Automation of America's Offices, 1985-2000

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Automation of America's Offices, 1985-2000

December 1985

NTIS order #PB86-185055



R e c o m m e n d e d C i t a t i o n :

U.S. Congress, Office of Technology Assessment, Autom ation of Am erica Offices(Washington, DC: U.S. Government Printing Office, OTA-CIT-287, December 1985).

L i b r a r y o f C o n g r e s s C a t a l o g C a r d N u m b e r 8 5 - 6 0 0 6 2 3

For sale by the Superintendent of Documents

U.S. Government Printing Office, Washington, DC 20402



.

F o rew o rd

Automation of America Offices, 1985-2000, assesses the consequences of

the continuing and rapid introduction of information and telecommunications tech-nologies in offices: the workplace of about 45 million Americans. The use of com-

puters and new communication systems in offices is bringing about fundamental

changes in employment patterns, the skills needed for white-collar occupations,

and the quality of worklife and the office environment. These changes will affectall industry sectors, since office work is a growing component of every industry

as well as all public sector organizations.

The s tudy, requested by the Senate Commit tee on Labor and Human Re-

sources and the House Committee on Education and Labor, will also be of interest

to many other congressional committees because it addresses a wide range of sub-

jects of concern to industry, government, and educational institutions, and to em-

ployers, employees, and their organizations.

OTA wishes to thank the many people and organizat ions that contr ibuted

to this assessment through advisory panels, workshops, interviews, and othermeans of sharing their information and experience with us. The final responsibil-

i ty for the study, however, rests with OTA.

Director

. . ///



Automation of America’s Offices Advisory Panel

Charles E. BranscombVice President, TelecommunicationsCommunication Products DivisionIBM Corp.

Dennis ChamotAssociate DirectorDepartment for Professional Employees

AFL-CIO

Robert L. ChartrandSenior Specialist

Congressional Research ServiceLibrary of Congress

Marvin Dainoff Professor of PsychologyMiami University

Rosalyn L. FeldbergVisiting Research ScholarHenry A. Murray Research CenterRadcliffe College

Thomas G, HermannChairman, Law Office Technology CommitteeAmerican Bar AssociationSquire, Sanders, and Dempsey

Robert C. HughesVice President and Group ManagerBusiness and Office Systems MarketingDigital Equipment Corp.

Barbara B. HutchinsonDirector, Women’s DivisionThe American Federation of Government

Employees

Henry C. LucasChairmanDepartment of Computer Applications and

Information SystemsGraduate School of BusinessNew York University

Lois Martin

Processing Services DirectorFBS Information Services

Karen NussbaumExecutive DirectorNine-to-Five: National Association

of Working Women

Robert M. PeabodyAssistant Vice President and Director of Office

AutomationMutua l of Omaha

Randy J. Pile, Jr.Department HeadAT&T Information Services

Robert Ellis SmithEditor and OwnerPrivacy Journal

Vernell K. Munson SutherlandPres identKnowledge Systems

Ralph E. Upton, Jr.DirectorSt. Augustine Technical Center

iv



Automation of America’s Offices: OTA

J ohn Andelin, Assistant

Assessment Staff

Director, OTA

Science, Information, and Natural Resources Division

Fred W. Weingarten, Program Manager Communication and Information Technologies Program

Project Staff

Vary T. Coates, Project Director Benjamin C. Amick III, Analyst Marjory S, Blumenthal, Analyst Janet DeMott, Detailee-DHHS

M. Karen Gamble, Analyst Mary Ann Madison, Research Analyst

Zalman Shaven, Senior Analyst

Administrative Staff

Liz Eman uel Shirley Gayheart Pa tr icia KevilleRenee Lloyd Audrey Newman

Contractors and Consultants

Eileen Appelbaum

Christopher P. Astriab

Alan PorterGeorgia Tech Research Corp.

Larry HirschornUniversity of Pennsylvania

Joan GreenbaumInstitute for Labor Education and Research, Inc.

Larry McClureNorthwest Regional Educational Laboratory

William Neufeld

Jon TurnerNew York University

Anne PosthumaUniversity of Sussex, United Kingdom

Tora BiksonRand Corp.

Kathleen ChristensenResearch Foundation of the City University of New York

Leslie SchneiderHarvard University, Kennedy School of Government

Marlene Thorn

IMT AssociatesAlan Westin

Educational Fund for Individual Rights



Office Automation in Federal Agencies

Lewis B. ArnoldSystems Policy Staff, Office of Information

TechnologyJ ustice Management DivisionU.S. Department of Justice

K, C. BacherHQ/USAF/DAXThe Pentagon

Ross BainbridgeInformation ResourcesU.S. Gener al Accoun tin g Office

Roger Bullock Director, Information ResourcesFederal Maritime Commission

Eliot ChristianOffice of the Associate Administrator for

Informa tion Resources Mana gementVeterans Administration

‘Claire DolanHuman Resource Management AnalystInternal Revenue ServicePM/HR/HRT

Barry L. Freedman

Manager, OMB SystemsAutomated Systems Division, Office of

Administra t ionExecutive Office of the President

Esther GeorgatosOffice of Data Management and TelecommunicationsVeterans Administration

Michael J. GilbrideChief of the Office Automation Division(office of the Managing Director

Federal Communications Commission

Carolyn HahnU.S. Department of Transportation

Terrell HicksDirector of Management SystemsTennessee Valley Authority

Charles HudnallInformation Processing Staff, Office of the

Assistant Director for AdministrationNational Science Foundat ion

David J ohnsonOffice of Information Resources ManagementAgency for International Development

H. Kasprzak Department of the ArmyHqDA, DAIM-PSP

Tom Kurihar aU.S. Department of Transportation

Christos KyriaziManagement Informa tion ServicesU.S. Department of Commerce

Alan Kotok Chief of Planning and Development Staff U.S. Information Agency

Coyeen Lawton

Office of the Assistant Secretary for Administrationand ManagementU.S. Department of Labor

Barry LeonardActing Director, Foreign Affairs Data Processing

CenterU.S. Department of State

Howard E. LewisDirector of Information SystemsU.S. Department of Energy

Steven MalphrusFedera l Reserve Board

Hal Niebel

Information Systems OfficeU.S. Department of State

Charles B. NewtonOffice of Information Resources ManagementFederal Emergency Management Agency

Er n ReynoldsSpecial Assistant to the DeputyUndersecretary for Intergovernmental Affairs, Office

of the SecretaryU.S. Department of Health and Human Services

Jack J. SharkeyDirector, Office of Data Management and

TelecommunicationsVetera ns Administrat ion

John Stra inOffice of the Assistant Secretary, Program and

Resources ManagementU.S. Department of the Treasury

Wally VelanderOffice of the Associate Administrator for

ManagementNational Aeronautics and Space Administration

Lydelle WertheimerHuman Resources Technology GroupInternal Revenue Service

vi



Office Automation Quality of Worklife Workshop

Nicholas AshfordDirector, Center for Policy AlternativesMassachusetts Institute of Technology

Dean BakerAssociate Professor, UCLA School of Public HealthCenter for Health Sciences

Tora BiksonSenior Scientist

Rand Corp.David CelentanoDepartment of Behavioral Science and Health

EducationSchool of Hygiene and Public HealthThe Johns Hopkins University

Michael DelarcoProgram Manager, Air, Toxics, and RadiationMonitoring Research Agency

Ray DonnellyOccupational Safety and Health AdministrationU.S. Department of Labor

Charles E. Grantham

Human-Technology Specialist, Local/Office SystemsHoneywell, Inc.

Judy GregoryResearch Associate, Depar tmen t for Pr ofessional

EmployeesAFL-C1O

Mary HaanUniversity of California, Berkeley

Bonnie JohnsonCorporate Strategic Staff Intel

Susan KlitzmanDivision of Environmental Sciences, School of Public

HealthColumbia University

Philip KraftCenter for Su rvey ResearchUniversity of Massachusetts

Andrea LaCr oixPost-Doctoral Fellow, Department of EpidemiologySchool of Hygiene and Public HealthThe Johns HQpkins University

Charlotte LeGatesDirector of CommunicationsComputer and Business Equipment Manu facturers

Association

Mary MurphreeRegional Administrator, New York Women’s BureauU.S. Departm ent of Labor

Diana RooseResearch DirectorNine-to-Five

Jan RowlandEpidemiologic Consultant

Art RubinResearch Psychologist, Center for Building

TechnologyNational Bureau of Standards

Steven SauterSection Chief, DHHS PHS CDC NIOSHApplied Psychology and Ergonomics Branch

Lawrence SchleiferStress & Motivation Research Section, DHHS PHS

CDC NIOSHApplied Psychology and Ergonomics Branch

Tapas SenDivision Man ager, Hu man Resources

AT&TRichard P. ShoreBureau of Labor Management Relations and

Cooperat ive ProgramsU.S. Departm ent of Labor

Michael SmithAssociate Professor, Department of Industrial

EngineeringUniversity of Wisconsin

Jeanne StellmanAssociate Professor, School of Public HealthColumbia University

Jon Turner

Department of Computer Applications andInformation SystemsGraduate School of BusinessNew York University

Hal VreelandCenter for P reventive ResearchNational Institute of Mental Health

vii



Reviewers and Other Contributors

Eileen AppelbaumTemple University

Walt BakerIBM Corp.

Tora BiksonRand Corp.

Robert Bednarzik

U.S. Department of LaborSharon CanterManpower Temporar y Services

Kathleen ChristensenCity University of New York

Steve CoilInc. Magazine

Keith CooleyMS A

Gerald DavisHarbinger Group, Inc.

Jim Day

Council of Vocational EducatorsWilliam J . Dennis, Jr,National Federa tion of Independent Businesses

Steven DeutschUniversity of Oregon

Claire DolanInternal Revenue Service

Colin DrurySUNY, Buffalo

Claudia GoldinUniversity of Pennsylvania

Joan Greenbaum

LaGuardia CollegeBill GrenawaltOptical Coating Laboratory, Inc.

Heidi HartmannNational Research Council

Ron HertzfeldNat ional Council on Compensat ion I nsur ance

Margaret HiltonCommunications Workers of America

Timothy L. HuntW. E. Upjohn Institute for Employment Research

Jim Jackson

Prime Computer

Laura JohnsonSocial PlanningCouncil of Metro Toronto

Judith KarnmBentley College

Kenneth KraemerUniversity of South ern California , Irvine

Charlotte LeGatesComputer and Business Equipment Manufacturers

Association

Dave LeGra ndeCommunications Workers of America

Dennis LittleMerit Systems Protection Board

Andrea LongUniversity of Michigan

Donald MarchandUniversity of South Carolina

Robert MasonMetrics Research Corp.

J ames McInnerneyIBM Corp.

Charles McMillionHouse Committ ee on Small BusinessU.S. House of Representatives

J ack MileskiDigital E quipment Corp.

Mark MuellerAT&T Information Systems

Mary MurphreeU.S. Department of Labor

Keith Nelms

Georgia Institute of TechnologyWilliam NeufeldConsultant

Gregory NicklasCommunications Workers of America

Norman Nissenoff

Thierry J . NoyelleColumbia University

Margrethe OlsonNew York University

Olov OstbergSwedish Telecommunications Administration

Bruce PhillipsSmall Business Administra tionBonnie J ohnson

In tel

.,.VIII



Joanne PrattJoanne Pratt Associates

David RoessnerGeorgia Institute of Technology

Carol RomeroNational Commission for Employment Policy

Diana RooseNine-to-Five: National Association of Working

Women

Fred RossiniGeorgia Institute of Technology

Mike RoushNational Federa tion of Independent Businesses

Arthu r RubinNational Bureau of Standards

Peter SassoneGeorgia Institute of Technology

Steven SauterRobert A. Taft Laboratories

William ScheirerSmall Business Administra tion

Perry SchwartzGeorgia Institute of Technology

Tapas SenAT&T

Phil ShelhaasIBM Corp.

Richar d P. ShoreU.S. Department of Labor

OTA Reviewers

Michael SmithUniversity of Wisconsin

Wanda SmithHewlett-Packard

Roberta Spalter-RothGeorge Washington University

Ronnie StrawCommunication Workers of America

Sharon Szymanski

The Labor Institute

J im TaylorSociotechnicd Systems

Thomas TaylorMountain Bell

Maureen TiernyAT&T

Jon TurnerNew York University

Hal VreelandNational Institute of Mental Health

Steve Weyl

Syntelligence

Fran k WhiteHuman Systems Incorp.

Robert YellowleesAmerican Telesystems Corp.

John Alic, Senior Analyst Eugene Fr ank el, Senior Analyst Gretchen Kolsrud, Program ManagerAudrey Buyrn, Program Manager Linda Garcia, Analyst Karl Kronebusch, Analyst

Wendell Fletcher, Senior Analyst Julie Gorte, Analyst Linda Roberts, Senior Analyst



C o n t e n t s

Chapter Page

1.

2.

3.

4.5.

6.

‘i’.

8.

9.

10.

11 .

12 .

The Outlook for Office Automation: 1985-2000 . . . . . . . . . . . . . . . . . . . . . . . . 3

Productivity and Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Training and Education for Office Automation . . . . . . . . . . . . . . . . . . . . . , 75

The Changing Nature of Office Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95Office Automation and the Quality of Worklife . . . . . . . . . . . . . . . . . . . . . . ..125

C o n f i d e n t i a l i t y a n d S e c u r i t y I s s u e s W i t h O f f i c e A u t o m a t i o n . . . . . . . . . . . . . 1 7 1

Home-Based Automated Office Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .189

Off-Shore Office Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ...211

The Automation of Federal Government Offices . . . . . . . . . . . . . . . . . . . ,233

O f f i c e A u t o m a t i o n i n S t a t e a n d L o c a l G o v e r n m e n t s . . . . . . . . . . . . . . . . . . . . 2 6 5

Office Automation in Small Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .283

Office Automation and Differentially Affected Groups:

Women and Minorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...297

Appendix A—The Technology of Office Automation. . . . . . . . . . . . . . . . .307

Appendix B–OTA Case Studies ..., . . . . . . . . . . . . . . . . ..., . . . . . . . ....330



C o n t e n t s

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Organization of Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Looking to the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .What is Office Automation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Un der sta nd ing t he Imp acts of Office Aut omat ion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Technology of Office Automation–Present and Future . . . . . . . . . . . . . . . . . . . . . . .Distr ibut ed In form at ion-Han dling a nd Net working . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Pr oliferat ing Op tions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 . . . . . . . . . . . . . .The Capture of Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Commu nication Between Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .How Ra pidly Will Office Aut omat ion Occur ? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Possible Consequences of Office Automation, 1985-2000 . . . . . . . . . . . . . . . . . . . . . .Economic and Employment Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Training and Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Orga niza tion s a nd J obs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Office Workers and Their Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Data Security and Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Home-Based Office Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Off-Shore Performance of Office Work.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Federal Government Office Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .State and Local Government Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Small Business and Office Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Workin g Women an d Min orit ies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Policy Issues for Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Further Discussion: Policy Issues and Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Conversion to Part-Time, Temporary, and Contractor Status . . . . . . . . . . . . . . . . . . . . .

Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. . . $ . . . . . . . . . . . . . . .Labor/Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Health and Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Data Security and Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Home-Based Clerical Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Off-Shore Office Work By or For U.S. Firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Federal Procurement Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Federal Personnel Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .State and Local Governments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Small Businesses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Women and Minorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ... ... ... ...~. . . . . .

Figures

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151517

181920212122232323

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Figure No. Page

l-1. Changing Structure of the Work Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3l-2. History of Technology Used in the Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9l-3. User Institution Model of Technological Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10



Chapter

The Outlook for Office

Automation Technology, 1985-2000

INTRODUCTION

America has become an information society.

Our economy is driven as surely by the inces-

sant demand for information as it is by the

continuing necessity of converting raw mate-rials into f inished products.

The majority of American workers are now

white-collar workers, and about 45 percent of

all American workers work in offices. (See fig-

ure l-l. ) Office work is rapidly being “auto-

mated, ” or computerized. What does this meanfor the productivity of office workers and the

number of office jobs that will be available in

the future? What skills will white-collar work-

ers need? What job ladders will be open to

them? Will the quali ty of their working l ife

be better, or not as good? What new opportu-

nities and new problems can we expect, as a

result of sweeping technological change in

America’s offices?

These were some of the questions that led

the Senate Committee on Labor and Human

Resources and the House Committee on Edu-

cation and Labor to ask the Office of Technol-

ogy Assessment (OTA) to conduct a study of

the growing use of microelectronic information

and communication technologies in office work.

With less than 3 percent of the labor force

now employed in agriculture and the propor-

tion of blue-collar workers steadily declining,the automation of white-collar work inevita-

bly raises concerns about the number of jobs

that will be available for the still growing la-

bor force in the long-range future. This report

deals with those white-collar workers who pri-

marily work in offices, although information

technology is also affecting others, for exam-

ple, department store clerks and supermarket

cashiers.

3



4 Automation of America’s Offices

But American indust ry i s now par t ic ipat -

ing in a global economy. Competition for both

world markets and domestic markets is a pow-

erful incentive for seeking higher productivity.

Microelectronic technology has enormous po-

tential for increasing productivity in white-

collar work, which is a large and growing partof every industry sector.

The office is the primary workplace for many

industries, such as banking, insurance, and real

estate, but the office is also a vital element

of every industry from manufacturing to farm-

ing. An OTA assessment of factory automa-

tion, for example, found that”. . . the salaried

or white-collar work force will constitute alarger proportion of manufacturing employ-m ent “1 in the future. Increased productivity

in office work thus would contribute to pro-

duc t iv i ty and g row th in a l l s ec to r s o f t heeconomy.

The demand for information will continue

to grow. With computerization, the unit cost

of col lec t ing, process ing, d is t r ibut ing, and

using information will decline. More kinds of

information will be gathered and used for new

purposes, and many new information servicesand products will be created. Demand for in-

formation and increased productivity are two

major factors in the employment equation; the

consequences of office automation for office

‘U.S. Congress, Office of Technology Assessment, Compute-rized Manufacturing Automation: Employment, Education,an d the Workplace, OTA-C IT-235 (Washington, DC: U.S. Gov-ernment Printing Office, April 1984).

employment will depend in large part on the

interact ions between them.

Just as the successive waves of mechaniza-

tion of farm and factory work have changed

U.S. society and economy, so will the automa-

tion of white-collar work. Social and economictransitions in the past have raised policy is-

sues that had to be addressed, and in many

cases are still being addressed, by Congress.

The new wave of automation will also create

both opportunities and problems that demand

the attention of Congress.

Technological change is also related to ques-

tions already on our political agenda, such as

comparable wor th and pay equi ty , in terna-tional trade, and health and safety in the work-

place. The effects will eventually be felt by

everyone—producers and consumers; manag-

ers, professionals, and clerical workers; largeand small organizations; the private sector and

the public sector. The role that informationand communications technologies will play in

offices in the future, and the opportunities andproblems they present, thus concern all Ameri-

can s an d all of their r epresenta tives in Congress.

This report puts before its readers a broad

range of likely consequences of office automa-

tion, and calls attention to large areas of un-

certainty. It points to some public policy is-

sues that are emerging or may arise. Many

other questions must and can be resolved onlyby the informed choices and cooperative ef-forts of individuals and organizations.

ORGANIZATION OF REPORT

After a brief look at the context of office ceptual framework or model that guided theautomation from the perspective of history, assessment. It then summarizes the findingsth i s chap te r h igh l igh t s som e expec ta t ions of the assessment, identifying policy issuesabout the technologies and their development that are likely to concern Congress over theover the next 15 years. It introduces a con- next decade.



Ch. l—The Outlook for Office Automation Technology, 1985-2000 q 5

Many of these issues are just coming to pub-

lic attention and have not yet been widely dis-

cussed; speci f ic proposals for deal ing wi th

them have not been put forward. A few of theissues, however, are already before Congress

or are apt to be the subject of congressional

considera t ion in the near future .

Chapters 2 through 6 discuss the possible

effects of office automation in more detail.

They deal with potential effects on employ-ment levels; the kind of training and educa-

tion needed for office work; changes in work

content, jobs, occupations, and organizations;

the quality of work life, the office environmentand labor management relations; and the secu-

ri ty and confidential i ty of information.

Chapters 7 and 8 consider two alternatives

to conventional offices, made feasible and eco-

nomically attractive by office automation. Thefirst of these is home-based work, especially

the u se of the worker’s home as t he prima ry

or sole site for clerical work. The second is off-

shore performance of data-entry operations,

in which work is sent off to be done in coun-

tr ies with lower paid workers.

Chapters 9 and 10 look at office automation

in th e public sector— Federal agencies an d Stat e

and local governments.

Chapter 11 is a brief survey of the limitedinformation currently known about office auto-

mation and small businesses, an important sec-

tor of the economy that is just beginning to

automate i ts offices.

Chapter 12 considers the implications of

office automation for two groups that are likely

to be particularly strongly affected: working

women and minority white-collar workers.

Appendix A describes office automation tech-

nology as it is now and as it is likely to de-

velop between 1985 and 2000.

Appendix B summarizes case studies of the

automation of several offices to provide some

exam ples o f t he changes tha t occur w hen

offices are automated. In particular these ex-

amples illustrate the variety of offices affected

and the difficult transition stage that occursas offices automate their work.

The summary discussion in this first chap-

ter is keyed at appropriate points to later chap-

ters, where the reader will find more lengthy

discuss ions .

LOOKING TO THE FUTUREDuring the present transitional stage of of-

fice automation, there are many problems that

are real but do not require congressional ac-

tion. Some of the fears that people have in an-

t icipating technological change later prove

groundless. Many problems are resolved by

ingenuity, trial and error, and negotiation be-

tween groups that have compet ing in teres ts

but a shared motivation to benefit from tech-

nology. Structural changes in the economy,

on the other hand, can create lasting inequi-

ties and conflicts. They can also open up newopportunities to resolve old issues and realize

new social benefits.

OTA chose a 15-year perspective because

Congress will be concerned less with ephemeral

ef fects and t rans i t ional problems than wi th

long-range structural changes. These struc-

tural changes are likely to become clearly vis-

ible only after office automation has been

widely adopted and organizations learn to use

its full capabil i t ies.

Information and communication technologyis itself rapidly evolving and expanding its ca-

pabilities. The range of technological choices

that an organization has for accomplishing any

given information-related objective is wide.The number of manufacturers and vendors of

office automation equipment is large, and the

competition between them is strong. This sug-

gests that the technology of office automationwill be strongly influenced over the next dec-



6 q Automation of America’s Offices —

— . .Photo credit L/brary of Congress Photo credit. Michae/ J SnJIfh

The evolution of the office environment is shown in these two photos from 1897 and 1980.Perhaps in the future there will

ade or more, by the needs and wishes of the

users .

The as-yet-undetermined characterist ics of

futu re office a ut omat ion technology will strongly

influence the social consequences of the auto-

mation of white-collar work. But changes in

the U.S. economy and society are not, or neednot be, entirely technologically determined.

They depend in part on choices and decisions

made by individuals and organizat ions , and

they also can be guided by public policy.

The conclusions of this assessment are there

fore conditioned by unavoidable uncertainties

about the choices that users will make, about

economic growth, and about future public pol-icies. Major directions in the evolution of the

technology can be discerned, but when these

technical improvements will occur is more un-

certain. It is most prudent to assume that some

technical breakthroughs may come sooner than

be a truly paperless office.

now projected, rather than later, since this has

happened repeatedly in the las t few years .Also uncertain is the speed with which of-

fices will adopt new technologies. This will be

influenced by general economic conditions, but

in the last decade office automation has been

less sensitive to these factors than many ex-

pected. Because it can be accomplished incre-

mentally and with relatively small investments,

adoption of office automation may be much

wider, more general, and more rapid than has

often been the case with new technologies. This

makes transitional problems more visible and

structural problems more important-e. g., dis-

placed workers will have fewer options for ad-

justment if their occupations are affected inmost regions and most industries in a rela-

tively brief period. It also indicates that deci-

sionmakers should now begin to at tentively

monitor the changes that are occurring, in or-

der to be prepared to deal with problems that

may ar ise .

WHAT IS OFFICE AUTOMATION?

Almost any place where information han-

dling is the main activity is called an office,

whether it is one person at a desk or a com-

plex hierarchy of executives, professionals, and

clerical workers. For the purposes of this re-

port, the office is wherever “office work” is

done, and “office work” is the processing and

use of information for the purpose of track-



Ch. l—The Outlook for Office Automation Technology, 1985-2000 7

ing, monitoring, recording, directing, and sup-

porting complex hum an activities.’ One of the

striking consequences of information and com-munication technologies is that together they

make much “office work” independent of the

place where it has usually been performed; thatis, they allow it to be done in the home, in air-

planes and trains, and in other countries.

For the purposes of this report, the term “of-

fice automation’ is used broadly to mean theappl icat ion of microelect ronic informat ion

technology and communication technology to

off ice work. I t includes large “mainframe”

computers, smaller minicomputers, personal

com pute r s o r m ic rocom pute r s , s t and-a lone

word processors, and the many diverse com-

‘By extension, people also speak of places where otherprofessional work is done as an office–e. g., a dentist’s office.

In this report we attempt no rigorous definition of what is oris not office work, but use a commonsense approach. We havegenerally excluded from consideration such peripheral or spe-cialized places of white-collar work as the dentist’s office, thescientific laboratory, and the draftsman’s office.

munication devices and systems that can link

them together .

The first offices may have been in the homes

of Babylonian merchants or Phoenician traders,o r pe rhaps they w ere cons t ruc t ion p ro jec t

offices in the palaces of Egyptian Pharaohs.

Almost certainly something like an office cameinto existence as soon as records could be kept

of the exchange of goods , on c lay table ts ,

chisled stones, papyrus, and quipus.3Office

work is inseparable from commerce because

it is concerned with gathering, keeping, and

using information about human activities, and

par t icular ly those act iv i t ies that have to do

with the production and exchange of goods

and services.

If office work began in the homes of mer-

chants and traders, it has nevertheless for most

of history been done in central locations closeto the production of goods and services.

4Th e

office plays the same role for an organization

that the brain plays in a living organism. Itreceives information flowing in from all parts

of the organization (or organism) and from theexternal environment, processes that informa-

tion and sends back responses, instructions,

and commands through an extended nervous

system—established channels of communication.

At the dawn of written history, clerks and

scribes were the first office workers. Informa-tion handling work has always carried withit a degree of respect or status (even when

many scribes were slaves) because it requires

skills and education that, through most of his-

tory, few people had.

The tools used in this work were for thou-

sands of years very simple, basically writingimplements and something to wr i te on, and

some means of storing the records written orreceived. As the scale of human activities in-

creased, the information about them becamemore voluminous and more diversif ied. The

tools became sl ightly more sophist icated (a

3Quipus were knotted cords used by the Peruvian Indians(who did not develop writing) to keep records.

‘One of the effects of new communication and informationtechnology may be to allow office work to again be done inhomes; see ch. 7, “Home-Based Automated Office Work. ”



bookkeeping ledger rather than a stone tabletor roll of papyrus) and office workers became

more numerous and more specialized. When

clocks were invented, the work became more

subject to measurement, pacing, and manage-ment control. When electric communications

were invented, it became less sensitive to prox-

imity but more sensitive to time. 5 But not un-til the advent of the telephone, the typewriter,

and the adding machine, near the end of the19th century, was a significant part of the work

automated. (See figure 1-2.)

The mechanical stage of office automation

was followed by the electromechanical stage,

with electric typewriters and calculating ma-

chines. The present age of computers begana little more than 15 years ago, and t his assess-ment looks forward for another 15 years—

together, only about one generation in human

terms, and less than the working lifetime of a white-collar worker.

Through the mechanical and electromechan-

ical eras of office automation, whitecollar work

continued to be labor intensive. Capital invest-ment in office work has always been low com-

pared to capitalization in other economic sec-

tors such as manufacturing and agriculture.

‘Note that until the 1840s, and the invention of the tele-graph, it might take days or weeks to communicate with anotheroffice in a different part of the country. Until the transatlanticcable of 1866, it took at least 4 weeks for a merchant to senda message to his field agent in Europe and get a response, and

it might take months to exchange messages with the ship car-rying his goods, since he could not know when and where itwould make port.

About 85 percent of office operating costs arelabor costs.

Now capitalization is occurring rapidly, in the

form of information and communication tech-

nologies that are transforming the nature of white-collar work.

Many other forces have affected office work in recent decades . The scale , geographicalscope, and concentration of economic enter-prise, and therefore of offices, has increased.

Some sectors of industry and commerce have

expanded and some have shrunk in impor-

tance. The growing pervasiveness of science

and technology as components of the economy

has both increased the demand for data and

changed the nature of the informat ion han-dled in offices. There has been a strong tend-ency to professionalize and credentialize manyoccupat ions .

The office work force has also changed. The

average educational attainment of office work-

ers has increased, yet the educational gap be-

tween office workers and the general popula-

t ion has narrowed or disappeared. Women,

once a very small part of the office work force,

now make up the larger part of it. Changesin values, lifestyles-and some claim, the work

ethic-have affected office workers along withall others in society.

These t rends are a l l impor tant . But tech-

nology or the tools people use, have a primary

affect on their work, how it is done, and howit is rewarded by society.

UNDERSTANDING THE IMPACTS OF OFFICE AUTOMATION

In carrying out this assessment, OTA used of effects: substitution, adaptation, and trans-

a s im ple ‘conceptua l m odel a s an a id in look- form a t ion .

ing for the possible effects.8(See figure 1-3.)

It suggests that when organizations adopt newThe new technology usually replaces an older

technology, there are likely to be three kindstechnology or human labor, or both. There aredirect substi tution effects, both at the task

‘This model was developed by J.F. Coates and V.T. Coates; level and at the organizational level. As wordfor an example of other as~essrnents in which it has been used, processors and computers replace the typewriter,see V.T. Coates, et al., A Retrospective Technology Assess-

bookkeeping ledgers, and payroll systems, andrnent : Submarine Telegraphy (San Francisco: San FranciscoPress, 1980); and V.T. Coates, “The Potential Impacts of Ro - other communication systems augment t e le-botics, ” The Futurist, February 1982. phones, there are effects on productivity, size



. .

Ch. l—The Outtook for Office Automation Technology, 1985-2000 q 9 — —.

Figure 1-2.— History of Technology Used in the Office

I (Third phase off!ce automation)1

Local area networks, integratad systems.

Non-impact printers.

(Second phase otflce automation) Software packages for microcomputers.

Microcomputers q

Optical scannlng and recognittcm equipment q

Video display terminals for data/text processing q

[(First phase offtce automation)

1Facsimiie transmission q

Etectronic(solid state) calculating machines.

Microchip computera q

Magnetic tape "seletric” typawritars.

Magnetic tape (replacing punched cards).

Magrtetic ink character reoognit@rr (cfteck proof lngfsorfin@ q

Electronic digitat computers (trsdstor$}.

Efeotronic digital computers (vacuum tubes).

