World class manufacturing and accountability
How companies and the state aspire to competitiveness
The Authors
Trevor Hopper, Manchester Business School, University of Manchester, Manchester, UK
Mostafa Jazayeri, Manchester Metropolitan University, Crewe, UK
Chris Westrup, Manchester Business School, University of Manchester, Manchester, UK
Acknowledgements
The authors thank: NWTEC for their generous assistance; help from interviewees and participants at meetings when early versions of this paper were presented – namely an EIASM Workshop on New Directions in Management Accounting, Brussels, December 1998; the Manufacturing Accounting Workshop, Copenhagen Business School, March 1999; Performance Measurement Conference, Cambridge, July 1999; the IPA Conference, Manchester July 2000; and the Seventh Biennial Management Accounting Research Conference, UNSW, Sydney, February 2001; and Colwyn Jones and Mahmoud Ezzamel for incisive comments. The research was funded by a European Regional Development Fund grant.
Abstract
Purpose – The paper's aim is to establish how world class manufacturing (WCM) was diffused to some small- and medium-sized enterprises in the NW of England and the network of institutions involved ranging from the state to firms, and to iterate the results with Miller and O'Leary's work on accounting practices and governance.
Design/methodology/approach – This followed an actor network theory approach of “following the actors and actants” using interviews and documentation.
Findings – Three accountabilities (financial, production, and idealised customer) at firm and state levels were linked through agencies like consultants, academics, and employer federations, and quasi-governmental organisations like training and enterprise councils. New discourses and programmes of governance associated with competitiveness fostered changes in accountability locally and nationally. Competitiveness, WCM, and occasional allies like activity-based costing lacked stable and consistent definition. They are adopted and circulate because their plasticity helps actors redefine themselves within translation and mediation processes.
Research limitations/implications – Shop floor workers were not directly studied. Hence, observations on resistance and enactment are tentative.
Practical implications – Continual translations within large networks shape new techniques of management and governance.
Originality/value – The paper shows that programmes and discourses of governance over time are reciprocally linked in a constellation of state institutions and firms.
Article Type:
Research paper
Keyword(s):
Activity based costs; World class manufacturing; Manufacturing industries; Social networks; Competitive analysis.
Journal:
Journal of Accounting & Organizational Change
Volume:
4
Number:
2
Year:
2008
pp:
97-135
Copyright ©
Emerald Group Publishing Limited
ISSN:
1832-5912
Foreword
Interviewer: What represents the greatest challenge for a statesman?Harold MacMillan ( UK Prime Minister, 1957-1963): Events, my dear boy, events.
Introduction
Like Topsy, this paper just grew. It started when the researchers en route to a research site discussed “how World Class Management ended up in a jobbing engineering company in the backstreets of Bolton?” The answer proved “messy” and complex – the paper's hopefully neat chronology bears little relation to the process of discovery on two inter-related phenomena posing as breakthroughs in managerial knowledge: activity-based costing (ABC) and world class manufacturing (WCM). Schonberger, who had a consultancy and academic record in operations research, manufacturing requirements planning (MRP), and Japanese manufacturing techniques, concluded that best Japanese manufacturing techniques could be exported to North American companies to counter their loss of international competitiveness (1982). In 1986 he articulated the concept WCM in a book of that name. Originally his methods were antithetical to cost accounting but his views softened, especially regarding to ABC, which like WCM, questioned conventional methods and advocated reform given Japanese competition (Johnson and Kaplan, 1987; Ezzamel et al., 1990). When studies reveal how little headway such practices make in companies commentators often wring their hands (Bromwich and Bhimani, 1994), and blame a countries' weak management for failing to adopt “cutting-edge” techniques (Leseure et al., 2004; Porter and Ketels, 2003). This paper dismisses such attributions of blame as simplistic and instead focuses on how “new” managerial ideas emerge, circulate, and are enacted.
Cultural and social explanations of transformations in ideas have flourished since Kuhn's celebrated work in the 1960s but recent research focuses on how ideas travel. Advocates of new ideas circulate apparently stable forms of knowledge but translation and slippage is more characteristic (Latour, 1987) as groups interact to pursue their interests, e.g. scientists (Latour and Woolgar, 1986); technologies (Latour, 1996); management consultants (Sturdy, 2002); academics/business gurus (Jones and Dugdale, 2002); companies and organisations (Fincham and Roslender, 2004); and countries' regimes (Ahrens, 1996). However, the most salient issue is not identifying groups that circulate business knowledge but relationships between them, i.e. exchanges and reformulation of group' identities therein. Companies use business knowledge to find fresh ways of acting and participants to provide new accounts of themselves. Accountabilities – giving of accounts and how actions are made publicly observable (Button and Sharrock, 1998) – are integral to business knowledge circulation. For example, our experience in the “near present” (Thrift, 2004) in the UK revealed that WCM became linked with national competitiveness and organisations reformulated roles for themselves accordingly (Hayes and Wheelwright, 1984). WCM was not adopted merely because of beliefs that it better represented companies' performance and prospects than financial measures but because it helped establish new forms of accountability and roles for various organisations. Moreover, appropriations of WCM by companies and consultants during translation varied, and frequently utilised accounting techniques discredited in early formulations of WCM.
After describing the research methods and aims, the paper appraises problematisation of accounting practice as “politics of the product” associated with Miller and O'Leary (1993, 1994) whose observations resonated with our own. It is argued that WCM endeavours to add a mode of accountability in companies beyond production and financial that we term “idealised customer accountability”. However, how business knowledge circulates and appropriates new and old management practices is a lacuna in the politics of the product. Hence, the paper examines how WCM was formulated by consultants and within change programmes to improve small- and medium-sized enterprises (SMEs) in the NW region of the UK. WCM's subsequent enactment of WCM in companies followed different patterns during translation, not least with respect to accounting generally and ABC specifically. WCM was justified in terms of national competitiveness but, as the paper examines, competitiveness is as problematic a concept as WCM. We argue that different formulations are embedded in notions of “state management accounting” that link state macro-economic policies to micro-level activities and accountability within firms. The next section analyses how different formulations of business knowledge during circulation helped develop and re-create roles for state agencies, especially the UK Department of Trade and Industry (DTI), local regional agencies (like the North West Training and Education Council (NWTEC)), and consultants who were vital intermediaries. The paper concludes by reflecting on how managerial and accounting knowledge and practices circulate between institutions and its theorisation.
Research methods
The precursor of this research was an intensive case study of a subsidiary of British Vita – a medium-sized chemicals company in NW England that underwent major changes after participating in a WCM programme organised by NWTEC described in Jazayeri and Hopper (1999). Somewhat fortuitously, a research opportunity involving European Regional Development funding arose that offered an opportunity to compare and contrast the results at British Vita with other companies.
This second research phase studied WCM applications in SMEs
Contextual data came from multiple sources including interviews with senior managers at training and education councils (TECs) and consultants; factory tours; internal documentation on Phases 1 and 2 of the WCM programme – including evaluations by the TECs; the DTI's web site; an interview with senior DTI officials; material on UK manufacturing in government publications, the labour government, its conservative predecessor, and both political parties. Excluding the British Vita study, the data were gathered over 15 months during 1998 and 1999.
The intention was to interview managers in each company, especially the chief executive, the production manager, and the accountant but this was not rigorously adhered to, partly because of restricted access but also because management roles in SMEs were not as functionally differentiated as presumed. The aim was to construct an account of why each firm considered implementing WCM; its implementation process, results and problems that arose; performance measurement changes; and its effect upon controls, including management information and accounting systems. Interviews with WCM providers – TEC managers, consultants who delivered the programme, and civil servants responsible for TECs and UK competitiveness policy – covered similar topics but more briefly, to allow time to explore political, economic and organisational contexts. Each interview was transcribed and analysed by each team member for themes and issues, and thence discussed. The research was emergent and grounded. Several issues emerged.
First, we were struck by the “messianic” fervour of proponents of WCM and how issues like quality management, serving customers, employee involvement were linked to diverting organisational cultures from “them and us” relations. This had a moralistic, almost religious tinge whereby WCM extended beyond managerial techniques to enunciate new, primarily reflexive forms of governance and accountability. This called for an enunciation of competing and sometimes mutually exclusive forms of accountability (financial, production, customer, and idealised) that resonated with participants' rhetoric. In particular, WCM became seen as manifesting “Idealised customer accountability” – a search for performance and methods akin to the best which, given continuous improvement, are never likely to be attained or remain stable. This led us to theorisation that embraced the institutions, practices and processes observed and links political ideologies at the national level to accountability practices within firms using non-deterministic analysis. Hence, our research framework drew partially from the work of Miller and O'Leary which was iterated with our research experiences.
Second, the meaning and application of WCM became a focal interest, especially with respect to management accounting. Sources for WCM range from Japanese methods, new managerial technologies – not least computerised systems – and human resource management. Embedded throughout is a rhetoric of incipient corporate decline in the face of global competition should such methods not be adopted. However, WCM's translation proved variable and malleable as actors involved in its propagation and application adapted it to serve their interests and preoccupations. We wanted to explore this further.
Third, WCM's intrusion into national competitiveness debates stimulated interest in the meaning, conceptualisation, and measurement of competitiveness within UK governance. This identified types of “state management accounting and accountability” that link national macro concerns to changes at the micro level. As with WCM this was associated with rhetoric of national decline, problems of conceptualising, defining and measuring competitiveness, various translations, and their embodiment in forms of accountability paralleling those in firms.
