Andrea Signoretti, University of Trento
Silvia Sacchetti, University of Trento
Lean production is seen to improve company’s competitiveness, while the managerial view over people’s deployment can differ. The strategic goals underlying lean application lead managers to emphasize two potential contrasting approaches in the management of the workforce: one centered on work intensity (cost reduction), the other on employee skills and involvement (quality goals). In the latter situation, further to lean technical sub-systems (just-in-time, quality management and total preventive maintenance), workers play a new role compared to taylor-fordist firms through the adoption of a bundle of integrated and complementary organizational and human resource management (HRM) practices (Kochan et al., 1997). Despite evidence indicates that inclusive organizational and HRM practices lead to mutual and collective benefits, their application is often partial. Several authors have highlighted that the limited or missing implementation of the soft practices of lean production is linked to profit pressures, and therefore to the focus on cost reduction as a strategic goal for lean implementation. When such pressures become high, managers and firms tend to privilege the coercive aspects of lean production by applying its technical sub-systems limiting or neglecting employee skill development and participation (Adler, 2012).
Lean production – as a concept and as a practice – has arisen in the context of conventional for-profit firms, being often affected by profit pressures as the main organisational objective. We argue that in Work Integration Social Enterprises (WISE) lean production can strategically privilege quality goals while continuing to pay attention to costs and efficiency. We focus on commercial WISE, in particular, where production organisation assumes central stage whereby representing an appropriate context for the application of lean production. These organizations, differently from conventional companies, are as a norm managed by workers and expected to design production around the special needs of weak categories and to be governed in participatory way (in the European context) because of their social mission. At the same time, efficiency has always been important in WISE. Differently from charities and foundations, they are run with entrepreneurial spirit, meaning that they value innovation, bear the economic risk of the activity, and strive for autonomy from public funding (Sacchetti and Borzaga, 2017). Given these WISE characteristics, lean production sub-systems and particularly the one related to human capital development can be appropriate for these organizations. On the one hand, lean production principles and practices can increase WISE efficiency assuring them higher competitiveness for their market-oriented production. On the other hand, the main goal of WISE remains related to the social dimension consisting of rehabilitating people with difficulties through participatory governance systems. The first research question thus consists of exploring if these theoretical reflections over quality-based lean production applications and WISE finds confirmation in the reality of these organizations.
Second, if lean production seems to fit WISE multiple goals from the conceptual viewpoint, it has to be seen how the sub-systems and practices shaping the model are possibly applied particularly in the organizational and HRM field. It is needed to understand what content the organizational and HRM practices characterizing lean production assume especially in the case of worker cooperatives that have the explicit social goal to include vulnerable people. What are the characteristics and functions these practices assume in WISE? This is the second research question that our study intends to explore.
The two research questions are inquired using an exploratory approach constituted by case-studies enriched by interviews with experts/practitioners. The methodology is suitable to our analysis where the aim is not to generalise conclusions, but to identify a new area of research and open questions supported by initial field-based exploratory research (Eishenhardt, 1989). The research design was conducted between 2015 and 2018. Three WISE have been purposively selected, following a logic of literal replication, as satisfying the concepts and dimensions under inquiry. This means that they had to apply lean production. We interviewed managers involved in lean production implementation at different levels for a total of around 20 interviews. Then, we interviewed two experts/practitioners.
Our initial exploratory findings suggest that lean production is increasingly drawing attention among commercial WISE to reinforce their efficiency, which represents the pre-condition to achieve their main goal of enhancing worker welfare and integrating people with difficulties into work (Battilana et al,. 2015). At the same time, the necessary social goals (i.e. the work-integration of disadvantaged people), may work as a barrier against making efficiency the absolute goal, and so it prevents isomorphism risks. Lean production allows to improve parameters of productivity, but first serves to settle work integration needs manifested by workers with difficulties, assuring their training (supplied by connected training WISE), involvement and motivation. Thus, the theoretical reflections over the possibility that quality-based lean production applications would result particularly suitable for WISE are proved valid by this exploratory research.
Second, the analysed technical, organizational and HRM systems implemented with particular reference to disadvantaged workers are reflected in these characteristics. Thereon, they assume peculiar characteristics and functions compared to for-profit firms. We can denote some ‘plasticity’ in some of these practices (an expression coined by Baccaro and Howell, 2017, for institutions), which means that they can be used by firms in the same form but with different characteristics to pursue rather different functions leading to different outcomes. However, areas of improvement are also found particularly in terms of disadvantaged people’s direct participation.
References
- Adler, P. S. (2012). The Sociological Ambivalence of Bureaucracy: From Weber via Gouldner to Marx. Organization Science, 23(1), 244-66.
- Baccaro, L. & Howell, C. (2017). Trajectories of Neoliberal Transformation. European Industrial Relations Since the 1970s. Cambridge: Cambridge University Press.
- Battilana, J., Sengul, M., Pache, A.-C. and Model, J. (2015). Harnessing Productive Tensions in Hybrid Organizations: The Case of Work Integration Social Enterprises. Academy of Management Journal, 58(6): 1658-1685.
- Kochan, T. A., Lansbury, R. D. & MacDuffie, J. P. (1997). After Lean Production. Ithaca, NY: Cornell University Press.
- Sacchetti, S. & Borzaga, C. (2017). “Social regeneration and cooperative institutions.” In Sacchetti, S., Christoforou, A. and Mosca, M. (eds.). Social Regeneration and Local Development: Cooperation, Social Economy and Public Participation. London and New York, Routledge.