I Electrification Era (1920-1960) 1. Data processing - telewriters

c Data processing - computypers

q Data processing - paper tape or card:

q Xerographic duplication

q Mechanical listing printing calculators, 4 functions

. Punched card syatems (e.g., PayrOfl)

q Oict@ting/stenographic machines with plastic belts

qCommon language concept for business machines

q Bank check sorting/proofing machines

Dialing Telephones

q 2 q d b w Ì

* Machine accounting systems(central records, control, payroll)

Multilifh duplicating (offset printinfj

Addressograph/multigraph with automatic f-

q Adding/subtracting calculating machines

[Ditto machines (gelatin duplcating)

qPower statistical accounting machine

qBookkeeping and billing machines (combinations of typewriting

and computing machlnesj

qLoose-leaf leadger Sheet$

I 1q Muttigrapff

(Mechanical Era 1800-1920)q Two-color typewriter rfbbon

. Addressograph

qAdding machine, Ilstlng and non-listing

. Hotlerith machtnes {card punch, tabulating and sorting machines). Cash qister

q ComPtometar Oakutattrrg maohirm

. M\mtqr@f maoftina @wmil Wttln$ duWMiW

* Pnaumatie tufnis

q Qlotating and $tanOgmpW faaohifraa

qWa@One

q Catbon paper* Typawritar

# . stia~ cwpming machineq Fountain pen

1 I I 1 I I I t I I I 1 I 1 I I I I I

1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990

SOURCE Off Ice of Technology Assessment



10 . Automation Of Am erica’s Offices

Figure 1-3.— User Institution Model of Technological Change

I‘Innovative technology

technology may bemodified to suit

needs of users better

Institution

adopts technology tocarry out existing

functions more

efficiently

J

lnstitution

changes internally totake better advantage

of new efficiencies

J

\

Other institutions I

may be created, or

old ones changed,to utilize new

technology

Competitionbetween

institutions

develops new functions

and activities madepossibly by additional

capabilities of thetechnology

I institution

Step I

Step II

Step Ill

Step IV

SOURCE Joseph T Coates, “Aspects of Innovation” Public Policy Issues in Telecommunications Development, ”Te/ecornmunications Po/icy, vol. 1, No. 3, June 1977.

of work force, job content, the skill required

of workers, etc. These effects are perceived as

“good” or “bad” depending on one’s perspec-

t ive and in teres ts .

The ins t i tu t ional s t ructures , cul ture , oper-

a t ing procedures , and management expecta-

tions at this point still reflect the old work-

flow and work process. Tension is created

because the characteristics of the new tech-

nology are different, and the requirements for

effectively using it are different. Until this ten-

sion is resolved, the full benefits of the substi-tution are not realized and productivity may

even fall. Many organizations are still at this

stage in office automation.

The institution deliberately or “unconscious-

ly, ” by plan or by trial and error, begins tomodify itself to suit new ways of doing things.

This is the adaptation stage. The adaptations

may include for example formal reorganiza-

t ions, shifts in power relat ionships, adjust-

ments in r esponsibilities, or chan ges in th e way

workers are recrui ted and compensated.

Two kinds of problems may arise in this

phase. If significant changes are made quickly

and by explicit decisions, they may evoke re-

sistance and resentment from those who losepow er o r w ho a re uncom for t ab le w i th any

change in the status quo, especially when peo-

ple do not understand the reasoning behind



72 . Automation o f America’s o f f i c e s —

In industries that deliver customer services,

such as insurance, th is phase i s somet imes

called “back office automation, ” since it chiefly

affected the part of the office characterized

by large numbers of clerical workers doing the

kind of paper processing seldom seen by the

consumer. They entered data into the com-p u t e r u s i n g “dumb terminals’ ’- i .e. , using

keyboards that fed data to a large central com-

puter that did the processing. Many organi-zations established central word processing

departments or pools, in which specialized cler-

ical workers took over the “typing” (or at least

the keyboarding of all lengthy documents) for

a department or for the entire organization.

The second phase of computerization began

in most organizations about 1978 to 1980, withthe introduction of small stand-alone word

processors and microcomputers or personalcomputers (PCs), used by people who are notcomputer specialists . Software packages al-

low people who know little about computers

or the arcane skills of programming to draw

on databases or add to them, to manipulate

text and quanti tat ive data, to generate tables

and graphic displays, and to exchange infor-

mation with other computer users, without the

direct mediation of computer specialists. PCs

are increasingly used by managers and profes-

sionals as well as by support staff. Many ex-

ecutives who would not ever have typed now

use word processing to draft letters, memos,or reports, or generate reports using spread-

sheet software.

This has come to be known by the awkward

term “end-user computing. ” Today, the use of

computers by nonspecialists-end-user comput-

ing—is a highly visible trend. End-user com-

puting is not replacing central computers, but

is often added to or superimposed over a cen-

tralized EDP process within an organization.

The th i rd phase i s a l ready beginning- the

linking together of microcomputers, and the

linking of microcomputers to mainframes orminicomputers so that they can act (compute)

either independently or as an extension of the

larger centra l processing unit. For t he n ext dec-

ade, networking will be a major trend in office

automat ion.

Such linked systems can also connect com-puters with printers and copiers, and with out-

side communications systems (telex, telephone

lines, cables, etc.) to create “integrated office

systems. ” Networking is not easily imple-

mented. Because of the wide diversity in hard-

ware, software, and interface mechanisms protided by vendors, it is often difficult to connectdevices and systems so that they can “talk

to each other” or work together as an effec-

tive system. In spite of these problems, in the

last 2 years many organizations have devel-

oped “networks” or l inked systems, and the

t rend is rapidly gaining momentum.

Differences between centralized EDP com-

puting systems and end-user computing willgradually blur. The first and second phases

of office automation, considered separately,

often appear quite different, but it will becomeless important whether a worker is using a

dumb terminal, or a PC that is networked to

other computers, because they will be able to

access the same databases and perform roughly

the same functions.

Prol i fe ra t ing Opt ions

Broad choices among vendors, devices, sys-

tems, software packages, connecting devices,

communications technologies, and service pro

viders now characterize office automation. This

range of choice, and the rapid evolution of the

technology, creates problems for organizations

that want to plan their automation rationally

over a long period. However, it also allows

offices to automate their work a few tasks at

a time, if they so choose.

Microelectronic office equipment is a highly

competitive industry, and this has contributed

to both declining prices and expanding capa-

bil i t ies. The computer industry has become

a consumer industry. Large volume buyers

(e.g., the Federal Government) have a less dom-

inant influence over the direction of techno-logical development than the cumulative choices

made by the great number of middle and small

size organizations. Even within large organi-zations, the purchase of microcomputers and

word processors has often been relatively un-



7 4 q Automation of America’s Offices —

Photo credit: Bell Labs

One characteristic of office automation is the integrationof computing and communication technologies

th en notifies th e hospital’s an d th e insur er’s

computer that the payment has been accom-

plished. As another example, the computer of

a manufacturer may receive an order from the

computer of a customer, then order and co-

ordinate the shipment, with the payment han-

dled and recorded by direct communication

between the computers of the buyer, sel ler ,

and bank. A few pairs of organizations are said

to have such l inkages operat ing a t present ;

more are likely to do so in the future.

How Rapidly Will Office

Automation Occur?

Office automation may proceed more rap-idly and penetrate economic activit ies more

thoroughly than have other waves of automa-tion. The pace of technological change has, in

the past, repeatedly confounded expectations;

sometimes it has been slower than expected,

sometimes more rapid. Much depends on the

resources required to adopt new technology,

the time required to recover the necessary in-vestment, and the economic condit ions that

prevail . Part icular factors of importance are

the costs of capital and labor; the availability

of people to use and manage the new technol-

ogy; the structure of the adopting industry

or industries, and their competitive environ-ment; and a variety of social and behavioral

factors that can be collectively called organiza-

t ional culture.10

An examination of these factors in relationto o f f i ce au tom at ion po in t s t o a r e l a t ive ly

broad and speedy adoption. The role of offices

and office work is tending to increase in every

sector (i.e., there is more “paper work’ or in-formation-handling in the production of al l

goods and services), and automation can beadopted by and adapted for offices in every

industry sector. Many kinds of office activi-

ties are similar in all organizations-generating

text, keeping records, circulating memos, pre-

paring payrolls, filing, etc. Because many kinds

of office automation can be implemented in-

crementally, and at relatively low cost, it canbe adopted by small as well as large offices.

There are a variety of reasons for automat-

ing information-handling, from reduction of

labor costs, to improving the quality or vari-

ety of services, to reaching a larger marketin a given time. If an organization adopts auto-

mation for the purpose of providing new serv-ices or products, or reaching a new market,

its competitors may feel forced to do likewise.

The effects of technological change often de-

pend on how rapidly that change occurs. Prob-

lems may solve themselves if there is muchtime to adjust. On the other hand, opportuni-

ties not quickly grasped may be forever lost,

or problems left to drag on may fester. Later

chapters of this report will point to organiza-

tional and behavioral problems that could slowthe adoption of office automation. At present

however, it appears that these are largely tran-

sition problems for which many solutions are

being developed.

“’The analysis here and in ch. 2 draws on an OTA contrac-

tor report, J.D. Roessner, “Market Penetration of Office Auto-mation Equipment, Trends and Forecasts, ” November 1984.This report is part of an OTA contractor report, A.L. Porter,et al., “Office Automation Outlook: 1985 -2000,” February 1985.




THE POSSIBLE CONSEQUENCES OFOFFICE AUTOMATION, 1985-2000

Some emerging and potential policy issues

identified by OTA are of interest because con-

tending parties have already voiced their con-

cerns, and in some cases, related proposals are

before Congress. Most of the policy issues,however, are of more long-range concern or

are contingent on conditions anticipated but

still in the future.

In relation to most of the policy issues, some

attempt has been made to indicate potential

congressional responses. This is done to indi-

cate the range of conceivable policy interven-

tions. OTA has not fully evaluated all of these

policy options in terms of their own possible

effects, or the pros and cons of adopting them,

either in this chapter or in the course of theassessment .

Economic and Employment Effects

Increased Productivity

By the mid-1990s nearly every office will

have at least one computer, just as nearly all

offices now have telephones. There will prob-

ably be a terminal of some kind for at least

every two or three office workers. Since many

organizations will by then have adapted their

work process and work environment to the newtechnology-although restructuring and change

will surely continue—many solutions to cur-

rent transitional problems should be available.

Office productivity should increase signifi-

cant ly .

Productivity in white-collar work is difficult

to define and measure, as is discussed in chap-

ter 2. But however productivity is perceived

by a specific office or industry, significant in-

creases as a result of office automation will

affect employment levels, at least for some of-

fice occupations.

Employment

There will certainly be a significant reduc-

tion in the hours of labor associated with a

given volume of information-handling. The

magnitude of the reduction will depend in part

on the technological trends noted above andin par t on management s t ra tegies .

The reduction in labor will be most signifi-

cant in the clerical/support occupations, espe-

cially those that predominantly involve data

entry. Fewer lower level workers would in it-

self indicate a need for fewer first line super-

visors and managers. But the span of man-agement control can also be broadened by

automation of the work process. Thus, fewer

managers may be needed (again, for a given

volume of information-handling). Some of the

tasks of lower level managers can be auto-mated, or be taken over by clerical workers

who are lower paid, so this tier of jobs is againlikely to shrink. Some of the tasks of para-

professional or technical workers may follow

the same route. Professional occupations are

less vulnerable, but not immune to the substi-tution and adaptation effects of automation.

Whether or not organizations have as their

primary motivation for adopting office auto-

mation a reduction (or constraint on growth)

in the work force, relatively few can yet dem-

onstrate that they have achieved that result .Many have hired more workers. OTA case

studies, internal corporate studies, interviewswith business executives, and reports in trade

literature have repeatedly shown such short-

term inefficiencies resulting when a new tech-

nology is introduced into a workplace, process,

working group, and organizat ional s t ructure

not yet designed to use it to best advantage.

Yet most evidence suggests that in a given

task, time and labor saving from automation

is significant. Some tasks or steps are elimi-

nated ent i re ly .

Declining costs and the proliferation of new

uses and needs for information argue for astrong and continuing growth in the volume

of information-handling and thus for a steady

increase in the office workload. The growth

in demand for information and the reduction

in labor associated with information-handling



16 q Automation of America’s offices

are two competing trends—both associated

w i th in fo rm at ion and com m unica t ion t ech-

n ologies —tha t will affect t he level of futu re

office employment. Which force outweighs the

other is surely a judgment call; it may ulti-

mately depend on broad economic conditions,

other unforeseen technological developments,and choices and decisions made in industry,

government, and society at large.

Because in the past, employment growth as

a whole has continued through periods of tech-nological change, many economists bel ieve

that the number of office jobs will continue

to grow strongly in spite of office automation.

Others doubt this because of the high poten-

tial efficiency of microelectronic technologyin office work (especially clerical work), which

has always been very labor intensive, espe-

cially since the economy is generally not ex-pected to grow as rapidly in the future as it

has in some past decades. For example, a re-

cent scholarly article suggests reasons for the

“common misconception” that future econom-

ic growth spurred by high technology will nec-

essari ly provide a net increase in jobs; the

authors said, especially speaking of computers

t h a t :

, , . the impa ct of (new) technologies is likelyto be more widespread than that of past tech-nologies because their cost has declined soshar ply relative to their capability an d rela-

tive to the costs of labor . . . (and) the economiccontext has changed considerably from thepast. ”

The present capability for economic and em-

ployment forecasting is not good enough to

resolve this very large uncertainty.

Thus, it is possible that there will be continu-ing strong demand for additional office work-

ers. Th e m ost likely outcome, h owever, is slowing

growth in the number of office jobs and even

eventually an absolute reduction in the number

of jobs in offices. While the latter outcome is

by no means certain, there is sufficient evi-dence po in t ing in th i s d i r ec t ion to jus t i fy—

“Russell W. Rumberger and Henry M. Levin, ‘iForecasting

the Impact of New Technologies on the Future Job Market, ”Technology Forecasting a nd S ocial Chan ge 27, 1985, pp.399-419.

watchful concern by Congress, and to merit

efforts to improve the monitoring of employ-ment trends so that corrective or compensat-

ing actions can be taken when and if they are

needed. Recent employment forecasts should

not lull policymakers into complacency. This

is an area f raught wi th uncer ta inty .

If the number of office jobs continues to

grow, no congressional action will be called

for; if that growth falters or reverses, there

will immediately be str ong dema nds for Federal

intervention. However, early signs of trouble

may be missed. At present, the Federal Gov-

ernment is poorly equipped to detect or under-

stand early signals of problems arising from

structural changes in the economy related to

technology.

Labor force and employment data collection

does not support analysis of emerging trendsbecause it is necessarily collected, aggregated

or disaggregated, and analyzed in categories

that reflect the occupations and jobs framed

around old technologies or occupational/dis-

ciplinary tools. Census data is necessarily old

(in t erm s of today’s ra pid chan ge) by the t ime

it is available for analysis. Econometric modelsare insensitive to realistic expectations about

new technology and the changing substituta-

bility of capital for labor. There is a great need

for improved databases, for greater attention

to advancing the state of the art in both tech-

nological and employment forecasting, and for

building and insti tutionalizing a capabil i tythat combines and integrates those two dis-

ciplines. No agency now has a strong capabil-

ity of this kind, nor the resources and specific

mandate to develop such a capability; more-

over, there is very little Federal funding avail-able for research into crucial areas of eco-

nomics , socia l sc ience, and organizat ional

beha vior rela ted to th is area . ’2

The critical question for Congress at present

is not one of immediate interventions, but how

to improve the capability of the Federal Gov-ernment to understand, and thus be prepared

“Hearings of the Science Policy Task Force of the HouseCommittee on Science and Technology, Sept. 17-19, 1985.



Ch. I—The Outlook for Office Automation Technology, 1985-2000 q 1 7

to respond to, technological and structural

changes that are occurring in the United States

and other advanced indust r ia l nat ions .

Conversion of Employee Status

Office automation may enable employers toconvert more employees into part- t ime andtemporary workers or independent contrac-

tors. This allows offices to adjust their labor

costs to a fluctuating workload, to reduce some

overhead costs, and to eliminate or external-

ize some secondary labor costs (benefits pack-

ages). While some workers prefer and seek

opportunit ies for part- t ime employment, thenumber of involuntary part-time or temporary

workers has been slowly and steadily increas-

ing. Significant growth in the use of part-time

and temporary work forces could ult imately

reduce the number of full-time jobs for thosewho need or desire them. I t may also shift

responsibility for benefits and protective mech-

anisms such as health insurance, unemploy-

ment and disability insurance, and retirement

income to the worker, costs that may ult i-

mately have to be assumed in par t by the

t a x p a y e r .

Job Opportunities

In some occupations and industries, those

tasks that have historically been at the cross-over point between clerical jobs and lower levelmanagement or professional jobs have been

automated. In other occupations or industries,

office automation has been used to narrow and

specialize clerical tasks or to deprofessional-ize tasks. In this way, some important chan-

nels of career mobility (job ladders) have been

truncated. These effects are of special impor-

tance to women and minorities. In some in-

dustries or organizations those channels have

only been opened to women and minorit ies

within the last decade, and are looked to as

a primary opportunity for escaping from poorly

pa id occup at ions an d segrega ted “women’sw o r k .

Office automation also creates some new cat-

egories of jobs, or new specialties within ex-

isting occupations. Proficiency in solving problems related to office automation has given

many people the oppor tuni ty to create spe-

cial roles for themselves and has led to new

job ladders and career paths. Men and women

with the capability, imagination, daring, and

opportunity to rise to this challenge are mov-

ing into the upper levels of organizational hier-

archies. Whether or not this career path will

create anew pool of potential senior managers

or chief executive officers, only time will tell.

Some of the likely effects on employment

are not inevitable results of office automation,

b u t r e s u l t f r o m m a n a g e m e n t / i n s t i t u t i o n a l

choices about the combination of technologies

adopted, the way they are implemented, and

the way the work is restructured. But to the

ex ten t t ha t t he t echno logy m ay encouragebusiness decisions to be made only on the ba-

sis of narrowly framed, near-term cost con-

siderations, this could have a negative effecton both long-term productivity and future op-

portunities for productive and rewarding em-

ployment for many Americans.

Training and Education

A major factor in achieving the full produc-

tivity benefits of office automation is the avail-

ability of workers skilled in its use. From the

s tandpoint of organizat ions and thei r man-

agers, an adequate supply of trained workers

to meet future n eeds is critical. From the st and-point of office workers, access to training andthe ability to master new skills is critical.

In the short term, the training need not be

lengthy or excessively expensive. The trend

in both hardware and software is toward great-

er simplicity for the user, and more opportu-

nisty for self-teaching based on training proce-

dures bu i l t i n to the t echno logy . H ow ever ,

because office automation often brings about

a drastic redesign and resequencing of tasks,

both initial and continuing tr aining is essential.

Training provided by vendors and by someemployers is highly system- and task-specific.For the user, this makes training easier, but

l imits i ts future usefulness. Economic pres-

sures, however, motivate some employers to

provide no more than minimum trainin g. Many



78 . Automation of America’s offices

organizations, in deciding to automate, have

underes t imated the cont inuing t ra ining and

support that is necessary, and these costs can

dwarf the original investment. Some employ-

ers also see it as in their interest to make train-

ing as narrow, specific, and brief as possible.

In that way they have minimum investment

in workers who could then be lured away, and

replacement workers can be trained rapidly.

But this practice can also trap workers in

dead-end jobs and limit their ability to move

up to jobs of wider scope and higher skill re-

qui rements .

Many organizations ar e providing th eir work-

ers with ample training both in their own in-

terests and from a sense of responsibility to

their workers and to the larger society. This

is a significant cost to the employer. While

in the long run it may increase the produc-tivity benefits that the organization seeks, itmay also defer the realization of sought for

cost reductions.

Workers just entering the labor force also

need training, at least in specific tasks or with

specific systems. Those aspiring to manage-

m ent pos i t i ons inc reas ing ly seek advanced

training in business and business technology

before entering the labor market. In recent dec-

ades, there has been a strong trend toward

external iz ing t ra ining cos ts and la tera l re-

crui tment- i .e . , depending on col leges andcommercial schools to train workers, and hir-

ing from the outside at the management level

rather than advancing people from lower levels

within an organization. Enrollment in business

schools, vocational schools, and adult educa-t ion courses has been rising. The students,

rather than an employer, bear the cost of this

training; but since it is often out of reach forlower income families, this raises questions

about equitable access.

Public schools and community colleges are

to some degree handicapped by the costs of

p rov id ing ins t ruc to r s and a w ide r ange o f

equipment for students to learn on, especially

since the technology is constantly changing

and instructors themselves must be continu-

ally learning. Commercial schools may be in

some ways better able to respond quickly toma rket changes-i. e. , to be able to invest in

up-to-date technology and retraining for in-

structors. Again, the costs to workers of com-mercial courses, in terms of both money and

time, mean that the most disadvantaged pop-

ula t ions are put a t a fur ther d isadvantage.

Organizat ions and Jobs

There is much controversy at present around

the question of whether office automation en-

hances or “de-skills” office work. De-skilling

means the standardization and routinization

of tasks, in such away that human knowledge,

judgment, and decisions are minimized and

the technology (in this case a computer) directs,

controls, and paces what a worker does.

Office automation can be used to de-skil ltasks. It is, and has been, so used in many

organizations that process huge volumes of

standardized data. More data can be processedin a given time, by less highly trained (and

lower paid, more easily replaced) workers, with

l e s s va r i ab i l i t y in ou tcom e and- supposed ly

but not always in practice—with lower error

rates. Professional tasks can also be de-skilled,

by building sorting rules, decision trees, and

analytical processes into computer processes

and software packages.

For the worker, this may mean less job in-terest and satisfaction and increased stress.

Factory-like offices could repeat the worst mis-

takes and problems created by manufactur-

ing assembly l ines . However , ra t ional iz ing

work (i.e., simplifying and routinizing it) can

also create new white-collar jobs for peoplewith less ability and training than is required

for some other office work. These jobs are

highly valued by people whose employment

opportunities are limited, or who are just en-

ter ing the job market .

Office automation can also be used to en-hance jobs , by re l ieving people of rout ine

repetitive steps. Jobs can be designed to inte-

gra te s imple tasks in to fewer broader tasks

so that the worker has a better sense of the

purpose and outcome of the work. Informa-



Ch. 1—The Outlook for Office Automation Technology, 1985-2000 . 19

tion systems can also give a worker access to

knowledge that could previously be obtained

only through advanced professional education,

and thus a l low a nonprofess ional worker to

take over interesting tasks previously consid-

ered the privileged province of the professional.

For example, clerks can use computerized data-bases to search for information that formerly

only a lawyer, medical doctor, biologist, or

Ph.D. in history or anthropology would have

known about. Some organizations are deliber-

ately using office automation to upgrade and

enhance work at all levels. As a result, they

can sometimes develop a flatter institutional

structure and reduce the costs of management.

Other kinds of organizational restructuring

are likely to occur. There is evidence that adop-

tion of large computers tended to lead to cen-

tralization of control. Adoption of end-usercomputers could lead toward some decentral-

ization of decisionmaking. These shifts in pow-

er depend less on the characterist ics of the

technology than on the characteristics of the

organizat ion and i t s management s t ra tegy.

Almost always some redesign and restruc-

turing of the flow of work is necessary, lead-

ing to shifts in responsibilities, jurisdictions,

allocation of resources, and relationships be-

tween coworkers and between working groups.

Communication patterns within the organiza-tional hierarchy are likely to change. Typicallyproblems arise over “ownership of informa-

tion” and responsibil i ty for assuring the in-tegr i ty of organizat ional data banks .

There is more flexibility in implementing of-

fice automation than in most changes in basic

technology; thus management has an even

greater responsibil i ty for the outcome. Theways in which organizations are implement-

ing office automation and redesigning their

work processes are r ich in innovation and

diversity. Results in terms of productivity will

be a matter of debate for some time to come.

Some organizations will be disappointed intheir expectations, and this may make others

more cautious about moving into office auto-

mation. But a great deal of cross-learning and

shared learning is occurring, and many orga-

nizations may learn from the experience of in-

dust ry leaders and thus shor ten thei r own

troublesome transit ion period.

Both in terms of productivity (because of

the importance of motivation and job satis-

faction) and in terms of equity and quality of

work life, problems of work de-skilling, occupa-tional downgrading, and disappearing job lad-

ders could result in serious social problems.

The handling of such problems is, in our sys-

tem, usually a management prerogative or a

m at t e r fo r l abor -m anagem ent nego t i a t ions .

Experience shows that the most fruitful strat-

egy, both in terms of productivity and job

satisfaction, is usually some form of worker

participation or representation in the search

for solutions. Less than 20 percent of office

workers in the United States are represented

by unions (although the growth of white-collarunions is said to be a high priority for labor

organizations at this time). Organizations are

now using or experimenting with other mech-

anisms for worker part icipation in decisions

related to technological change and job design.

O f f i c e W o r k e r s a n d T h e i r W o r k p l a c e

With more and more Americans working in

offices, there is growing attention to the qual-

ity of work life in offices, to job satisfaction,

and to the effects of office work on physicaland mental well-being. Office automation has

aroused some added concerns in terms of thelong- range e f f ec t s o f phys ica l and m enta l

stress, and fears related to work with computer

video display terminals (VDTs).

Workers using VDTs have increased com-

pla ints about eyes t ra in and musculoskele ta l

problems. Better workstation design, improvedhuman/computer interfaces, and work breaks

from long periods of VDT work can greatly

alleviate these problems. There is no evidence

as yet that such problems, while serious in

terms of day-to-day discomfort , lead to any

organic deterioration or chronic disease or ill-ness. However, evidence from other occupa-

tions with heavy workload and repetitive tasks

suggests musculoskeletal strain in VDT work may lead to chronic health effects.




have established these with regard to central-ized EDP operations, but often overlook the vul-

nerability y of data processed by end-user devices.

Organizations moving into office automation for

the first time may not realize the threats until

serious problems arise.

Home-Based Office Work

A special and important capability of office

automation technology, resulting from the con-vergence or combination of information and

communications technology, is to allow work

to be done at a distance from the office. The

worker’s home can become the pr imar y work

site. Home-based clerical work, with the work

performed on a piece-rate or hourly basis, couldincrease significantly in the next few years. Al-

ready controversial, it would then become much

more so.

The opportunity to work at home is highly

valued by many workers. Many professionals

now do part of their work at home, by their

own preference and at their own and their em-

ployer’s convenience. This flexibility is mutu-

ally beneficial and should be protected. A sec-

ond kind of home-based, computer-mediated

work is the performance of office services (e.g.,word processing, data entry, analytical studies,

computer programming, or consulting) by en-

trepreneurs who establish small businesses in

their own homes. They sometimes find bar-riers to operating their businesses in the form

of zoning laws or confusing tax provisions, but

such ventures are proliferating in spite of this.

Many women, in particular, are gaining busi-

ness skills and experience in this way.

A more controversial form of home-based

office work is the farming out of clerical office

work (e.g. , data entry and word processing)

to be done in homes, usually by women and

especially by mothers of small children. Home-

based workers are often paid at piece-rates or

hourly rates. They may be former employees

converted to the status of independent con-t r ac to r , t hus g iv ing up em ployee benef i t s .

Critics object to this form of home-based work

on the grounds that it eliminates jobs for regu-lar employees and constitutes unfair competi-

tion, tending to depress the general level of

clerical wages and preserve the segregation

of women into the lowest level office jobs. They

also argue th at it is difficult t o assure t he work-

ers of safe and healthy working condit ions;

and that i t weakens socia l pressure for the

establishment of child day care centers, ac-commodations for handicapped workers in the

office, and other social services needed by

workers employed under more conventionalcondi t ions .

A work-at-home opportunity at present is

almost always sought by the worker, not forced

by the employer. The most common reason

is the need or the wish to combine paid em-

ployment with care of children or other house-

hold responsibilities. Some home-based work

programs are designed for physically handi-

capped or ret ired workers.At present only a few thousand people are

engaged in homebased clerical work. However,

the technological and economic conditions ex-

ist for substantial expansion in the future. If

home-based workers begin to compete with

office-based workers for a shrinking number

of clerical jobs, then this issue will be muchmore highly visible and controversial .

Bills have been introduced before Congressthat would encourage home-based computer

work by means of tax credits. The AFL-CIO

has called for a ban on home-based clericalwork. Other groups argue for enforcement of

existing occupational safety and health laws

and other worker protection laws in home-

based work.

There are legal questions to be resolved re-

garding the status of some of those designated

as independent contractors; IRS has recently

ruled that those accepting work only from one

employer/organization must be regarded for

at least some purposes as employees, not con-

t r ac to r s .

O f f - s h o r e P e r f o r m a n c e o f O f f i c e W o r k

Some U.S. firms have relocated their data-

ent ry operat ions to other countr ies to takeadvantage of low labor costs. Intermediary en-



22 q Automation of America’s Offices

t repreneurs a lso make off -shore data-ent ry

services available to U.S. f irms. Recent ad-vances in communications technology are mak-

ing this activity increasingly cost effective, and

it is also being encouraged by the Federal Gov-

ernment as a mechanism for assisting economic

development in Caribbean countries. However,if predicted technology developments reduce

the need for large-scale data entry, off-shore

sourcing of data entry will probably cease to

expand.

Off-shore clerical work for U.S. firms nowinvolves only a few thousand workers, chieflyin the Caribbean countries but with some in

the Far East and India. With further improve

ment in communications services, this activ-ity could expand considerably in politically sta-

ble developing countries in many regions of

the world. The governments of many develop-

ing countries, and U.S. economic development

experts, perceive valuable potential benefi tsin encouraging this activity. It does, however,

represent a direct loss of U.S. data-entry jobs.

F e d e r a l G o v e r n m e n t O f f i c e

A u t o m a t i o n

Effects of office automation will be felt in

public sector as well as private sector offices.In Federal Government offices these effects

have implications for procurement policy, per-

sonnel policies, and budgetary planning. Theymay have implications also for the delivery

of government services, the access of citizens

to government information, and the ability of

citizens to participate in public decisionmak-

ing. This report only briefly considers such

effects on the quality of governance, primar-

ily in terms of the possibility that loss of ac-countability could result from erosion of estab-

l ished bureaucratic communication channels.

Present procurement and acquisition policies

have, in general, allowed the Federal Govern-

ment to keep pace with the private sector and

to adapt office automation technology to theneeds of Federal agencies. There are some con-

spicuous exceptions and some unsolved prob-

lems. Chief among these problems are the lack

of compatibility among devices, which is ham-

pering networking within agencies and between

agencies and field offices; and the lengthy

procurement cycle for large systems, whichis out of step with the rapid evolution of the

technology.

Gains in Federal office productivity are ob-

vious, yet hard to measure or document. Some

agencies have been able to handle greatly in-

creased workloads without a proportionate in-

crease in the work force. There are, however,

buil t- in disincentives to achieving maximum

cost r educ t ions . G overnm ent m anager s a re

offered few rewards, and may suffer subtlepenalties for reducing the number of people

they supervise or cutting their annual expend-itures. Grade level or promotion may depend

on the number of people one supervises, and

unexpended funds m ay encourage fu r the r

s t r ingent budget cuts .