Fourth, we became fascinated with how and where managerial knowledge emanated. WCM proved to be embedded in a nexus of loosely coupled relationships between independent but inter-related sites running through manufacturing firms experiencing global competition; new supply chain relationships; Japanese management techniques; management consultants and business school advisers/researchers; and quasi-governmental organisations like TECs and business links, business institutions such as chambers of commerce, the Confederation of British Industries, and even trade unions, and local and national state organisations, especially the DTI. A common thread was a perception of declining UK manufacturing competitiveness and needs for drastic change – including adopting WCM. Managerial knowledge creation was embedded in a complex translation process whereby micro-level actions loosely resonated with macro political programmes of governance.
Accounting and forms of accountability
Accountability is “the justification of one's acts to self and others” (Munro and Hatherley, 1993, p. 369). Our definition is broad and extends beyond formal accountability to accounts of the self (Roberts and Scapens, 1985). We concluded that programmes of control were best analysed within three ideal types of accountability – financial, production, and idealised customer. Their articulation owes much to work by Miller and O'Leary. Their initial work lies within the Foucault research fold (Hopwood, 1987), whereby accounting is seen as an expression of shifts from sovereign to disciplinary power following the enlightenment and accounting programmes and techniques render subjects visible and governable. Whilst accepting that environmental factors stimulate accounting changes, Miller and O'Leary challenge functional, deterministic explanations based on social improvement or class interests. Instead they emphasise geneaological historical investigation that ascribes accounting innovations to complex, dispersed events rather than a single origin. They use archealogical methods to trace how complex webs of discourses and practices within particular legal and institutional circumstances legitimate accounting methods of firms or states (Miller and Napier, 1993). Relations between discourses and practices are seen as problematic, i.e. accounting practices need locating in broader discourses of legitimate knowledge.
Miller and O'Leary (1987) apply these concepts to standard costing's emergence in the early twentieth century. They note how an apparent technical solution was justified in the name of stemming incipient national decline, reducing labour-capital conflicts, and a rhetoric of progress. Standard costing constructs individuals as passive, programmed, and atomised employees using a cost language of variances based on “scientifically” determined performance measures based on a “one best way” of execution. Its rise was associated with “efficiency movements” prominent in US political debates that cut across prevailing party allegiances, and inspired social programmes like work-study, mental testing and eugenics that went beyond the workplace into education, families, and government.
We label this approach production accountability. It is based on Taylorism, namely maximising production by applying “science” through work-study, machine design, plant layout, and automation; separating execution from control – assuming passive, atomised, and programmed workers motivated by economic incentives; and a language of budget variances. Within production accountability physical indicators predominate. New production standards advocated in WCM like quality, throughput, and downtime follow this tradition, facilitated by new information processing possibilities in ERP systems. Later we argue that national policies based on identifying features of successful companies, measuring shortcomings of domestic firms in these respects, and launching remedial programmes to rectify this, parallel production accountability within firms.
Miller and O'Leary (1990b) counter Johnson and Kaplan's history of accounting as an accretion of self-evident practical tools for organisational success with claims that it changes according to accounting vocabularies and understandings within specific political cultures of corporations as governable entities, and individual rationality and responsibility. At this juncture Miller and O'Leary, influenced by actor network theory (Miller, 1997), develop four conceptual tools (accounting constellations, dispersed social agency, accounting complexes, and government) to analyse four issues (problematization, programmes, translation, and action at a distance). Accounting complexes are activities, institutions, and conceptual schemas associated with government that include academia and scholarship, the accounting profession, public and private firms, and state organs. Governance requires programmes – “technologies”, rationales, and statements defining objects and objectives to regulate social relations. Miller (1991) and Miller and O'Leary (1990a) apply these theoretical tools to analyse how UK Government preoccupations with Gross National Product growth and macro-economic planning became associated with discounted cash flow (DCF) techniques. An accounting constellation is a temporary, non-monolithic network of actors, institutions, and arguments associated with particular accounting governance practices. Thus, a constellation of state planners, the profession, academia, and industry seized upon DCF to reconcile micro-economic practices with macro-economic management of trade cycles, poor investment decisions, and low productivity. However, organisations – being heterogeneous and non-unitary – have dispersed social agency: thus each promulgated and adapted DCF to its own interests. DCF adoption was not inevitable: it was used and promulgated much earlier, only to be ignored or treated with scepticism by agencies that later became advocates. It only became problematised when its possibilities for fusing micro and macro economic regulation were recognised, along with its congruence with prevailing governmental and firms' programmes (general objectives) of investment and growth. This brought translations (Latour, 1987): DCF's technology mediated by interested actors within the accounting constellation constructed means of government based on action at a distance (where one point becomes a centre capable of influencing other distant points without direct intervention). Accounting measures derived from DCF principles emerged, for example, ministers in Parliament legislated to govern nationalised industries through target returns on capital leaving managers free to decide the means of achieving them, and corporate taxation adopted investment allowances based on cash flows. Thus, the micro and macro became inter-related.
We label approaches that rely on accounting numbers for control in the belief that they summarily represent performance, as financial accountability. The rise of standard costing must be seen alongside the adoption of budgets and divisional performance measures facilitating financial accounting systems based on “decentralised-centralisation” or action at a distance (Robson, 1991, 1992). These rendered conglomerates manageable: senior managers could concentrate on strategy and monitor segments through financial numbers, leaving operational decisions to line managers. Financial information in company reports provided external accountability, especially to capital markets. The promulgation and adoption of DCF and later economic value added (EVA) systems are extensions of financial accountability to capital markets. We argue later that financial accountability has parallels at the national level when governments regulate micro-economic activities through macro-economic measures, be they interest rates, money supply data, or budget deficits and surpluses.
In 1993 Miller and O'Leary turned to American economic and political discourses in the 1980s under the banner of “politics of the product”. Problematization, programmes, and technology are explored in the Decatur plant of Caterpillar in Illinois. Perceived declines in national competitiveness, stock prices, and workers' skills problematised management expertise based on financial engineering and enterprise accountability to capital markets. Old' programmes embracing action at a distance accounting controls using overhead recovery rates and DCF became vilified. Instead management programmes focusing on quality of products to meet customer needs, and re-engineered factory technology incorporating cellular manufacture, just-in-time (JIT) principles, waste reduction, and electronically co-ordinated supply chains were advocated. Caterpillar turned to WCM precepts and invested in a “plant with a future” whose workflows, co-ordinated through computer systems such as MRP and ERP, reconstituted manufacturing cells as suppliers to other cells (Miller and O'Leary, 1994). New financial representations like ABC, value-added analysis of supply chains, customer costing, and predictive costing, brought new forms of visibility and governance (Miller and O'Leary, 1993). Customer needs, based on a myriad of quality indicators and external benchmarks, became paramount and activities, especially overheads, become objects of scrutiny. Work cells were expected to continuously reduce costs and improve operations and products. Miller and O'Leary argue that “cell proprietorship” replaces the “governable person” with “governable processes” as its accounting makes knowledge about these new manufacturing spaces calculable and identifies candidates for outsourcing or automation – a potent threat for workers. They argue that the innovations established economic citizenship that blended co-operation and creativity of workers with economic agency that inverted organisational hierarchies and reinforced American ideals of entrepreneurship, involvement, equality, and progress.
We liken this to idealised customer accountability (Vaivio, 1999). Here, workers become members of teams responsible for “mini-businesses” and the physical and financial architecture reproduces a value chain of processes within and beyond the organisation that constitutes workers as suppliers accountable to customers. Managers are transformed from dispensers of commands to suppliers of expertise. Idealised customer accountability benchmarks activities against those of best practice based on a problematization that fundamental international restructuring has produced a dichotomy between high and low value-added companies. Labour intensive companies will survive only by using cheap labour, living on their wits, and utilising the “Black” economy. Salvation lies in moving to higher value activities based on effective production technology and accountability, using employee knowledge for creativity and improvement to serve customer needs, and attaining performance levels matching the best worldwide.
Creating performance measures is not new – other accountability modes do this. What is different is the creation of metrics for all activities based on ideal performance, coupled to a model that links them together
Each form of accountability can compete, complement, or run alongside each other, though problematizations and programmes tend to emphasise one form. Different accountabilities in tandem are sources of dialectical tensions. For example, Munro and Hatherley (1993) argue that lateral communications in the “new commercial agenda” associated with idealised customer accountability often operate within hierarchical systems from previous accountability systems and, despite their “empowerment”, employees remain accountable economic agents subject to new forms of surveillance and domination. However, as in Miller and O'Leary's work, it is unclear how shifts to idealised customer accountability relate to business knowledge circulation and other accountabilities. Moreover, how types of accountability are linked to actions within firms and government agencies is neglected. The remainder of the paper examines these lacunae with reference to the conceptualisation, diffusion and enactment of WCM and competitiveness.
What is WCM?
Schonberger's articulation
In the pre-WCM era we thought that production could be managed “by the numbers”. The numbers would show what to make, what to buy, whom to blame. If, for example, the latest cost report shows a negative cost variance in welding, the onus is on the welding supervisor to cut costs. But how? There are no data on the causes of the cost average […] The numbers failed to show causes (Schonberger, 1986, p. 3).
WCM – a term coined by Hayes and Wheelwright (1984) – emerged in several formulations as a distillation of insights gained from Japanese manufacturing in the 1970s, when western manufacturing was perceived as failing and unable to compete. WCM was formulated and presented as a revolutionary business approach in the USA in the 1980s and then in the UK in the 1990s. WCM, it was argued, provides a new form of accountability and control that more faithfully represents the nature and causal processes of manufacturing than financial representations. It had a strong focus on accountability to the customer and monitoring progress according to benchmarks derived from principles and practices of the best manufacturers internationally to engage the minds of managers and employees alike:
[…] the world class journey is a journey without destination. [It] doesn't mean without direction, because the direction is clear – it's forward. What [it] means is you never get to the end, because there is always something you can improve (Manufacturer, 2005, p. 9).
