Corporations Are Not Humans : Not Even Close --- Episode 44

             SHEDDING JOBS AND CONCENTRATING POWER 

  Although there are regional variations, the world's most successful transnational corporations ----whether Japanese, European, or American --- are engaged in a process of transforming themselves and the structures of global capitalism to further consolidate their power through complex networking forms of organization. Four elements of that transformation are of particular relevant to our analysis. 

I. Downsizing Staff and Contracting Out 

   Drastic cuts in personnel are the most visible aspect of downsizing, but they are in most instances only one part of a larger organizational strategy. The larger scheme is to trim the firm's in-house operations down to its "core competencies," generally the finance, marketing, and proprietary technology functions that represent the firm's primary sources of economic power. The staffing of these functions is reduced to the bare minimum and consolidated within the corporate headquarters. 
   Peripheral functions, including much of the manufacturing activity, are farmed out to networks of relatively small outside contractors, often in low-wage countries. Employment shifts from the corporate core to peripheral contractor organizations that form part of a production network of firms that depend on the markets and technology controlled by the corporate core. Peripheral activities that are NOT contracted out and cannot be automated may be located FAR AWAY from corporate headquarters. These are, for example, the "back offices" of the big insurance companies and banks, which are generally staffed with poorly paid female clerical workers. 

II. Using Computers and Automation to Reduce Staff and Inventory 

   The core corporation brings the full capabilities of computers and automation to bear in whatever manufacturing functions it retains and in the management information systems by which it flexibly coordinates the product network's far-flung activities.  Automation has two key purposes. One is to pare down the number of workers to an absolute minimum, such as in AT&T's plans to replace thousands of telephone operators with computerized voice-recognition systems. The second is to minimize inventories by linking dispersed suppliers with marketing outlets using "just-in-time" delivery of parts and supplies. 

III. Mergers, Acquisitions, and Strategic Alliances to Reduce Competition Pressures 

   The corporations that occupy the core positions in major networks pursue a variety of strategies to manage the potentially destructive competition among themselves. One is to meld through mergers and acquisitions. Another is to construct strategic alliances through which they share technology, production, facilities, and markets and engage in joint research. 

IV. Investment in Headquarters Teamwork and Morale to Maintain Loyalty and Performance 
  
   Those who work in the core are well compensated, with full benefits and attractive working conditions to assure their loyalty and commitment. Their job is to protect, control, and expand the various sources of the corporation's monopoly power, including its logo, image, brand names, intellectual property rights, financial and political assets, and strategic alliances.