There has been strong pressure by the Ad-

minis t ra t ion to reduce Federal employment.There are some indications that office auto-

mation may have already contributed to curb-

ing the growth of the Federal work force. A

significant reduction in the number of clerical

workers and a change in the ratio of clerical

to professional and administrative employees

seem to have occurred, along with changes in

job content and ski l l requirements that are

likely to continue to accelerate.

The Federal Government has a responsibil-ity to see that changes in Federal white-collar

employment, working condit ions, and career

opportunities are managed smoothly, equita-

bly, and with due concern for civil service em-

ployees. There should be continuing reexami-

nation of job classifications and classification

cri teria. Uncertainties in future employmentlevels should affect present recruitment and

hiring, and projected changes in future employ-

ment needs should also guide the planning for

re t ra ining and redeployment of present em-

ployees. Such changes are not being systemat-

ically tracked, studied, or considered in per-sonnel or budgetary planning.

Since 1975 there has been a slight rise in

average grade levels, which was strongly crit-

icized by the Grace Commission as overgrad-



Ch. l—The Outlook for Office Automation Technology, 1985-2000 . 23

ing. The changes in occupational distribution

(i.e., a smaller proportion of clerical workers)m ay have con t r ibu ted s ign i f i can t ly to th i s

sl ight r ise. Neither the Office of Personnel

Management nor Congressional Budget Office

has accounted for this factor in their analysis

of the grade level rise. If the number of lowerlevel workers has been reduced, and will be fur-

ther reduced, then efforts to hold constant the

average grade level will significantly hinder the

ability of the Government to attract and holdhighly qualified middle and upper level em-

ployees.

State and Local Government Offices

State and local governments are struggling

to manage an increased workload, partly re-

sulting from present Federal policies, without

a proportionate increase in staff . The more

than 78,000 governmental units in this coun-

try show a rich diversity in approaches to of-fice automation, both in large systems for

many governmental operations and more re-

cently in end-user computing. Small cities and

rural counties are lagging in use of office auto-

mation, in spite of the opportunities presented

by microcomputers. In part, this probably re-

sults from lack of access to expertise to help

them in choosing and supporting office equip-

ment and t ra ining workers .

There is, at this early stage, little informa-tion about the aggregate effect of automation

on local and State government offices across the

country. Evaluations of productivity so far

show mixed results. Some researchers, in spe-

cific States and localities, have found evidence

of increased productivity and of work force

reduction, others have not. Some researchershave reported findings of standardization and

depersonalization of government services, of

strong reinforcement of the existing distribu-

tion of bureaucratic and political power, and

of increased difference in the relative access

of ci t izens to government information.

Small Business and Office Automation

The effects of office automation on small

businesses are of particular concern to Con-

gress because of the vital role that these orga-nizations play in job creation and in innova-

tion. Small computers and improved software

packages appear to make office automation

more practical for small organizations, but can

still represent a significant capital investment

in comparison to their assets. The t ime re-quired to make informed decisions about equip-

ment, to redesign work procedures, and to train

staff, plus the lack of in-house expertise in trou-

ble shooting and problem solving are also sig-

nificant problems.

Although computer vendors identify small

business as an active and growing market, there

is little empirical evidence about the results of

their experience with office automation so far.

Opt imis ts hope that automat ion may a l low

small firms to expand their markets and suc-

cessfully compete with larger organizations.Pessimists fear that many will incur capital

costs beyond their abil i ty to support . Their

experience should be carefully monitored for

emerging public policy concerns.

Working Women and Minor i t ie s

The effects of office automation are of par-

ticular concern to women. Most clerical jobs

are now held by women, and one-third of work-ing women are in clerical occupations; they

are vulnerable to displacement. Women now

in clerical posit ions are trying to move intomanagerial and professional jobs, but some

job ladders may be truncated by automation.In managerial and professional occupations

that are vulnerable to office automation, wom-

en tend to have less seniority than men. On

the other hand, some new jobs and occupa-

tions, offering good potential for advancement,

are being created by office automation; access

to education and training for these specialties

is vital for women.

As skill requirements and training prereq-

uisites for traditional office jobs change, their

comparability to other jobs changes, but these

shifts may not be reflected in changes in job

titles or even in formal job descriptions. De-

bate over pay equity and comparable worth re-

quires understanding of the changing nature of

office work and its changing skill requirements.



Office automation is also of part icular in- Minorities, especially Black and Hispanic wom-

terest to minorities, and for similar reasons. en, are disproportionately represented in jobs

Clerical jobs have often been the first step in likely to be directly affected by office auto-

white-collar work for disadvantaged groups. mation.

POLICY ISSUES FOR CONGRESS

A number of policy issues have been identi-

fied above, and are discussed in more detail

in the following chapters. OTA has concluded

t h a t :

M any o f the conce rns tha t have been

raised with regard to office automation

are transition problems that will be solved

by m arke t fo rces and by the com m onsense and ingenuity of users—they do notrequire Federal action of any kind.

S om e concerns–m os t im por t an t ly , t hepossible effects on future white-collar em-

ployment levels—are matters of long-term

national interests. They merit watchful at-

tention, and Congress should begin now

to make sure that the nation is prepared

to deal with them if and when conditions

warrant action. This however will be dif-

ficult to do, because the capability to de-

tect and understand emerging structural

change in the economy is poor. Better eco-

nomic and employment data and develop-

ment of improved forecasting techniques

are urgently needed.There are a few specific issues of immedi-

ate concern; some of them are already the

subject of legislative proposals before Con-

gress or State legislatures. These include,

for example:

–documented or suspected heal th prob-

lems associated with office automation,

q

q

q

—proposals to encourage or to ban home-

based office work, and

– la rge ly unexam ined r e l a t ionsh ips be -

tween pay equity and comparable worth

quest ions and the changes associa ted

with office automation.

There are also specific issues of concern

to Congress in i ts oversight of Federalagencies and activities, including:

—the implications of Federal office auto-mation for procurement, personnel, and

budgetary policies, and

—adequacy of present provisions to as-sure data secur i ty and conf ident ia l i ty

and continuation of Federal functions

under emergency condit ions.

An emerging issue, which may become

more important and more controversial in

the near future i s the beginning t rend

toward off-shore sourcing of data-entry

work.

There are several groups for whom the

effects of office automatic are particu-

larly important and whose interests meritspecial attention:

—women in clerical, managerial, and pro-

fessional office positions,

—minority workers, and

—small business f irms.

FURTHER DISCUSSION: POLICY ISSUES AND QUESTIONS

Em ploym e n t f ice jobs is already affecting large numbersIn the immediate future, the anticipated ef- of people. It is therefore attractive to think

fects on employment are only possible or prob- of immediate actions that would position Con-able. There is little evidence that decline in gress to act in timely fashion when and if thegrowth in, or reduction of, the number of of- need becomes real . A prudent preparatory



Ch. 1—The Outlook for Office Automation Technology, 1985-2000 25

strategy would be systematic monitoring and

research to clarify the emerging effects of of-

fice automation and provide an alarm signal

if they seem likely to exceed acceptable limits.

This would require actions to improve the col-

lection and collating of occupational and em-

ployment data, and improved mechanisms formonitoring and analyzing structural changes

in the economy.

It is difficult to track and demonstrate even

long established employment trends because

the kinds of data collected by the Bureau of

the Census , the Bureau of Labor S ta t i s t ics ,

and other government agencies change over

time. The way in which those data are aggre-gated or disaggregated, and the way they are

labeled also change. The various bureaus and

agencies differ, at any one time, in the way

they define categories, so that their data oftencannot be compared and the data f rom one

agency cannot be used to augment and sup-plement, or explain, data from another agency.

For example, cashiers may or may not be in-

cluded with other clericals; “Fede ra l emp loy-

ees’ ma y or m ay n ot include postal workers

and congressional employees; part-time work-

ers may or may not be distinguished from full-

time workers. Sometimes only a highly spe-

cialized data expert can disentangle employ-

ment data to address a simple question; some

questions cannot be answered at all because

data does not exist. It maybe impossible, forexample, to determine when, and under what

conditions, blacks entered office employmentin significant numbers because no records of

black/white employment were made until re-

cent years.

What data is collected and how it is recorded

depends, of course, on what questions one ex-

pects to address. At the present time, no Fed-

eral agency has a clear mandate, nor the avail-

able resources, to develop an indepth capability

for economic and employment forecasting of

the kind Congress and the executive branchwill need in a future in which technological

change will be continuing and rapid, and will

have pervasive effects on all economic activi-

t ies. Those agencies with primary responsi-

bility for collecting economic and demographic

data have little capability, and few resources,

for understanding advanced technology and

the way it is likely to evolve in the future. The

Federal agencies with the most highly devel-

oped knowledge of new technology, including

computer technology, have no clear mandate,

little capability, and few resources for analyz-ing economic and employment effects. More-

over, the primary government source of fore-

casts of commercial information technology,

the institute of computer Science and Tech-

nology of the National Bureau of Standards,

has recently suffered a severe cut in support

of i ts planning and forecasting functions.

This indicates that the ability of Congress

to be apprised of disturbing trends in office

employment, or the broader area of whitecollar

employment, should they occur, is not likely

to improve in the future unless steps are takento ensure that this capability is being devel-

oped wi thin Government or that suppor t i s

available for such research and analysis out-

side of the Government.

If it should become clear at some future point

that white-collar employment is indeed not

growing, or if there are signs of increasing

structural unemployment, then Congress will

need to consider interventions. At a minimum

it may be necessary to take steps to assure

that changes in employment opportunities do

not differential ly burden certain groups of workers, for example, women and minorityworkers. Work ers in low-level clerical jobs m ayneed special assistance in finding other em-

ployment. Steps may be needed to assure that

there are entry level jobs for untrained work-

ers, with on-the-job training opportunit ies.

Sometime within the next 15 years it could

become necessary for Congress to take posi-

tive steps to deal with a declining number of

office jobs or white-collar jobs, whether or not

the economy as a whole remains strong. What

steps are appropriate will , however, depend

in part on whether there are available jobs inother employment sectors for which off ice

workers may be retrained. The many strate-

gies for consideration in responding to high

levels of employment have not been a focus



.Ch. 1— The Outlook for Office Automation Technology, 1985-2000 . 27

about the effects of office work on health and

well-being, and what can be done to reduce

visual and musculoskeletal strain and psycho-logical stress; and 2) directing the Occupational

Safety and Health Administration to develop

ergonomic advisories, guidelines, or standards

for use in public and private sector offices andin design of equipment and furniture used in

office automation.

If these actions and self-initiated organiza-

tional management actions to alleviate these

concerns are inadequate, then Congress may

wish to consider legislation limiting the num-

ber of hours that workers can be required to

spend continuously in VDT use.

In any case, because scientific evidence is

still equivocal, and significant risks involved

in computerized office work would affect a

large proportion of Americans, Congress could

support the funding of research on the rela-

t ion of stress to chronic disease and i l lness

and on the possibility y of reproductive hazardsrelated to VDT use. It may also wish to estab-

lish national mechanisms to monitor the health

status of American office workers.

Data Security and Confidentiality

Previous actions to increase data security

and ensure confidentiality in the handling of information about citizens have concentrated

on risks from large centralized computer oper-ations. Most organizations have been slow to

recognize addit ional r isks to confidential i ty

and security that come with decentralized com-

puters. These risks are largely related to the

increased access to organizational data banks;

the portability of data storage media; and the

lack of knowledge among general users about

privacy laws, the principles of confidentiality,

and es t ab l i shed p rac t i ces fo r sa feguard ing

data. Information about cl ients, employees,and corporate resources and activities is sub-

ject to compromise or misuse. Organizationsneed to develop policies and practices that bet-

ter protect the confidentiality and security of

data that is processed or stored by small com-

puters or other end-user devices.

Existing Federal privacy and security laws

are largely designed to strengthen the ability

of an individual to challenge the use of infor-

mation about himself or herself . If lack of

attention by organizations to data protection

in decentralized computing leads to serious

abuses, Congress may need to consider morestringent data protection laws, including lia-

bil i ty for breaches of privacy and security.

Home-Based Clerical Work

Because this activity is already controver-

sial, Congress may have to formulate policy

regarding i t wi thin the next several years .Proposals have been made in Congress to pro-

vide tax credits for the purchase of computersfor home-based work (and other nonrecrea-

tional uses). Other ways to encourage home-

based work include legislat ive actions void-ing IRS rulings and court decisions that make

many home-based workers employees rather

than independent contractors, and removal of

other regulatory or tax barriers to home-based

work.

However, Congress may instead wish to dis-

courage home-based computer-mediated cler-

ical work. It could then consider a ban on paid

computer- re la ted employment when the pr i -

ma ry or sole work site is t he worker ’s home,

but would probably wish to distinguish this

employment from similar activit ies designedto establish entrepreneurial small businesses.

Congress may, instead, wish to clarify throughlegislation the conditions under which home-based workers are employees entitled to the

normal worker protections afforded by law and

equity, and to require pro-rated benefits for

workers accepting work to be done in their

homes.

Instead of banning or strongly discourag-

ing home-based office work, Congress could

insist on rigorous application and enforcement

of existing worker protection laws and regu-lat ions to home-based work, including wage

and hour laws, occupational safety and health

regulations, and all applicable reporting re-

qui rements . T h i s s t r a t e g y w o u l d r e q u i r e



Ch. 1–The Ouflook for Office Automation Technology, 1985-2000 q 29

tional evidence suggests that there is a public q

interest in assisting small business office auto-

mation, options to be considered include an

information and education program for small

organizations considering office automation, q

or specific technical assistance or financial loan

programs for small businesses for the purposeof office automation.

q

W o m e n a n d M i n o r i t i e s

If office automation reduces the number of q

office jobs, women and members of minority

groups who have historically been disadvan-

taged in the job market, are likely to be most

negatively affected. Congress may then wish

to consider a series of steps to alleviate their

disadvantage. I t could:

take explicit notice of these concerns and

factors in discussion of bills concerning

pay equity and comparable worth, which

are now before committees;

provide incentives for maintaining or im-

proving ratios of female to male employ-

ment in labor force reductions associatedwith automat ion;

provide incentives for maintaining the

share of employment held by minority

groups in office work; and

provide subsidized child care facilities or

increased tax deductions for child care to

increase the employment options open to

working parents .



C h a p t e r 2

Productivity and Employment



C o n t e n t s

Page

The Un cert ain Out look. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33The Framework for Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34What Follows.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Recent Labor Force Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Productivity and the Nature of White-Collar Work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

How Office Automation Affects Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47Emerging Occupational Shifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Technology and Recent Trends in White-Collar Employment. . . . . . . . . . . . . . . . . . . . . 56Pa rt -Time a nd Tempora ry E mploymen t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59Analogies From Past Waves of Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64The Future White-Collar Labor Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Policy Considerations: Labor Market Adjustment Options . . . . . . . . . . . . . . . . . . . . . . . . 68The Need for Monitoring of Structural Economic Change Related to

In form at ion Techn ologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68Longer Range Policy Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69What Action Is Needed Now? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

TablesTable No. Page2-1. Growth unselected Occupations as Projected by the Bureau of Labor Statistics,

1982-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382-2. Percent of Total Work Force in Occupational Groups by Selected Industry

Sectors, 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512-3. The Growth in t he Nu mber of Clerical J obs, 1950-84 . . . . . . . . . . . . . . . . . . . . . . . . . . 572-4. Changes in the Percent of Total Employment for Involuntary and

Voluntary Part-Time Workers as Percent of Total Employment, 1968-84. . . . . . . . . 592-5. Shifts unemployment by Industry Sectors, 1900-80 . . . . . . . . . . . . . . . . . . . . . . . . . . 652-6. National Unemployment Rates During Recession Troughs and

Recovery Peaks, 1961-84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

FiguresFigure No. Page2-l. Framework Describing the Relationship of Office Automation to Changes

in t he Nu mber of Office J obs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352-2. Framework for Analyzing Long-Range Effects of Office Automationon

White-Collar Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502-3. Changing Percentage of Work Force From 1900-80 White-Collar

Compared to Blue-Collar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 562-4. Capital Investment Per Production Worker, 1970-80 . . . . . . . . . . . . . . . . . . . . . . . . . . 572-5. Changes in the Percent of Total Employment for Involuntary and

Voluntary Part-Time Workers, 1968-84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59



Chapter 2

Productivity and Employment

Office automation promises an increase in

productivity in all sectors of the U.S. economy,

because all industry sectors increasingly de-pend on information as a major component

of products and service. Office automation will

significantly reduce the number of jobs re-qui red for a g iven volume of informat ion-

handling work. It will also fuel a growing de-

mand for information and information proc-

essing.

Thus, it is possible that there will be con-

tinuing strong demand for addit ional office

workers. The most likely outcome is, however,

slowing growth in the number of office jobs, and

eventually, an absolute reduction in the num-

ber of jobs in offices from some p eak in t he 1990s.While the latter outcome is by no means cer-

tain, there is sufficient evidence pointing in

this direction to justify watchful concern by

Congress, and to merit efforts to improve themonitoring of employment trends so that cor-

rective or compensating actions can be taken

when and if they are needed. Recent employ-

ment forecasts should not lull policy makers

into complacency. This is an area fraught with

uncer ta in y .

THE UNCERTAIN OUTLOOK

T he f i r s t tw o conc lus ions—tha t w ork r e -

quired for handling a given volume of infor-

mat ion wi l l decrease , and that demand for

information will grow-can be made with con-

siderable certainty. Between these two con-

clusions and the third, that the number of of-fice jobs may ultimately decline, lie several

large questions. The most important is, “how

much will the total volume of information-han-dl ing increase?” Second, what ar e “informa -

tion-handling” jobs, and which ones will be

affected? Third, if there is a stable or lower

demand for white-collar work, are there ways

of adjus t ing wi thout creat ing s t ructura l un-

employment ?

This assessment indicates that , wi th the

amazing capability inherent in computer and

communications technologies, even the needs

of a thoroughly information-driven economy

do not, in the long term, assure rising levels

of white-collar employment equal to growth

of the labor force. That labor force by the year

2015 will be about 142 million people or 35percent larger than it is now. But the number

of people entering the work force each year

is declining. If the transition to stable or declin-ing office employment is slow enough then the

negative effects would be muted. If there is

strong economic growth, then office employ-

ment could continue to grow, although more

slowly than in the past. Strong continuing eco-nomic growth like that of the 1950s and 1960s

is not, however, certain in the future.

The overall employment effects of the first

phase of office automation, the large com-

puters installed in the 1960s and 1970s, have

been hard to detect amid other changes in theeconomy. But the second phase of office auto-

mation, decentralized computing and advanced

communication capabil i ty, is spreading rap-

idly. The third phase, the evolution of inte-

grated office systems or networking, will bring

about much restructuring of the flow of work

in and between offices.

Delayed effects of the first phase and the

emerging effects of the second and third phases

are overlapping. From this perspective, it is

possible to see the latent productivit y e n h a n c -

ing effects of office automation as water build-ing up behind a dam. The dam is made of insti-tutional inertia and the unavoidable transition

problems. When that is removed, there could

be a flood of work force reductions, unless

33



34 . Automation of America's Offices —

workers are channeled into productive new jobs

and indust r ies .

Organizations often resist laying off work-

ers when they adopt labor-saving technology,

preferring, when possible, to let attrition solve

the adjustment problem. This is one example

of institutional inertia. But every year somefirms go out of business and some new busi-nesses are started. New organizations are like-

ly to use new technology from the beginning,

creating fewer jobs than new starts would

otherwise create. This is probably already hap-

pening; for example, Dun and Bradstreet re-

por t ed tha t i n 1984 m ore new f i rm s w ere

started than in 1983, but they employed nearly

5 percent fewer people. In the financial, insur-ance, and real estate industries, which are theleaders in office automation, the number of

workers hired by new organizations declined

by over 9 per cent. ’ If new organizat ions t endto create fewer jobs because they make effec-

tive use of new technology, then employment

effects would tend to accelerate over t ime.

Which white-collar jobs will be affected?

Most directly and strongly, they will be cleri-

cal jobs. The number of professional and man-

agerial jobs is apt to be less strongly affected,

and professional work may continue to expand

indefinitely in an information society. How-

ever, even managerial and professional jobs

are not immune from the labor-saving effects

of office automation.

Businesses are now engaged in strong ef-

forts to reduce labor costs and to increase

productivity. Forbes Magazine reported that

th e na tion’s 500 lar gest pu blicly owned com-

panies (which account for about a fifth of all

civilian employment) expanded their total sales

in 1984 by 4 percent and at the same time

shrank the number of people on their payrolls

by 4 percent, or 840,000,2Sales per employee

rose by 10 percent, and assets per employee

rose by 11 percent; these are two rough meas-

The 10~,329 new starts in 1984 hired 578,838 workerscompared to 607,416 new hires for the 100,868 new starts in1983. See “Dun and 13radstreet Looks at Business, ” a Dunand l~radstreet subscriber newsletter, vol. 3, No. 3, ill ay-June1985.

-Forbes hJagazine, Apr. 29, 1985, p. 231.

ures of increasing productivity. There are other

signals of pressure on employment growth de-

spite continuing job creation. During recent

business cycles, unemployment rates in “busi-

ness r ecovery yea r s” have remained higher

than they were in recession years before the

mid-1960s, in spite of the creation of thousands

of new jobs. The number of involuntary part-t ime workers is continuing to grow. These

indicators are not tied directly to office auto-

mation, yet there is a strong possibility that

some of the effects on employment oft wo dec-

ades of office automation are now becoming

apparen t .

The Framework for Analysis

The long range effects of office automation

on office employment are pictured, in figure

2-1, as a dynamic interaction between:

q growth in demand for information, and

the labor-saving characteristics of office

au tom at ion t echno logy .

Information handling and communication

play a larger and larger role in all economic

activities. This is what is meant by an “infor-

mat ion society . ” Comput ers whet th e appe-

ti te for information. More kinds of informa-

tion can be collected. It can be analyzed in more

ways, thereby producing st i l l more informa-

tion. All of this data can be used in new ways

and easily communicated to more people.

Organizations are likely to find more inter-

nal or intermediate uses for information, and

to produce new information-intensive services

or products as office automation technology

makes i t possible to combine, package, and

d i s t r ibu te in fo rm at ion in innova t ive w ays .

Consumer expenditures appear to be shifting

from hard goods to soft goods and services,

as evidenced by the growth in service indus-

tries and in particular by the proliferation of

new financial services in recent years.

Because information-handling costs have al-ways been primarily labor costs, and because

office automation technology is labor-saving,

i t is assumed that the cost of information-

handling will decrease. This should, accord-



. .— —

Ch. 2—Productivity and Employment q 37 — —

earlier waves of mechanization and auto- T he r em ainder o f t h i s chap te r d i scusses

mat ion in the Uni ted Sta tes because the these points in more deta il , beginning with a

economy will not be growing as rapidly, review of recent employment forecasts. It endsit wil l affect more occupations, and i t wil l with a brief discussion of labor force growth,

cut across industry sectors (see “Analo- possible adjustment mechanisms, and some

g ie s F r om P a s t Wa v es of Au t om a t i on ”). p oli cy i mp lica t i on s .

There are, in many cases, some signs thattechnology has contributed to rising un-

employment rates since the end of World

WarII.

RECENT LABOR FORCE PROJECTIONS

The Bureau of Labor Statistics (BLS) ex-

pects employment in managerial, technical andprofessional, and clerical occupations to in-

crease by about 28 percent by 1995.3Most job

growth is projected to be in the service pro-

ducing industries ( transportat ion, communi-

cations, utilities, trade, finance, insurance, real

es ta te , government , and “other services”) ,which BLS expects to account for 75 percent

of all new jobs, or 18.7 million by 1995. Since

these industries are the ones in which office

automation could have major effects, the BLS

reasoning should be examined closely.

BLS expects that a quarter of all employ-

ment growth, 31 mill ion jobs, through 1995

wil l be in the category of “other services .Within th is ca tegory the larges t indust ry i s

business services, which includes a variety of things from business consultants to janitorial

services, and is projected to grow by 5.3 per-cent per year, with employment growth of 3.9

percent per year. Professional services (legal,

engineering, accounting, etc. ) are expected to

add another 850,000 jobs. Financial and bank-

ing se rv ices a re p ro jec t ed to have s t rong

growth but “modest” gains of employment

of 1.9 percent per year or 21 percent increase

in 10 years.

The BLS projection assumes: 1) full recov-

ery from the 1982 recession and stable eco-nomic growth through 1995, 2) continuing de-

‘George T. Silt’ estri, tJohn hl. I.ukasiewicz, and Marcus E.E:instein, “Occupational Employment Projections Through1995, ” Emplo~rmen t Rejections for 199,5, U.S. Department of [.abor, Rureau of I,abor Statistics, Bulletin 219’7, March 1984,p. 44.

cline in the average weekly work hours per

worker, 3) product ivi ty growth a t the ra tes

of the late 1960s and early 1970s, and 4) some

shifts in employment, namely that “new labor-

saving technologies will cause shifts to occur

among industries, with many of the old-line

factory jobs giving way to new industries and

o c c u p a t i o n s . Factory automation and officeautomation will displace some workers but

they will have an opportunity to move into

other jobs; what new industries and occupa-

tions will be created is not specified.

BLS expects that jobs requiring college or

specialized technical training will increase sig-

nificantly, as will some less skilled jobs; for

example, nursing aides and orderlies. The BLSan alysts recognize th at ‘‘employment growth

in many occupations will be affected by tech-nological change . . . “ and that among theseare typists. Nevertheless, they expect many

office occupations to grow, as shown in table

2-1.

B L S pro jec t ions show th ree a l t e rna t ive

growth rates, which are based on alternative

assumptions about the overall rate of economicgrowth. The BLS employment projection proc-

ess links a labor force model, an aggregate mac-

roeconomic model, an industry activity model,

a labor demand model, and an occupational

demand model . Under di f ferent assumpt ions

‘Nlanufacturing employment. which has declined from 25percent of all jobs in 1959 to under 19 percent, is projectedto hold this share through 199,5. This means that manufactur-ing would have to create about 4,3 million additional j ohs, orone-sixth of all new jobs.



4~ Automation of America’s offices—

than-average rate of growth for this occu-pation,

The occupational forecast is made by disag-

gregating the labor demand further; that is,

the 156 indust ry sectors used in the other

models is spread apart into 360 industries and

the total number of jobs is allocated between

them. For each of the 360 industries, BLS con-

siders the historical staffing pattern—obtained

from the Occupational Employment Survey

and carried out by State Departments of Em-ployment Security.

gThe jobs that it is assumed

the industry will provide are distributed amongthe occupations according to the rat ios that

have been obta ined in the pas t , wi th some

qualitative adjustment. In preparing the oc-

cupational projections for 1995, the BLS pro-

cedure assumes that all workers will be in oc-

cupations that not only exist now, but have

existed long enough that employers begin list-ing them as separate ca tegor ies .10

BLS uses several kinds of sensitivity anal-

yses in preparing i ts forecasts; the analystslay out three different scenarios or trend lines

for economic growth, and also make varying

assumptions about labor productivity. These,

how ever , w ou ld no t cap tu re fundam enta l

changes in production processes and capital-

to-output rat ios. No sensit ivity analyses are

performed to test the effect on staffing pat-

terns of technological change.

In summary, the strong link in BLS fore-cast methodology between industry growth

and projected occupational growth, together

with reliance on traditional industry staffing

patterns and occupational distributions, tends

to greatly underestimate the effects of fun-

damental technological change. This forecast

cannot be assumed to capture reliably the po-tential effects of office automation.

The Leontief-Duchin Forecast, “The Im pactsof Aut omat ion on Em ployment , 1963-2000,’’”

‘The survey covers 500,000 businesses, one-third of which

are covered each year, and 1,500 occupations found within thosebusinesses,“Hansen, op. cit., p. 18.“Prepared by the Institute for Economic Analysis, New

York University, for the National Science Foundation, April1984, Wassily I.eontief and Faye Duchin, Principal Investi-fzators.

.

also used input-output analysis. To deal with

the problem of incorporating the effects of

technological change into the model, however,

Leontief and Duchin allowed the coefficients

in the matrix to change over time, adjusting

these coefficients on the basis of qualitative

judgments .

Four scenarios were developed. Scenario 1

assumed no further automation or any other

technological change after 1980; it is clearly

a h ighly unlikely scenar io and is used as a r efer-

ence or benchmark for the others. Scenarios2 and 3 project an increasing use of computers

in all sectors for specific information process-

ing and machine control tasks and their in-

tegration. Of these two, Scenario 3 assumes

faster technological progress and more rapidadoption of available technologies, including

more powerful software. Scenario 4 is identi-

cal to Scenario 3 except that it uses differentfinal demand assumptions. The study con-

cluded that the intensive use of automation:

. . . will make it possible to achieve over thenext 20 years significant economies in laborrelat ive to th e production of th e sam e bills of goods with the mix of technologies currentlyin use. Over 11 million fewer workers are re-quired in 1990 and over 20 million fewer in2000, under Scenario 3 as compared to Sce-nario 1: this represents a saving of 8.5 per-cent and 11.7 percent respectively of the refer-ence scenario labor requirements.

12(Emphasis

added. )The differences by 1990 between Scenario

1 (no further automation) and Scenario 3 for

major categories of workers are:13

q 5.5 percent more profess ionals ,

q 13 .9 pe rcen t f ew er m anager s ,

32.4 percent fewer clerical workers, and

q 8.4 percent fewer jobs in all categories in

the national economy.

—.—.—— .—‘I,eontief and Duchin, op. cit., p. 1.15. There is a slight dis-

crepancy between the percentages given in the authors’ textquoted here and those given below and computed from theirtables (p. 1.16 of the report cited); the difference is minor andperhaps was caused by rounding errors.“This includes all private sector employment plus public

education and health, but does not include public administra-tion, the armed forces, or household employees.



By 2000, the changes are greater :

q 21 .5 pe rcen t m ore p ro fess iona l s ,

41 pe rcen t f ew er m anager s ,

45 percent fewer clerical workers, and

q 11.4 percent fewer jobs in al l categories

in the national economy.

Note, however, that “fewer” here means only

fewer than there would be without any fur-

ther automation—not fewer workers than there

are now. As compared to the real figures in1978 (the base year), total employment will

grow by 49 percent under Scenario 3 as com-

pared to 53 percent growth under Scenario l—

no further automation. By 2000, it will increase

76 percent over 1978 employment in Scenario

3, as compared to 98 percent increase in Sce-

nario 1.

Under Scenario 3, the proportion of profes-sional jobs to all jobs rises from 15.6 percent

in 1978 t o 19.8 percent in 2000; man agers’ jobs

decline from 9.5 to 7.2 percent, and clerical

jobs from 17.8 to 11.4 percent. Sales workers

decline slightly relative to total employment,

while the proportion of craftsmen, operatives,

service workers, laborers, and farmers each in-

creases. The increases in professional jobs, un-

der Scenario 3, are mainly in demand for com-

puter specia l i s t s and engineers .

The good news in the Leontief-Duchin fore-

cast is that if their projections were correct,

the labor requirements for Scenario 3, in 2000,would exceed the projected available labor

force of 157.4 million (after allowance is made

for public administration, household workers,

and some multiple job holders). This means,

however, that the rate of growth in final de-

mand that they assumed could not be achieved

without st i l l greater technological change.