Schonberger's first “lesson” in his 1982 book states that: “[m]anagement technology is a highly transportable commodity”. His 1986 book formulated his version of WCM – a term quickly taken up by academic and consultant audiences (Dixon et al., 1990; McNair et al., 1988; Ranky, 1990; Steudel and Desruelle, 1992; Todd, 1995). Schonberger established a consultancy company in 1986, World Class International (WCI) that was active in the UK and Europe in the late 1980s and 1990s: UK clients included companies such as Coats Viyella, Clarks Shoes, Glaxo, and the Midland Bank. WCI's expression of WCM in the late 1990s stated that a world class business “is organised to serve the customer” but to do so it must return to basics (WCI, n.d.), namely continual and rapid improvement in serving customers through better quality, lower costs and quicker, more flexible, responses. They emphasised how WCM techniques mesh together. Their analysis began with a world class benchmarking assessment, which provides a platform for a structured management plan with performance measurements marking the route to becoming internationally competitive. They specified eight areas necessary “for a company to achieve World Class status … which involve little or no outlay in capital expenditure”. They were: structured management – “a skilled and capable management team that can lead the company through what is a significant cultural change”; a total quality ethic, elimination of waste and management inefficiency; employee involvement, including cross-functional and multi-skilled teams; responsiveness to customers – both internal and external; co-operation with and control of suppliers; business process management to simplify processes and reduce overheads; manufacturing that focuses on integration, simplification and automation; and innovation of new competitive products and services. However, Schonberger's formulation of WCM changes between 1986 and 1996. Moreover, WCM was articulated differently in the TEC training programme and companies participating in it and other writers on WCM. The definition of WCM proved variable and unstable consistent with claims that there is no such thing as WCM – rather it is a set of disparate knowledges. We wish to illustrate this with respect to cost accounting, especially ABC
Schonberger's (1986, p. 3) initial distaste of management accounting is evident (Hansen and Mouritsen, 2007):
In the pre-WCM era we thought that production could be managed “by numbers”. The numbers would show what to make, what to buy, whom to blame. If, for example, the latest cost report shows a negative cost variance in welding, the onus is on the welding supervisor to cut costs. But how? There are no data on the causes of the cost average […] WCM mandates simplification and direct action: Do it, measure it, diagnose it, fix it, manage it on the factory floor. Don't wait to find out about it by reading a report later.
However, by 1996 Schonberger alludes to ABC being relevant to product line decisions though not cost reporting (as it deflects attention from physical measures and continuous improvement). Nevertheless, ABC remains excluded from his WCM package. However, other consultants and writers (Umble, 1990; Maskell, 1994; Ranky, 1990; Voss and Blackmon, 1996) developed different definitions of WCM, not least with respect to accounting. For example, McNair et al. (1988) and Howell and Soucy (1988) include ABC, arguing that it helps firms to identify and shift to areas of high value added. The inconstancy of WCM's formulation extended to the WCM programmes organised under the auspices of NWTEC.
The TEC programme's formulation
Is your company in such a strong position that the impact of future competition will be minimal? If not are you willing to accept the challenge? […] If you want to transform present working practices and take your business to improved level of performance then the World Class Manufacturing Growth Programme will help (MANTEC, 1996, Publicity Brochure).
The steering group of NWTEC and a consulting company, Denplan Associates (subsequently Forum21), were instrumental in initiating the WCM “agenda” in the NW and elsewhere in the UK (interview, NWTEC). After research in 1991-1992 John McMahon and his Denplan colleagues produced a report – “Best practice in business development” that recommended initiatives directed at “What we saw as the core agenda at SME level which was: 1) help me take out cost; 2) help me add customer value and; 3) help me grow turnover” (Consultant). This produced the specification of WCM in the training literature of TEC programmes (Jazayeri, 1998). John McMahon described it thus:
It started with this whole agenda of cost, customer, value, and turnover […] it was about credibility in the marketplace, opportunity in the marketplace and the capacity for more business and profit […] there were two clear strands – I must take cost out of the business, while at the same time, I must add value from the customer perspective. We defined the cost dimension […] to focus on three hidden costs under the headings of machine productivity, material productivity, and people productivity. We defined customer value around service, engineering, quality of performance and MPI. Then we divided each into a range of sub-elements […] The means were at three levels, […] structure, […] systems, and […] culture, attitude, and behaviour […] Many of these companies had tried the structures and tried the systems but usually without ever touching on the attitudes, behaviours, and cultures. And they'd failed […] because often they were carried out by managers from some other culture. We spent a long time trying to define that cultural attitude. We defined it on two levels – in terms of attitudes to be eliminated and attitudes to be cultivated […] What was unique about what we said, at that time, was that you are wasting your time on systems or structural changes if you do not change the cultural agenda.
The consultants' definition of WCM drew from observations of perceived best practice; some managerial literature, especially Schonberger (1986); consultations with employer organisations, in particular the CBI and the Engineering Employers Federation; and research visits to compare UK and international practices, mainly in Germany, Finland, Japan, and the USA. The resulting training documentation, defined WCM as consisting of: flexible processes and facilities – flexible machine centres, zero set-up times, small warehouses and work-in-progress areas; advanced information technology – a single database, maintained on a real-time basis for operating control and financial reporting; planning and control – demand stabilisation with minimum rescheduling, zero changes, hourly planning, short lead times, small batches and vendor synergies; product design – recognising short product life cycles, adding value through differentiation, few complex or non standard components, and 100 per cent quality right first time; financial controls – that identify product and customer profitability through ABC, intensive investment, maximising value added by minimising variable costs beyond materials, physical performance measures tracing flexibility, reliability and quality; organisation structures – based on product teams, few hierarchical levels and organic structures for quick and complex decisions; benchmarking – openness and action to trade comparative information with other companies; employee involvement – multi-skilling and delegation of responsibilities to the shop-floor, e.g. quality, maintenance; total quality management – continuous improvement in all areas, e.g. equipment, procedures, employee skills, throughput times, quality, supplier and customer relations; long-term strategic plans – three to five year plans and objectives translated into policies and operational plans; statistical process control; and an emphasis on constant product innovation. Each dimension was broken down into 25-30 sub-elements. Space precludes a detailed listing. However, unlike Schonberger's WCM definition, this articulation had a strong cost orientation and included ABC.
The consultants argued that new systems and structures were insufficient without new beliefs and attitudes about appropriate work behaviour:
To change the cultural agenda – now recognising that takes time. Hence, there's no quick fixes here. If you are going to buy into this, you must buy into a minimum of a 15 to 18 month process […] You're going to muck about with culture here because remember a lot of the people you are dealing with are the classic autocrats whose endemic style is, “I'm boss, do as you're bloody well told”, and what you were effectively selling them was a different way of managing the business.
Three consulting companies successfully bid for delivery of the programme organised by the TEC. A feature was its long-run nature (15 months) and insistence upon senior management being involved and then cascading the lessons back to their firms, utilising employee involvement and, if necessary, training in social and group skills (Jazayeri and Hopper, 1999). Forum21 evaluated the impact of the first WCM initiative as high in 13 companies, medium in 21, and low in 21 (Forum21, 1995) and NWTEC's internal evaluation judged it as successful.
In 1995 NWTEC and the 14 regional TECs launched a Phase 2 WCM initiative based on Forum21's (1997b, c) framework. Three consulting companies won tenders to implement it. About 28 companies enrolled and each was assigned a consultant experienced in their area to guide implementation. The results and main impacts of Phases 1 and 2 were similar (Table I). Forum21 (1997a) evaluated the 1997 programme impact as high in 28 per cent of firms, medium in 32 per cent and low in 39 per cent. The companies (Table I) ranked each impact: the first six mainly concerned changing how workers and managers performed. Although much of the programme was ensconced in cost management, only one impact assigned was a conventional management accounting one (no. 8 on cost of quality) though company visits revealed significant accounting changes were attributable to categories such as strategic. The results suggest the main impacts were upon managerial issues and changing employee attitudes rather than how physical items were manufactured.
Formulation in firms
I've read the book, I've seen the film, I've even met the Guru: but what do I actually do about it, starting on Monday morning? (NWTEC, 1996, Publicity Brochure).
NWTEC (1997) launched the Phase 3 WCM programmes, which was similar to previous ones. Our research examined why the seven firms studied entered this and its perceived effects. Their managers' reasons for implementing WCM ranged from attempts to cope with a difficult business situation through to an opportunity to try new techniques or fundamentally review strategies. All deemed WCM as at least a modest success but their formulation, implementation and attribution of its benefits deviated from expectations of the programme, Schonberger, and other WCM purveyors (Table II).
Hab confronted problems of growth and dependence upon four or five key customers. Its MD commented, “In '93 and '94 we were struggling on output, capacity, training people, technical knowledge … It [WCM] enabled a relatively small management team at the time, there were six, to try and pull us all together.” Introducing a conventional management accounting system was seen as WCM's primary benefit. The MD explained:
The key objective we were looking at was product costing […] As the business had grown we were completing individual orders as and when they came through but we weren't measuring our performance. So WCM was saying to us, “If you don't measure it how do you know how you are performing?” So certain key measurements were put in place: an analysis of our production output, the number of people we employed on the line, and the time it took. That information is still done today and is used as the basis for our product costings. We were preparing quotations for customers on the basis of gut feel, history, price of job, etc. without the aid of the back up of production information. That's changed now so we are actually doing job costing. Also we tended not to plan particularly far ahead […] Now we have additional management accounts, which we've always had in fairness, but now we relate those back to a production budget for each month, we relate them back to the number of people we want to employ each month […] We do monitor now literally yesterday's output […] the income that was generated […] every day and week […] which is related back to budget.
Thus, Hab developed a management accounting system geared to financial accountability that gathered production costs, improved production logistics, and reported customer and product profitability.
