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A holistic approach to the productivity paradox
Örebro University, Department of Business, Economics, Statistics and Informatics.ORCID iD: 0000-0001-9580-421X
2007 (English)In: Human Systems Management, ISSN 0167-2533, E-ISSN 1875-8703, Vol. 26, no 2, p. 85-97Article in journal (Refereed) Published
Abstract [en]

Both the public and private sectors have since the 1980s relentlessly cut the size of their workforces. The downsizing has regularly been reported to lead to closure of a whole or a part of a corporation or organization. Some studies which have analyzed the closures have reported that remarkable, counterintuitive improvements in labor productivity occurred during the time-period between the closure announcement and the final working day. Testing an elaborated cybernetic model on a Swedish case study, and on an exploratory basis, this paper proposes a holistic approach to generate a better understanding of this phenomenon. The main holistic pattern is a new order where management control is replaced by more “Self-management” on the plant level, and very strong psychological reactions based on feelings of unfairness.

Place, publisher, year, edition, pages
2007. Vol. 26, no 2, p. 85-97
National Category
Business Administration
Research subject
Business Studies
Identifiers
URN: urn:nbn:se:oru:diva-2928OAI: oai:DiVA.org:oru-2928DiVA, id: diva2:135603
Available from: 2008-03-05 Created: 2008-03-05 Last updated: 2019-03-26Bibliographically approved
In thesis
1. On closedowns: towards a pattern of explanations to the closedown effect
Open this publication in new window or tab >>On closedowns: towards a pattern of explanations to the closedown effect
2008 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Productivity effects under uncertainty and threat is the topic of this thesis. It comprises a synthesis and four papers on closedown – focusing a phenomenon where there is an overall productivity increase during the closedown process. Productivity effects are the primary focus of this work’s case closedown studies, and uncertainty and threat the common denominator of the cases. This thesis contributes a theoretical foundation for analysis of closedowns. It identifies explanatory contributing factors and patterns which enable a better understanding of the Closedown effect.

The theoretical foundation for this thesis is outlined in the first paper. It recontextualizes the Hawthorne experiments by applying a closedown perspective to them. This new perspective identifies several similarities between the Hawthorne experiments and situations where closedown is threatened or decided. Originally the Hawthorne experiments were viewed as a closed system, laboratory experiments instead of actions on daily operations. The new perspective analyzed the prevalent threat implicit in the context that the Hawthorne experiments were conducted in. Such threat was identified in other earlier work on the Horndal and Closedown effect, situations where productivity also increased. Threat can act as a motivator or de-motivator. With the recontextualized perspective, it was found that employees become sensitive to their managerial and informational context, and so productivity patterns fluctuate. A productivity increase is observed overall when closedown is threatened. It is this phenomenon we term the Closedown effect.

In the second paper, a case study of the closure of a plant tracks productivity fluctuations and fine-tunes analysis of critical events that occur during a closedown process. It builds on the previous papers theoretical foundations and outlines a theoretical model for explaining the Closedown effect. Productivity development depends on workers’ interpretations of management information, and actions and reactions to the prevalent closedown. The dialectics between management and workers change during the closedown period – there were fewer conflicts, speeder conflict resolution, increased formal and informal worker autonomy, and more workers’ work design initiatives. A HRM-program initially had a positive effect on workers, but its importance diminished during the closedown period. The closedown decision generated structural changes: management control over daily operations diminished, informal leadership evolved and individualization grew stronger as the importance of informal groups deteriorated.

In the third paper a multiple case-study is presented. Lack of social responsibility characterizes the managerial setting in these cases, in contrast to the case study presented in the second paper. That is, here there was a lack of management support for worker activities in this particular closedown process. The Closedown effect was found to be statistically significant in three of the four cases. This paper also contributes a theoretical elaboration of the Closedown effect, including distinguishing the key aspects needed in a detailed analysis of the closedown process.

In the fourth paper the productivity paradox is examined with a holistic approach, which draws on Buckley’s (1967) modern systems theory. This holistic perspective considers changes in the initial economic and institutional structure, and assesses the dynamics that are triggered by the closedown decision. A closedown decision evidently reorders the equilibrium between management and the workers. The main holistic pattern that emerges is a new order, where worker self management replaces management control at plant level and workplace psychology is based on the apprehension of unfairness.

An empirically-close analysis approach is a recognized method for highlighting puzzling phenomenon and developing explanatory patterns. This empirically-close analysis of the empirical data generated in this thesis enabled identification of key factors to explain the appearance of the Closedown effect. Moreover, it was a means for generating a more rigorous theoretical understanding of the Closedown effect, and developing a pattern of explanations to this productivity increase effect.

A key theoretical contribution of this thesis is the identification of a range of concepts that form antecedent explanations to the Closedown effect’s occurrence. These antecedents are aggregated in themes: managerial actions, counter-institutional actions, conflict context, worker autonomy, perceived threat of job loss, collective action, economic and institutional reordering, and institutional restrictions. The following describes the influence of these aggregates and their temporal dynamics, in relationship to the Closedown effect.

The identification above factors and the generation of a theoretical framework to assess closedowns is the contribution this thesis makes. The significance of these for future research is also critically assessed.

Place, publisher, year, edition, pages
Örebro: Örebro university, 2008. p. 158
Series
Örebro Studies in Business - Dissertations ; 1
Keywords
Closedown, Closedown effect, Downsizing, Productivity
National Category
Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:oru:diva-1885 (URN)978-91-7668-584-6 (ISBN)
Public defence
2008-03-28, HST, Teknikhuset, Fakultetsgatan 1, Örebro, 13:15 (English)
Opponent
Supervisors
Available from: 2008-03-05 Created: 2008-03-05 Last updated: 2019-03-26Bibliographically approved

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Hansson, Magnus

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