This problem reveals a serious weakness in

the model; i t ignores the importing of both

capital goods and services. Since imports are

a major, and growing factor in the economy,

the Leontief-Duchin model does not reflect eco-nomic reality.

Leontief and Duchin developed a fourth sce-

nar io to assess the growth in demand that

could actually be attained under their techno-

Ch. 2—Productivity and Employment q 41

logical assumptions. Growth in demand was

progressively reduced unti l the labor forceneeded fell within the range of the projected

labor force available for the years 1990 and

2000, This scenario does not correct the de-

fect of ignoring imports; all demand is again

assumed to be supplied by domestic labor.

This required a reduction of their projected

output demand of 4.4 percent for 1990 and

17.8 percent in 2000, Because overall economic

activity is lower in Scenario 4, capital invest-

ment is also lower, and the number of jobs

related to production of capital goods fal ls ,

especially cra ftsmen ’s jobs. The occupa tiona l

composition of the work force otherwise re-mains much the same. The percentage reduc-

tion in demand for labor is, however, greater

than the reduction in final demand.

Scenario 4 therefore represents an estimate

of the extent to which real per capita consump-

tion can increase if the entire projected labor

force is employed, using computer-based tech-

nologies, and demand is met by domestic pro-

d u c t i o n . I t i s i m p o r t a n t t o n o t e t h a t t h eLeontief-Duchin team did not generate its own

projection of consumption (final demand, or

delivery of goods and services), but used that

generated by BLS for its moderate growth sce-

nario, discussed above.

Leontief and Duchin, as noted, incorporated

the potential effects of technology into their

forecast by changing the input-output coeffi-

cients over time. These changes are exogenous

to the model; the direction and magnitude of

the changes were arrived at by the team of analysts on the basis of extensive review of

research results and scholarly and trade liter-

ature, and their assumptions are set out within

thei r project repor t . The factors expl ic i t ly

taken into consideration were estimates of thera te and extent of capi ta l inves tment , the

amount of time in 1977 that a worker spends

performing par t icular tasks , the amount of automatic equipment that will be applied to

those tasks, the amount of time that can be

saved per task by using automated equipment,

the percent of workers in particular occupa-

t ions and indust ry sectors that wi l l use the



42 q Automation of America's offices

new technology in a given year, and the possi-

ble increase in demand for certain office occu-pations (i.e., the effects of increased demand

for information-handling). Coefficients were

modified accordingly; for example, in Scenario

3, the labor coefficient for “stenographers,

typists, and secretaries” for 1990 was set at

0.65 of the 1977 coefficient, and for 2000 it

was set at 0.45 of the 1977 coefficient, mean-

ing that for a given unit of work done by these

workers in 1977, only 65 percent as much la-

bor will be needed in 1990 and only 45 percent

as much by the year 2000. To look more closely

at the narrower category “secretaries,” the

team assum ed tha t by th e year ‘2000 in com-

parison to 1977:

q

q

q

q

q

q

30 percent of secretaries will not be af-

fected by word processing,

20 percent of a secret ar y’s time is spen t

in tasks not affected by word processing,word processing saves 80 percent of the

time required for conventional typing,35 percent of secretaries are also affected

by other office technologies,

45 percent of their t ime is affected by

other office technologies, and

75 percent of secretaries’ t ime is saved

by new technology relat ive to old tech-

nology.

While other analysts may quarrel with one

or all of these estimates or assumptions, and

m ay ques t ion w he the r they have fo reseenlikely technological breakthroughs, their as-

sumpt ions in general do not appear to be overly

conservative. There is no obviously better way

available as yet to arrive at such estimates

than the one the project used–exper t judg-

ment. The far larger problem has to do with

the assumptions about future economic growth.

This brings one back to a broader version

of the question proposed at the beginning of

this chapter: will the demand for information

(which is to a large extent a function of the

level of economic activity in this country) reallygrow to an extent that it will more than bal-

ance the labor-saving effects of information

technology? Both the BLS and Leontief-Duch-

in forecasts of employment growth depend on

an assumption that it will do so. The model

formulated by Leontief and Duchin is dynamicin that investment is a function of changes

in output in industry sectors. They project sig-

nificant gains in employment in most sectors

because the model projects nearly unlimited

increases in the production of capital goods

(output) . But the model ignores the strong

trend toward import of capital goods (and of

services); in reality, the income generated by

production of capital goods outside of this

country does not directly translate into in-

creased consumer demand wi thin th is coun-

try and can translate instead into a loss of em-p loym ent .

Leontief and Duchin, recognizing this un-

certainty, conclude that “it is not yet possi-

ble to pass a final verdict on the question of

technological unemployment by the year 2000. ”

Another reason is, as they acknowledge, thatto do so they would have to incorporate into

thei r forecas t o ther k inds of technological

change, which will change the nature and level

of f inal demand for goods and services.

Leontief and Duchin also postulate on the

basis of their model that “labor requirements

to satisfy a continually but moderately increas-

ing standard of living will number 124 million

jobs in 1990 with the required occupational

composit ion reflecting the technologies that

will be in place . . . but because of very slow

change in the orientation of education, train-ing, guidance, and so on, these individuals’

skil ls and occupational expectations will re-

flect the mix of jobs that corresponded to the

technologies that were in place in 1978 . . . “

Under those conditions, they point out, 744,000managers and over 5 million clerical workers

could be potentially unemployed while there

would be about the same number of unfilled

jobs in other occupational categories, for which

they lacked the necessary skills. The problem

for public policy, in other words, could be very

serious even if demand for labor is equal to

or greater than the supply .

A major difficulty with this forecast is doubt

about the assumption of great and increasing

demand for information-handling, which is ulti-



44 q Automation of America Offices

t i onsh ips be tw een c l e r i ca l and nonc le r i ca l

work. It did not consider creation of entirely

new jobs and had little to say about the con-

version of professional work to clerical tasks.

It did not consider the possibility of signifi-

c a n t r e s t r u c t u r i n g o f t h e i n d u s t r i e s t h e m -

selves, and their products and services. Moreimportantly, the forecast does not explici t ly

deal with growth in workload, except through

very broadly stated, arbitrary macroeconomic

assumptions, i .e. , growth within the two in-

dustries of about 3 percent annually.” Therewas not explicit consideration of expansion of

the role of information within the two indus-

tries, which are of course already highly infor-

mation intensive.

Finally, the methodology used depends on

judgmental data—est imates by indust ry ex-

p e r t s a n d t e a m a n a l y s t s - e v e n t h o u g h i t i s

treated quanti tat ively. In this of course, al lemployment forecasts are alike insofar as they

go beyond mechanical extrapolation of t ime-

series data. To do otherwise would defeat the

purpose of anticipating change brought about

by technological or economic trends.

All of the above forecasts thus are highly

dependent on the assumptions made about the

increasing volume of information handling (in-

dependently of the credibil i ty of the models

used) and the continuation of long establishedtrends in the growth of occupations and their

association with specific industries. The BLSprojection anticipates increases in office em-

ployment in the neighborhood of 25 percent

over the next decade but is probably much too

conservative in its attention to technological

change. The Leontief-Duchin forecast points

to con t inued g row th , a l though h igh ly con-s t r a ined by the e f f ec t s o f au tom at ion , bu t

bases this forecast on flawed economic assump-tions. The Georgia Tech forecast, which points

to a decline at least in clerical employment,gives more attention to l ikely technological

breakthroughs (in this field more credible than

“The most important of these were (op. cit., p. 18): 1)

periods of growth and recession, but no major depression; 2)

modest overall economic growth averaging 3 percent annually;and 3) growth in insurance and banking industries parallelinggrowth in the general economy.

an expectation of smooth technological evo-

lu t ion) bu t i s na r row ly l im i t ed to tw o in -

dust r ies .

Agreement or disagreement with these fore-

casts does not turn primarily on the models

and methodology used, but on the complex

assumpt ions , es t imates , and judgment thatgenerated the numbers fed into those models.

All such models address the question of “what

will happen if. . .”; if for example, technology

changes in certain ways, is adopted at certain

expected rates, produces in practice the prod-

uctivity benefits that in theory should result,

and leads to the changes in organizational be-

havior that can be ra t ional ly ant ic ipated.

In spite of the fact that vendors and adver-

tisers are often accused of overstating the ben-

efi ts to be gained by automation, forecasts

such as these may underestimate them. Tech-nology and employment forecasts often mis-

fire in this way, for two reasons. First, fore-

casters have no reliable way of estimating how

pervasive a technological change will be–the

ult imate rate of penetration. Some technol-

ogies are likely to be widely adopted only in

a few industry sectors or in certain parts of

a given industry, or only by organizations in

a certain size range. Other technologies affect

a broad range of economic and social sectors

or become so pervasive that they fundamen-tally change social and economic activities—

for example, the internal combustion engineand electric communications ( the telephone

and telegraph). Office automation, in particu-lar, computers, are in the latter and more fun-

damental category of technology; and l ikely

to become as pervasive in office activities as

the telephone and the typewriter have become

in the last few decades.

Secondly, technology forecasts often go wrong

either because they assume technological or

sc i en t i f i c b reak th roughs tha t f a i l t o com e

about, or because they assume a smooth evolu-

tionary development of technology rather thanbreakthroughs that suddenly occur . In com-

puter technology, the latter mistake is more

common. Recent employment forecasts appear

to assume that computer-based technologies

of the next 5 to 15 years will not be signifi-



46 . Automation of America’s offices —

There are other general problems in discuss-

ing the productivity of service industries. Serv-

ice outputs are different from material prod-

uc t s . T hey can usua l ly no t be s tockp i l ed .

Customer behavior intrinsically affects the de-livery mechanism. For example, a study of in-

c reased p roduc t iv i ty in B r i t i sh accoun t ing

firms found that most of the productivity gains

came not so much from anything the accoun-

ta nt s did but ra th er from the clients’ com-

puterization of their own accounts, which al-

lowed the accountant to save vas t numbers

of person-hours in audit ing.17

In fact, the concepts of “input” and “out-

put” both become blurred in many kinds of

whitecollar work. “Hours logged in” or “hourspa id for” a re oft en no t t he sam e as “hour s

worked. ” This is true in both blue-collar and

white-collar work, but perhaps most obviousfor professional and managerial workers who

may be ‘processing information’ or “formulat-

ing decis ions’ while they read the newspaper

or fall asleep at night. The quality of work is

of ten more impor tant than the quant i ty of work for both blue- and white-collar workers,

but for white-collar workers quali ty is more

difficult to measure in terms of error rates.

The skill that a receptionist uses in soothing

irate clients, or that a secretary uses in locat-

ing an elusive file, shows up in t he compan y’s

records only indirectly as an addit ion to a

salesperson’s accounts or a lawyer’s clients.

Contributions to corporate reputation or em-ployee morale are diff icult to measure.

In terms of outputs, a good decision or the

elimination of erroneous information from a

data bank may not be counted, or even be pos-

sible to identify as a discrete output. There

is a tendency to use worker activity, an input,

as surrogate for an output in measuring pro-

duct iv i ty , wi th the unwarranted assumpt ion

that more is better. Thus, computers and wordprocessors sometimes lead to a proliferation

of reports that may or may not be useful andmay or may not represent increased produc-

t iv i ty .

‘ ‘Irving H. Siegal, Productivity Measurement: An Evolving Art, Work in America Institute Studies in Productivity, No.16 (New York: 1980).

It is therefore difficult to measure, to de-

fine, and even to discuss the amount of in-

creased productivity that could be gained by

office automation even if it is widely adopted

by organizations of all kinds and all sizes. Some

organizations have been slow to adopt office

automat ion for th is reason.

However, an organization will usually not

decide to automate a specific task or set of

tasks if it expects that over the long run the

task will therefore require more labor, or will

take longer to perform per unit of workload

than without automation. Automation usually

implies some transference of work from hu-mans to machines, and thus a substitution of

capital for labor.

If office automation only allowed those orga-

nizations that automate (assumed for the pres-ent to be more efficient) to take over markets

previously served by nonautomating organi-

zations, the result would be a reduction in the

total amount of labor used. On the other hand,

if office automation only stimulated the crea-

t ion and sale of products and services that

could not previously be offered—that is, cre-a ted new markets- the to ta l amount of out -

put and labor used would increase. But office

automation will both create new information

markets and reduce the amount of labor re-

quired for existing and new products and serv-

ices. The difference-net labor demand-couldbe either posit ive or negative.

The factor of time is crucially important. For

some period of transition, longer for some orga-

nizations than for others, there is little or no

gain in productivity and often some loss. On

the other hand, the new technologies are so

powerful that some organizations settle for theshort-run labor savings and l imited cost re-

ductions that are possible from limited use of

automated devices, rather than run the r isk

of temporarily disruptive restructuring of the

work to systematically capture all the poten-tial benefits. Across the economy as a whole,

with sectors and industries and organizations

at all stages of this transition, it is difficult

to anticipate how long this transition will take.

Over t ime–measured in decades–more effi-

cient organizations should tend to replace less



At the most general level, table 2-2 shows

the relative shares of major occupational cat-

egories in the economy. Clerical workers are

the larges t employment ca tegory, fo l lowed

closely by professional and technical.26

In the first stage of automation (large com-puters), the tendency was to make affected jobs

more narrowly defined—in other words, to ra-

tionalize work. Batch data processors did not

learn or do other work. Word processors were

set apart in word processing centers. New spe-

cialties were created, ranging from computer

operators to programmers, and the holders of

those jobs typically did nothing else. If data-

entry work is completely automated (e.g., by

optical scanning technology) those who do only

data entry are most likely to be displaced and

secretaries are unlikely to be displaced by that

deve lopm ent .

As discussed in chapter 4, second phase

au tom at ion—end-use r com put ing—appear s

less l ikely to rat ionalize tasks or to narrow— —

‘ A major problem in assessing occupational change is a set

of difficulties and deficiencies encountered in working with oc-cupational data as it is now collected and aggregated. Occupa-tional data are deri~ed from sur~’eys, and the more specific andnarrow the occupational category used, ~he smaller the sur~’e~sample is, and therefore the less reliable the estimate of thetotal. A more important problem is the lack of consistent time-series data because of frequent changes in occupational clas-sifications, especially between the 1970 and 1980 censuses. hluchof the data used in this chapter is drawn from the occupational

industry employment matrix prepared by the Bureau of I.aborStatistics from occupational ~~mployment Surve~’ data, modi-fied by 131.S use of a statistical model. Both the survey andthe model have some methodological problems; for example,there are \“ariations o}’er time in the way that sur~’ey data wascollected, and matrix data for 1980 and 1982 are not fully com-parable. For more information on emplo~ment statistics con-sult the 111.S Iiandbook of Afe thods , vol. 1, Bulletin 2134-1,December 1982.


jobs. Personal computers can be used to inte-grate tasks and broaden jobs. Moreover, orga-

nizations that rationalized work during their

early office automation are in some cases using

fur ther automat ion to reverse that process .

Many firms have decided that computer and

communication technologies are often most ef-fective in reducing costs when control, com-

munication, and decisionmaking are decen-

tralized and when hierarchic organization andfunctional specialization of tasks are reduced.

They are experimenting with the elimination

of both low-skill clerical jobs and routine tech-

nical/professional jobs, and with the creation

of new multiactivity, skilled clerical positions.27

In some insura nce firms, the r esult of task rein-

tegration has been a significant reduction in

unit labor requirements and an increase in the

average skill levels of the remaining clerical,

sales, and professional work force.28

It is important to note that reduction of unit

labor requirements has been achieved in both

work ra t ional iza t ion and work in tegrat ion,

with office automation being used for both,

The networking of computers is l ikely to

eliminate some jobs that have until now pro-

vided the link between automated tasks—for

example, those concerned with reorganizing

-“In the insurance industry, management first tended to fol-

low the logic of scientific factory management, rationalizingand fragmenting tasks. Some insurance firms are now usingintegrated systems to reintegrate tasks, iillowing one personto handle multiple service transactions so that the individualmaster record for each policy is a complete database.

-“Eileen Appelbaum, “Technolog~ and the Redesign of M’ork in the Insurance Industr~’, ” Stanford Uni\’ersitJ’, I nsti-tute for Research on Educational Finance and Go\’ernance,Project Report No. 84-A22, No\rember 1984, p, 10,

Table 2-2.– Percent of Total Work Force in Occupational Groups by Selected Industry Sectors, 1982

Industry Sector

All All HealthOccupations industry manufacture ng F i r ea Services TCUb services Trade

Professional, technical, and relatedoccupations . . . . . . . . . 16.39°\0 10.270/o 9.46°\o 33.65 0/0 7,86 0/, 34.47 0/0 3,78

Managers. officials, and proprietors . . . . . . 8.37 6.69 17.06 6.82 8.99 4.38 9.34

Clerical ... . . . . . . . . ... 20,36 11,75 63,40 19,11 33.29 17,02 20.68

Total . . . . ... 45,12 28.71 89.92 59.58 50.14 55.87 33.80aFIRE F!nanclal Insurance real estatebTCU Transportation commuqlcatlons ut(lltles

SOURCE U S Department of Labor Bureau of Labor Statlstlcs Ernp/oymenf and Earn/ngs, VOI 30, No 1 January 1983



52 Automation of America’s Oftices

or resorting data generated by computers in

one department for entering into another sys-

tem, or the rekeyboarding that has been nec-

essary when one organization’s dat a was passed

on to another .

Office occupations must be considered in thecontext of industries and industrial sectors,

all of which have some component of office

work. In office-oriented industries such as fi-

nance, insurance, and real estate (FIRE indus-

tries), a very high proportion of the work forcein clerical and professional occupations is likely

to be directly affected by office automation.

In other industries, such as machine tools pro-

duction, a much smaller proportion of the work

force is in office occupations, and these tend

to be in less specialized jobs (i.e., general sec-re tary) .

Some occupations are more or less stand-

a rd ac ross indus t r i e s . T yp i s t s and payro l l

clerks do much the same work with only mi-nor variations in whatever industry they find

themselves. The same is true of many profes-

sional categories—tax lawyers, auditors, or

certain types of engineers work for many in-

dustries that require the same general skills.

Other occupations are characteristically found

in one industry or a cluster of highly related

indust r ies .

Both generic and industry-specific occupa-

tions may perform narrowly defined tasks andthus be potential ly subject to displacement.If office automation is broadly adopted across

industries for tasks performed by generic oc-

cupational groups, then the people who are dis-

placed will find it difficult to find similar jobs

in a different industry. On the other hand, if

industry-specific occupations f ind their work

being automated, they may move to smaller

firms or less rapidly automated firms within

the same industry—unless those applications

are insensitive to the size of the firm.

Labor force adjustment to office automationmay require major shifts in employment levels

across occupations. Industry sectors differ in

the proportion of workers in major occupa-

tional categories (see table 2-2).

Professional Occupations

Professionals here are defined as workers

doing cognitive tasks that require specialized

knowledge gained through lengthy education,

often with a graduate degree, or special cer-

tification or licensing.

29

They make up moreth an 16 percent of the work force and a re found

in all industry sectors, but there are relatively

few in some sectors such as agriculture and

t r ade , w hereas in som e se rv ice indus t r i e s

(health services, business services) they make

up more than a third of the work force. Someprofessional categories are generic; lawyers,

accountants, and computer scientists for ex-

ample are found in every industry. Others are

industry-specific, such as insurance investiga-

tors, title exam iners , and br oker’s floor repr e-

sentatives; or are heavily concentrated—more

than 82 percent of financial analysts, for ex-ample , are in the FIRE indust r ies .

30

In an information-driven economy, in which

services—with high concentra t ions of pro-

fessionals-is the most rapidly growing sec-

tor, it is likely that the demand for professional

workers will increase. This category has in-

deed been increasing much more rapidly than

any other occupational category. I ts growth

is not, however, unaffected by office auto-m at ion .

Many professionals are not primarily office

workers; for example, teachers, medical doc-tors and laboratory scientists may have or use

offices, but the core of their activity is not of-

fice work and is not directly susceptible to of-

fice automation. However, it usually requires

supporting clerical and administrat ive work

that will be affected. Professionals may them-

se lves use o f f i ce au tom at ion in pe r iphe ra l

tasks , and thei r profess ional tasks may be

‘<’The term “professional” has undergone a subtle change inmeaning in this century: historically, most professionals prac-ticed their calling on an independent or free-lance basis andin common parlance professionals tended to be distinguished

from salaried workers. Now most professionals are probablyemployees of organizations.‘“To some extent, however, this distinction is an artifact of

the way jobs are titled in various industries. People with differ-ent job designations in different industries may still do muchthe same work, or have much the same training and basic skills.




these industries have large numbers of profes-

sionals who also act as managers.

There are large numbers of managers whose

work is only partly and secondarily office work;

for example, bar and cafe managers or automo-

bile repair shop managers. Office automationtechnology, if adopted, may help them to fo-

cus on supervisory responsibilities by reduc-

ing the time spent on “office” chores.

In offices, some managers are primarily con-

cerned with the direction and supervision of

clerical or production operations and person-

nel. If fewer clerical personnel are needed with

office automation, proportionately fewer su-

pervisory managers should also be needed. Inaddition, as discussed in chapter 4, office auto-

mation can be used to increase the scope of

supervision; that is, one manager or supervi-

sor can monitor the performance of more work-ers or an increased volume of production.

The tasks of many lower and middle-level

managers largely center on: 1) information col-

lection, processing, and reporting, tasks that

office automation either facilitates and enhances,

reduces the necessary expenditure of time, or

takes over completely; and 2) communication

and coordination, where office automation can

be very t ime-saving. Higher level managers

concen t ra t e m ore on dec i s ionm aking . H ere

computers can be used in many ways. Some

decisionmaking can be, and is being, built intocom pute r p rogram s , r educ ing the need fo r

lower level managers. Management informa-

tion systems and other kinds of computer pro-

grams are des igned to help managers make

decisions, by integrating and displaying the

information they need. In some situations this

saves a great amount of time for the manager;

in other situations, it takes more time to make

a decision because more information is avail-

able to be considered.

In some organizations, information that was

once collected, integrated, and laid out by lowerlevel managers for review by higher level ex-

ecutives, is now aggregated and formatted by

computers and accessed directly by the deci-

sionmaker. This points toward a reduced num-

ber of lower level managers, and some corpo-

rations are reported to have adopted office

automation with the explicit objective of flat-

tening the management hierarchy. Heightened

competi t ion and pressure to cut labor costs

can lead firms to try to keep a lean manage-

ment staff, since their salaries are high com-

pared to other workers. At present, the jobmarket for managers is strong because of over-

cu t t ing o f m anager i a l r anks dur ing r ecen trecession years.

37

Thus, there are conflicting trends to be con-

sidered in the outlook for managerial jobs, but

they are not immune to the effects of office

automat ion.

Technology and Recent Trends

in White-Collar Employment

White-collar employment has grown rapidlyin recent decades. (See figure 2-3. ) The nar-

rower category of clerical jobs, about 16 per-

cent of all employment, has also grown rap-

idly even through the f irst phases of office

automation. Table 2-3 appears to indicate, how-

ever, that this growth may already have slowed

or s topped .38

‘-Dun Business Month, “Executive .Job Market: Fillingthe Talent Gap, ” November 1984.‘“Does not include cashiers (of whom there were about

230,000 in 1950 and 2.2 million in 1984). Beginning in January

1983 BLS reclassified some occupations; cashiers and real es-tate appraisers were removed from the clerical occupations cat-egory. These reclassifications are one of the continuing pitfallsof working with occupational data time-series.

Figure 2-3.—Changing Percentage of Work ForceFrom 1900-80 White-Collar Compared to Blue-Collar

a)~m

: 50 —White collar

z~ 40 “

E Blue collar: 20

&n lo-o~1900 1910 1920 1930 1940 1950 1960 1970 1980

Year

SOURCE U S Department of Commerce, S(at/st/ca/ Absfracfs of the Urr/fedSfafes— 1981, No 673




is not workers’ choice of a more flexible life-

style, but employers’ response to economic

pressures. In some industries and some orga-

nizations, slack workloads lead employers to

convert workers to part-time in preference to

a layoff. Other employers, however, are adopt-

ing a policy of keeping a minimum-size work force, which can be temporari ly augmented

when necessary .48

There are reports that in other industrial-

ized countries automation has greatly increased

part-time work; for example in Japan, “intro-

duction of part-time workers and subcontrac-

tion ha s gr own m as sively.’’” Office a ut oma-

tion and creation of a part-time work force are

in some si tuations al ternative or competing

strategies for cost-cutting but they may also

be complementary. Part-time workers (consid-ered by BLS as an employee working less than

35 hours a week) are cheaper than a propor-

tionately smaller number of full-time employ-

ees because they often are paid lower wages

and do not qualify for benefits packages, regu-

lar yearly wage increases, or job security agree-

ments based on seniori ty. There have been

many anecdotal and press reports of compa-

nies reducing work hours to one or two hours

fewer per week than would qualify workers

as full-time employees, but few companies are

willing to admit formally to this practice. The

biggest advantage of part-time workers for em-

ployers however is that of load-leveling; thatis, they can be used during parts of the day

or week when the workload is heaviest.50

T o

the extent that office automation allows the

work force to be reduced and workflow made

more efficient , i t may obviate some interest

in moving toward a part- t ime work force.

‘“See, for example, a recent article in Business Week , “Part-Time Workers: Rising Numbers, Rising Discord, ” Apr. 1, 1985,p. 62, reporting explicit statements by several companyspokespersons about reluctance to staff to full capacity.‘“Katsus Nishiyama, “Introduction and Spread of VDT Work

and Their Occupational Health Problem in Japan, ” to be pre-

sented at the 5th UOEH International Symposium in Japan,Sept. 19, 1985.

“’’Business W~k, op. cit. Another strong factor has beenthe growth in demand for part-time employees by fast-foodrestaurants, shopping centers and shopping malls, and neigh-borhood banking locations, many of which are open long hours,at night, or on Sundays.

But in other si tuations, office automation

encourages the creation of a part-time work

force. Where it is used to standardize and de-

skill work many employers have found it prof-

itable to use part-time, low-paid workers. Some

have reportedly moved to suburban locations

to take advantage of the availability of house-wives willing and eager to work part-time atlow wages because there is another primary

wage-earner, with a full benefits package, in

the family. As discussed in chapter 7, office

automation also makes it feasible to use home-

based workers, on a part-time and piece-rate

basis. In the long run, office automation may

stimulate a stronger trend toward use of part-

t ime or temporary workers by allowing em-

ployees to maintain a minimum work force that

will need supplementing during hours or sea-

sons of work overload; and by standardizing

the basic skills needed by clerical workers andsome kinds of professional and technical workers.

In 1955, only 8 percent of American work-

ers were part-time;51

this rose fairly steadily

to about 15 percent in the late 1960s and con-

tinued to rise to 20 percent by the 1980s. (See

table 2-4.) Thus, about one-fifth of Americanworkers are working part- t ime. Women are

much more likely to work part time, often in

order to combine paid employment with child

care. About 29 percent of working women work

part time, compared to 12 percent of working

men. About 21 percent of teenagers aged 16-19 and employed, are working part t ime.

In 1983, in the FIRE industries—leaders in

office automation—only 11 percent of employ-

ees were part-time. This sector ranked fourth

among major industry sectors, after the whole-

sale and retail trade (32 percent), service in-

dustries (27 percent) , and construction (14

percent). In the service industries, a large pro-

portion of the part-timers were probably also

office workers.

In the office-oriented sectors of banking and

insurance of other industrial ized countries,however, part-time work is expected to increase,

“] New Work Schedules for a Changing Society (Elmsford

NY: Pergamon Press, 1981), p. 45.



mation would be a barrier , since temporary

workers would be unfamiliar with equipment,

which varies widely between offices, but the

larger temporary agencies provide training in

a broad spectrum of office automation equip-

ment and applications, particularly word proc-

essing. Also, automation has standardized andde-skil led some tasks for which temporary

workers can be used. Clerical occupations ac-

counted for over 60 percent of temporary as-

signments made by the industry in 1980, al-

though it accounted for only 49 percent of the

revenue since clerical wages are generally lower

than those in technical, medical, and indus-

trial assignments made by the temporaries in-

d u s t r y .

Temporary computer and data communica-

tion specialists, and other professionals, are

in growing demand. They can offer up-to-dateknowledge of current systems, languages, and

protocols, because of recent schooling and var-

ied experience, and may choose to work as tem-

poraries for fear of becoming trapped in a nar-

row specialty or job where their knowledge

will gradually become obsolete.5G

A computerservices official at tr ibutes the trend toward

use of temporary professionals in computer-

related work to “the tr iangle brought about

by mounting costs in corporate and govern-ment-mandated f r inge benef i t s , the inabi l i ty

of many companies to meet peak workloads

wi th thei r permanent s taf f , and f inal ly thegrowing number of professionals who desire

to chan ge th eir work pa tt erns .’’”

Closely related to temporary employment

are employee leasing and use of independentcontractors. Employee leasing may be used

by employers as a still longer term strategy

for workload leveling (by month, year, or proj-

ect-duration), but it is more generally used by

very small firms or professional offices (doc-

(continued from p. 61)plied by the National Association of Temporary Services andalso based on the Census Bureau’s Count~~ Business Patterns,“Vital Statistics of the Temporary Help Industry, ” Contem-

porary Times, vol. 2, issue 6, fall 1983.)

‘ I]a\’i:’, op. cit., says “In practical terms, the! do not want

to spend the next 5 ~rears of their careers learning how to appl~:Unix or C into an insurance conlpan-v microcomputer system.Da\is, op. cit.

tors, lawyers, dentists) to shift the adminis-trative costs and benefits costs associated with

employees to a contracting firm, which can

benef i t by economies of scale .58

T h e l e a s e d

worker usually enjoys a full benefits package,

although he or she is not guaranteed perma-

nent employment ( in practice, the job secu-rity may be about the same as in conventionalforms of employment).

Office automation appears to have given alarge boost to the growth of independent con-

tractors offering business services such as

word processing, data entry, and computer pro-

gramming. Independent contractors are se l f -

employed, with all the risks and benefits this

entails; he or she assumes the costs associ-ated with slack work periods and loss of work-

er’s benefits in r etu rn for a ut onomy. The work

may be done in the employer’s facility, withthe contractor/worker effectively indistinguish-

able to observers or coworkers from employ-

ees. The work may however be done in the con-

tr actor/worker’s h ome, using th e commu nication

capabilities of office automation.

Some clerical and professional independent

contractors are entrepreneurs, or small busi-

ness men and women, seeking multiple clients

either at one time or in sequence. They may

or may not plan to expand their activities and

take on employees of their own. Many con-

tractors on the other hand work for only onefirm and are in effect employees without the

benefits otherwise associated with employ-

ment. The unresolved tax and legal issues asso-

ciated with independent contractor status are

discussed at greater length in chapter 7 in con-

nection with home-based clerical workers, many

of whom are former employees converted to

the s ta tus of independent contractor .