Others were pre-empting customer demands. Vyp became involved because of intense competitive pressures in an industry dominated by five major players. They believed survival depended on improved performance. The MD explained, “There's probably going to be some cause for consolidation within the industry so we went to make sure we were on the front edge rather than the back edge of that.” They embarked on the WCM programme to audit whether they were at the cutting edge of practice and, if not, how they could be. The major technique adopted, according to Vyp's MD, was ABC:
We got heavily involved in activity based costings. We then started to drive the understandings of margins product by product. So margin management has become a bigger issue than it was. We were selling more and more diverse products to more and more diverse customers.
Acting upon customer profitability by improved financial accountability measures was perceived as a major strategic re-orientation, though a modest amount of customer accountability through team building and improved production measures were introduced.In Pmel customer pressures for quality, improved service and cost reduction led managers towards WCM. Its MD stated:
We decided that sooner or later we would need to become a world class manufacturer because our customers would drive us that way and why not get into the process before pressure started.
Unlike Hab or Vyp, the Pmel Chief Executive had little desire for more accounting:
We don't have a data collection system that permits us to do a wide range of checking and costing, and actual costing versus standard […] I come from a background where […] one did a hell of a lot of tracking and a lot of people spent a lot of time maintaining the system and nobody took any notice at all, so that's made me very jaundiced.
Each job had an estimated cost and periodically a sample of job cards was checked to ascertain whether estimates and actuals coincided. Budgeting beyond one year was regarded as unrealistic due to unpredictable markets. Nevertheless, an annual budget was prepared as a “discipline” and to establish forward targets but with little expectation of its predictive accuracy. In Pmel, perceived benefits of WCM were a realisation of the need for major capital investment in machinery, and new performance measures for production flexibility, especially deliveries-on-time, inventory levels, quality, and set-up times. This was facilitated by introducing MRP for production control, which was attributable to WCM exposure. Throughout there was a desire to change employee attitudes through involvement and continuous cost reduction though this was perceived as difficult in a locality with a tradition of unionisation in heavy industries.
Other companies saw WCM as continuing previous reforms. British Vita entered in the wake of an incipient crisis despite manufacturing improvements started a few years previously. As in Hab, the MD saw it as a means of taking managerial stock:
I decided to go in for this WCM programme to take a long hard look at ourselves and to decide what we were good at, what we were not too good at, and what we needed to improve. Because we had put all the effort into reductions the other side wasn't working.
British Vita had already introduced MRP and quality systems. WCM extended the trend for a plethora of new physical measures extending beyond production to customer satisfaction indices, product innovations, and employee relations (Jazayeri and Hopper, 1999). A customer facing exercise was introduced to change employee attitudes. Service departments were reconstituted as producers of services to the line and made subject to measures of customer satisfaction. However, this was not easy in the face of employee and union resistance as a manager explained:
We're going to set up teams that will link in with continuous improvement […] waste reduction, productivity improvement, call it what you will – cost reduction is perhaps the best term […] We've put one or two teams in place before and they went down like a damp squib. I remember the consultants trying to get the unions involved in setting conditions, etc. They didn't want to be involved.
Resistance was reduced through a skilled and elaborate change process (Jazayeri and Hopper, 1999). Thus, in British Vita efforts to further introduce idealised customer accountability on the back of previously strong production accountability systems continued, albeit mitigated by prevailing employee attitudes and resistance.
Zep had also undergone considerable change: its markets had become global and they were no longer a manufacturing subsidiary but an independent company. Its managers perceived that the company had a strong manufacturing orientation (many manufacturing elements of WCM were already in place) but was weak in product development, strategy, and customer relations. WCM offered an opportunity to review its managerial activities and strategy. The chief executive explained:
It became obvious to me that we were going to have to shift the emphasis of the business. To become much more commercially driven rather than production process driven. The mentality had to shift. We had to get out of what all MBOs [management buy outs] go through – the great danger in the infant mortality period. We survived that by the skin of our teeth […] We had to become more creative in products and development. It was then that I guess we first became aware of the WCM scheme. It seemed clear to me that this was a good vehicle to broaden our understanding of what being in business was about […] It had all the essence of a good vehicle for learning as well as tackling some short-term problems.
Like British Vita, senior managers of Zep perceived the strategic switch from a manufacturing to a customer orientation, not least amongst senior managers, to be the major gain from WCM. This was achieved through product innovation programmes, strategic reviews of markets, and associated issues relating to service quality. For Zep elements of idealised customer accountability were introduced as part of WCM, though largely at senior management acting at strategic levels.
Ven had, in the opinion of its MD, already implemented much of WCM prior to joining the WCM programme. Indeed, he claimed to be influential in getting the programme established. He signed up to help get his company through recession “by keeping people focused on continuous improvement.” His company had experienced a period of diminishing profits, sales and financial reserves, increasingly severe competition, and growing customer demands. In the mid-1990s sales dropped from £5 million to less than £1 million and employees from 115 to 50 and the company had surplus capacity. Like Pmel, another jobbing engineering company, Ven placed little reliance upon conventional management accounting: the major consequences of WCM were, like Pmel, capital investments in machinery and new physical manufacturing performance measures coupled to an emphasis on continuous improvement by employees. Thus, Ven adapted WCM to maintain efforts towards greater idealised customer accountability.
Vol also saw WCM as a continuation of previous quality efforts, namely towards ISO 9000 and 9001, Investors in People Awards, and joint seminars with local MDs. The primary motivation was to maintain an improvement momentum. Its MD said, “The whole concept of world class was unknown to me […] We knew we could do better than we were doing in manufacturing.” Vol introduced a system of colour coding controls after flowcharting based on SPC systems. The flowcharts and cost tracing led to a major cost review of both products and customers aided by ABC. For Vyp WCM brought greater financial accountability through ABC.
The various effects attributed to WCM should be no surprise (Table II). Slippage and translation is to be expected as talk and documents from training seminars are taken by senior managers and enacted in each company with help from a consultant. WCM (and ABC – see Jones and Dugdale, 2002) proved to be a boundary object that was:
Plastic enough to adapt to local needs and the constraints of the several parties employing them, yet robust enough to maintain a common identity across sites […] They have different meanings in different social worlds but their structure is common enough to more than one world to make them recognizable, a means of translation. The creation and maintenance of boundary objects is a key process in developing and maintaining coherence across intersecting social worlds (Star and Griesemer, 1989, p. 393; emphasis added).
WCM was presented as interrelated techniques to convert companies into world class manufacturers but, as Miller and O'Leary note, in each site a constellation of actors, especially consultants and managers translated it according to their interests and programmes. WCM's plasticity helped enrol companies as it enabled managerial preoccupations to be recast in WCM terms. The companies perceived it as beneficial because it could be reshaped upon application to meet varied concerns about competitiveness.
Nevertheless, measurement issues reappear. If early formulators of WCM are to be believed, what is measured is significant, financial measurement is defective, and emphasis should lie on production and customer measures. Financial accountability is seen as a positive disadvantage – “[t]he direct goal of the firm is not to produce revenue or make money. It is to serve customers. Making money is derivative” (Schonberger, 1996, p. 231). The metrics of WCM contend that common, objective and measurable characteristics of world-class business performance are available and possible. Objective measurement is important to WCM's credibility because its change trajectories assume an objective diagnosis has been made. However, this can provide a representation of companies at odds with managers' perceptions and recognised financial forms of accountability. For example, the first WCM programme in the NW found 70 per cent of participating companies believed they were world class though the metrics only identified 4 per cent as so. Moreover, at least three of the companies studied created accounting systems as their new measurement systems following WCM. This paradox is partially explicable by Forum21's formulation that emphasised cost reduction, consistent with claims that UK regimes of accountability are accounting oriented (Ahrens, 1996), and organisations can effectively run financial accountability mechanisms alongside WCM techniques (Hansen and Mouritsen, 2007). Thus, WCM proved to be a moveable feast and its rhetoric of mutually exclusive forms of accountability more unpredictable and mixed than anticipated.
Like Miller and O'Leary's research this project did not interview workers at each company, a point taken up by critics (Arnold, 1998; Armstrong, 2006). However, from managers' comments it was evident that techniques introduced under WCM's banner hit employee resistance. WCM programme designers recognised that WCM required “cultural changes”, as one recounted:
OK, there is a cultural dimension to it but it was about management and how you manage the business. At the heart of the Japanese approach to management and business was a different view of people. In the British context it was very much divided we stand, divided we fall. We are right and you are wrong: shut up and do what you are told […] We spent a lot of time trying to define that cultural attitude in terms of attitudes to be eliminated and attitudes to be cultivated.
Many managers adopting WCM believed that the secret of getting good results lay in organisation, housekeeping, attitude, teamwork, and performance measurements but the need to change the “Them and Us” culture and accommodate WCM to this was a recurring theme. For example, Vyp recognised the need for, “A change of culture. It's getting people involved with the business performance and their part to play in that – taking on more responsibility.” Nevertheless, Vyp had only devolved responsibility for quality issues to the line. Pmel's MD explained how:
It's impossible to achieve world class without everybody being on board. You need continuous improvement for a start. Well that involves everybody […] [Our workforce] come from a background where it was very much an “Us and Them” situation out on the shop floor and very confrontational […] We tried to lead them away from that.
Idealised customer accountability may try to create governable employees, newly empowered and now managers, who will do with “heart and head” what is best for the customer and, by implication, for the company but this study found it difficult to establish how far workers did “invest personality” (Lash and Urry, 1994, p. 56), mainly because the smallness of the companies inhibited employees to speak openly. However, it was evident from managers' comments that workers only partially accepted managerial rhetoric promulgating mutual responsibility (Kunda, 1991). Companies struggled to dispense with (or drastically reduce) management and worker distinctions due to employee scepticism. Indeed, several reported that major resisters were managers not workers. WCM assumes that these relationships can be reconstituted and sustained in capitalist relations where market pressures create job insecurity, and goals of senior management and workers may be incongruent but this often proved difficult. Moreover, expectations that focussing on the customer will produce financial success were not always evident. For example, Ven opened its books to large customers as part of its new customer relations only to find that it brought further pressure for continuous price reductions.
