Moving now to another stage in our discussion, let us take a look at some of the Asian countries (Japan, South Korea, China). The author
had the opportunity to present an analysis of the “Japanese miracle”, highlighting the market more in terms of the system (its “organization”
in the sense that the word has been used here) than in terms of the miraculous recipes and other imaginary exaggerations which Western analysts have tried to import.60I identified, based upon the analysis of the white appliance industry, two explanatory facts which still seem today to be rather poorly understood: on one hand the roughly medi- aeval organization of the Japanese distribution network, and on the other hand the power and remarkable harmony of their system of production. This system, largely organized into cartels, closely controls the widely dispersed distributors and dependent firms. These base-level units very rarely venture to offer foreign products, whatever the legal measures in place or however the authorities might object in good faith.
The way in which the home market is dominated by producers, backed up by the financial control of consumer organizations, makes it possible to maintain a nucleus of loyal workers with guaranteed lifetime employ- ment. This attachment is itself made possible by externalizing its cost on to part-time employees, hired to do their master’s bidding. In the end, these are the employees for whom there is no sacred aura to the miracle.
In such a case, the problem of cost is not resolved through new tech- niques (Rifkin’s hypothesis61) or through the organization as proposed in this book. It is resolved through pressure on the labour force. It cer- tainly seems simple. But it is likely that the days are numbered for this competitive advantage. The strikes which occurred at the end of 1996 in South Korea drew attention to the social pressure which had been felt there since the 1980s and which now seems destined to reduce the advantages which that country once held.62The ongoing sluggishness of Japan, of great concern to Americans, could very well stem from the same source. It could even be suggested that China will follow more or less the very same path a little further down the road.63
So what can we draw from the foregoing? That in the end, the triumph of Japan, of South Korea, and perhaps yet tomorrow of China, have been, are, or will be only intermediate successes, their market advantage stemming only from a relatively inexpensive labour force? Those who believe in the end of work might add that “it is only a question of time before this same labour force becomes useless”. Perhaps. But at least in an even shorter term the pressure on labour costs will not endure, first because developed countries will adapt to it either by reducing costs of their own labour force as they have already done, but more importantly by seeking their own increases in productivity in other forms of An Uncertain World 23
organization; second, because Asian countries will follow the same route, a route upon which the most developed of those countries have already set foot. With just a little imagination Western countries could manage to “think the unthinkable” as suggested in this book, and those who have travelled to the East in search of a model might just turn around and head the other way.
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2
The Customer’s Victory
It is starting from the debate on globalization, as discussed in the introduction, that one can reach an understanding of what we will be calling the customer’s victory, and how this leads to a revolution in organizations. As we saw, the idea of globalization today is no longer contested, but this is not to say that the concept is accepted everywhere in the same way, or that its consequences do not undergo harsh criti- cism. In many countries, we find two schools of thought. On the one hand, there is the school which, although having observed the unavoid- ability of globalization, does not take for granted the elimination of nation-states.1 Instead, a strong state should increasingly regulate the effects of globalization and protect its citizens from the more serious consequences. This would mean voluntarily bowing out, “politically”, from the hyper-financialization of the world. This line of thinking is the exact opposite of the one proclaimed on billboards in the United States, such as the well-known slogan “Government is the problem, free enter- prise is the solution”. On the other hand, there is the school, in the minority, that suggests that we might, by cutting ourselves off from the rest of the world and refocusing our energies on national culture, tradi- tion, morality, and so on, escape the generalized movement towards a global economy.
These are not very realistic. Robert Reich clearly defined globalization, and its consequences on a country, by adopting a distinction between American society and the American economy:
We are experiencing a transformation which will reorganize politics and the economy in the next century. There will be no national prod- ucts or national technologies, no national businesses or industries.
National economies will no longer exist, at least in the way in which we conceive of them today. All that will remain rooted within borders are the people who make up a nation … the underlying ques- tion concerns the future of American society as distinct from the American economy, and the destiny of the majority of Americans, who are losers in global competition.2
The idea of a dual society returns with, on one hand, those who can participate in globalization, benefit from it and free themselves once and for all from the former local dependencies which have left a deep historical imprint;3 and, on the other, those who are subject to its consequences, with few means to react and intervene in their own fate.
This winner/loser vision is not wrong, at least in the short run, which is, after all, as far as we can see in respect of the phenomenon of glob- alization. But what is of interest is that this vision can be found in the workplace and in organizations, starting with what seems to be one of the most immediate and abrupt consequences of globalization: the cus- tomer’s victory. This is not a new observation, no more than the intu- ition that this victory must have irreversible consequences for organizations which produce goods and services. It was at the root of the re-engineering process, which many countries, including France, rejected categorically4without reflecting more fully on the extent of the preconceived notions from which this movement stems, looking only at the technical aspects, most often only to refute them. “Economic power has been handed over from the producer to the consumer … mass production, more quality, more for the money, more choice, more serv- ice”, write Hammer and Champy.5This is about as clear as one can get concerning the consequences of such a movement.
From an entirely different perspective, and with quite different con- clusions, Sami Naïr says much the same thing:
In its “chemically pure” form, the legitimization of liberal globaliza- tion hinges on praising the consumer as king. Since the market constitutes the most effective mechanism for distributing wealth, and since globalization is now helping to tear down all borders – be they geographical, cultural, of the nation or the state – borders which, up till now, have held it back from fulfilling its universal vocation, globalization must now be allowed to run its full course.
For the final result will be the victory of the consumer … If the latter is not the “end of the story”, it is at least the “sense of the story”.6
The Customer’s Victory 27
Rifkin offers yet a third version of this observation:
The “personalized” consumer is now starting to displace “standard- ized” distribution amid the various forms of competition in which businesses engage in the hopes of winning customers over, one by one, while at the same time attempting to keep costs associated with maintaining a stockpile of products as low as possible.7
This is thus the same vision, today commonplace in many companies, built around “disinterested consensus” which keeps us from under- standing the actual consequences in day-to-day life in the workplace. In their heated battle to hold at bay the drastic changes which are on their way, bureaucrats – a term which we will define more precisely in the next chapter – “swallow” the idea of the customer’s victory, but see it as little more than a tasteless pill. The idea must thus be explored more seriously in three directions. First, what does it mean that the “customer has won” in daily life, but conceptually as well, in terms of the distri- bution of power? Next, if the customer has truly won, and must be lis- tened to at all costs, then how do organizations react to this new constraint? Finally, why does this victory present a fundamental prob- lem of the organization, as defined in the preceding sections?