Par t - t ime and temporary employment and

independent contracting are likely to increase

as automated offices move toward a lean work

force with need for occasional supplementary

business services, and as more workers are fa-miliar with the equipment. There are strong

.%om-e” service contracting companies make their profits

from the interest on advance deposit of the monthly fees paidI]y th e client to cover wages plus associated costs.




benefits in it for workers as well as for em-ployers. Many people prefer and actively seek

part-time work. Students, mothers, and retired

people often want to work less than a stand-

ard workweek; others want more time for fam-

ilies, education, or recreation. They choose to

trade income for leisure time, and are willingto pay the addit ional costs in terms of loss

of benefits such as health insurance, lack of

job security, and diminished likelihood of pro-

mot ion and advancement . The s tandard 40

hour w orkw eek has no t changed s ince the

1930s, and part- t ime work is the way some

people create their own shorter workweek,

Many ‘temporaries” choose this form of em-

ployment because they want or need the flexi-

bility it gives them.. Some use it as a form of

job-hunting, or trying out potential employers.However, some temporaries are unable to get

ass ignments as regular ly as they wish, andfind the unpredictability y of their income a se-

vere disadvantage, but have been unable to

f ind permanent employment .

At a minimum, part-time work is preferable

to unemployment, Employers sometimes con-

vert full- t ime employees to part- t ime status

during a recession, in preference to laying them

off and losing a valuable worker.59

If part-time work is beneficial to many em-

ployers and is sought by many employees,under what condit ions is i t a public policy

concern? First, if enough full-time jobs are

eliminated–-i .e. , converted to part- t ime jobs,

opportunities will be diminished for those who

must have full- t ime work to make enough

money to suppor t themselves and thei r de-

pendents. Second, in the United States, many

social services and income protection mecha-

nisms are provided not directly by tax payers

but through employee benefits packages–e.g.,

health insurance, life insurance, income dur-i n g i l lness or childbirth, pension plans, and

to some extent training and higher education.

These protections are much more costly, if theyare available at all, on an individual basis. If

conversion to part-time work means that a siz-

able proportion of the population no longer

has these protect ions through employment ,

then the taxpayer is in the long run likely to

bear more of the burden of the illness, old age,

and death for these people, and the average

level of health and well-being of the popula-

tion is likely to decline.Society may be willing to bear this risk, if

that is the price of allowing people to choose

part- t ime work. If part- t ime work is not achoice, but the only al ternative available to

them, and especially if this limitation on choice

is th e resu lt of employers’ decisions, t hen th e

public policy issue becomes one of whether this

shifting of responsibility for basic protections

from employer to employee is acceptable to

the society at large. Historically, the choice

of full- t ime or part- t ime work has been re-garded a s th e individual’s prer ogat ive. We

must then ask: is this still a free choice, and

will it be so in the future? To what extent is

involuntary part- t ime work increasing?

The official part- t ime employment f igures

based on annual aver-ages do not tell the whole

story. The number of people who work part

time at some time during a year is often dou-

ble the annual average. For example, in 1978,

a recession year. the annual average was 21.4

million part-time workers, but a retrospective

survey indicated that 40.9 million people, atsome t ime during 1978, had only part- t ime

work. ’() While the a nn ua l avera ge showed 3.4million of the part-timers as working part-time

involuntarily (that is, because they could notfind full-time work)” the retrospectiv’e survey

counted 10.1 million. The number of involun -

tary part-timers has been increasing, as shown

in table 2-4, to more than a quarter of all part-

timers (and about 5 percent of all employed)




at present . Recent increases in involuntary

part-time employment and multiple-job hold-

ing for women suggest that there may not be

enough fu l l - t im e jobs fo r t hose tha t seek

t h e m .62

Thus the number of people who “want”to work par t - t ime may be smal ler than as-

sumed, and the change in attitudes and life-

styles cited above as a factor in the trend may

not play as strong a role as is often assumed.

Public interest in part-time and temporary

work is therefore twofold:

1.

2.

that the number of involuntary part-time

workers not increase to undesirable levels,

causing a deterioration in income levels,

because full-time jobs have been converted

to part- t ime jobs; and

that the costs of worker protection not

be shifted from employer to worker to a

degree that ultimately causes them to beborne by the taxpayer .

These unanswered questions again point to

the need for more careful and systematic mon-

itoring of trends in employment, since a sig-

nificant increase in the number of long term

involuntary part-time workers would challenge

the adequacy of existing mechanisms for in-

come security and other employee protection

m echan i sm s .

Analogies F rom Pas t Waves

of AutomationThroughout modern history, mechanization

and automation of work have brought dire

warnings of unemployment.63

But employment

has continued to expand. Mechanization and

automation have contributed to, or driven, this

expansion by reducing the costs of food and

“A~cordi~g to Professor Eileen Appelbaum in a talk pre-pared for presentation to the Panel on Technology and Women’sEmployment of the National Academy of Sciences, Washing-ton, DC, Feb. 17, 1985.

‘]Mechanization is the use of machinery as a substitute for

human or animaJ labor. Automation is a narrower term, mean-

ing the use of machinery that “makes decisions” about thework without human intervention; that is, machinery with con-trol systems that incorporate the principle of feedback to fine-tune or correct the machinery’s operations. Computerizationcarries this internal decisionmaking a great deal further, withthe use of information stored in memory and by the sensingof external conditions.

material goods, st imulating the market for

them, providing paychecks for workers to buy

those goods, and creating capital to be invested

in production of more and still cheaper goods,

fur ther s t imulat ing the market .

In general, workers displaced by mechani-

zation have taken other jobs in the same in-dustry as it expanded, or moved into new or

expanding economic sectors.

The argument from history is powerful; in

general , technology creates ra ther than des-

troys jobs. That is why developing nations,

with exploding populations, struggle to indus-

trialize. There are however several important

considerations to be noted. The great waves

of mechanization and automation in the pastwere still part of the continuing industrial rev-

olution. The United States was, in the 19th

century, a developing nation—an agriculturalnation becoming an industrial nation, with an

expanding national market based on plentifulresources, in which the consumers who bought

goods were also the workers that produced

them. From World War II through the 1950s,

at least, U.S. technology enjoyed worldwide

preeminence across the board. But this is now

a mature economy, strong but with increas-

ing competition for both domestic and worldmarkets . Impor ts are a major fac tor in the

economy. I t is therefore not clear that theAmerican economy will grow, in the future,

at the vigorous rate of the past. In an econ-omy that is growing more slowly, new jobs

are created at a slower rate, and workers do

not enjoy the mobility they have in a rapidly

growing economy.

Secondly, past waves of automation have

been concentrated in one or a few industries,

for example, at one time agriculture, at anotherperiod commodity manufacturing or industries

that could use assembly line techniques. Auto-

mation proceeded unevenly across economic

sectors, crafts and occupations, industries,

organizations according to size, and geographi-cal regions. Jobs were increasing in some in-

dustries and occupations, when jobs at approx-

imately the same skill level were decreasing

in other industries. Large companies auto-

m ated w e l l be fo re sm al l com pan ies . M any



70 q Automation 0f America Offices

out such a change existing employment a ndtraining programs will continue to play onlya marginal role in assisting workers in themainst ream of the indu strial labor force whoface economic hardship as a result of ongoingstru ctural chan ges in the economy. (Emph a-sis added. )

An al ternat ive or complementary s t ra tegyis to focus Federal programs on those office

workers apt to be most directly and strongly

affected, and also relatively disadvantaged in

t e rm s o f cu r ren t em ploym ent s t a tus . T h i s

group includes: 1 ) those in specific clerical oc-

cupations generally at lower levels of the wage

scale, most of whom are women; 2) minority

workers; and/or 3) all women office workers,

since even in managerial and professional oc-cupations women as a group have less senioritythan men and are concentrated at the lower

levels of the occupational hierarchy most likelyto be affected by automation.

Exist ing job training programs and labor

exchange or employment service systems that

provide labor market information are primar-ily’ framed ar ound blue-collar employment.;

71

programs available to displaced workers in the

automobile and steel industries, for example,

have given relatively little attention to office

workers in th ose indust ries. There may be ways

to improve the quality and availability of la-

bor market information and counseling serv-

ices for office workers, with an emphasis onforecasting changes in occupational demand.

working hours by taking second (part- t ime)

jobs, which would tend to make the strategy

ineffective.

In effect , the standard workweek may be

shortened without policy intervention if the

use of part-time workers increases. This has

disadvantages from a public interest view-

point, because as discussed above it would re-

sult in a deterioration of income security, and

very likely a long-range increase in the costs

of necessary social services and/or an increase

in the share of that burden borne directly by

taxpayers .

To some extent that problem might be al-

leviated by laws requiring the prorating of all

workers benefi ts packages, stronger controlsover conversion of employees to independent

contractor status (or more stringent definition

and clarification of that status), and nation-wide eligibility of involuntary part-time work-

ers for prorated unemployment benefits. This

would lead to a more rational allocation of la-

bor resources by eliminating the advantages

that accrue to employers who substitute part-

time workers for full-time workers not t O level

the workload but to save the cost of fr ingebenefits. Rigorous cost-benefit studies would

be necessary, however, to assesss the desira-

bility” of such policy action~: they should in-

clude cost-effectiveness studies to determine

the relative advantages to employer sponsored

f r i n g e b e n e f i t s p u b l i c l y p r o v i d e d s o c i a l

services.



W h a t A c t i o n I s N e e d e d N O W?



C o n t e n t s

Page

Technology and Training. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76The Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76Basic Skills Required for Office Automation. . . . . . . . . . . . . . . . . 78Determining Training Requirements . . . . . . . . . . . . . . . . . . 79

Methods for Delivery of Training . . . . . . . . . . . . . . . . . . 79How Is Training Obtained? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81The Adequacy of Office Automation Training . . . . . . . . . . 83

Education for Office Automation Technologies . . . 85Teachers and Computers . . . . . . 87

Curriculum Development . . . . . . . . . . . . . . ‘ . . . . . .“. 87Access coeducation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

Policy Considerations. . . . . . . . . . . . . . . . . . . . . . . 89Policies in Foreign Countries . . . . . . . . . . . 89Existing Legislation . . . . . . . . . . . . . 89State and local Practices . . . 91Policy Options . . . . . . . . . g~

Tables7’ah le No. [~~g~

3-1. Average Costs for Training Among Selected Off ice-Rela~ed Occupat ions 773-2. Sources of Training Needed for Obtaining Current Job Among Representative

S e l e c t e d O f f i c e - R e l a t e d O c c u p a t i o n s . . . 84

3-3. Sour ces of Training for Skills lmpr o~’emen t Among Re[*rcsent at iveO f fi c e -R e l a t e d O c cu p a t i o n s . 85

F i g u r e

Figut-e NO. P2ge

3-1, Th e IJse of Computers in Elementary and Secondary School Education 86



Because of continuing technological change,

office workers will have to train and retrain

over a lifetime. This will have a heavy impact

on the resources of both providers of training

and of those who are trained. In 1981, when

the average annual earnings in private indus-

try were just over $13,000, 42 percent of thepar t ic ipants in adul t educat ion had incomes

of over $25,000, 42 percent had incomes of

$10,000 to $25,000, and 12 percent had incomesof under $10,000 (the remainder were unre-

ported).”

Average costs for training in some office-

related occupations are illustrated in table 3-

1. Additional costs to the trainees are reduced

leisure, family, and personal time. These costs

can be a substa ntial ba rrier, especially for t hose

with child care and other family responsibilities.

Women, who are heavily employed in cleri-

cal work and increasingly striving to move upin organizational hierarchies, have a large stake

in the changes in jobs and training. Women

have constituted a large proportion of the in-

crease in the labor force in the past 15 years.

Blacks have also been moving into office jobs

in the past three decades, increasing their par-

t icipation rate in clerical jobs from 2.7 per-

cent in 1950 to 10.2 percent in 1984. They,too, have a s t rong in teres t in the changesoccurring. Black and other groups will enter

the work force at a faster rate than whites,and will account for about one-fourth of the

projected increase in the labor force to the year

1 9 9 5 .9 Hispanics will also make up a larger

‘Digest of Education Statistics, 1983-84, op. cit., p. 157.‘Monthlev I .abor Retiew (Washington, DC: U.S. Depart-

ment of Labor, Bureau of Labor Statistics, November 1983), p. 3.

Table 3-1 .—Average Costs for Training AmongSelected Office-Related Occupations

Costs (dollars) Hours

Occupation Public Private Public Private

Ch. 3—Training and Education for Office Automation . 77

part of the office work force because of a higher

birthrate than whites and because of high im-migrat ion ra tes .

The group most effected in the past by dis-

crepancies between skills required for avail-

able jobs and their own education and skills,are young workers, and especially those from

inner-city minorities. More than 40 percent of

the unemployed in January 1983 were under25 years old.

10The rate was 50 percent for black

teenagers . This s i tuat ion may be somewhat

alleviated by the decrease in number of young

workers, but the problem of lack of needed

skills will continue to limit the opportunities

in office work for ma ny young m inority workers .

The 35 to 50 year olds who will constitute

the largest group in the work force until after2000 have completed their basic formal edu-

cat ion. Thei r addi t ional t ra ining and educa-

tion will be achieved through on-the-job train-ing or through their own efforts outside the

workplace.

Older workers also have a stake in chang-ing skill requirements. There is no evidence

to prove that age is directly and linearly re-

lated to performa nce,” or to learning, but there

is less incentive for organizations to offer con-

tinuing education and training to older work-

ers as they approach early retirement age. Atti-tudes on the part of managers that reflect their

own perceptions of a worker ’s capa bilities pla ya large part in determining what training isoffered. While there is no evidence that intel-

ligence, learning ability, memory, or motiva-

tion decline with age until very late in life,12

this perception can seriously affect the kind

and amount of t ra ining and re t ra ining that

is offered to older workers.

Accounting . ... . . . . . . $488 $2,893 1,238 1,019Bu s ine ss a d m in i s t rat i o n 3 9 5 3,913 1,148 1,198Secretary, . . . . . . . . . . . . 541 2,903 998 1,043Computer programmer . . . . 551 3,473 1,276 704Clerk . . . . . . . . . 507 1,870 924 785

SOURCE U S Department of Ed;catlonNational Cen!er for Educa!lon Stat[s-tlcs Dfgest of Educ~fIon Stat6t/cs, 79831984, Washington, DC table

139

. . —.—“’T h e Em p lo. vmen t Situation: December 1982 (Washington,DC: U.S. Department of Labor, Bureau of Labor Statistics,Jan. 7, 1983).

“U.S. Senate, Special Committee on Aging, T h e Costs of Emp lo . v i n g Older Workers ( Washington, DC: U.S. GovernmentPrinting Office, September 1984), p. 4.

-Ibid., p. 59.



Basic Skills Required

Office Automation

for

Whether skil ls required to work in auto-

mated offices are at a‘ ‘higher’ or ‘lower’ levelthan those they are replacing, and whether

more or less training and education will beneeded by future employees, has been the sub-

ject of much debate.

The basic skill requirements for all office

work can be obtained through the traditional

educational system. These include reading,writing, spelling, and some math proficiency.

Problem solving, abstract thinking, commu-nications, and interpersonal skills are increas-

ingly important. But studies have concludedth at one-fif th of the Na tion’s a dults do nothave adequate reading and writing skills to

function competently in the labor force. ”Some office automation equipment will fos-

ter jobs that require less skill than do manual

operations, but many jobs found in an auto-

mated office require a higher degree of dis-cretion, init iat ive, understanding, and crea-tivity. A few specific skills become redundant,but many workers must cover a wider span

of work activity than before, often in a shorter

t ime span.

The degree of automation achieved may de-termine the skill levels required. In the fac-

tory, levels of automation vary from a powertool that is hand controlled to a robot that

identifies and selects appropriate actions andcorrects its own performance while operating.The skills required can increase as tasks are

automated but only to a certain level.14

When

the automation reaches higher levels the re-

quired skill levels can decrease, as the workeris required only to monitor the machine and

respond when the machine warns that some-thing is wrong.——.

‘See Norv e l l No r t h c u t t , Adult Functional Cornpetenc~’,Adult Performance Levels Project, Industrial and Business

Training Bureau, University of Texas, Austin, 1975.“James Bright, “The Relationship of Increasing Automa-

tion and Skill Requirements, Employment Impact of Techno-logical Ch ange, Appen&”x Vo lume II : Technology and the Amer-i c a n Econom.v, National Commission on Technology,Automation, and Economic Progress (cd.), Washington, DC,1966, pp. 11-209.

Most offices are now at the lower to middlelevels of automation; it is likely that the skills

required are more complex at this time because

of the man y sets of rules that need to be learn ed

to operate the new equipment, and becauseof the changes in the work process and in rela-

t ionships between work groups.

Among clerical workers surveyed by Kelly

Services, Inc., 88 percent of the 613 respond-ents believed that their skills were increased

by automation and that this would help them

obtain salary increases, even though only 30

percent of them had achieved such increases

since acquiring new skills.

Some experts15

challenge the popular belief t ha t com pute r t r a in ing shou ld be bas i c in

schools in order to prepare students for theworkplace, on the grounds that the “higher”

the technology, the lower the skill level re-quired. A BLS analysis indicates that only a

small percentage of new jobs in the future will

require computer literacy beyond what can be

learned on the job in a few hours or days. ”

Others challenge the assumption that jobs re-

quiring use of a computer are automaticallytransformed into “knowledge work. ”

Researchers seem to be in agreement that

the number of jobs available in the future re-

quiring in-depth knowledge of computers arenot a large proportion of projected new jobs.

However there is also general agreement thatskills will change for many jobs (particularlyoffice jobs) and that training and retraining,

probably throughout the lifetime, will be re-

quired for many workers. As lower level cleri-

cal jobs are automated and eliminated, the re-maining jobs will require higher level skills.

To what extent employers are willing to pro-

vide this training on the job will depend on

the availability of workers who have obtained

the required skills elsewhere. From the work-ers ’ point of view, achieving th ese sk ills will

be cri t ically important in obtaining employ-

‘r’For exa mple, Douglas N oble, “Computer Literacy and

ideology, ” Teachers C ollege Record, vol. 85, No. 4, summer1984, pp. 602-614.

“Henry Levin, “Jobs: A Changing W’orkforce, A ChangingEducation’?” Change, vol. 16, october 1984, pp. 32-37.



Generally, when office automation equip-

m ent i s purchased , t he vendor p rov ides a

limited amount of orientation training, often

in a classroom setting or through computer-

based training. The users must then experi-

ment independently to determine what appli-

cations are best for their own specific tasks.Coworkers supply addit ional knowledge.

Key workers are often used to train others

in an office and assist them in acquiring office

automation skil ls . These “internal trainers”

may receive formal training from the vendoror may develop expertise on their own. Then

they m us t “ in t e rp re t ” the sk i l l s and tu to r

other staff members. Other office workers ben-

efit by learning from someone who knows both

the business operat ions and the sys tem.

Beneficial as this short cut to formal train-

ing may seem, i t may not be as productiveas it first appears. The internal trainers are

often volunteers whose formal job descriptions

do not take this role into account and no al-

lowance is made for it in their official work

schedules.21

They must balance the importance

of their training activities against the possi-

ble loss of productivity in their own assigned

duties. While the key workers often enjoy their

teaching role, they may or may not be good

teachers and may or may not treat coworkers

f a i r l y i n s h a r i n g t h e i r t i m e a n d a t t e n t i o namong them.

User groups are formed by users of a tech-

nology to share information and to assist each

o the r . S uch g roups a re usua l ly fo rm ed by

employees and are most often managed and

m ain ta ined by the use r s them se lves . U se r

groups are also encouraged by equipment ven-

dors. Outside help or intervention is rare.During meetings, users take on the role of

teacher, translator, t rainer, problem solver,

and s tuden t .

Centers for learning, testing, and exchang-

ing information (often called user or technical

information centers) have been established in

“Tora 13ikson, Don Mankin, and Cathleen Stasz, “Individ-ual and Organizational Impact of Computer-Mediated Work:A Case Study, ” The Rand Corp., OTA contract report, March1985, p. 42.

many organizations, as a place that employ-

ees may go to learn about automated technol-

ogies. These “user information centers” may

offer a variety of services including—instruc-

tional classes, computer-based training, hard-

ware and software testing, rating guidelines

for applications and prepurchases, and educa-t iona l and in fo rm at iona l pub l i ca t ions . T he

training is most often self- init iated by the

worker seeking basic skills or further applica-

t ions knowledge. These forms of in-house ,

group learning are beneficial because people

feel rewarded when they meet new challenges

on their own.

Computer-based training (CBT) for learning

office automation skills is increasingly avail-able. There are multiple choices of off-the-shelf

equipment and systems, standard sets of equip-

ment and software programs that can quickly

and easily be adjusted to a variety of require-

ments. Some include optical disk and video

text. As more manufacturers and vendors have

entered the field, the cost of CBT hardware

has decreased; i t is no longer a prohibit ive

factor in most cases. In its 1984 industry sur-

vey, Training magazine reports that 46.4 per-

cent of all responding organizations use com-

puters for t ra ining.22

Computer-based training is popular becauseit reduces the two most commonly cited prob-

lems of training-cost and t ime. One expert

reports that the use of CBT reduced courselength and that students trained on such tech-

niques achieved the same or a better level of

performa nce than was achieved by those tra ined

in the longer conventional instruction courses.

A review of the literature found no evidence

that the use of computer-managed instruction

(CMI) or computer-assisted instruction (CAI)

caused students to do less well than control

groups receiving other forms of instruction

within the classroom.23

Two matters cause con-

cern when CBT is used—the fideli ty of the

training system in simulating the work envi-

“Tr ain ing, October 1984, p. 56.

“S* Mildred D. Jarvis, “Computer Based Training: Les-sons Learned, ’ Proceedings of the Human Factors S ocie ty—28th Annual Meeting, 1984, pp. 515-519, also her reference to

Orlansky and String’s report on the cost-effectiveness of CBTin military training, 1979.



Ch . 3— Training and Education for Office Automation q 81

Phofo cred(t D~gf ta / fqu~~rnen( CorP

Computer-based training

ronment, and the quality of the written docu-

mentation used in the training. The closer the

learning situation follows the work setting, as

opposed to merely presenting drill and prac-tice exercises, the greater the applied learn-

ing tha t i s acqu i red . P oor ly w r i t t en docu-

mentat ion prevents t ra inees f rom advancing

through the stages of learning or achieving

the highest level of learning possible.

Home study is a growing alternative to for-

mal classroom-based training. CAI and CM I

packages are offered, for example, by the Na-

tional Radio Institute (NRI), which provides

technical correspondence courses. Cost is the

restr ict ing factor for home study because i t

is expensive to convert courses to technology-

oriented modes of delivery and because the

students must often purchase their own hard-

ware and software to study at home. However,

for basic education, TV-presented courses are

very cost effective. While sending employees

to a training seminar or conference can cost

approximately $40 per hour, and a university

course can cost $7.50 per hour, a TV course

costs only pennies per hour.

How Is Training Obtained?

A survey of Fortune 1500 firms” indicated

that companies, when automating offices, are——.—-“ ‘Amer ica a t ~’ork: The Management Pe r spect i \ 7e on

Training for Business, ” I’IT Educat iona l Senices, Indianapolis,IN , 1983, p. 44.



most l ikely to hire new employees with the

required skills (44 percent), switch employees

into positions requiring no additional skills (40

percent), or reduce the number of employees(40 percent). Thirty-six percent switched em-

ployees into positions that required additional

t ra ining.

In addition to formal education institutions,

many public and private sector organizations,

including unions, are involved in providing

training and/or education, but demand so far

outstr ips supply. Some experts have ques-

tioned whether the capacity exists to respond

to all training and retraining needs. Many busi-

ness organizations are increasing their budgets

for training. A 1983 survey of 1,821 private

and government employers” showed that 1984tra ining budget increases were predic ted by

47.4 percent of the companies surveyed, but53.5 percent actually did increase those ex-

pendi tures in 1984.

Although i t varies considerably by indus-

try, the dollars spent on nontechnical train-

ing such as sales and supervisory skills, out-

weigh the dollars spent on technical training

such as word processing, programming, and

elect ronic tes t ing. Also, according to th is

s u r v e y26

managers were much more likely to

receive training than lower level employees.

Midlevel managers and first line supervisorsreceived an average of 32.5 hours of training,

executives received 28.3 hours, and profes-

sionals, 27.2 hours, while administrative andsecretarial employees received approximately

11 hours. Most of the companies surveyed

offered both in-house and outside training with

executives most likely to receive outside train-

ing and lower level employees most likely to

receive in-house training. Only 31 percent of

these companies engage in retraining of em-

ployees, usually lower level employees.

In a survey of selected clients in Chicago,

P r i ce Wate rhouse27

found that 42 percent of

. - - . — -“Training Budgets ’84: In the Pink—and the Green, ”

Training, october 1984, pp. 16-31.“’’’Training Magazine’s Industry Report, ” !ll-aining, Oc-

tober 1984.“Price Waterhouse Office Automation Survey, ” Chicago,

1 ] , , 1984,

these firms provide on-the-job training, most

often with vendor prepared documentation.The figure went up t o 64 percent for the smaller

firms surveyed. This agrees with the BLS sur-

vey showing that 50 to 60 percent of workers

gained qualifying skil ls on the job.

T em pora ry agenc ies anx ious to inc rease

their supply of trained workers are offering

word processing training to potential employ-

ees, often by means of computer-aided instruc-

t ion and simulation. A standard for basic,

intermediate, and advanced skills has been de-

veloped by one agency .28 This standard re-

qui res that an operator wi th bas ic ski l l s beable to—set up the system, keyboard, create

documents, make minor corrections and proof,store and fi le text , recall /retr ieve text , and

print text. Advanced operators should also be

able to execute special software packages, de-velop graphics, write special programs, and

supervise other operators .

The Kelly surveys29

found in 1982 that 52

percent of the companies surveyed developed

their own training programs and 51 percent

—.. — .-——-“’Manpower-The Temp Agency–-Launches New Ap-

proach to WP Training & Placement, ” Inside 14rord Process-ing, vol. 4, No. 6, June 1983.“’T h e Kelly Report on People in the Electronic Office (Troy,

MI: Kelly Services, Inc., 1982); The Kelly Report on Peoplein the h’lectronic Office 11: How Office 1$’orkers Triew A u toma -t ion (Troy, MI: Kelly Services, Inc., 1983); and T h e Ke]l.v Re-

port on Peop)e in th e Electronic Offke / 1 1 (Troy, M 1: Kell~

Services, Inc., 1984).

&

pho fo Credl( ManPower /nc



trained their own personnel. Fifty-one percent

used a manufacturer-developed training pro-

gram a nd 32 percent u sed the ma nufacturer’s

trainers. A 1983 survey showed that 34 per-

cent of the nonmanagerial employees surveyed

received their training from a vendor repre-

sentative, 28 percent from a supervisor, 26 per-cent from a manual (self-trained), and 11 per-

cent from an outside consultant or a class off

the premises .

Professionals and managers in offices are

not neglected in the market for office automa-

tion training. Courses focusing on the upper

level employees’ need for tr ain ing a re becom-

ing common. Many professionals and man-

agers learn such skills on th e job, through t heir

own efforts, by means of a manual or by ‘‘just

fooling around” with the machine. The avail-

ability of simplified software in specific profes-sional fields is making it easier for the profes-

sional to be self-taught, and new ways to get

work done are finding their way into manage-

ment t ra ining curr icula ,

Data on the sources of training for current

jobs were developed by Carey and Eck at the

Bureau of Labor Statistics.’” Table 3-2 shows

that in 1983, 70 percent of computer systems

analysts and scientists received training for

their current jobs in a school, mostly 4-year

colleges. Fifty-seven percent of secretaries,

stenographers, and typists and 22 percent of records clerks received school training. Seven-

teen percent of all workers received qualify-

ing training in 4-year (or more) college pro-

grams. Professionals working in offices, such

as economists, stat ist icians, engineers, etc. ,

usually obtain their qualifying training in a

4-year college. Business administrators and

managers are also increasingly qualifying for

their jobs through college education. Employers

seem to be requiring higher qualifications for

many jobs as a more highly educated work

force becomes available. This reduces oppor-

tunit ies for less educated employees to bepromoted to higher level posit ions.

hlax Care} an d A l a n F;ck, “HOW M’orkers (jet T h e i r Train-

ing. ” occupational outlook Quarter?’. t’ol, 28. wint,er 1984,pp . 3-21.

Ch 3— Training and Education for Office Automat ion q 8 3

Formal company training programs reached

27 percent of computer systems analysts and

scientists, 30 percent of operations and sys-

tems researchers and analysts, 17 percent of

general office supervisors, 25 percent of insur-

ance adjusters, examiners, and investigators,

but only 4 percent of secretaries. Informal on-the-job training was received by considerably

larger proportions of the occupations shown

in table 3-1.

About 55 percent of a sample of all workers

employed in January 1983 indicated that, ac-

cording to their own perceptions, they needed

specific training to qualify for their current

jobs. One-third of all workers had undertaken

skill improvement (see table 3-3 for some typi-

cal office-related occupations) since obtaining

their current jobs.

Although only about 5 percent of all work-

ers obtain training from high school vocational

programs, a large proportion of these are of-

fice workers. Thirty-five percent of secretaries

have received vocational training as have al a rge p ropor t ion o f com pute r sys t em s p ro -

grammers and computer sys tems operators .

Thirty-five percent of the 5.9 million enrolled

in public vocational education in 1981 -8231

studied office trades, and 23 percent of adult

education participants studied business-relatedcourses.” Business/office school enrollment in-creased 38.1 percent between 1975 and 1981,while vocational and technical schools and in-

stitutes suffered decreasing enrollments dur-ing that t ime.

The Adequacy of

Off ice Automation Training

A recent study” found that in the last 20

years, the post-secondary education field was

able to accommodate quite well to changes in

demand for its services. However, secondary

‘Occupational Projections and Tra iningData

(~~’ashington.DC: U.S. Department of I,abor. Bureau of I.al)or Statistics,19X4). table c-l .

Digest of L’ducation Statistics, 198.3-84, op . cit.S u e Berr~’n~an, T h e .4djustn]ent of l’outh a n d l“’duc:]-

t ional Institutions to Tec’hn(jlogi(>till\ Generated (’hangps in.Skilf Requirements {J$-ashington, I)C: National (’omission forl~;mplo~’ment Polic?, Ala? 19851, p, 66 .



C/r, 3— Training and Education for Office Automatlon q 85

Table 3-3.—Sources of Training for Skills Improvement AmongRepresentative Office-Related Occupations

Sources of trainlng (percentof occupatlonal employment)

vocational education in comprehensive schools

was relatively unresponsive to changes in skill

requirements. This problem may be exacer-

bated by declining enrollments and the need

to delegate scarce resources to the academic

studies, for that there is greater demand in

these comprehensive schools. By contrast, pri-

vate and public schools that focused on voca-

tional education are more adaptable to changes

in skill requirements in the labor market.