Lastly, it was not clear whether the stress of continual change could be accepted – as Pmel's production manager commented: “I don't feel you can take the WCM programme as a whole and bottom everything, along with making a living … I think we would end up in straight jackets because you just can't handle it.” WCM constructs a measurable state of world class performance against which progress can be monitored but which always recedes as world class performance criteria change and are re-evaluated – a feature central of modernity where reflexivity increases (Beck, 1992; Giddens, 1990, 1991; Lash and Urry, 1994). Being modern entails constant movement with the impossibility of gratification as “the finishing line of effort and the moment of restful self-congratulation move faster than the fastest of runners” (Bauman, 2000, p. 28). Idealised customer accountability processes exemplify how an expert system like WCM can disembody social relations in one location, moving them across time and space, and re-embed them elsewhere (Giddens, 1990). Organisations following WCM are left recognising that constant change is desirable and necessary but whether their employees can endure this is questionable.
Competitiveness, states and measurement
WCM (Schonberger, 1982) was advocated under the flag of reviving national competitiveness, especially debates centred on “Japanisation” (Oliver and Wilkinson, 1988, 1992; Elger and Smith, 1994a) urging US and European industry to adopt lean production (Womack et al., 1990)
But what is competitiveness? Like WCM and ABC the concept has critics. Krugman (1994) argues that “competitiveness is a meaningless word when applied to national economies. And the obsession with competitiveness is both wrong and dangerous.” Competitiveness of a nation (rather than a firm) has no agreed meaning in economic theory (Thompson, 2004; Wren, 2001). Corden (1994) disagrees and claims three different national competitiveness measures are in common usage: sectoral competitiveness; relative cost competitiveness (the real exchange rate); and productivity. However, competitiveness studies are selective and variable, for example Eltis and Higham (1995) argue that UK White Papers on Competitiveness based on methods from Porter (1980) and the US Competitiveness Policy Council (1993) use only Corden's third definition.
Our investigations of UK competitiveness policy supported such criticisms. The meaning, measurement, and operation of competitiveness changed from an action at a distance financial approach to a factor-based production approach, and then a processual, customer-based menu-driven approach akin to WCM. The concern with competitiveness provokes important questions. How can it be made visible – what metrics identify the characteristics of competitiveness at a national or a company level? And how can the competitiveness of the nation state and companies be improved? The nation state and companies cannot be disentangled as a competitive state requires competitive companies and thus competitiveness measures.
State financial accountability
Miller (1990) and Miller and O'Leary (1990a) analyse linkages between accounting and the state in relation to governance mechanisms derived from “political rationalities”, i.e. programmes that establish the objects and objectives of government, and its technologies of calculations, procedures and mechanisms. Relations between each “loosely assembled sets of practices” are reciprocal. However, Miller and O'Leary do not fully illustrate or articulate how these occur. This paper argues that the growing problematisation of the state as an economic “manager” coupled to new technologies of calculation has produced forms of state accounting that link national concerns to sites of production, i.e. a “crypto” “state management accounting”. Drawing from our interpretation of Miller and O'Leary's work and our empirics we identify three forms of state accountability: state financial, state production, and state idealised customer that parallel the typology of firm accountability outlined previously. They are not mutually exclusive, exhaustive or stable but they give insight into links between accounting, politics and the state. Furthermore, we illustrate inter-relations between accounting at the firm and state levels and how calculation regimes like ABC, WCM, and competitiveness are boundary objects. Their malleability and possible multiple translations enabled shifting networks and alliances of actors in accounting complexes – including politicians, civil servants, trade unions, employer federations, consultants, and business-led agencies – to forge new but mutually acceptable measurement and accountability technologies for government consistent with prevailing programmatic discourses.
“Political arithmetic” seeking to measure national production goes back to the 1660s (Miller, 1986) when it was believed that monarchs should not merely extract from subjects but renew or even increase such wealth. Standard costing emerged in a US political discourse of national growth and progress (Miller and O'Leary, 1987) but no state accounting technology to measure national production was advocated, probably because nothing suitable had been developed
State production accountability
In the late 1980s, a DTI (1989) commissioned report by PA Consulting concluded that UK manufacturers must become “world class” to meet increasing global competition in five areas: introducing new products; better manufacturing processes; integrating logistics with suppliers and customers; better organisation of people; and integrated information systems. This was influenced by economists' calls for a competitiveness policy based on productivity differences between nations (Eltis and Higham, 1995) with greater state micro-economic intervention. An important influence was “growth accounting” (Denison, 1967; Maddison, 1991) that attributes output increases to the growth of factors of production (physical capital and labour), their quality (i.e. labour skills), and their efficient combination. A key finding was that their quality significantly influenced growth – a substantial proportion being attributable to “technical change” (Eltis and Higham, 1995). Thus, state officials, like their business counterparts, developed indicators to determine where detailed interventions might be useful. In 1992, the DTI established the Industrial Competitiveness Unit (Hansard, 1993). Its statistics (e.g. manufacturing productivity; value added per hour worked; business investment as a GDP percentage) demonstrated how the UK's performance lagged behind other economies, particularly the USA, Japan, Germany and France. Academics working with consultancy companies reinforced this. Professor Voss from London Business School and IBM Consulting told the DTI Select Committee on the Competitiveness of UK Manufacturing Industry that their measures were “very objective, very numerical” and represented company performance irrespective of current trading conditions (Hansard, 1993, p. 238). According to a government source:
The intellectual streams informing early competitiveness programmes were: “a) the factor based approach, you try and identify whatever it is – the ten, twelve lead factors which you think are going to promote business, and then b) you benchmark how the UK is doing against the international competition in those areas”.
UK competitiveness concerns became reformulated as a search for appropriate metrics using a factor approach and benchmarking, which led to a plethora of models developed by interested bodies (e.g. Probe, European Quality Model, CBI's Best Practice Model). We label the factor approach as state production accounting.State idealised customer accountability
However, the factor approach hit problems. A government spokesman commented:
The idea was to go into a company and take an overview of everything it is doing. [But] you ended up with rather large, telephone-sized volumes, which the question mark is, “Whether anyone reads them?” I think one can be fairly convinced that no business people ever read them. This was not a particularly customer focused communication at all.
Hence the DTI switched to a menu driven approach using models generated or sought by businessmen themselves, which reflected the Thatcher Government's desire to play a facilitative not a directive role, with public services seeing businesses as customers (Flynn, 1997). In addition it got the DTI off the hook of defining a single model for competitive companies. Now the DTI let “… the market itself choose what is most successful”, partly through local TECs and subsequently Business Links. This had advantages, as a DTI spokesman commented:
[…] [local companies] can't say, “It's a load of public money being wasted by those stupid bureaucrats” or if it does say that we [DTI] simply say back to it, “Well why don't you do something about it?”
Thus, state management accounting focussed on state idealised customer accounting using benchmarked metrics. However, the key lay in developing “leadership” and “managers with vision and commitment to improving practice rather than just commitment to improving financial performance” (Voss and Blackmon, 1996). The CBI (1997) had identified the importance of changing individuals rather than organisational factors, stating that winning companies:
[…] are led by visionary, enthusiastic champions of change, unlock the potential of their people; know their customers; are continually striving for operational excellence and total quality; are constantly introducing new products and services; know that benchmarking is a never ending task never assuming that they have “got there”.
The labour government entered power in late 1997 and shared the CBI's preoccupations of, inter alia, promoting entrepreneurial behaviour and “individual skills and creativity, which help to create high productivity business processes and high value goods and services” and “encouraging people to collaborate to compete” (DTI, 1998). They pledged itself to supply-side initiatives to encourage entrepreneurship and innovation amongst employees commenting that “In the UK, entrepreneurs are still too often regarded as mavericks” (DTI, 1998). Competitiveness policy extended to changing employee cultures, state support schemes, and improving employees' skills, creativity, collaboration, knowledge, and entrepreneurship, in the name of continuous improvement for “the knowledge economy” (Government spokesman). The 1998 Competitiveness White Paper emphasised benchmarking as a continuous process extending into other areas of national life
The direction we come at these issues of best practice is really from the purpose of continuous improvement rather than you must reach a standard […] That's one of the reasons why we are not terribly exercised about the fact that there is more than one model.
Thus, under the rubric of competitiveness, the DTI extended their aims, inter alia, beyond promoting best business practices into inculcating business attitudes and skills within educational institutions. State idealised customer accounting helped redefine the DTI as playing a supply side role, serving customer needs, and re-skilling workers as internationally benchmarked knowledge producers. Notions of becoming world class entered the lexicon of state activities and stimulated calculative technologies and change programmes that extended beyond practices in firms to reconstituting attitudes of subjects, not least in education spheres.
WCM and competitiveness: the constellation of agencies
So, how did WCM appear in some SMEs in NW England? To address this requires linking problematisations, e.g. of competitiveness and being world class, and their calculation and accountability technologies, to consultants, state agencies, and firms within the “accounting constellation”. First, there was an approach, WCM, formulated by Hayes and Wheelwright, appropriated by Schonberger in the mid-1980s articulating a set of practices in books, workshops and consultancy (Hayes and Wheelwright, 1984; Schonberger, 1982, 1986, 1996). This ran parallel to competitiveness approaches of economists popularised by management writers like Porter working at interfaces of academia, consulting, and policy. Second, there was the UK Government's growing concern about competitiveness and the DTI's search for a role in a political climate where markets were axiomatic. However, the laisser faire ideology of the Thatcher administration waned after her downfall. Hence, debates on the DTI being an unwarranted intervention into business affairs and requiring abolition waned and some ministers sought interventions to make UK companies internationally competitive. However, the meaning, measurement, and policy implications of competitiveness, like WCM, proved problematic and variable. Third, companies beset with current or incipient financial crises were ripe for and often sought external solutions, of which WCM seemed one. Fourth, agencies newly formed by the government, like TECs, sought to justify their existence and secure funding, especially from state organs like the DTI, by assisting companies to such ends. Finally, consultants were formulating new approaches to sell to clients, be they national government, regional agencies, or companies. How discourses and technologies of WCM and competitiveness developed, and their enactment are described earlier. This section examines how such programmes were interconnected to a constellation of agencies, especially the DTI, TECs, and consultants.
