. The network becomes crystallized. Network analysis is more personal than other types of organization analysis. The role of the personal network in the initiation of a new enterprise is crucial, but can be studied and fostered.

Productivity Techniques

DerekC. Jones andTakao Kato. “The Scope, Nature, and Effects of Em- ployee Stock Ownership Plans in Japan,” Industrial and Labor Rela- tions Review, 4 6 2 (January 1993), 3 5 2- 367.

One factor about Japan’s industrial success in recent decades has been largely overlooked: the role of em- ployee stock ownership plans (ESOPs)

590 National Productivity Review/Autumn 1993

Page 11: Books and articles in brief

Rook and Articles in Brief

in encouraging enterprise productivity. This article addresses that oversight.

The authors show that in 1988 more than 90 percent of the larger companies in Japan had ESOPs, and that the aver- age nonexecutive employee plan par- ticipant owned stock worth about $14,000. This compares to less than 40 percent of American companies offer- ing ESOPs, and runs well ahead of Europe as well.

Typically, Japanese firms encour- age participation with a 5 to 10 percent match and bear administrative costs as well. Employee participation in the plans has risen steadily and currently tops 40 percent. Available data suggest that productivity gains for companies offering ESOPs have justified the ex- pense; apparently no company has dropped their ESOP after it was estab- lished.

Mary Scott and Howard Rothman. “Moving People from Welfare Rolls to Payrolls,” Business and Society Review, 84 (Winter 1993), 29-33.

Social responsibility is an important agenda for many companies today; this article suggests an avenue that some may not have considered. The jump from welfare rolls to productive work is not as daunting as we might think. Some non-profit organizations have been effective with a few weeks of preemployment training and business lab, rather than long-term training. Con- necticut and New York are paying from $4,000 to $5,300 for successful transi- tions, saving the remainder of costs- more than $20,000 per welfare recipient a year. At least one for-profit company, America Works, is successfully apply- ing this approach in both those states.

The hiring company gets a trainee

for a four-month trial period at lower than the going rate. When they hire one of these people they can qualify for a federal tax credit of at least $1,000. Sometimes good works are also good business; this approach shows prom- ise.

Total Quality

Owen Harari. “Ten Reasons why TQM Doesn’t Work.” Management Review, 82: 1 o‘anuary 1993),33-38.

Harari asserts that the bloom is off the rose of TQM. His ten reasons, however, are not all equally valid. Criticisms that carry some weight and should be considered include the idea that TQM focuses attention on pro- cesses rather than results, that it fosters another bureaucracy (composed of “ex- perts” at that), that it does not require changes in management compensa- tion, and that is too susceptible to “quick-fixism. ”

The author is not entirely persua- sive, but he quotes findings that there are two disappointments for every notable success with a TQM program. That Fact, plus his other criticisms, should force a serious evaluation of TQM programs in many companies, and there is nothing wrong with that.

Ken Myers and Ron Ashkenas. “Re- sults-Driven Qu ality... Now!” Man- agement Review, 82:3 (March 1993), 39-44.

The authors assert that TQM fo- cuses too much on processes and too little on results, and that many pro- grams are going to disappoint their sponsors in terms of return on invest- ment. Their recommendation: get the

National Productivity Reviezv/Autumn 1993 591

Page 12: Books and articles in brief

James W. Marcum

horse back in front of the cart with results-driven-quality (RDQ). A short- term strategy designed to achieve a “breakthrough,” RDQ then moves on to other problems that affect quality and lead to organizational transforma- tion. Beginning with quick results, and continuing to focus there, RDQ can save a TQM effort from ineffectiveness or failure.

Andrew P. Sage. “Systems Engineer- ing and Information Technology: Catalysts for Total Quality in Indus- try and Education.” IEEE Transac- tions on Systems, Man, and Cyber- netics, 22: 5 (SeptembedOctober 1992), 833-864.

Quality specialists need to pay more

attention to the engineering profession and the perspective they bring to the tasks at hand. Systems thinking may be passe in management theory, but it is still a working approach among engi- neers. Sage’s breadth of view is remark- able, ranging from the issue of national productivity to the improvement of qual- ity in higher education, particularly engi- neering education.

Sage stresses the role of informa- tion technology as a major component in the systems paradigm. He asserts the value of systems engineering as a tool for improving process and organiza- tional performance. He concludes with a set of twenty questions for self-assess- ment of potential for change to achieve higher quality and productivity-an impressive overview. 0

S92 National Productivity Review/Autumn 1993