Although the adequacy of any training or

retraining depends on the office, the job, and

th e individual’s needs,

pability, it is possible

hc

373816

9262616

7

136

251315

252216

121611

2511

1912232326

&

87827

1

2

332654

terms other factors influencing the quality of training. The quality is dependent on the qual-

ity of the instructional materials and design,

the quality and availability of instructors, andthe range of courses that are offered.

There is currently no legislation to regulate,

assess, or accredit the content or the quality

of the courses offered in the private and com-

mercial sectors. Those who invest in such train-

ing are at the mercy of the market. This lack of quali ty control can be expensive and can

drain the resources of individuals and organi-

com mit men t, a nd ca - za tion s.

to discuss in general

EDUCATION FOR OFFICE AUTOMATION TECHNOLOGIES

Computers have assumed such an important find themselves pressed for expanding the cur-

function in the contemporary practice of busi- r iculum:

ness, industry, science, and scholarship that

almost no student can expect to remain iso- q

Iated from these tools. This imposes on edu-

cat ion the addi t ional task of prepar ing s tu-den t s fo r j obs in w hich they w i l l u se the

computer as a partner.34 Schools and collegesq

‘C-harles ‘~lossman, ,4ssociate Vice Pres id en t , Acad emicResource I]lanning, California State [Jni\ersit~. Fullerton, in

joint hearings hefore the L]. S. C’ongr-ess, I louse, InformationTechnology in F;ducation, Apr. 2-3, 1980, p . 145

b y s t u d e n t s – m a n y o f w h o m e xp e ct

schools to provide them with access to

computing and instruction in computer-re la ted subjects , and

by the job market-because employers ex-

pect applicants to have some basic com-

puter literacy before they arrive on the

job.




According to a recent national study, com-

puters in high schools are used two-thirds of

the time to teach children how to use a com-

puter (“computer l i teracy”), and 18 percent

of the time for drills and practice in various

subject matter. Results of a survey of 1,082

elementary and secondary schools, conductedby the Center for the Social Organization of

Schools, the Johns Hopkins Universi ty, are

shown in figure 3-1. It appears that relatively

little is being d one to exploit t he comput er’s

potential for teaching traditional subject mat-

ter in a more efficient, interesting, or effec-

tive manner. Also, time is not spent on the

computer to teach and develop office automa-

tion skills for future jobs.

C om pute r -as s i s t ed ins t ruc t ion (C A I)– the

computer as teacher— has been introduced to

improve the delivery and productivity of gen-eral education. CAI has been found to reduce

by 10 to 30 percent the amount of time stu-

dents need to master a subject.35

CAI supple-

ment s th e teachers’ efforts in th e tr aditional

classroom setting and provides specialized in-

dividual instruction.

“’Education Turnkey Systems, Inc., “Uses of Computers inEducation, ” prepared for the National Commission for Em-ployment Policy, April 1985, p. 42

Figure 3-1 .—The Use of Computers in Elementaryand Secondary School Education

70 r6A

60

50

40

30

20

10

0 L Literacy

40

[ Drill

18

L

24

—G a m e s Other

Functions

u Elementary = Secondary

SOURCE Flqure derived from School Uses of Microcomputers ReDortsFr~m a National Survey (working paper) Center for Social Organlzatlon of Schools The Johns Hopktns Unlverslty No 2, June 1983

The effectiveness of CA I is hindered by the

lack of high-quality software. The Educational

Products Information Exchange Insti tute, in

cooperation with the Consumer Union, evalu-

ated 600 pieces of educational software in 1984

and rated only 5 percent of what was exam-

ined, or 30 programs, as “first-rate.”36

I t takes about 200 person-hours to create

1 hour of conventional CAI. Work is being done

at the Advanced Computer Tutoring Project,

Carnegie-Mellon University, Pittsburgh, Penn-

sylvania, to reduce the time required to de-

velop CAI. 37 A t tem pts a re a l so be ing m ade

to develop intelligent CAI, or ICAI, which al-

lows for conceptual modeling and interactive

instruction.

Computer-managed instruction (CMI) is an

automated technology used for the manage-

ment of the school system and for managingthe instructional flow in the classroom. It aids

both the teacher and student by providing pre-

and post-tests to evaluate advances in learn-

ing levels, offering diagnostics, helping stu-

dents with assignments, and keeping student

records. The teacher need not be present for

all testing, assigning, and recordkeeping. Cog-

nitive diagnostics for learners can also be pro-

vided by computer programs.

The hardware available for educational uses

and teaching office automation skills has fo-

cused on using microcomputers. Video disksin the future may play an important role be-

cause they allow for greater interaction in in-

struction by simulating actual situations. Al-

though information on educational software,

evaluations, and availability is published, the

price of these analyses l imits access to this

information for many educators. Most school

districts lack the means to identify better soft-

ware, and in most schools only a handful of

teachers have the training to make effective

use of computers .38

‘hEdward B. Fiske, “Computers, In Most Schools, Have

Brought No Revolution, ” /Vew York Times , Dec. 9, 1984, p. 80.‘“John R. Anderson, C. Franklin Boyle, and Brian J. Reiser,

“Intelligent Tutoring Systems, ” Science, Apr. 26, 1985, p. 228.‘“Fiske, op. cit., p. 1.




Access to Education

To the extent that computer l i teracy and

computer expertise are needed for success in

getting and keeping jobs, inequities in receiv-ing computer experiences in school are espe-

cially serious for low-income, female, and ru-ra l s tudents . They t rans la te in to socia l and

economic inequities by giving some people

more effective tools for working and living in

an age of information technologies than others.

acy associated with wealth of the school, com-

munity size, region, gender, and race.

S tudent enrol lment in computer program-ming is much lower in schools that qualify for

Title I assistance (by having a large percent-

age of the parents with income below the pov-erty line) than in schools that do not qualify.

After a survey of schools in 1983, Quality Edu-

cation Data, Inc., reports that the 12,000 wealthi-

est schools are four times as likely to have

m ic rocom pute r s a s a re the 12 ,000 poores t

schools. Rural and disadvantaged urban com-

munities provide computer learning opportu-nities at a much lower rate than other com-

m u n i t i e s .45

Among students at age 13, lessthan 17 percent of the rural/ghetto students,

but 32 percent of those living in “urban/rich”

areas, reported use of computers in schools.

Eighteen percent of junior high school stu-dents in small towns report school computer

use, compared with 26 percent in large cities.

Each year the National Assessment of Edu-

cational Progress (NAEP) surveys 44 a s t r a t i -fied random sample of students aged 9, 13,

and 17 in approximately 700 schools in the

Uni ted S ta tes . Data f rom the 1982 survey

show inequit ies in access to computer l i ter-

Students living in the South are much lesslikely to have used computers in schools than

students living in other parts of the country.Those in the Western States are twice as likely

as southern s tudents to receive such expe-

rience.

Young women in secondary schools are less

likely than young men to spend time with com-

puters and to enroll in computer classes.46

F e-

males ar e less likely to take comput er pr ogram-ming classes than males; one study in 1983

showed that 8 percent of the females and 14

percent of the males have enrolled in program-ming courses for at least one semester. The

Women’s Action Alliance of New York Cityhas devised several school-based strategies to

overcome this problem, working with parents

and teachers to increase girls’ use of com-

puters. The results after a year of trial at a

“iThese and the following figures are based on the work of

Ronald E. Anderson, Wayne W. Welch, and I.inda J. Harris,Computer Inequities in Opportunities for Computer Literacov,University of Minnesota, based on work supported by the Na-tional Science Foundation under grant SED 8022125Ao I, 1983,p. 4.“As shown in studies by Anderson, Welch, and Harris, op.

cit., 1983.




Federal contracts. Various congressional ac-

t ions have been taken to draw at tent ion to

selected national problems, to provide the fis-

cal resources needed to address these prob-

lems, to support research activities that have

nat ional and in ternat ional impl icat ions , and

to complement and supplement the role of par-ents and State and local governments in sup-

por t ing individuals and ins t i tu t ions .

Although there is no existing Federal legis-

lation specifically addressing office automa-

t ion educat ion, there are re la ted laws that

could provide a vehicle for delivery of office

automat ion educat ion.

Direct Federal involvement in training and

employment programs is considered to havebegun with the Area Redevelopment Act (ARA)

of 1961, although indirect Federal involvement

in training through vocational education pro-grams began with the Smith-Hughes Act of

1917. The Manpower Development and Train-

ing Act (MDTA), enacted in 1962, focused

training efforts on workers displaced due toau tom at ion . T he J ohnson Adm in i s t r a t ion’s

war on poverty brought about a wide range

of work experience and training programs tar-

geted on the poor, minorities, and youth. The

Comprehensive Employment and Training Act

(CETA), passed in 1973, absorbed many ex-is t ing work and t ra ining programs and was

designed to operate primarily at the local lev-

el.50

CETA underwent amendments during its

history that expanded its purpose and reach.The Trade Adjustment Assistance (TAA) pro-

gram reauthorized in 1981, also authorized

funds for training. The Job Training Partner-

ship Act (JTPA) replaced all portions of CETA

on September 30, 1982. This new program

shifted the focus away from direct Federal in-

volvement in t ra ining programs and es tab-

lished a business-government partnership in

the provision of training for job skills. Train-ing programs are operated by the S ta tes in

combination with local-area governments andPrivate Industry Councils (PICS) and provide

“’U.S. Congress, Library of Congress, Congressional Re-search Service, Job Training Programs: Reauthorization and Funding Issues, by Karen Spar, Issue Brief No. IB82005, Feb.8, 1982.

for the training of unemployed displaced work-

ers in skills relevant to real employment op-

portunities in the area. These programs were

not primarily aimed at office workers or at of-

fice automation training.

Target groups for legislated training pro-

grams have traditionally included about 8 per-

cent of the population. These groups include—low-skilled adults (especially women and mi-

norities), disadvantaged youth, and residents

of economically depressed areas. The gaps in

public policy left by JTPA and similar pro-

grams relate to: 1) the retraining needs of the

large-middle tier of employed but at-risk work-

ers; and 2) the basic skill needs of the 20 mil-

lion or so functionally illiterate adults in thework force who will not be touched by reforms

in elementary/secondary education, and whose

learning handicaps prevent them from bene-fiting from job-specific training.”

The Vocational Education Act (Perkins Act),

as revised in 1984, provides focus on educa-

t ional needs at the secondary and post-sec-

ondary school level . The Perkins Act grants

funds to States to make vocational education

programs accessible to all persons, but follows

the current t rend of p lacing greater control

and responsibility at the State and local levels.

Targeted groups include:

q handicapped and disadvantaged persons ,

q s i n g l e p a r e n t s a n d h o m e m a k e r s ,q adults in need of training and retraining,

persons in programs designed to eliminate

sex bias and stereotyping in vocational

education, andq per sons inca rce ra t ed .

The act is designed to improve the quality

of vocational education programs in order to

give th e Nat ion’s work force the m ar keta ble

skills needed to improve productivity and pro-

mote economic growth. Under this act, the ac-

quisition of office automation skills may be

included in State programs for general voca-tional opportunities. Part E of Title III, “In-

dustry-Education Partnership for Training in

High-Technology Occupations, ” al lows for

—.—.—“’Perelman, op cit., p. 27.



Ch. 3— Training and Education for Office Automation q 91

grants to States to provide incentives for busi-

ness and industry and the vocational educa-

tion community to develop training programs

for high-technology equipment, systems, and

processes. These programs are intended to be

closely tied to the local labor market and skill

needs.

The act states that to the maximum extent

practicable, funds will be utilized in coordina-

tion with JTPA to avoid duplication of effort

and to ensure maximum effective utilization

of funds under both acts. While the goals of

the two acts are similar, the manner of achieve-

ment is different. The focus of the Perkins Act

is public vocational training and education,

while the focus of JTPA is on industry-spon-

sored training. The two acts overlap where

there i s the greates t need for ass is tance .

Funding for these programs is the key totheir success. However, the level of Federal

funding for employment and training decreased

by 49.7 percent between 1981 and 1984. Fund-

ing for elementary, secondary, and vocational

education decreased by 8.9 percent during that

period. There were some increases for fiscal

year 1985— 17.5 percent for elementary, sec-

ondary, and vocational education; and 14 per-

cent for tra ining and employment; but decreases

are again projected for fiscal years 1986 through1990 in training and employment functions.

52

Federal aid to State and local governmentsfor vocational and adult education decreased

by less than one-half percent between 1981 and1984, but is projected to increase by 23.7 per-

cent in 1986. Federal aid to State and localgovernm ent s fo r em ploym ent and t r a in ing

services was decreased by nearly 57 percent

between 1981 and 1984, and is projected to

increase by only about 13 percent by 1990,

with some fluctuations. If this trend continues,

State implementation of this act will not be

effective.53

The Employee Education Act amends theInternal Revenue Code to extend for 2 years

~:xecutive office of the President, Office of hlanagementand Budget, Historical Tables. Budget of the U..!. (;o~rernm ent,Fiscal Year 1986, tahle 3-3 (19) and (20), 1985.

I bid., table 12-3 (431 and (52).

the income tax exclusion for amounts received

by an employee under a qualified employer pro-

vided assistance program. Unless extended by

Congress, this act will expire at the end of 1985.The act limits the exclusion to $5,000 of educa-

t ional ass is tance furnished to an individual

during a calendar year.

State and Local Practices

Typically, State funding and support of edu-

cation has been related to economic develop-

ment. Several private sector industries and re-

search and development f i rms have recent ly

moved toward more direct involvement with

higher education institutions by starting joint

education ventures. While joint ventures are

encouraged by some Federal laws, many busi-

nesses have traditionally contracted locally for

training and education programs for their em-ployees.

States have assumed a greater role during

the past few years, as they enact student assis-

tance programs to supplement declining Fed-

era l suppor t and shoulder the responsibi l i ty

of Federal programs. As State policy makershave been confronted simultaneously with rev-

enue declines and requests for additional funds

for higher education as well as for other hu-

man resource inves tments , some have taken

the unpopular course of raising taxes to pro-

vide additional support. Others have reducedreal levels of support for higher education in

general and for research universities in par-

ticular. The funding pattern has been unique

to each State.

Some S ta tes are making s t rong ef for ts to

keep up with the new teacher and curriculum

needs. For example, the State of Minnesota

has made new office automation skills and com-

puter knowledge a high priority for vocational

education programs. Efforts are being made

first to increase the competency of teachers

through conferences and workshops on high-technology equipment, office systems, tele-

communications, and curricula design. An in-

tegrated office system has been installed for

tea chers’ ha nds -on experience. The system pr o-

vides administrat ive assistance for teachers.




The St at e’s vocat iona l program will also in-

c lude more oppor tuni t ies for the adul t and

par t - t ime s tudent communi t ies .

A nothe r exam ple o f S ta t e ac t iv i ty i s i n

Texas, where “House Bill 246” will be imple-

mented in all school districts in the 1985-86

school year. This law mandates computer liter-

acy courses for middle school (seventh and

eighth grade) students and computer science

classes for all high school students, as require-

ments for graduation. The computer literacy

course includes history, terminology, basic pro-

gramming skills, and issues of computer use

in the society. Computer-related course credits

are not required at the elementary school level,

but many school districts are providing sometype of computer awareness a t that level .

Policy Options

Federal actions that could encourage edu-

cat ion and t ra ining oppor tuni t ies re la ted to

office automation might include:

q

q

q

q

q

q

q

designate funds specifically for office au-

tom at ion educa t ion p rogram s th roughnew legislation or existing vocational edu-

ca t ion l eg i s l a t ion tha t p rov ides a id toschools;

increase funds for programs through ex-

isting legislation (e.g., the Perkins Act);

promote access for students in low-incomefamilies and in ru ral ar eas, and for women,

through direct funding and establishment

of service programs;

increase Federal attention to maintaining

the capacity and quality of research in the

Nation’s universities and the flow of new

talent in to academia;

provide career counseling, job guidance

programs, job search assistance and train-

ing programs that do not penalize those

receiving unemployment insurance;

encourage t ies with the private sector

through cooperative educational efforts,curr iculum development , and indust ry-

based act iv i t ies for of f ice automat ion

skills;

establish support programs or tax credits

for small businesses to ensure that the ed-

ucation of employees is adequate to main-

tain current levels of employment and

product ivi ty ;

provide t ra ining grants and tax credi ts

to businesses that incur expenses for of-

fice automation training. Also provide in-

centives to establish training programsin office automation skills, including em-

ployment tax credits for employers who

t ra in and educa te w orker s . E m ployer s

could be given the same kind of tax write-

offs for training that they get for plant

modernization;

establish a program of Individual Train-

ing Accounts (ITAs), similar to the Indi-

v idua l R e t i r em ent A ccoun t s . T he IT A

may require employers and employees to

make equal contr ibut ions to a bank ac-

count; this money would not be taxed un-

til withdrawn. The account could be drawnby employees to pay for retraining whenneeded. This would direct resources toward

retraining needs of mainstream workers

now being neglected. A key objection to

this proposal is that workers may not be

able to choose an d direct their own retr ain-

ing in the best way, or appropriate pro-

grams may not be available;

expand the tax deductibil i ty of training

for current and new occupations related

to office automation;change unemployment regulations to per-

mit receiving unemployment benefits dur-

ing training. Encourage States to consider

those in training programs as still avail-

able for work, and to reserve parts of their

State funds to establish permanent fundsfor retraining; and

encourage union involvement in negotia-

tions for skill training opportunities. In-clude requirements that firms give notice

of plant closings in advance and aid in

the retraining of displaced workers.

Congress may determine to take none of the

above actions, making the conscious choice topreserve the status quo. Since there is no ex-

ist ing regulation of office automation train-

ing, the training available commercially islikely to grow, but with existing inequities in

access and quali ty unchecked.



Ch a p t e r 4

The Changing N a t u r e

of Office W o r k



C o n t e n t s

Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Individual and the Work Process . . . . . . . . . . . . . . . . . . . . . . . ........ . . . . . . . . .The Nature of Office Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Work Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Information Age Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Task Change and Computer-Mediated Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Job Changes With Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Management and Professional Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cler ical J obs..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Job Ladders and Mobility . . . . . . . + . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......+.

Organizational Structure and relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Power and Access to Information.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .End-User Computing Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........+ . . .....4...Dispersion of Work Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Reason for Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Key Actors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Adaptive Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Users in the Implementation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figures

95

9696

9710 1

103

10410510710 9

11 111 111 4114116

11711 811811911 9

.Figure No. Page

4-1. Possible Variations of Work Process for Word Processing . . . . . . . . . . . . . . . . . . . . 984-2. Model of an Integrated Customer Service System . . . . . . . . . . . . . . . . . . . . . . . . . . . 102



Chapter 4

The Changing Nature of Office Work

Translating the capabilities of office auto-

mation technology into tangible operating ben-

efits for an organization illustrates effects atmany levels—individual tasks, the work proc-

ess, organizational structure and culture, and

quality of working life. These effects are at

the core of the most interesting and pressing

issues related to office automation. Yet, they

are difficult to address because it is not possi-

ble to give a simple or universal description

of the effects of automation on workers, jobs,

or organizations.

This chapter looks primarily at the effects

of office automation on the nature of office

work, on job content, and on organizations.I t examines the effects of office automation

on the work process; on specific tasks, skills,

and jobs; and on promotional opportunit ies.

Next it discusses the possibility of structural

or cultural change in organizations that adopt

office automation. Finally, it reviews some of the major factors that contribute to success-

ful implementation of office automation.

One point to be emphasized throughout this

chapter is that the technology itself is not theonly factor—and may not be the most impor-

tant factor—in bringing about these changes.

M anager i a l s t r a t eg ies -dec i s ions abou t t he

organization’s goals and the role of people and

technology in achieving them—are of major

importance in determining how the technol-

ogy is used. In many cases, it can be seen that

outcomes are more dependent on how the tech-nology is used rather than on what specific

equipment is employed.

CASE STUDIES

Many of the examples used in this chapter

were taken from case studies of offices usingautomated equipment. In addition to the case

studies in the literature, OTA commissioneda number of small case studies, discussed in

more detail in appendix B.

Case studies provide a rich source of detailed

information about the process of implement-

ing office automation and the possible changes

in tasks, jobs, work processes, and organiza-

tions. They allow one to view the intended andunintended consequences at many levels, and

in a variety of contexts. In this chapter, case

studies are used to provide illustrative details

about the effects of technology in a wide vari-

ety of organizations. These observations form

the basis of some cautious generalizations about

th e effects of office a ut omat ion on organizat ions.

Caution is needed in making use of case ma-

terial for a number of reasons. First, the meth-

odology and level of detail of published case

studies vary widely. Some are highly quan-

titative, others depend largely on qualitative,

participant-observer, or anecdotal information.

Second, the organizations studied are al l

unique. Authority structure, corporate culture,

management philosophy, internal dynamics,f inancia l heal th , and operat ing environmentare different. To the extent that these factors

of themselves cause certain outcomes, or mod-

erate the effects of technological change, it is

difficult to state authoritatively that the re-

sult observed at one study site can be expected

at other locations.

Third, the technology itself is defined differ-

ently from one organization to another and

from one study to another. Office automation

in one organization may be word processing

capabi l i ty used a lmost as a d i rect subst i tu-

tion for typewriters; in another it may be an

extensive multiuser, multifunction operational

system governing the production of the orga-nizat ion’s pr ima ry product . Man y poss ible

systems and combinations of functions, includ-

95




ing text processing, messaging and commu-

nication, decision-support software, graphics,

and numerous special purpose applications

may have a separate effect on the individual,

the job, or the organization. The choice of fea-

tures, the way the work process is organized

to use them, and the order and timing of sys-tem introduction, often make each case of of-fice automation unique.

Finally, the time factor must be considered.

User reactions and use of technology in a

“honeymoon” phase shortly after the equip-

ment is up and running may be different from

what happens at a later date when new capa-

bil i t ies or l imitat ions are fully understood.

Some changes in the work process may takeplace immediately after implementation, while

others may not become evident for some time.

Thus, the findings of a case study may depend

on where the organization was in the system

life cycle when the study was carried out. There

are few longitudinal studies that follow the

same set of organizations over t ime. Even

within one study i t can be diff icult to com-pare ‘before’ with ‘after’ in an environment

where new technology is introduced gradually

over a period of months or years, and where

systems are continually being upgraded or ex-

panded.

Despite these difficulties, case studies are

often the only information available, and they

capture the detail necessary for understand-ing dynamic change within the organizations.

THE INDIVIDUAL AND THE WORK PROCESS

The Nature of Office Work

Office automation has transformed office

work. Many offices are now semiautomated

environments where people and computers in-

teract. An “office, ‘‘ in the sense of a working

unit of people doing information processing

work, is seldom a totally automated environ-

ment. A fully automated procedure is one that

does not require human intervention in order

to produce i ts f inal output. Automatic dataprocessing falls into this category; all trans-

formation of information is internal to the com-

puter . But such ful ly automated procedures

usually make up only part of the work. Office

work usually involves a series of steps, some

are ful ly automated, some are manual , and

some require interaction between people and

com pute r s .

For the purpose of this chapter, a task will

be considered any clearly definable activitythat forms a step in producing the final prod-

uct of the office. Tasks may be performed by

people or by machines. The work process is

the social and technical organization of work.

It is the way people and machines are orga-

nized to produce a result—the way informa-

tion or materials flow from one to another un-

til the final product is completed. Jobs areorganizationally defined positions that are usu-

ally associated with a bundle of tasks and a

particular role with a defined set of responsi-

bilities in the work process. The work unit or

office is a group of people of any size, with

responsibility for producing some identifiable

final product. The work unit has a skill and

task mix, that is, its members are at different

levels, have different roles, and perform a range

of functions to produce their product. S k i l l sare the attributes and knowledge that work-

ers need to perform useful activit ies.

The impact of office automation on office

work goes beyond changes in tasks. It can in-

troduce new tasks, change the nature of the

skills required, modify the work process, and

ult imately can cause or be associated with

changes in jobs and in organizational culture

and structure. This is at least in part because

computer-based technology bundles tasks in

a way t ha t is different from t he way t hey would

be done manually. When part of a process be-comes automated, the tasks that remain to

be done by people may be different kinds of

tasks. A new process is necessary for inte-

grating the work done by people and the work

done by machines to accommodate those differ-



— —

ences. When the work process changes, the

organizational structure, which defines the

roles and responsibilities of the members, can

also change.

Take, for example, an office where a profes-

sional researcher writes reports and a secre-

tary types them. Introducing a word proces-sor can change the work process in a number

of ways. First, the nature of some tasks will

change, and the new tasks will require differ-

ent skills. If the professional decides to use

the word processor, then composing on a key-

board will require skills quite different fromthose of writing by hand. Some skills needed

for old ta sks–like th e secreta ry’s a bil ity t o

neatly paste up final copies—may seldom be

used.

Further, a change may take place in the proc-

ess that governs the in teract ions of author ,secretary, and other people needed to produce

the report. Partially completed drafts may no

longer pass between the author and the secre-

tary. The secretary may be left out of the revi-

sion procedure entirely, or at least the secre-

ta ry’s res ponsibilities ma y no longer include

th e task of typing the a ut hor’s reports.

There are also some points where the tech-

nology does not dictate a change, but allows

an opportunity for choice. The word proces-

sor could be given to the secretary instead of

to the author. The author might still hand writedrafts, with the secretary keying in the docu-

ment and making corrections on the word proc-

essor. In this case, the word processor is more

like a simple subst i tut e for the secreta ry’s

typewriter. The relationship of author and sec-

retary, and the flow of work between them,

might have been altered only a little, although

the secretary will have to learn new skills. In

another scenario, that relationship might be

severed completely. The secretary might be

reclassified as a word processing operator and

moved to a newly created pool to key and cor-

rect draf ts for many authors , as par t of achange in the structure of the organization.

The use of new technology also introduces

new steps and new tasks. For example, use

of an automated system introduces the need

Ch, 4— The Changing Nature of OffIce Work q 97

to make backup copies, design and use an elec-

tronic filing system, and manage disk space

or diskette storage. Decisions about whether

these tasks will be handled by all users, by

secretaries, by a system administrator, or by

some combination will affect the work process.

There is also the possibility that the avail-ability of the technology will catalyze its own

use. In the experience of many authors, the

ease of editing a document on a word proces-

sor sometimes leads to additional rewriting,

so that this step can sometimes seem to be

repeated almost indefinitely.

Thus, even with this simple example it is

possible to see how changes at the level of the

task, job, work process, and organization could

take place as a result of office automation.

The Work Process

The bundle of tasks an individual performs

describes the job, but the job is more than

merely the set of tasks. The job is an organiza-

t ionally defined posit ion. In many organiza-

tions it is characterized by a job description

that legitimizes the position. People identifywith their jobs. The job defines a role within

the work process and within the social struc-

ture; it is the point of articulation between the

individual, the technology, and the organiza-tion. Thus it is not sufficient to talk about how

of f i ce au tom at ion a f f ec t s i nd iv idua l t a sks .Jobs also change-the bundle of tasks, the rolein the work process, the position in the orga-

nization, and the self perception.

Division of labor is necessary when there

is too much work for one person to handle.

Once a division of labor is made, the work proc-ess governs the relat ionship of the various

workers to the part ial ly completed product.

One way of looking at work process is asa cont inuum that runs f rom the most in te-

grated to the most differentiated. Figure 4- I

shows five possible steps along this continuum

for a word processing office. The most in-

tegrated is the one where authors do their own

word processing and have complete responsi-

bility for all steps in the process and control



98 . Automation ot America Offices

Figure 4.1 .— Possible Variations of Work Process for Word Processing

Integration of work process

. G r o u p o f a u t h o r s , o n e o p e r a t o r ~ . Team of authors, team of operators

. Many authors, centralized WP pool withtask specialization

Differentiation of work process

SOURCE Adapted from S M Pomfret, C W Olphert, and K D Eason, “Work Organ tzatlon Impllcatlons of Word Process ing, ” Proceed/rigs of the Ist /F/P Con/ererrceon f-/urnan-Corn~uter /n/eract/on (/N TERACT ’84A VOI 2 , 1984 , pp. 357-363



Ch. 4—The Changing Nature of Office Work q 99

over the end product. The most differentiated

is one where authors send work to a central-

ized word processing pool where operators

have specialized tasks–some key in text, some

proofread, some do corrections, etc. Between

these extremes might be one-on-one relation-

ships between author and operator, or situa-tions where one operator or a team of opera-

tors focus on all stages of work for a particular

group of authors.

The basic concept of work integration or

differentiat ion can apply to a large extent

regardless of the level of technology employed.

The example above works equally well if the

technology used is typewriters or quill pens.

There is a popular perception that advancing

technology is associated with increasing dif-

ferentiation and fragmentation of work. The

manufacturing assembly l ine, with workersperforming repeti t ive tasks, is a product of

the industrial revolution, not of earlier craftma nu factu ring. Man y people’s only ima ge of

office automation is a picture of the central-

ized word processing or data-entry pool. Al-

though there has been a connection between

computerization and fragmentation of work in the past, other forces are also at work. Of-

fice automation technology offers the possi-

bility of reintegrating the work process in some

cases.

Another way of looking at the work process

and the way it changes with automation is in

terms of the three generic types of work proc-

esses in offices identified by Giuliano—pre-

industrial, industrial, and information age.]

The preindustrial form of organization is

used by many small and medium sized offices,

for example, a real estate brokerage or profes-

sional office. These work units may have a

number of workers with different jobs, or roles,

in the work process. However, each worker is

to some extent a craftsman. Each works with

some independence and performs a variety of

tasks. There has been little effort to completelystandardize or systemize the work process. A

variety of individual work styles is tolerated.

‘l’in~>~nt l;. (li~llimt), “The ~le~h~niz~t i~n of office W’ork, ”Scienti f ic ,4m erican, September 1982, pp. 149-164.

There may be some fuzziness or overlap in

respons ib i l i t i e s and w orker s m ay be su f f i -

ciently familiar with the work of others to

switch tasks occasionally, or take over in anemergency.

While the preindustrial style of organization

works well in many contexts, it is often ineffi-

c i en t i n hand l ing l a rge num bers o f t r ans -

actions. Thus, in the insurance industry, bank-

ing, or the billing departments of large firms,

where high t ransact ion volume is handled,

industrial-style offices evolved. They are de-

signed to organize people to serve the needs

of a large, r igid production system. The in-

dustrial office is a production l ine. Workers

are differentiated into functional groups, for

example-typists, log-in clerks, validation clerks,

and signature control clerks. Each group has

its own supervisor, and is responsible for somestep in the processing of a transaction. Docu-

ments related to customer transactions f low

from one functional area to the next, from one

“out’ box to the next “in’ box, receiving some

incremental processing at each stop.

The flow of work in an industrial office is

consciously designed according to principles

of “scientif ic management” f irst art iculated

for manufacturing by Fredrick W. Taylor in

the early 1900s. With Taylorization, a com-

plex production process is analyzed and divided

into a series of simple tasks that can each be

performed quickly and efficiently. workers are

assigned to perform a single task, or a narrow

range of tasks, in a routine and repetitive way.

The industrial form of work organization is

a deliberate attempt to increase efficiency by

rationalizing the work process, and by reduc-

ing individual discretion and variat ion.

Because industrial-style offices were ones

in which the work process had been consciously

analyzed and the individual tasks identified,

isolated, and standardized, they were ideal can-

didates for the early introduction of computers.