Competitiveness did not become a key policy theme in the UK until the 1990s (Eltis and Higham, 1995). Michael Heseltine, a prominent Conservative politician instrumental in Thatcher's downfall, joined John Major's Conservative government and in 1992 became Secretary of State for Trade and Industry (or President of the Board of Trade as he preferred). He is credited with starting the DTI's competitiveness initiatives. His zeal (and scepticism of laisser faire industrial policies) was crucial as a government source commented:
The interesting thing about Heseltine is that he had a very synoptic view. In fact he used to use the analogy of an organ requiring a thousand different stops to be deployed in order to achieve competitiveness. His general view, in contrast to some of his Conservative predecessors, was that in order for British business to improve their performance, Government had to play its role and the Government was seriously implicated, if not the active partner, in many of the dimensions of competitiveness […] The trick that he pulled was to say, “let's write a paper setting out and substantiating that argument”. In essence that really kills off the questions that have been asked at the beginning of the 80's about what the DTI is for. He said […] “It's obvious we're there to ensure that what the rest of the Government does helps British business grow rather than hinders. It's none of this business of government to just stand back and assume markets will do it by magic all on their own” […] He had this famous slogan that, “I want to intervene before breakfast” (emphasis added).
The advent of a labour government in 1997 brought little change. They entered power enthusiastically endorsing competitiveness initiatives. UK Governments published four White Papers on competitiveness (DTI, 1994, 1995b, 1996, 1998) followed by a commissioned DTI report on competitiveness by Professor Michael Porter of Harvard Business School (Porter and Ketels, 2003).
Heseltine's thrust to find a role for the DTI found intellectual allies, as described previously, though it was not invariably welcomed by other government departments, not least the Treasury which remained protective of its state financial accountability role. However, the declining power and “hollowing out” of the nation state within a global economy weakened the scope for central intervention (Jessop, 1992) and reinforced arguments from consultant-academics for a greater supply-side state role with micro-economic interventions.
In 1990 the government had created 72 TECs as independent, not-for-profit, companies controlled by a board of directors – two thirds from prominent local business persons. NWTEC was the regional co-ordinating body for 14 local TECs, covering specific geographical areas. TECs contracted primarily with the departments of education and employment, environment, and the DTI to provide training, work experience, and related programmes, previously offered by national and local government departments and colleges, to create employable workers and, to some extent, create jobs for them. Funding agreements with the government detailed their annual operations (Flynn, 1997). In 1995 TECs received £1.5 billion of public money. In practice, despite being private companies, TECs were public sector “quangos”, highly dependent upon government funding through contracts. Flynn (1997, p. 81) argues that:
This mode of control, from Ministry to TEC […] to private and incorporated providers is an ideal type of how the Conservative governments have preferred to operate: appoint people you can trust (preferably from business) who are accountable to you and establish funding and control mechanisms which enable you to determine what they do.
WCM's origins within TECs were highly contingent. McMahon's consulting company, Denplan Associates, was instrumental in initiating the WCM “agenda” in the NW and elsewhere in the UK (interview, NWTEC). McMahon and colleagues undertook a research project in 1991-1992, “Best practice in business development”, 50 per cent funded by David Sainsbury through the Gatsby Foundation with three TECs (S. and E. Cheshire, Bradford, and S. Derbyshire) matching this funding:
It was a large pot of money put on the table to undertake a major research project that looked at UK and international best practices […] The objective was very simple. It was, from Sainsbury's perspective, “Can these fledgling organisations known as TECs do anything to help redress the ever diminishing level of British produce on our supermarket shelves?” Simple as that (Consultant).
The real clients were however TECs seeking to demonstrate to companies and the DTI by demonstrating that TECs offered a service capability that they lacked and gain contracts to develop portfolios of programmes. TECs had to survive by bidding for national funds, so their antennae to DTI beliefs and changing roles were well attuned
The NW WCM steering party chairman (and chief executive of a large local TEC) recollected how a survey of Lancashire SMEs in “early 1993” had shown that manufacturing “had been hammered” and the:
[…] biggest barrier to being competitive was the ignorance of SMEs in terms of their need to be competitive. “Why do I have to be competing in a global economy? I don't actually export.” You know the kind of stuff, it was unbelievable. And seventy per cent of the companies interviewed nationally felt they were already world class. The review of processes and culture within those companies showed that four per cent were, seventy per cent thought they were. I thought, “Well, there's a real job for a TEC” … And we embarked upon trying to draw together a programme with the help of John McMahon (emphasis added).
The DTI's “Managing in the ‘90s’ programme promoted the adoption of best practice by SMEs, so the TECs and their consultants knew this mirrored DTI concerns but no-one had developed ‘nuts and bolts’ specifications of what to do operationally, especially in SMEs.”
The WCM programme did not directly stem from a central government directive or funding but it bolstered the TECs' attempts to secure funding and responsibilities for training in SMEs. Its launch coincided with the first Competitiveness White Paper in 1994 and, according to a consultant, secured an invitation to be involved with DTI programmes:
So a lot of the thinking that had come out of Gatsby built into the DTI sort of work through our involvement with the internal Steering Groups that were set up to develop Competitiveness White Paper 2 [CWP]. The key to CWP2 was the DTI putting on the table £100 million to fund service development in business development […] The WCM initiative was one of the initiatives cited in CWP2 as best practice.
WCM gave an entrée for consultants and TECs to frame aspects of competitiveness policy using WCM precepts, which helped TECs gain matching funding. Following the DTI putting out £100 million for training to tender in 1995 NWTEC and the 14 regional TECs launched Phase 2 of the WCM programme. This gave TECs a distinctive role providing new business knowledge to companies, provided the consultants with more work, and gave both DTI endorsement of their WCM programmes.
The DTI's adoption of a factor approach to competitiveness and the government's adoption of regionalism shaped criteria for funding initiatives involving TECs. DTI Challenge Funding for “local regeneration and development” was released to local government offices, regional TECs, chambers of commerce and local authorities, “to improve the competitiveness of their areas” (DTI, 1996, p. 2). Local schemes like WCM programmes now mirrored DTI pre-occupations. Policy makers within state bodies and their satellites increasingly believed that the better UK SMEs, despite their weak international competitiveness, had major potential for increased economic activity and jobs. The DTI established the Business Link Movement in 1996 bringing together TECs, Chambers of Commerce, Enterprise Agencies, local authorities, government, and other support service providers to businesses to “help businesses compete, develop and grow in an increasingly competitive marketplace” through private sector-led partnerships locally and regionally (Business Link, 2000). Business Link programmes were normally devised and delivered through contracts with TECs. In 1997, NWTEC won funds from a DTI Local Competitiveness Challenge grant and European Regional Development funds for the Phase 3 of WCM programmes in NW England targeted at SMEs classed as “innovators” (NWTEC, 1997). The Business Link Network Company approach reflected the change to a menu-driven approach. Its Business Focus scheme based on WCM precepts developed within TEC programmes enabled businesses to exchange good practice through the “Good Ideas” area of its Intranet site and its “Good Practice Database” (Business Link, 2000). All were extensively promoted in the 1998 Competitiveness White paper with links from DTI web pages. The Business Focus scheme offers three support schemes that companies can use online “individually or as part of an integrated improvement process” – Connect for Better Business; the UK Benchmarking Index and; Inside UK Enterprise
This search for “origins” of WCM not surprisingly proved more complex than anticipated. We do not claim to have fully unravelled all significant actors in the constellation, their interactions, and their effects but nevertheless we identified a complex and constantly changing nexus of relationships between discourses about knowledge, groups of actors, and technologies for governance from the firm to state level. Throughout, communities of consultants and academics lubricated and shaped ensembles of understandings and possibilities of action. However, social agency was dispersed, variable, and technologies were constantly mediated through translations. It was impossible to assign causation at any single point in time or space to any particular actor though clearly some were more powerful than others. This caused us to reflect on how ideas circulate.
Circulation of ideas
Miller and O'Leary's “politics of the product” elucidates how new ensembles of understanding and measuring products and people creates business knowledge, fresh representations of organisations, recipes for managerial action, and new accounts of institutions and actors within new relationships (Latour, 1987). However, a lacunae remains on how ideas and practices gain prominence in companies and national discourse. How ideas are formulated, how they travel and their significance for problematisations and enactment of accounting representations require greater clarity.
New business knowledge diffusion in late capitalist societies has been explicated as management fads or fashions (Abrahamson, 1996); cultural phenomenon of soft capitalism (Thrift, 1997); a travel of ideas (Czarniawska and Joerges, 1996); and the capacity of companies “to absorb new ideas and turn them in action” (DTI, 2003, p. 14). This involves diverse institutions – universities, management consultants, management “gurus”; companies, and public bodies acting at different times and spaces as information gatherers, knowledge producers; distributors of knowledge; and audiences (Thrift, 1999). The issue often turns on representation, whereby ideas are promulgated as vital new ways for understanding and intervening in companies, whilst problematising and discrediting existing management ideas and practices.
