CHAPTER 3: LITERATURE REVIEW
3.5 The New Work Order
In order to explain what is meant by the term"new capitalism" I will quote Andy Grove,the C.E.O. ofIntel Corp in an address his managers:
"You have no choice but to operate in a world shaped by globalisation and the information revolution. There are two options: adapt or die. The new
environment dictates two rules: first, everything happens faster; anything that can be done will be done, if not by you then bysomeone else,somewhere.Let there be no misunderstanding:these changes lead to a less kind,less gentle, and less predictable workplace .... In principle, every hour of your day should be spent increasing the output or the value of the output of the people for
whom you are responsible" (cited in Gee et al 1996)
The morality expressed in Grove'smessage is,"ifyou don'tdo it,someone else will'.
Gee et al (ibid)blame increased global competition and advances in science and technology as the culprits who contribute to these new capitalist ideologies. Sadly, the message for workers living in the new capitalist environment is grave. The implications of the new capitalist work order are that more output is required from the worker with little return on his or her input.
Thus far a small number of people have become 'big winners',a larger number of people have seen their income decline or grow at an abnormally slow rate, and an even larger number of people are facing poverty. This is the reality and logic of the new capitalism. Initially two forces drive it: global competition and the fragmentation of mass markets. The globalisation of competition makes the competition fiercer and makes losing all the more likely. Science and technologyallow mass markets to be fragmented into many sub-markets, to which more and more competition can direct their efforts. However, with such small fragmented markets there is less for each competitor to win. There is a crucial winner-take-all aspect to the new capitalism, which follows from the effects of science and technology (Frank & Cook 1995 cited in Gee et al 1996).
According to Gee, Hull, and Lankshear (1996) the fierceness of competition, the fragmentation of markets,and the winner-take-all nature of our science and
technology-driven world means that competition centres around two things: 'quality' (i.e., the 'best' product or service for the lowest price)and 'identity' (i.e.,fitting the niche as petfectly as possible so as to gain customer loyalty). The writers of this article believe that there are two ways in which businesses can cope with the intense
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growth of global competition and the demands of science and technology. Firstly, such businesses need to combat competition bydelivering the best quality product or service for the lowestprice and secondly,bycreatingan identityor fitting the niche as closelyas possibleto attract customer loyalty.
Gee et al(ibid) elaborate further to explain howbusinesses can beat the competition byfocusing on these two aspects: qualityof product orservice and the improvement of customer loyalty. Competition around qualityleads to constant innovation , 'lean and mean' production,and less and less profit margin for most competitors,with large but often short-run profits for a few. Competition around identitymeans
customisation and the creation of a local, 'close tothe customer' image on the part of big businesses which need desperatelyto please and retain customers. However,the 'local' in the new capitalism is a deeply paradoxical notion (Gee,Hull. & Lankshear 1996,pg. 157).
Gee et al (ibid)suggest ways in which workers can help their employerscope with the pressure that the tenets of the "new capitalist" order places on the organization. They identify strategies such as:
• Constant innovation
• 'Lean and mean' efficiency
• Acceptance of high risk
• The meeting of intense customer demands creates a need for skilled and fully committed employees,each of whom has to add value at every moment to the enterprise (Gee et al 1996).
In a winner-take-all market,finishing off at the top need not spell success. Onlya very highlycommitted team can take an organization to the top. The need for intense loyalty and commitment under such stressful conditions leads to the focus on
enculturation,communities of practice,core values,and visionary leadership (Gee, Hull,& Lankshear 1996).
The kinds of principles that apply to the new capitalism are similar to what the Chief Executive Officer at Imana Foods believes his companyshould abide byto stayin the
competition.The C.E.O. ofImana Foods referred me to a book by Michael Hammer titled,"Beyond Reengineering. How the process- centered organization is changing our work and our lives", that he said was a great source of inspiration to him and that it contained valuable suggestions which he has aligned to his business strategies. The kind of ideology reflected in this book provides him withthe necessary tools to survive in the world of new capitalism.