Certain tasks could be automated completely,ma king u se of th e compu ter ’s abil i ty to do

large batches of calculations quickly. However,many man ual tasks remained in preparing data

for the computer or making use of computer

o u t p u t .




Some have argued that computerization al-

lows managers to speed the process of Tay-

lorizing and routinizing office work in order

to reduce costs and increase management con-

tr ol.’ Certa inly, as a ut omation began t o be used

in offices, it appeared that Taylorization and

computerization were mutually complemen-tary and in terdependent processes , as com-

puters were f i rs t in t roduced in those areas

where ma nua l processes had already been ‘in-

dustrial ized.”3

Indeed, computerization seems to have in-

tensified the factory-like nature of industrial-

style offices. “Pools” of functiona lly similarworkers existed before, but the trend toward

specialization increased with computerization,

especia l ly in rout ine data-ent ry tasks :

Routine keyboarding was separated more

sharply from other clerical functions and wasoften spa tially isolat ed . . . As a r esult of theheightened fragmentation of work, processingpersonnel (both data processing and wordprocessing) typically worked at machines allday. . . both t he technical and social relationsof work in these centralized word processingand data processing centers were factory-like.The work process was machine paced and oftenmachine su pervised; aut onomy of the opera-tor was minimal; competence measured bymanual dexterity and speed.

4

Taylorization is not limited to clerical proc-

essing functions. It isolates predictable tasks.Professional or managerial jobs can be ana-

lyzed and the more routine functions stripped

away. Baran and Teegarden note that under-

writing, the main professional occupation in

the insurance industry, has been increasingly

rationalized. At one firm, this was done by

splitting off the lower level functions and cre-

ating a new clerical position called underwrit-ing technical assistant to perform them. Re-

maining professional posit ions were divided

into specialty categories o

5

Fo r example, see Harry 13raverman, Labor an d MonopolvCapital: The Degradation of Work in the Twentieth Centur~’(New York: Monthly Review Press, 1974), pp. 293-358.

‘Barbara Baran and Suzanne Teegarden, “Women’s Laborin the Office of the Future: Changes in the Occupational Struc-ture of the Insurance Industry, ” Department of City and Re-

gional Planning, University of California, Berkeley, 1983, p. 11.II bid.Ibid.

Some offices are in factories. Note that some of theseclerical workers are protecting their ears

from excess noise.

Photo credit M/chae/ Srmth

Some offices where large numbers of transactions arehandled resemble factor~es,

The industrial style of office organization

works well for highly routine processes. It has

some disad vant ages, in dealing with ‘ ‘excep-

tions” or nonroutine si tuations, and is usu-ally not efficient for customized services. Some

experts also note that it is susceptible to pos-

sible long-term growth of overhead costs. For

example, in order to deal with error detection

and correction it maybe necessary to add mores teps , thus making the process longer and

more unwieldy. Generally, no one employee

has all the information needed to correct an

error, so mistakes may persist or build on one

another; papers might cycle through the sys-

tem several times before they are corrected.



Ch. 4– The Changing Nature 0f Office Work 101

It can become difficult to provide quick, ac-

curate customer service when work is proc-

essed in a production line fashion. The proc-

ess of issuing an international letter of credit

at one bank required 23 steps performed by

14 workers over a 3-day period, and generated

stubs and carbon copies to be stored in a num-ber of locations.’ A customer with a question

had a difficult time finding the one worker with

the right bit of information to answer it, and

if a customer wanted a transaction to be mod-

ified, the whole process had to start over again.

Finally, for many workers, the endless repe-

tition of a limited range of tasks is boring. Yet

information-handling tasks, even boring ones,

usually require a high degree of focused at-

tention. The result can often be a high error

ra te in the work, and a high turnover ra te

among the employees. These problems will be

discussed at greater length in the next chapter.

The Information Age Office

For some businesses, office automation of-

fers the possibility of restructuring the work

process in a way tha t reduces some of the prob-lems of the industrial style of work organiza-

tion. This new approach has been called “post

indu st ria l’ or ‘‘informa tion a ge’ an d is cha r-

acterized by an electronic reintegration of the

steps involved in producing a product.

Electronic reintegration of work representsa new approach to rationalization of work. In-

stead of attempting to make the work process

efficient by rationalizing each task and func-

tion separately, this approach seeks to ration-

alize a whole procedure, perhaps along prod-

uct or market lines. This is possible becausethe technology allows: 1) the integration of in-

formation from many sources, and Z) the dis-

tr ibution of information to many locations.

A general example can be seen in the case

of the bank mentioned above. Under the old

system, each worker performed one or twosteps in the processing of all letters of credit.

Under the revised work process, each worker,

with the aid of a computer workstation anda client database, performs all the necessary

steps in processing letters of credit for a par-

t icular set of cl ients. The database contains

all inform at ion r elated t o the customer’s ac-

count. The customer service worker is the sin-gle point of contact between the customer and

the bank for corrections or inquiries.

An illustration of the capabilities of an in-

tegrated customer service system at Ameri-

can Express is shown in figure 4-2. customer

service representatives have the ability to deal

with a wide variety of activities related to their

cases. Working from the on-line database they

can answer telephone inquires, send writtenreplies to mail inquires, make credit adjust-

ments, stop automatic duns, or issue a special

statement. In addition to the on-line database,

the customer service workers have access to

historical records stored on computer output

microfilm.

Electronic reintegration allows a worker a

view of the whole operation and gives a vari-

ety of tasks to perform. Roth factors are in-

dicative of a “de-Taylorization” of work, andprobably contribute to greater job satisfac-

tion, and in many cases, greater autonomy andresponsibil i ty. However, electronic reintegra-

tion does not necessarily lead to greater au-tonomy, responsibility, or discretion. Because

the work is dependent on the use of the com-puter, it can be subject to machine monitor-ing and pacing.

When a whole process cannot be handled by

one kind of worker, electronic integration can

still be used to accommodate a decentralized

team approach to the division of labor. Some

insurance firms have created small teams of

raters, underwriters, and clerical support work-

ers to work on specific product lines. Workers

that were formerly separated by function are

now integrated into a team that serves a spe-

cific market. Organizing the workers in teamsrather than isolating them in functional groups

a l l o w s t h e m g r e a t e r u n d e r s t a n d i n g o f t h e

whole production process and facilitates com

munication.




Figure 4-2.— Model of an Integrated Customer Service System

Case 3.. ,

1. Open a case

[

o

2. Post an action -3. Create an adjustment ~4. Close a case

i I L 1

SOURCE Jay W Spechler D[rector Performance Englneerlng American Express Co , personal communication 1985



——.—.

Ch. 4— The Changing Nature of OffIce Work 103

Baran and Teegarden suggest that in the

insurance business, firms will tend to continue

to use the industrial-style work process to pro-

duce and dis t r ibute s tandardized products .

Much of the work will be highly routine, and

the work force will consist of a shrinking num-

ber of low-skilled clericals and a few highlyskilled professionals. With these products the

goal is to reduce unit costs as far as possible

and to minimize labor costs. For more spe-

cialized products, those that require customiz-

ing o r r e spons iveness to ind iv idua l c l i en t

needs, there may be more use of the team ap-

proach along with integrated office automa-

t ion sys t em s . 7

‘Baran and Teegarden, op. cit., p. 21.

TASK CHANGE AND COMPUTER-MEDIATED WORK

One commonly noted characteristic of work

with computers is that they make work more

abst ra ct and a l ter t he worker’s re la t ionship

to the task. This is sometimes called a “com-

puter mediated” relationship, in that the in-

dividual must now do the task through themedium of the computer system rather than

through direct contact with the objects of the

tasks Using any sort of tool can, of course,

distance a worker from direct tactile contact

with an object. But most manual or power tools

still allow the worker to remain cIose enough

to the object to get direct feedback about the

condition of the object, the status of the proc-ess, or the need for adjustments. When a com-

puter is used, feedback is indirect, in the formof symbols generated by the information system.

Office work is already abstract. What is ac-

tually being processed is information. Yet from

the point of view of the worker, this informa-

tion becomes concrete because it is carried on

physical objects–s ignature cards , accountledgers, invoices, letters, reports, and checks.

Most manual or mechanical ly a ided off ice

tasks involve transforming the information by

manipulating the object—copying, typing, up-

dating, or signing it. When computers are in-

t roduced , m any o f these ob jec t s d i sappea r

completely. The worker is left to deal with in-

tangible information, which is transformed in

invisible ways inside the computer.

—— —

“See, for example, Shoshanah Zuboff, “New L$’orlds of Com-

puter-hlediated W’ork,” Har\ ”ard Bus iness I?et’iew, September-October 1982, pp. 142-152.

The rules by which information is prepared

or transformed also change with computer me-

diation. Quantitative comparisons are easy for

computers to handle , qual i ta t ive judgments

are not. Thus, in the process of restructuring

work to be done by computers, qualitative as-pects of information are either quantified or

lost. Correctness of data or procedures must

be redefined to fit the formal logic of the com-

puter, and formal correctness can become moreimportant than the relevance of information

content.gHuman judgments are often replaced

with computer-based decisions and human er-ror detection or correction become difficult.

The language of the human-computer inter-

face is different from human language, as well.Although computers are becoming easier touse, they still require human operators to learn

specific codes and procedural commands. Fur-

ther, even when these commands are similar

to plain English, the formalized process by

which the computer works may be quite differ-

ent from human thought patterns. The human

operator must learn to think and to perform

actions in a precise order that reflects the log-ical sequence buil t into the software.

The ability to think in a way that parallels

computer logic is not a trivial intellectual dis-

cipline, and represents a new way of working

for many people. For example, retrieving in-

formation from a computerized database re-—- ...—

‘Fu r t h e r discussion is in Gu n n a r Aron s s o n , ‘‘ChangedWork Qualification Structure in Computer-hlediated M’ork, ”National Board of occupational Safet~’ and Health, Solna,Sweden, 1984.




quires different modes of thought than find-

ing a folder in a filing cabinet. Physical search

is aided by physical aids to memory—thickness

of the file, color, a coffee stain on the corner.

These do not exist in a computer-based file.

There is only a name, constructed according

to rules inherent in the computer logic. A

search through a database requires use of theright key words, in the proper relat ionship;

otherwise the search may yield fault y results.

An example of how tasks change when com-

puters take over part of the process may be

seen in banks. With computerization, the proc-

ess of fabricating accounts, the principal activ-ity of a bank, was made internal to the com-

puter. These procedures had previously been

done manually, or with the assistance of me-

chanical account ing machines . The role of human operators then changed f rom one of

doing banking to one of surveil lance of thecomputer as it does banking. Adler points out

t h a t :

. . . a series of tasks formerly considered thevery essence of bank work have been elimi-nated, including accounting imputation andadjustment, classification of documents, mul-tiple entries of data, manual data search, andsupervision by signature.

10

He also notes that new tasks were in t ro-

duced. For example, “Accountants now diag-

nose and rectify residues and anomalies listed

by the computer system. New types of errors–a n d f r a u d — a p p e a r .

11

‘ ‘Paul Adler. “Rethinking the Skill Requirements of NewTechnologies, ” Working Paper 9-784-027, Graduate School of Business Administration, Ilarvw-d University, Boston, October1983, p. 17,

‘‘ Ibid.

Some observers note that the increased ab-

str action can affect people’s un derst an ding of

the work. Some managers in banking have

noted, for example, that new employees—those

who have only worked on the automated sys-

tems—understa nd t he system, but don’t n ec-essarily understand banking. They think like

computer programmers instead of like bankers.As one manager sa id:

Now you mak e an in put an d it’s gone. Peo-ple become more technical and sophisticated,but they have an inferior understanding of thebanking business. New people have no ideaof the manual procedures so they never seeor understand the process, People start creat-ing programs t ha t don’t necessar ily reflect t hespirit of the opera t ion . lz

Clearly employees acquire new skills, they

learn to interact with the computer, they may

never learn certain old skills. To the extentthat processes are automated and these skills

are not needed any more, this may not be a

problem. But, if the skills are still needed, ei-

ther at that job level or at another, there may

be costs to individuals or the organization forallowing them to be lost. To continue the ex-

ample above, an understanding of basic bank-

ing practice probably is necessary for promo-

tion above the lowest operational levels. To

the extent that employees do not gain it by

doing bank work, it may be necessary to ac-

quire i t through formal t ra ining.

— .—-Shosh&ih Zuboff, “Problems of Symbolic Toil: How Peo-

ple Fare M’ith Computer-Mediated W’ork, ” Dissent. winter 1982,pp. 51-61.

JOB CHANGES WITH AUTOMATION

Office automation can change jobs in many esses might be eliminated. This does not nec-ways. The automated system may completely essarily mean that the people are eliminated

take over certain tasks. To the extent that cer- from the organization-they may be retrainedtain processes become completely automated, and t ransfer red—but par t icular posi t ions no

jobs that consist solely of those tasks or prol- onger exis t .



On the other hand, office automation cre-

ates new tasks, either supporting the system

or related to new products made possible by

the system. These tasks may be incorporated

into existing jobs or new jobs may be created,

as in cases where a trainer or systems special-

ist position is created after introduction of of-fice automation.

Finally, very commonly, a change in the

work process modifies jobs through the addi-

tion or deletion of tasks. This can also result

in a change in the boundaries between jobs,

transferring a task from one job to another.

Any of these changes may or may not be ac-

companied by a formal change in job t i t les,

descriptions, or compensation.

The boundaries between clerical and profes-

sional and between clerical and managerial are

showing interesting changes with office auto-mation. Some researchers have referred to this

redistribution of labor as the “clericalization

of professional work’ and the ‘ ‘professionali-

zation of clerical work. ISMost clear is the shift

of keyboarding tasks when professionals and

managers acquire terminals or personal com-

pu te r s . Ind iv idua l s w ho w ould never havetyped their own memos and reports now rou-

tinely draft them on their personal computers.

Clerical workers have not stopped doing key-

board work completely, however. Secretariesmay work on documents at a later stage to

revise, format, or print them, or they may stillkey documents that profess ionals and man-

agers choose not to key themselves. ~ever-

theless, many organizations have seen a de-

crease in the amount of time secretaries and

other clerical workers spend in keyboarding

or r ev i s ing o r ig ina l m a te r i a l w hen p ro fes -

sionals and managers begin using the system.

By the same token, secre tar ies and some

other clerical workers have taken over tasks

former ly def ined as profess ional . In case

studies of two different banking organizations,

for example, secretaries began using on-line

‘See, for emmp l e , t J~an ( l r~enk]aum, C>’dncl’ Pullman, andSharon szymanski. “F;ffects of office i4utomation cm the Pul)-lic Sector W’orkforce: A Case Study, ” OTA contract No. 433-

7990.0, ~lpril 19/!5.

Ch 4—The Changing Nature of Office Work q 105

databases and s ta t i s t ica l sof tware avai lable

on their terminals to collect data and do anal-

yses formerly done by economists. ” Clearly,

new technology is not the only factor in cleri-

cal worker s’ being able to tak e on new an d

interesting tasks; there must be management

support for these job changes.

The question of whether changes related to

automation lead to an increase or a decrease

in skill is a hotly debated one. Often the terms

job “de-skilling” and “enrichment” are used

to describe the changes. Enrichment usually

implies an increase in task variety, autonomy,

skills acquisition, and other factors that are

considered to contribute to job satisfaction.

De-skilling usually means the removal of thesefeatures, usually through simplifying the work

and narrowing the number of tasks performed,

and is usually associated with rat ionalizingor Taylorizing the work. Both de-skilling and

enrichment could be accompanied by job “en-

l a r g e m e n t , that is, an increase in workload.

It is clear that the impacts of office automa-

tion will vary from one job to another. Thefollowing is a brief summary of some generic

changes that have been seen to affect differ-

ent categories of workers.

Management and Professional Jobs

Increasingly, computers are helping profes-

sionals get more work done by providing moreand better information, by providing tools to

aid in formulating professional opinions, and

by taking over some routine decisions. Tradi-

tionally, professionals and managers have high

levels of autonomy in their work. ” Use of new

technology can give managers and profession-

als better control over their t ime and even

greater autonomy in their jobs. For example,

electronic messaging may reduce telephone

. . — .‘13.C. Amick and J. Damron, “Considerations in Defining

Office Automation: A Case Study in the Eastern Africa Re-

gion of the M’orld J3ank, ” Human Computer Interaction:Proceedings of th e Fimt USA-Japan Conference cm I I uman Cmn-puter Interaction. Gavrie] Sal\rend} (cd. ) (Amsterdam: ~jlse~rierScience Publishers, 1984), pp. 439-445. See also app. B, “Com-

puter hlediated \t’ork in Commercial Banking.”B. Kaplan, et al., J o b D e m a n d s a n d Workers Hea l th

(}$’ashington, DC: U.S. Go\rernment Printing Office, 1975),




call-backs, or in some cases, the number of

meetings. Managers can get up-to-date infor-

mation on factory operations or business activ-

ity by accessing on-line databases within their

companies. They may be able to manipulate

these data, to do “what if” studies to deter-mine the probable outcomes of their decisions

before actual ly making them. Managers andprofessionals can avoid the need for outside

data processing or other expert help by usingspread-sheet sof tware or informat ion data-

bases at their own terminals. They can pro-

duce polished reports on their own printers

wi thout a secre tary or a graphics ar t i s t .16

Along with these advantages, there can be

some drawbacks as well .

Greater autonomy, for example, can have

its disadvantages. When managers and profes-

sionals demonstrate less need for a secretary

to do their typing, they may lose the secre-

tary entirely, even if they still want one forother duties—or for a status symbol.

I n a n o t h e r e x a m p l e , a m a n a g e r w h o i s

pleased to get up-to-date information about

factory operations through the office automa-

tion system, may be dismayed to find that the

same information is available to a senior ex-

ecutive, who is therefore capable of more close-

ly monitoring or second-guessing decisions. Inthis case, the use of the technology might lead

to a reduction in autonomy for the lower level

manager .

“Knowledge engineers” have been attempt-

ing to identify the skills, information, and ex-

per t i se that go in to manager ia l and profes-

sional judgments and to incorporate these into

software. The results are a variety of computer-

based models, expert systems, and decision-

suppor t sys t em s .

Some analys ts have expressed fears that

computer-based models are making profes-s iona l and m anager i a l w ork m ore rou t ine .

There are also fears that some people are go-

ing too far in allowing them to replace human

judgment. Human judgment is not perfect, but

i ts imperfection is generally recognized and

expected. Many people have higher expecta-

tions of computers, and sometimes a misplaced

fa i th in the i r accuracy . A com pute r -based

model, no matter how good, is only a partial

representation of complex relat ionships, and

i ts in ternal assumpt ions , theoret ica l b iases ,and mathematical quirks can produce results

that are not consistent with the real world.

Overconfidence in the effectiveness of com-

puter-based models, some believe, can lead to

neglect of other forms of research that were,

before computerization, the basis of expertise.

Skill in these areas is still important as long

as the model is incomplete.17

The ability of computers to give the wrong

answer to six significant figures is sometimes

called “the tyranny of illusory precision. ” Its

d a n g e r t o p r o f e s s i o n a l s a n d m a n a g e r s h a s

probably been exacerbated by the growing use

of computer graphics. Advertisements by com-puter companies rightly tout the greater per-

“’Alexia, Martin, Office Automation: Catalyst for Change,SRI, International, 1983, p. 9.

‘“Linda Sandier, “Securities Risk: Wall Street Is FindingIts Trusty Computers Have Their Dark Side, ” Wall Street Jour-nal, Dec. 4, 1984, p. 1.




both by private firms and government agen-

cies. Often these are implemented in a way

that reduces autonomy. Under a manual sys-

tem, the individual worker had some discre-

tion about which account to pursue, when to

start a new file, or how often to call. Many

automated systems make all those decisions.The system makes other decisions as the work-

er keys new information into the files during

telephone calls with the delinquent accounts.

The worker’s individual a ssessm ent of priori-

ties or intuitive judgments of which people are

most l ikely to respond to extra cajoling be-

come less important . The automated system

determines when, how often, and how long each

call should be. Sometimes the worker has no

under stan ding of the whole case, except t hroughthe notes provided by the sys tem. Under amanual system, a worker ends each day with

a big pile of completed work and a sense of accomplishment; a machinepaced system may

continue to send new work at the same rate,

no matter how much is accomplished.

On the other hand, if designed differently,

the same sort of system can maintain worker

autonomy and control while providing the ad-

vantages of a computer-based information sys-

tem. For example, work can be bundled so that

one worker, or a team of workers, follows a

certain set of accounts from beginning to end,

and has the satisfaction of seeing the big pic-

ture in each case. If the system is modifiableby the user, so as to give some discretion about

timing and duration of tasks or to allow use

of individual expertise, it can offer the bestfeatures of both the manual and automated

systems. Autonomy is not directly tied to the

technology and is related to characteristics of

the organization and the work process prior

to automat ion.

Changes in the work process can lead to a

redistribution of tasks, which may either re-

duce or increase workload for clerical work-

ers. Where professionals and managers havebegun to do most of their own keyboard work,

or where keyboarding is sent to a word proc-

essing pool, secretaries may find their typing

load considerably reduced. How this change

is handled depends on managerial and indi-

vidual decisions. In one OTA case study site,

a New York City office, secretaries organized

themselves to sol ic i t overf low typing f rom

other depar tments .

In the case of one Wall Street law firm, le-

gal secretaries found they were losing theirkeyboard work to the word processing pool

an d th eir lawyering’ ta sks to par alegals. As

a result, their work is generally now limited

to pe r fo rm ing “pr im ar i ly those nonrou t ine

tasks that involve social skills, time emergen-

cies, and multiple contingencies, ” such as field-ing phone calls, gatekeeping, coaxing rush jobs

through the bureaucracy, etc. The firm has

made a deliberate effort to reduce the number

of secretaries and to el iminate the one-sec-

retary-one-attorney relationship. Increasingly,

secretaries work for more than one attorney

or as members of small clusters in teams withother secretaries.

23

The allocation of tasks is a management de-

cision. In the case of the law firm, business

and economic factors moved management to

allocate tasks in a new way. A centralized word

processing pool appeared to minimize capital

costs and ensure maximum use of equipment.

Technology helped make the reallocation of

tasks possible, but did not guarantee it. The

other cha nge in the legal secret ar ies’ work hadmore to do with accounting procedures than

with technology; “lawyering’” work d one byparaprofessionals is billable to clients, but the

same work done by legal secretaries is consid-

ered an overhead expense. Economic factors

motivate both the acquisition of new technol-

ogy and the assignment of work.

For secretaries at one major bank the in-

crease in workload relates not to fragmenta-

tion, but to the addition of new and interest-

ing t a sks . When pe r sona l com pute r s w ere

introduced into their work unit their keyboard-

ing duties did not decline; the unit withdrew

from the typing pool it had used previously,

making secretaries responsible for more key-

-’Mary C. Murphree, “Brave New Oifice: The ChangingWorld of the Legal %cre t a r y , ‘‘ Jf .y Trouble,s Are Going To H aveTrouble With Me: Everyday Trials and Triumphs of 14romen14’orkers, K. Sacks and D, Remy, (eds.) (New Brunswick, N,J:Rutgers University Press, Douglas Series, 1984).



Ch 4—The Changing Nature of Office Work q 109

boarding. At the same t ime, the secretaries

discovered that the s ta t i s t ica l packages and

databases available on their terminals allowed

them to do some types of work previously done

by professionals. They found this work an en-

joyable challenge and do not wish to give it

up, even though it increases their workload. 24

Job Ladders and Mobility

Changes in job content may affect career

mobili ty within organizations ( internal labor

markets) as well as mobility within the econ-

omy at large (external labor markets). In many

firms employees have the possibility of mov-

ing up job ladders within the organization—

acquiring new skills, assuming greater respon-

sibil i ty, and receiving higher compensation.

The development of these opportunit ies and

the cultivation of this internal labor markethas been very important to some firms. Some

indeed consider the experience of working up

through the ranks, with its concomitant un-

derstanding of internal operations and dem-

onstrated loyalty to the firm, to be more im-

portant than any amount of outside training.These firms may have a policy of filling cer-

tain positions only through promotions rather

than f rom outs ide .

Both company policy and the shape of the

job ladders may change over time due to any

number of fac tors , including technologicalchange . Wha t w i l l be the im pac t o f t hose

changes directly related to office automation,

or to the changes in work process or job defi-

nit ion permitted by technological change?

On the one hand, the fragmentation of work

into a multiplicity of narrowly defined jobs

has t radi t ional ly aroused concern about the

availability of “good” jobs. On the other hand,

the prospect that office automation may lead

to more standardized jobs raises concern about

potential polarization of job opportunities into

low skill, low wage and high skill, high wage jobs with breaks in the job ladder between

them .

The import of diminished mobility must be

judged relative to the context, which includes

‘f~.{’. . lmick a n d J. I ) ammn . op. cit., pp. 1:~$.1 45 .

both internal and external labor market con-

ditions. In many industries, internal job lad-

ders have been significant factors in the past.

Capable and ambitious workers could learn the

industry from the ground up, coming in as cler-

ical workers and working their way up through

lower level supervisory (or paraprofessional) jobs into management levels. In the insurance

industry, for example, clerical workers might

become ra ters and la ter underwri ters .”

Some technologies provided a natural learn-ing sequence so th at workers learned on th e

job how to car ry out m ore complex tasks an doperations. Firms that anticipated futuregrowth wisely saw to it th at ther e were poolsof workers at the various intermediate skilllevels available for promotion so that expan-sion could be smooth and free of external la-bor market constraints. ”

The insurance industry traditionally selected

and trained managers from within the indus-

try, usually from within the firm. In other in-

dustries too, such as retail trade, the internal

job market was the most significant and em-ployers provided much formal and informal

training for lower level employees. Although

the m essenger - to -m anager o r c l e rk - to -C E O

paths were trod to the end by very few, the

possibil i ty that a combination of dil igence,

striving, and luck could take one to the topwas a powerful motivating factor.

Some researchers have suggested a grow-ing trend in recent decades to externalize both

training and recruitment. In other words, em-

ployers are depending more on lateral recruit-

ment of managers and skilled workers trained

in colleges and business schools.27

This also

‘ It has been pointed out b~ T se~’eral researchers that this job ladder worked well only for male clerical workers beforethe earl~’ 1970s; women clerical workers seldom made the climb.Under pressure of equal opportunity initiatives this becamea significant job ladder for women in the 1970s, but is nowsaid to be truncated by the automation of rating and mu tint’

underwriting.-*Eileen .Appelbaum, School of Husin(lss tldnlinistrati(~n,

Department of Economics, Temple Universit?r, personal com-munication, Feb. 5, 198,5.

See for example, ‘rhierr~’ ,J, No~’elle, “Plmplo~n~ent a n dCareer opportunities for W’omen Minorities in a Changing I~con-

om~’: The F: xperience of I.arge and Nlediurn Sized Firms, ” Con-ser~ at ion of I IU man Resources, (’oIu mbia I Ini\’ersi t?’, ,J anu ar}.19N3,




applies to lower level workers, because of thelonger years of schooling for the general pop-

ulation and the growing availabil i ty of vo-

cational schools and community colleges, em-

ployers can rely on the public sector for training

once provided within the firm. For those who

cannot or do not get that training and educa-tion—for reasons related to socioeconomic con-

ditions, culture, talents, or the driving neces-

sity of earning a living early in life—a critical

alternative path to better jobs is being eroded.

Office automation could further weaken and

truncate internal job ladders by completely

automating some of the jobs that provided the

intermediate rungs, and by encouraging em-

ployers to rat ionalize, simplify, and narrow

tasks so that workers learn about only smallerand smaller fragments of the total work of the

organization. This also makes the individualworker less and less valuable to the employer

since he or she can be readily replaced by otherswho require only the briefest training, or have

already learned the same simple procedures

in other firms or other industries. Their skills

are, in other words, fully standardized.

T h i s t endency f rom one pe r spec t ive in -

creases the mobility of workers, who can moverelatively easily from one firm to another or

from one industry to another with fully trans-

ferable skills. But it does not increase theirupward mobility at the same time. If the sup-

ply of lower level jobs shrinks and the supply

of higher level jobs increases, such workersmay not benefit because the higher level jobs

are likely to be filled laterally, with people who

have had the benefit of higher education–or

more recent education.

Some researchers believe these trends are

leading to a polarization of the labor force into

low skill, low paid jobs and high skilled, high

paid jobs, with few opportunities in between.

Empirical evidence regarding any economy-

wide trend toward job polarization within orga-

nizations gives conflicting signals. Polariza-tion of jobs has occurred in such office-oriented

indust r ies as banking and insurance; exam-

ples are provided in previously cited researchby Baran and Appelbaum. Conditions in those

industries are not necessarily generalizable to

general of f ice c i rcumstances , where in i t ia l

staffing patterns are different and motivations

regarding job design are also different. In

many general office environments with lower

levels of clerical employment (the extreme be-

ing the one-secretary office) office automationis not driven as strongly by the objective of

immediate reductions in force. In many such

offices, there is perhaps a stronger need for

quality improvement, greater timeliness, and

workload leveling. The result could be a greater

tendency for job enhancement and possibly

improved internal job ladders.

Many people advance their careers by mov-

ing from one organization to another. Thus,

the external labor market is also a source of

opportunity. In professional, technical , and

managerial occupations, advancement by mov-ing between organizations, as well as by mov-

ing within them is relatively common. A study

of occupational mobility noted that most job

changes dur ing the s tudy pe r iod occur redwithin the same major occupational group,

especially for both male and female profes-

s ionals .24

Indeed, mobility of these personnel

seems to be the foundation for the employ-

ment agency and placement business .

Although some people can advance readily

via the external labor market , some groups

f ind tha t m ore d i f f i cu l t . In m any cases , a

change in jobs does not reflect advancement.It was noted in the previously cited occupa-

tional mobili ty study that a relat ively high

percentage of women who had recently movedinto manager or sales positions had previously

been clerical workers. However, the largest

group of women changing jobs were those who

moved from one clerical occupation to another.29

For lower level clerical workers, advancement

through job changes is likely to require for-

mal, external training, if on-the-job acquisi-

tion of skills needed for higher level positions

is diminished. A reduction in intraorganiza-

‘KEllen Sehgal, “occupational Mobilitj’ and Job Tenure in1983, ” A40n th l y Labor Retiew, October 1984, pp. 18-23.

‘qIbid.



—

Ch. 4—The Changing Nature of Office Work 111

tional career ladders is a shift in training bur- cation and training is uneven; job opportuni-

den from employer to employee. That burden ties may be increasingly t ied to social class

is aggravated inasmuch as access to good edu- or economic means.

ORGANIZATIONAL STRUCTURE AND RELATIONSHIPSChanges in the s t ructure of organizat ions

related to introduction of office automation

can be influenced by economic, environmental,

or cultural considerations, in addition to tech-

nology. Managerial strategies-upper level de-

cisions a bout th e organ ization’s goals an d th erole of technology and of people in achieving

them—are probably the major considerations.