Gibbons et al. (1994) argue that business knowledge circulation follows a “mode 2” knowledge regime, whereby traditional subject discipline contributions from universities are being replaced or attenuated by networks that lack central authority; consist of multiple heterogeneous producers, distributors and audiences; are loosely structured; span disciplines and public and private sectors; and spawn new knowledge which rapidly circulates and transforms organisations. Some attribute this to management fashions, for example, Scarbrough and Swan (2001) regarding intellectual capital accounting in the UK. Abrahamson argues that management fashions are collective beliefs that new techniques will enhance rational management progress and represent instances in business knowledge evolution and/or management fads (Abrahamson, 1996). He argues these are “deadly serious matters” for academia, for its societal funding will be questioned it forfeits its status as a producer of business knowledge.
However, Czarniawska and Joerges (1996, p. 35) argue that managerial fashions represent paradoxes such as creation and imitation; novelty and conservatism; change and status quo that help change organisations and introduce order and uniformity into situations with multiple possibilities. Ideas stem from local knowledge in specific contexts which upon enactment form quasi objects which can travel, say as a book or a design. Occasionally fashions survive and become institutions, i.e. black boxed representations of ideas translated in actions. Fincham and Roslender (2003) also emphasise local contingent factors and the influence of sponsors when new abstract management ideas are mediated by operational constraints in companies. They claim that less institutionalised management ideas provide greater interpretative space and flexibility, and hence are adopted. But what of management consultants and academics who flourish on the creation and attribution of new ideas?
Thrift (1997) identifies a self-organising “cultural circuit of capitalism” (Figure 1) that constantly produces and distributes new managerial knowledge primarily from business schools and management gurus acting on information garnered from firms, research, market researchers, the media, and management consultancy and purveys it to managers in private (and public) organisations who read books, undertake academic managerial education, engage consultants, attend management seminars, and follow television and other media. However, audiences are not passive – they demand performance and crave the paradox of novelty and conservatism (Jones and Dugdale, 2002) – nor are they heterogeneous: consultants seek novel ideas to circulate; academia act and react to their propagation, and institutions like the state and firms position themselves accordingly. Moreover, audiences diminish distinctions between phases by recasting knowledge when financing initiatives.
Business knowledge circulation was integral to changing concepts of national competitiveness and accountabilities. Blockages can occur at any point – innovation may not take place, or not be mobile or distributed, or not taken up by companies. UK Government studies (DTI, 2003; Porter and Ketels, 2003) and some researchers denote these as problems and offer solutions. Leseure et al. (2004, p. 187), for example, identifies an “administration innovation adoption gap” in the UK but are unsure why this is so. They call for further research (Leseure et al., 2004, p. 176) on each stage of their generic model of administrative innovation adoptions (Figure 2) and how institutional push (seen as negative) and company needs (a success sign) interact. However, their focus on companies as adopters of business knowledge ignores how practices circulate and companies' needs are shaped and articulated using vocabularies from circulating business knowledge.
WCM, ABC, and competitiveness were formulated in multiple and changing ways by different people despite their names remaining constant. They were quasi-objects delineated in an actor network of management consultants, companies, academics, and public bodies seeking new roles (Callon and Latour, 1981; Latour, 1987). Initially such representations may be passive, being intermediaries that link actors but not recognised as actors in their own right. However, upon becoming active they constitute programmes within four phases of translation (Callon, 1987): problematization, interessement, enrolment, and mobilisation. As they circulate, decay and change, actors reformulate themselves accordingly. New actors, important but often unappreciated, bring links to other networks, for example see Robson (1991) on action at a distance accounting.
The name WCM presumes that techniques with universal applicability exist and can circulate. Early formulations (Hayes and Wheelwright, 1984; Schonberger, 1982, 1986) stressed that Japanese manufacturing was superior and not rooted in Japanese social practices or macro economic differences (Froud et al., 1998), i.e. WCM is a universal bounded set of knowledge encapsulating techniques and principles made self evident by creating “facts” (Latour, 1987) showing how new techniques are superior to financial measurement. This ignores the particularity of Japanese manufacture (Williams et al., 1994) and the techniques' inherent plasticity. As Giddens (1990, 1991) and Jones and Dugdale (2002) argue, expert systems like WCM disembody knowledge from its social context, only to re-embed it elsewhere. Thus, the system conserves what was disembedded whilst being portable in time or space consistent with Schonberger's dictum mentioned earlier, “[m]anagement technology is a highly transportable commodity”. But, an expert system comprises of its formulation and facilitators of its transmission. Flying from Japan to Europe requires aircraft but also needs airlines, airports, air traffic control. Similarly, a signifier like WCM may represent an expert functional “technology” but agencies necessary for its passage and formulation and making it a discrete replicable “commodity” with market value remain unattended.
Consultants like Schonberger, consulting companies such as Forum21, and academics like Hayes and Wheelwright are central to knowledge movement for pecuniary gain but their role is occluded through language and representation occluding the messiness of what it represents. WCM's movement was more complex than cultural circuits of capital or management fashion explanations suggest for they ignore how new business knowledge gains prominence in companies by engaging other agencies including the state, and allied technologies like ABC.
Moreover, like purveyors of WCM and competitiveness, they neglect how such systems and associated knowledge are enacted, mediated, and thereby rendered unstable, as Schonberger's and others' constant reformulations of WCM bear testament. This could imply that firms fail to embed techniques correctly (Leseure et al., 2004) but we argue that this ignores (necessary) processes of displacement and cultural or contextual features supporting new management practices being embedded in organisations (Fincham and Roslender, 2004). Our research casts doubt on the notion of expert systems and durable management knowledge. Global claims of WCM occur in local social relations. For example, John McMahon convinced NWTEC that NW companies needed WCM following their Best Practice research project. Formulating and circulating knowledge like WCM requires simplification and minimisation of its relational aspects. For instance, agencies championing competitiveness, like the DTI, saw WCM was one of several competing business models: WCM advocates had to form relations with other agencies and constantly re-define WCM to incorporate potential allies' predilections – hence WCM had multiple and changing formulations. An understanding of management knowledge circulation must embrace how it changes as it forges new institutional relationships and not just focus on companies as sites of application.
The terrain of the “politics of the product” (Miller and O'Leary, 1993, 1994) reads differently here. World class companies were seen as key by TECs, the DTI, and consultants alike but how to become world class is treated differently. The DTI became agnostic about any management approach – their concern was how many companies enrolled on programmes of change – the market would ascertain their value. NWTEC, following a survey, recognized that companies in their region were not world class and backed WCM programmes to remedy this and thereby gain recognition from the DTI and local businessmen. Within companies WCM was a means to understand themselves, for one, “to become more commercially driven”, for another “to take a long hard look at ourselves”. Consultants were more concerned with gaining business by enhancing company performance or survival through cost reduction, adding customer value and, like managers, changing cultures – not a national need for economic renewal, though they were mindful of the advantages of linking this to DTI and TEC concerns.
Miller and O'Leary (1993) use problematization, programme and technologies to trace implications of the “politics of the product” upon accounting. This study also found this triptych but not one tightly bound together. Measurement and cultural change were prominent as WCM provided tools and a vocabulary to assist self audit (Power, 1997) but economic citizenship was played out differently. Problematization varied: for the DTI it was a measured gap in UK competitiveness; a lack of a clear role for NWTEC; a need to formulate management knowledge (Forum21); trying to do better (Hab; Vol). For all, WCM was a central or partial solution or programme but it did not make social relations durable (Latour, 1988), possibly because it was an inchoate grouping of practices. To label it a technology does injustice to those who labour to make technologies stable. However, WCM was presented to look stable: Schonberger expends considerable effort in books to do so but this denies a fundamental ontological issue – technologies, whether accounting or WCM, must be performed, whence they change. Representation and measurement were features of WCM and, to our surprise several companies claimed its major outcomes were accounting systems. Positing a cleavage between production and accounting measures or the demise of accounting, a la WCM problematizations, was not borne out. For Richard Schonberger this may be a shock but financial systems (including “advanced accounting measures” like ABC (as in Vol, Zep and Pmel)) often predominate in UK companies (Ahrens, 1996). Accounting (and WCM) and their technologies were sufficiently malleable for consultants and companies to gradually elide early formulations of WCM to incorporate accounting. But what about new formulations of accountability advanced earlier?
Giving accounts takes multiple forms and people must know which to provide in different circumstances to gain membership of networks (Munro, 1996). Mobilising and circulating WCM enabled actors to redefine themselves and WCM, in turn, entered debates about competitiveness (e.g. Hayes and Wheelwright's, Restoring Our Competitive Edge: Competing through Manufacturing). WCM, as articulated by Schonberger and Forum21 (1997c), depicted financial accountability as the problem not the solution. However, companies used the new vocabulary and set of techniques to reformulate WCM in self reflection and praxis and on occasion incorporated financial and production accountability and their measures, and even aspirations for idealised customer accountability, as Miller and O'Leary (1993) recognise. Schonberger's and Forum21's solutions appear democratic – managers and workers alike should work with heart and mind without the necessity of rules but this obviates differences between hierarchical and socialising forms of accountability (Roberts, 1991) by making them complementary in rhetoric of continuous improvement. But we could not gaze into the souls of men and women to judge whether this reflexive gaze, where subjects engage “whole heartedly”, self reflect, and be called to account was internalised, instead we had to look for effects. In companies like Pmel and British Vita resistance and unionisation were seen as anachronistic and divisive hindrances thwarting hopes of idealised customer accountability, whereas in others like Ven and Vol, employee commitment was taken for granted and management derived new measurement systems to direct commitment (and idealise accountability) from WCM. Thus, agency was manifested throughout the circulation of quasi objects.
This had diverse, unpredictable and oft ephemeral outcomes later. The DTI (now the Department for Business, Enterprise and Regulatory Reform) lost its prime role as the harbinger of competitiveness except for science research and skills development. Responsibility for business development was transferred to Regional Development Agencies (RDAs). TECs were abolished in 2001: their business development work was transferred to RDAs along with agencies including Business Links. But traces of WCM programmes remain. Anecdotal reports from some firms suggest that though WCM is a distant memory as they have turned to new managerial programmes its effects linger and no doubt influence subsequent developments. The consultants, Forum21, continue to prosper and supply services bringing “best practice” to firms and governments worldwide.
Conclusion
We return to the central issues raised at the commencement. The first concerned the “messianic fervour” of proponents of WCM and our use of Miller and O'Leary's work for guidance. Miller and O'Leary insist that understanding power-knowledge relations and control requires studying mundane, everyday controls within organisations and vice versa, to identify how managerial and accounting knowledge and expertise claims emerge, change, and gain legitimacy. We concur, and their triptych of problematization, programmes, and technologies captured how technologies of competitiveness and WCM were inter-linked. However, Miller and O'Leary's triptych was only loosely connected: problematization varied across settings – local, governmental, and intermediary organisations formed their own problematisations and accountabilities that shaped and constrained the activities of each; actors used unstable quasi-objects to reflect and redefine themselves; and both allegedly new superior technologies and accounting were sufficiently malleable to incorporate accountabilities claimed to be mutually exclusive by “experts”. Miller and O'Leary concentrate on the articulation of problematizations and programmes but neglect the processes creating them, and focus on the nation state and national political discourses. This can inadvertently neglect the role of firms and institutions like TECs, portray the state as static and unitary, and as Munro and Hatherley (1993) argue, confuse managerialist literature with processual substance, reproduce problematic informal/formal dichotomies, and mask actual occurrences such as constraints posed by workforce attitudes. In contrast, our research traces networks of actors and actants and their reciprocal relations from the state to firm levels.
The second and third of our initial questions concerned the meaning, conceptualisation and measurement of WCM and competitiveness. Drawing from Miller and O'Leary's work, we identified apparently competing, perhaps progressive forms of accountability within firms and the state ranging from financial through production to idealised customer. In so doing we identify a neglected area, namely “state management accounting” whereby state organs involved with macro-economic governance represent, measure, and influence micro activities within firms and reproduce forms of accountability that parallel modes within firms. Miller and O'Leary recognise that serendipity and translations permeate application of managerial programmes but they do not fully explore this. Consequently, technologies and programmes associated with WCM and competitiveness are attributed greater consistency in meaning, definition and application than justified. Translations of programmes into tangible measures and technologies were ongoing, often unstable, and inconsistent within and across sites. As the consultant involved in formulating the WCM programme commented: “There was no sort of definition of what world class was, any more than there is now. It meant as many things to as many people that cared to think about it”. Mediation between interested parties with divergent and changing goals produced unintended consequences (Vaivio, 1999), for example new accounting systems being perceived as major benefits of WCM. Competitiveness, WCM, and accounting systems like ABC transpired to be malleable “quasi-objects”.
Our final concern lay in the origins of managerial knowledge. Managerial ideas travel because they are quasi objects – their on-going redefinition is part and parcel of each episode in their travels. For example, just as the balanced score card embraces non-accounting measurements (Kaplan and Norton, 1993), WCM was amenable to incorporating production and financial measures and accountability. To explain why, how, and what are new management techniques one must go beyond boundaries of firms. Business knowledge circulation draws on appropriations and reformulations both within the organisation and through the interaction of external agencies (Leseure et al., 2004). Treating management knowledge as a “highly transportable commodity”, as Schonberger and the DTI would have us believe, ignores a continuing process of reformulation. At every juncture, world class techniques had to be linked with other issues to appear relevant and ensure subsequent movement: DTI programmes to enhance national competitiveness became reciprocally linked, in part, to TEC WCM programmes and techniques; the consulting company incorporated financial measurement systems to make WCM acceptable to a UK audience; and within firms WCM was linked to and helped redefine existing problems. These continuing processes of redefinition cast doubt on the efficacy of adopting new management knowledge to change company behaviour and develop national competitiveness, and question work seeking to identify and eliminate blockages in its circulation (Leseure et al., 2004). For accounting, it shows surprising scope for re-defining apparently hostile representations of its role in manufacturing. Nonetheless, the common assumption that managers can construct a measurable model of a company and a measurable path towards world-class performance exists and can be followed remains. We take issue with this. The circulation of management knowledge must be located in a complex and changing network of actors and technologies incorporating “gurus” of global management, political discourses and state organs, intermediaries such as consultants and training agencies, and companies' aspirations and operations, and incorporate continual reformulation during translation as protagonists advance (and shape) their interests.
Figure 1The cultural circuit of capitalism
Figure 2Model of the adoption process of administrative innovations
Table IRanking impact areas of the first and second WCM initiatives
Table IIMain outcomes of WCM in researched companies
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Further Reading
Kieser, A. (1997), "Rhetoric and myth in management fashion", Organisation, Vol. 4 pp.49-74.
Latour, B. (1991), "Drawing things together", in Lynch, M., Woolgar, S. (Eds),Representation in Scientific Practice, MIT Press, Cambridge, MA, pp.19-68.
Latour, B. (1999), Pandora's Hope: Essays on the Reality of Science Studies, Harvard University Press, London, .
Oliver, N. (1998), Rational Choice or Leap of Faith? The Creation and Defence of a Management Orthodoxy, Judge Institute, University of Cambridge, Cambridge, mimeo, .
Schonberger, R. (2001), Let's Fix It! Overcoming the Crisis in Manufacturing: How the World's Leading Manufacturers were Seduced by Prosperity and Lost Their Way, The Free Press, New York, NY, .
Appendix. The research sites
Interviews were conducted during on-site visits with 6 NW SMEs who had implemented the WCM programme. In addition the researchers had previously conducted an in depth case study of WCM in a subsidiary of British Vita.
British Vita is a medium-sized British Company based in Manchester. It has 9,500 employees and sales in 1997 of £875.6m. It is a chemical manufacturer of polymers and foams to international markets. Company A, the research site, manufactured coated fabrics, adhesives, closed cell foam products and chemical resistant elastomers. It had 130 employees and sales of £355,000 per week. The management became enthusiastic adopters of the WCM precepts in all regards except ABC.
Hab
[11]
bottles miniatures and novelty products in the wines and spirits industry normally produced in short batches. It also provides a contract bottling service to the industry. Its customers are major distilleries in the UK or Europe, international airlines (over 60), and UK high street retailers (Asda, Marks and Spencer, Tesco, Sainsburys and BHS). The business has changed direction several times over the last century. It was originally a retail off-licence group. The family owners sold these interests in the late 1970s leaving the company with a two-line production facility employing about 20 people. This has grown to seven different bottling facilities employing 105 people.
Pmel is a metal product fabricator for the vehicle industry founded in 1988 by the current senior management. It initially employed 20 people in the present factory of 90,000 square feet in South Lancashire. In 1998 it had 180 employees and was experiencing increased sales (£8m). It produces a range of fabrications (up to 400 per month) mainly to order and in small batches from potentially 2,000 fabrications on file with 7,000 light piece parts. It subcontracts to four major customers – large heavy equipment assemblers and aircraft companies – though it actively seeks opportunities elsewhere including more exports. Lead-times are often short and demanding requiring considerable production flexibility.
Ven is an engineering sub-contractor that machines components and assemblies for trucks, boats, trains, planes, power oil, transmission and allied industries. It is situated in North Manchester in a former cotton mill. It was founded in 1973 by three ex-engineering apprentices during difficult economic times including the “3 day week”. It supplies up to 10,000 parts to over 100 highly diverse companies – ranging from wheel nuts to complete build of special purpose machines. About 60 per cent of their work is regular/repeat and 40 per cent is made to order. The owner is an original founder. Ven has prided itself in adopting new managerial techniques. It has utilised CNC machines, cell manufacture, and full production control with MRPII, including bar coding, since the mid-1980s. In 1987 it was the first jobbing shop in Europe to achieve ISO9002. Employees in 1999 totalled 70.
Vol manufactures contact lenses. It has two main product lines serving over 1,000 customers. It is in a highly competitive market. Vol's niche market lies between the “cheap and nasty” end dominated by UK manufacturers and the specialist “high tech” end mainly in the USA. Most of its products were developed by its Technical Director who has a science PhD. The present owner and a relative founded the company in 1979 and it initially had three employees. It now employs 15. The MD, a business studies graduate, had a strong affiliation to local education and training institutes and prided himself as a proponent and practitioner of “modern” management methods like TQM, JIT and employee involvement. The company took ISO9000 in 1992 as the first step towards quality improvement. Subsequent developments used external consultants to ascertain problems from the staff point of view which led to major changes incorporating IIP. Currently the firm is changing its manufacturing to a “focused factory” approach, utilising TQM, IIP, and SPC. The WCM programme was seen as complementing and facilitating these initiatives.
Vyp designs, manufactures, and distributes printed wall-coverings and borders in Manchester. It was reconstituted as a publicly quoted company in 1994 following a management buy-out. It has 402 employees, 280 within manufacturing and the rest are support staff. The main customers are UK superstores such as BandQ; Homebase; Fads and high street retailers like Next and M and S. About 15 per cent of production is exported.
Zep, leading European provider of innovative analogue solutions and preferred supplier of various discrete and linear integrated semiconductors to automotive, computing, industrial electronics and telecommunications industries throughout the world was formed in 1989 following a management buy-out, backed by its subsequent parent company. Zep employed 500 people at three manufacturing sites – in the UK, Germany, and via a joint venture in China. About 25 per cent of sales are in the UK. Its exports are significant: North America, Asia and the rest of Europe account for 24, 28 and 23 per cent of sales, respectively.
Corresponding author
Trevor Hopper can be contacted at: t.hopper@mbs.ac.uk