Formal structural changes ( i .e. , something

that would be noticed on the organization

chart) might take place during implementation

of office automation or shortly afterwards, per-haps reflecting a change in the work process.For instance, in some firms, the creation of

administrative centers and the aggregation of

all support personnel in word processing pools

accompanied the decision to adopt office auto-

mation technology. On the other hand, change

may not be reflected formally at all, but may

only be seen as changes in communication pat-

terns or in power relationships between groups

or depar tments .

Organizational effects often take place over

a period of time, as part of an evolutionaryprocess. As familiari ty with technology and

its capabil i ty grows, structural changes may

be introduced that allow the organization to

take bet ter advantage of those capabi l i t ies .

New product lines made possible by the tech-

nology may emerge, which in turn give r ise

to new work groups or depar tments .

P o w e r a n d A c c e s s t o I n f o r m a t i o n

Early research on the computerization of

organizations suggested that introduction of

computing appeared to change power relation-ships, and a central preoccupation of research

in the 1970s, was whether computers led to

growing centralization of power among upper

level managers. The sources of organizational

power include such things as control over re-

sources, information, critical technical skills,

or coping capability .30 As control over the com-

pu te r o f f e red sen io r m anagem ent m any o f

these things, some researchers predicted that

computerization would increase the centrali-zation of decisionmaking power.

These studies were done for the most part

in the era of mainframe computers. However,

even in the age of personal computing and dis-

t r ibuted process ing, there may be reason to

bel ieve that in tegrated informat ion sys tems

can aid in the centralization of organizational

power. Possible routinization of middle man-agement work, through dependence on com-

puter-based information systems and decision-

support models, was discussed earlier. Some

researchers have pointed out that any worker

whose job becomes more routine becomes less

powerful, less able to offer a unique contribu-

tion to the organization. While middle man-

agers may retain responsibility y for making cer-

tain decisions, their range of choices could

become more rigidly circumscribed by the as-sumpt ions inherent in thei r decis ion-suppor t

system. Their authority could be accompanied

by increased supervision and control, as higher

level management will have access to the same

information and decision aids.31

A nothe r ex -

pert has suggested that “paradoxically, [cen-

tralization] may be manifested by locating de-

cisions at lower levels but controlling decision

outcomes through the provision of perform-

ance records. “32 I t has been suggested that

the widespread use of integrated office auto-

“’Jeffrey Pfeffer, Power in Organizations (Nlarshfield, MA:Pitman Publishing Inc., 1981), p. 274.

“M. Lynne Markus, S - v s t ems in Organizations: Bugs and Features (Boston, MA: Pitman Publishing Inc., 1984), pp. 52-53.‘&Daniel Robey, “Computer Information Systems and Or-

ganizational Structure, ” Communications of th e .4CAI, October1981, pp. 619687.



mation systems reduces the need for middle

management and could ul t imate ly lead to a

flattening of some organizational pyramids .33

The concept of centralization is too simple

to describe all the possible changes in power

re la t ionships that might resul t f rom the in-

troduction of office automation. Organizations

a re no t m onol i th i c ; d i f f e ren t depar tm en t s ,

work groups, or factions may be affected dif-ferential ly.

A set of case studies found that introduc-

tion of automated production scheduling sys-

tems into Danish plants altered the power rela-

tionships among management groups because

of differential access to information. The plantshad a matrix organization, with major deci-sions being made by interdepartmental teams

of production planners, production managers,

and plant managers.34

The new computer-basedproduction plan ning syst em wa s ‘owned’ an d

mainly used by production planners. It seems

to have concentrated up-to-date knowledge in

their hands, thus giving them greater power

over production decisions and higher status

as compared to production managers and plant

mangers. These shifts of influence were evi-

dently unintended by the designers of the sys-

tem. One expert35 in in terpre t ing the same

study, points out that th is concentra t ion of

power caused the matrix arrangement to lose

some of its anticipated effectiveness, although

it was still retained, largely for symbolic orideological reasons.

In one of the OTA case studies, Aircraft In-

struments Plant, the introduction of the MRP

II planning and scheduling system seems to

have given greater power to production-sup-

port office workers while taking some discre-

tion away from the supervisors on the factory

‘ R~~f ‘T Vv’~and, “Integrated Communications and Wrorkh~fficiency: Impacts on organizational Structure and Power, ”paper presented at the International Communication .Associa-tion ,4nnual Con\rention, Honolulu, Hawaii, hlay 22-27, 1985,p. 16.

‘IN. Bjorn-Anderson and P. Pederson, “Computer Systemsas a Vehicle for Changes in the Management Structure, I nfor-mation Systems Research C~roup, University of Copenhagen,1$’orking Paper 77-3, 1977. Cited in Rob Kling, “Social Analy-ses of Computing: Theoretical Perspectives in Recent Empiri-cal Research, ” CoI]]p~ltingSLlr\ re\ r 12 (March 1980), pp. 61-110.

llobey, op. cit.

floor. (See appendix B.) While access to up-to-

date information is partly responsible for this

shift , even more important is the abil i ty to

act on information. Under the new system,

only production-support staff have the author-

ity to override the system when the automatic

response would be inappropriate. Because of the complexity of the work and also because

of some conceptu al pr oblems in th e system ’s

design, such conditions arise frequently. Pre-

viously, factory supervisors might have dealt

with exception conditions on their own author-

i ty , but now they must request permiss ion

from production support .

On the other hand, where shifts in relative

power are inappropriate to the “corporate cul-ture” of any organizat ion, management has

the option of reinforcing existing lines of au-thority and modifying the automated system

to ensure that change does not take place .

One example is that of a military organiza-

tion that replaced its manual logistics system

with a computerized one. Under the old sys-

tem, senior officers received requests for equip-

m ent t r ans fe r s and had jun io r o f f i ce r s t o

compile a detailed report on which to base adecision. The junior officers gathered informa-

tion for these reports through written docu-

ments and through te lephone contacts wi th

a network of supply officers at other installa-

tions. With the new system, the junior officers

worked at computer terminals with on-line ac-cess to information about the location and sta-

tus of equipment, a decision-support system

to calculate least-cost routing, and the means

to implement transfers. Because the junior

officers had timely and complete information,

people began making requests for equipment

di rect ly to them ra ther than going through

proper channels, and the junior officers some-

times could not resist the temptation to re-

spond, even though they did not have author-ity to do so. Senior officers attempted to have

the new system removed. In the end it wasretained, but it was redesigned so that junior

officers were unable to take action based on

their decisions.36

“Markus, op. cit., p. 74.



Ch 4— The Changing Nature of Office Work 113

.

Pho [o cred(f E?(// Ke//ey Commu n~cat(on Workers ()+ 4 me, IL a

Advances in microelectronic technology have made telephone operators more productive



114 q Automation of Arnenca’s Offices —

Many firms are using integrated databases,and employees at various levels need access

to it in order to do their jobs. However, access

to different parts of the database can be strati-

fied so that existing organizational lines of au-

thor i ty are not threatened.

End-User Comput ing Power

Since one source of power is control over re-sources and since the computer itself (or what

it can do) is a resource, there has been some

dispersal or shifting of power in many organi-

zations. Only a few years ago computers were

a sca rce r e source ; da t a p rocess ing p ro fes -

sionals usually acted as gatekeepers between

all other departments and the computer, and

thus were in a position of power. Over the past

5 to 10 years, with the declining cost of elec-

tronic hardware, computer power has becomemuch more widely dispersed throughout many

organizations.

High costs of computer equipment used to

make centralization more attractive. Lower

prices, increased capabilities, and the ability

to l ink workstations in networks now makeit possible for firms to disperse data process-

ing and word processing capabilities. This does

not necessarily mean that the word process-

ing pools have disappeared (although they

have in many firms) but that word processing

capabil i ty is now available to private secre-taries, receptionists, professionals, and others.

Nor are cent ra l ized data process ing depar t -

ments likely to disappear, as many organiza-

tions continue to need the power of mainframe

com pute r s and the exper t i se o f com pute rprofessionals. However, the abil i ty to do a

growing variety of data processing activities

can now be brought directly to every profes-

s ional and manager .

In some organizations there maybe an over-

all strategy to keep centralized control over

computer resources, to maintain compatibil-ity between systems, to make sure that per-

sonal computer users can access databases ,

etc. This function may be performed by the

data processing department or by some other

office automation group. Where some other

group is designated, turf difficulties with thedata processing department have often arisen

with the continuing convergence of word proc-

essing, data processing and communication.

In one Fortune 500 company, conflict between

the data process ing depar tment and ad hoc

office automation group was finally resolvedwhen the office automation group was assigned

responsibility for managing all resources for

data and word processing within the firm. The

data processing department was limited to pro-

viding data processing services for external

clients .37

In many cases, organizations have acquired

office automation, especially personal com-

puters , wi thout a grand plan, in response to

grass roots decisions at the individual or de-

partmental level. Later attempts to s t andard -

ize or to centr alize cont rol of th e organ ization’sinformation resources inevitably result in bat-

tles when different kinds of equipment or dif-

ferent philosophies of operation have already

become entrenched. No system is perfect for

everyone’s needs, an d ma ny groups ma y want

to influence the development of office auto-

mat ion sys tems to make them most sui table

to their own needs or most acceptable from

their own bias .

Communication

Additional organizational implications of of-fice automation are related to their effects on

communication within organizations. An in-

teresting sidelight on the case involving themilitary logistics office is the way in which

the new system changed communication pat-

terns. The senior officers were “left out of the

loop, ” when supply officers began contacting

junior officers directly for equipment trans-

fers. In addition, however, the flow of infor-

mation reversed along the junior officers net-

work of telephone contacts. The junior officers

had created these networks to call out for in-

formation. However, once the on-line systemcame into place, the junior officers became a

source of systemwide information. Their form-

—

“Ginger Levin, “Excellence in Information Resource Man-agement, ” GHL Inc., Washington, DC, 1984.



er informants made use of the same telephone

network, with its established informal work-

ing relationships, past favors, friendships, etc.,

to call in for information or for emergency

equipment t ransfers .

Changes in communication patterns maybeat the base of many of the organizational

changes associated with office automation,

simply because communication is such a ma-

jor p ar t of white-collar worker s’ jobs. Man -

agers, especially, spend a large portion of their

time communicating. It is estimated that from

46 to 77 percent of their day is spent in oral

communication, including both telephone con-

versations and face-to-face meetings.38

The introduction of new pathways of com-

munication may bypass traditional gatekeepers

an d ma ke pr ofound cha nges in ‘‘who ta lks to

whom. ” Although some researchers have pre-

dicted that full access by many workers to a

linked electronic system could lead to a com-

plete reshuffling of power relationships, giv-ing most power to those with access to the

system,39

there is little evidence that formal

hierarchies are greatly affected by innovations

like electronic mail and messaging. In fact ,

these systems are often constructed in such

a way as to reinforce the existing hierarchy,

e.g., automatically sending information copies

to man agers of al l their su bordina te’s mes-

sages, but not the other way around. Thereare some anecdotes of superiors using the sys-

tem to intensify pressure on subordinates (“Irequ ested t ha t inform at ion an hour a go! Don’t

you check your messages?”). In addition, even

in a completely wide open system, where every-

one theoretically has access to everyone else,

it is doubtful that everyone has something use-

ful to say to everyone else.

However, there are cases where use of an

electronic mail system has lead to the under-

mining of an organization’s tr adit ional h ier-

‘~largarethe 11 . Olson, “ New Information Technology andOrganizational Culture,” .$11S Quarter-l> S pecial Issu e 198,2,

pp. 71-92.

“S ee for example, Carol T. Gaffney, “The Impact of officeAutomation on Power in organizations, ” Proceedings of AFI PSOffice Automation Conference, Philadelphia, February 1983,pp. 216-21 ’7.

Ch. 4—The Changing Nature of Office

archy and authority structure. In one exam-

ple, members of a disbanded project team used

th eir firm’s electr onic ma il system t o continu ework on an abandoned project, eventually con-

vincing management to revive it. At the same

f i rm , the e l ec t ron ic m a i l sys t em becam e a

means of exchanging complaints and cri t i-c i s m s a b o u t m a n a g e m e n t .

40M o r e r e c e n t l y

th ere h ave been other reports of electronic mes-saging systems being used for “flaming, or

emotional outbursts related to organizational

or other problems .41 Such “subversive” use of

electronic mail probably depends a good deal

both on corporate culture and on the configu-

ration and capabil i t ies of the system. Anec-

dotes from other firms suggest that their elec-

tronic mail is never used for complaints or any

communication with implications for internal

politics because electronic messages are more

eas i ly t raced than paper ones .

It is not yet clear how effectively electronic

messaging will replace face-to-face or telephone

communication. Early evaluations have not

shown consistent patterns of replacement of telephone, face-to-face, or writ ten messages

with electronic messages across organizations.

At some organizations, as at OTA case study

site Company XYZ, electronic mail has been

consciously rejected because personal commu-

nication is considered important to the cor-

porate culture. In another OTA case study,

Office of the Special Trade Representative, in-ternal electronic mail is used extensively for

circulation of documents for comment and it

would be used externally if other agencies were

equipped.

Many managers do not use electronic mail

extensively to replace face-to-face meetings or

telephone calls . This may be attr ibutable to

two factors. First, use of the technology may

interfere with the personal management style.

Second, there may be dissonance between the

electronic system and the type of information

being transferred. In one study, over one-thirdof the messages exchanged in face-to-face or

‘‘Tlarkus, ‘p. 60, citing Ralph filmmett, “T’NET or Gripe-net? Da tama t i o n , .Not’ember 1981, pp. 48-58.

1 “Con\ ’ersations by Computer, ” ~~lectronic .Ser}ices Un-limited, october 1984.




telephone m eetings contain ed ‘soft inform a-

tion, that is, they conveyed opinion or conjec-

ture. It is possible that messages of this sort

cannot be effectively communicated through

electronic mail.42

Another researcher has noted

that teleconferencing also is more successfully

used for giving or receiving factual informa-tion, and less so for complex tasks like bar-

gaining and persuas ion.43

These factors make

it likely that these technologies are more likelyto reinforce exist ing trends in the organiza-

tion rather than to bring about radical changes.

Major changes in the way people communi-

cate at work may come, not from electronic

mail , but from common access to databases

and to computer operations that control the

work process. If office automation offers em-

ployees new access to information, it can also

change their informal patterns of communi-cation. For example, where coordination be-

tween work groups is taken care of in infor-

mal ‘hallway conferences’ among work group

members, there is opportunity for social in-

teraction as well as the exchange of work-re-

lated information. The introduction of an of-

fice automation system with a shared database

may allow these groups to accomplish coordi-

nation through the system, and the people mayno longer need to see one another for that

purpose.

At Aircraft Instruments Plant, an OTA case

study site, coordination through the system,

and the el imination of informal conferences

and negotiations, were clearly goals of the new

MRP II system. Although these goals have

not yet been achieved, the new system has

clearly changed patterns of communicationwithin the plant and its offices. Informal con-

ferences continue, but now a major purpose

of negotiation is to get permission to override

the system. (See appendix B for further infor-

mat ion. )

This integrative quali ty of computer sys-

tems, which when successful allows coordina-tion without physical proximity, leads directly

to the subject of the next section.

—

‘-Olson, op. cit.“Thomas hlancie~rille, “The Spatial I+~ffects of Information

Technology, Some I~terature, Fu tures , February 1983, p, 67.

Dispersion of Work Activi ty

Perhaps the most powerful effect of the com-

munication features of office systems is the

ability to change the location and geographic

dis t r ibut ion of work act iv i ty . Once words ,

data, or pictures have been converted to elec-tronic form they can be sent to a device across

the room, across town, or halfway around the

world with almost equal ease. As a result, peo-

ple do not have to be aggregated in one place

in order to work in the same ‘‘office.

Traditionally, information-intensive services

have located in large cities where they have

the advantage of proximity to other organiza-

tions and people. To the extent that telecom-

munication can substitute for proximity, orga-

nizations will have many more choices in where

to locate. Many see this as leading to a moregeographically dispersed style of functioning

because:

. . . the increasing spr ead (and cheapn ess) of telecommu nication r educes the former exter-nal economies of physical proximity, we seethe dispersal of corporate headquarters andmajor white-collar operators like the insuranceindustry from the decaying central cities tothe suburbs.

44

Firms might minimize use of expensive big

city office space not only by locating in the

suburbs , bu t by m oving to o r e s t ab l i sh ing

branches in small cities or towns, or even inforeign countries so long as a suitable work

force and an adequate telecommunications sys-

tem are available. The departments most likely

to be located in remote locations are those that

need l i t t le outs ide contact or that pr imar i ly

engage in routine communications.45

So long

as coordination and integration of work can

take place electronically, there is no longer

much need for spatial proximity.

In a study of automation in the insurance

industry, it was pointed out that the centraliz-

ing and dispersing tendencies of automationare complementary.

46

Procedures for insurance

“Ibid.‘ Ibid.“ Barbara 13aran, ‘*Technological Innovation and Regula-

tion: ‘1’he Transformation of the Labor Process in the Insur-ance Industry, prepared for Technology- and Economic Tran-sition Project, Office of Technology .Assessment, OTA contractNo . 3433 -3610.0 Washington, DC, ,Januar~r 1985, p, 95 .



Ch 4— The Changing Nature of Office Work . 117

rating, underwriting, and claims handling are

inc reas ing ly be ing s t andard ized and au to -mated. A recent trend has been to centralize

physically the databases on which these activ-

ities depend. Many insurance companies are

now consolidating their regional offices into

two or three highly automated regional cen-ters. At the same time, these firms are dis-

banding some of their large centralized data-

entry pools. Data-entry work is being dispersed

to functional departments located in agencies

or field offices, connected by on-line terminals

to computers at the regional centers. Func-

t ional uni ts wi thin the company can be in-

tegrated electronically through the computer

even if they are geographically distant. At the

same time, “because in all cases information

is being increasingly consolidated in central

master files, although access to it is prolifer-at ing and decen t ra l i z ing spa t i a l ly , decen t r a l -ized production is fully compatible with cen-

t r a l i zed d i r ec t ion and con t ro l .47

Spatial dispersion of office work could havemajor effects on the labor force of the future

and could have differential impacts based on

race and class. Large data processing pools

of ten employ high propor t ions of minor i ty

women in low-skilled clerical jobs. These are

the jobs that are increasingly being automated

away. The more highly skilled clerical jobs that

—

1hici.

remain will increasingly be located outside of

cities as organizations search for lower cost,

nonunionized or more highly educated labor.

In one insurance company relocation, labor

force characteristics were explicitly important

in the location decision—the company sought

to place i t s of f ices in communi t ies wherewomen were “well educated, of German de-

scent, with u nem ployed husba nds ‘—as these

were considered the most likely to put in agood days’ work. 4’

There is probably a limit to how far spatial

dispersion can go. Most organizations are un-

likely to scatter branch offices across the coun-

try simply because office automation makes

it possible. Certain activit ies may not lend

themselves easily to dispersion. Because of the

unsuitability of telecommunications for activ-

ities like negotiating, persuading, or exchang-ing soft information,

qgit is likely that some

critical mass of employees would have to re-

main near each other for face-to-face meetings.In addition, other cultural, logistical, and cost

factors unrelated to the features of office auto-

mation may limit the number of separate in-

stal lat ions.

—.“Baran and ‘Ikegarden, op. cit., pp. :]0-31.‘“olson notes that this ma~’ he one reason wII}’ man}’

managers hay’e not started using electronic mail to replace face-to-face meetings. See Olson, op. cit.

IMPLEMENTATION

While advertisements are full of the prom-

ised benefits of office automation, there are

a vast number of horror stories about unsuc-

cessful at tempts. The technological and or-

ganizational barriers to be overcome, the in-

t e rna l po l i t i ca l ba t t l e s t ha t o f t en m us t be

fought, the planning and redesign of work to

be done, are daunting. After hearing and see-

ing some of the things that can go wrong, thoseresponsible for bringing office automation to

their own organizations may consider an im-

plementation to be successful if it is not com-

pletely botched—if productivity does not plum-

met or employee turnover does not rise to the

ceiling.

Paul Strassman, formerly Vice President of

Xerox, noted that many organizations greatly

underestimate the organizational costs (as op-

posed to technological costs) of automation.

Organizational costs, for example, inefficiencywhile learning new procedures, time lost for

t ra ining, t ime spent negot ia t ing wi th peers

about new work processes, can add up to sev-

eral thousand dollars per employee in the firstyear if properly noted and accounted for.

50

Where organizational issues like job redesign

and w orkf low res t ruc tu r ing have no t been




properly managed, organizational costs can

more than offset productivity gains expected

from new technology. A number of firms are

demonstrably worse off with automation than

they were without it, at least in the short run.

However, these new tools are becoming in-

creasingly available and increasingly neces-sary for doing business in the present era. Itis possible to learn something from success-

ful implementations to avoid the problems ex-

perienced in horror stories.

The success of the introduction of office sys-

tems into an existing organization has been

found to depend on a number of circumstances

that surround the implementation. Althoughvar ious researchers d isagree on the re la t ivestrength of their influence, there seems to be

some general agreement on their importance

and direction.

51

These variables include t he rea-son for adoption, the involvement of key ac-tors, th e use of adaptive planning procedures,

level of user p articipation in plann ing and deci-

sionmaking, and training and incentives for

users, and training.

Reason for Adoption

In most discussions of successful instal la-

tions of office systems, there was a clearly iden-

tified organizational objective. Organizational

goals involving improved outputs have been

associated with success more often than or-ganizational goals defined only by cost reduc-

tion. Cases where a technological opportunitywas se ized, wi thout demonst ra ted organiza-

tional need were those where there was least

evidence of success.52

These findings are in line with admonitions

to tie system planning closely to the office’s

business function.53

Where there is a clear un-

derstanding of the output to be produced and

—-

“Tora Bikson, Barbara Gutek, and Don A. Mankin. “Im-plementation of Information Technology in Office Settings: Re-view of Relevant Literature, ” Rand Corp., Santa Monica, CA,November 1981.

‘)

’ Ibid.“Michael Hammer and Michael Zisman, “Design and Im-

plementation of Office Information Systems, ” I.aboratory forComputer Science, Massachusetts Institute of Technology,OAM-005, May 1979.

the role of automation in improving that out-

put, there is a greater likelihood of selectingand designing a system which achieves that

objective.

Although cost reduction can be an impor-

tant objective, a narrow focus on cost reduc-

tion alone may not have the desired results

if th e organizat ion’s goals an d th e work proc-

ess leading to the achievement of those goals

have not been thoroughly analyzed.

In the case of Company XYZ, an OTA case

study site, use of information technology was

seen as a competitive weapon, a means of both

cut t ing cos ts and increas ing market share .

However, cost cutting was placed in context

of the type of work done at XYZ and the cor-

porate philosophy.

The goal was to replace old, rigid, batch-oriented information systems and manualtechnology with flexible cutting-edge elec-tronic tools, and concurrently to give usersa renewed sense of power, insight and en-thu siasm about t heir ta sks, so as t o improveorganizational performance.

54

This focus on user needs led to the criterion

that any system selected should be manipula-

ble by users and should:

. . . augment the worker rather than automatethe work. Being able to ask good questions,do insightful analyses, take the initiative, and

mak e a decision are emph asized as distinctlyhuman skills that computers can assist butnot replace.

While other firms will have different goals

and a different philosophy about the role of

their workers, analysis of organizational goals

and the role of computers in achieving themis st i l l important .

Key Actors

Another important element in successful im-

plementation is the “key actor. ” This can

sometimes be a top management official who

“Tora Bikson, Don Manken, and Cathleen Statz, “Individ-ual and Organizational Impacts of Computer-Mediated Work:A Case Study,’” prepared for Office of Technology Assessment,1985, p. 21.



—

Ch 4—The Changing Nature of Office Work 119

clearly supports innovation, but in many cases

a “technological entrepreneur” somewhere be-

low the top level of the firm maybe the prime

motivating force in a successful introduction

of new technology. In some studies it has been

found that the role of the unit manager is es-

sential in successful implementation.55

Support and understanding of top manage-ment are also crucial. In the case of XYZ, the

CEO was the inspiration behind the move to

automation, although actual responsibility was

delegated. Having management support guar-

anteed needed resources and a lso provided

guidance in developing a system that matched

corporate phi losophy.

On the other hand, lack of top management

support seems to have aggravated some of theproblems in the Aircraf t Ins t ruments P lant

case study. For example, insufficient funds andtime for training, both of which undercut the

success of the implementation, were probably

related to lack of senior management under-

standing of the need. Senior management did

not ease production quotas when the new sys-

tem was first introduced, even though it would

be reasonable to expect some decline in produc-

tivity as people learned to use the system. Fur-

ther, ongoing performance measures were not

modified to fit the scheduling process inher-

ent in the sys tem. Thus , toward the end of

each month managers all scrambled to bypass

the sys tem and manual ly schedule projects

with high dollar value but low priority, in or-

der to meet dollar quotas. This is likely to con-

t inue as long as management pr ior i t ies and

system priori t ies are in conflict .

A d a p t i v e P l a n n i n g

A planning process that is flexible and con-

tinuous, both before and during introduction,

also seems to be associated with successful

implementation. It is inevitable that both the

organization and the system will change some-what in the process of implementation. A plan

‘‘se t in concret e , which cannot be modified

to accommodate changed user needs or new

Ibid,; and ~ ik son , ~u t e k , and h!ankin, op. cit.

information, can seldom be successful. In some

cases, with sufficient f lexibil i ty on the part

of th e plann ers a nd t he u sers, even a ‘‘drop

it in their laps’ approach to implementa tion—

one where users have minimal involvement in

planning—can work. A generic system can be

modified to fit an organization needs duringthe early days of operational use. However,

users may not be sufficiently f lexible, andadaptability may not be the only requisite for

success.” In general, research in t he literature

as well as “how to’ ar ticles in th e compu ter

and m anagem ent t r ade p res s ag ree tha t i n -

volving users in the planning process is highly

desirable.

Users in ’ th e Implement at ion P rocess

There are at least three areas where users

must be taken into account—design and im-p le me n ta t ion , t r a i n i n g, a n d i n ce n t iv es f or

users. Before the user can be adequately in-

volved in the process, however, it is necessary

to ask “who is the user?”

Al though the term “user-driven” is often

used in designing office automation equip-ment, there are several conceptions of who theuser is, and it is not always clear wh ich ‘user ’

is being addressed or represented. Wynn points

out a t leas t t hr ee levels of ‘user . ’57

One is the

organization or department that intends to de-

velop an automated sys tem. Another i s theperson or group of people within the organiza-

tion with the authority to make decisions aboutthe purchase of equipment. This is often the

“user” that the vendor i s t ry ing hardes t toplease. The third is the “end user, ” that is,

the person who actually operates a computer

or terminal. The needs, opinions, and level of

knowledge about office practices of these dif-

ferent types of user are not necessarily identi-

cal; they may not even be in harmony in somecases.

“)Ron H. Epstein, “An Approach to Inb-educing and Evalu-ating Automated Office Systems, Electronic Office: Manage-ment and Technology (Pennsauken, NJ: Auerbach Publishers.1980).

‘Eleanor 11 . J$’ynn, “The User as a Representation Issue, ”Proceedings of the Hawaii International Conference on SJTs-tem Sciences, 1983.




User Involvement in Designand Implementation

Successful implementations of office auto-mation technology tend to include users of all

types in the process. While there maybe some

difficulties in involving future end users in sys-

tem selection when they are not yet familiarwith computers, there are benefits to be de-

rived from the investment of time and effort

necessary to bring them up to speed. No one

knows better than the actual end user exactly

what he or she does and how it might be done

better. User needs may not be well understoodby system designers or vendors, or even bymanagers in the same firm. Attempts to di-

vine needs without asking can too often lead

to the use of social stereotypes (clerical work-

ers do not make decisions, managers will not

type) instead of fact. Getting the user perspec-

t ive early in the planning process can save

costly retrofi t t ing or other problems later .

Methods for involving the users in the design

process can include interaction with the en-

tire user community by collecting design data

through surveys and polls, or by having user

representatives on the design task force or

commit tee .

Finally, involving users in the design proc-

ess can help to overcome some of the resist-

ance to use of new systems often classif ied

as “fear of computers, ” “technophobia,” or

simply “fear of change. While some have as-sumed that certain types of people “naturally’

resist new technology (e.g., older workers, less

educated workers, etc. ) Wynn notes that:

The hidden assu mption in these notions isthat the reason people may not rush to be newuser s of technology is a ) psychological r at herthan rational in nature; b) the fault of the usernot of the equipment. Both of these a ssump-tions, if acted u pon, cau se developmen t orga-nizations to do nothing at all to solve the prob-lem, to go ahead and design as they see fitan d see if people can be forced to use t he r e-

sulting system, or to go to great lengths tocater to the users’ supposed psychological andcognitive incapa city, mostly by t rying t o “ad-vertise away” the problem.

58

‘“Eleanor H. Wynn, “Linking User Responses to the De-sign Chain, AFIPS Office Automation Conference, San Fran-cisco, Apr, 5-7, 1982.

Several studies have shown that what man-agers or system designers sometimes perceive

as clerical workers’ irra tional fear s of techn ol-

ogy are actually very rational concerns. Wynn

found in open-ended interviews at several firms

that clerical workers were concerned, for ex-

ample, that they might not be able to learnthe sys tem, that the equipment chosen was

wrong for the job, that new measures of job

performance were wrong for the job, that they

might lose their jobs and be unemployed. She

concluded that “people can be seen to resist

not change itself, but change for the worse. ’59

Managers often do not perceive these spe-

cific concerns, but view them as generalized

irrational fear. In one survey of Fortune 500

firms, over half (57 percent) of the managers

at tribut ed employees’ appreh ension about n ew

systems to general, unfocused fear, while only8 percent attributed it to fear of computers

and 4 percent to skept ic ism about manage-ment ’s ability to man age the cha nge. On t he

other hand, only 20 percent of clerical work-

ers at tribut ed other workers’ appreh ension to

general fears. Most (30 percent) identified con-

cern about computers—presumably fear of be-

ing unable to learn to use the new system.

About 25 percent cited skepticism about man-

agement choices, and 22 percent cited job secu-

ri ty as the major worry.60

TrainingTraining employees to use automated equip-

ment is essential to making most effective use

of it, and most researchers agree that the im-

portance of training to a successful implemen-

tation cannot be overemphasized. As Strass-

man notes, “Training, training, training: these

are the top three priorities to changing work

in the automated office.61

A training plan is

a necessary part of the implementation plan

when an organization begins using office auto-

mation system. In addition, continuing efforts

———.—‘Ibid.

‘)(’ Research and Forecasts, Inc., !lhe Kelly Report on People

in the Electronic Office 11: E?ow Office Workers View Au toma t -

ion (Troy, MI: Kelly Services, Inc., 1983), p. 10.‘ ‘Paul A. Strassman, Information Pa~’ofi} The Transforma-

tion of U’ork in th e Electronic Age (New York: The Free Press,1985), p. 81.



Ch. 4— The Changing Nature of Office Work 121

are necessary–for training new employees andfor upgrading the skil ls of current ones.

An adequate t ra ining program may of ten

constitute one of the major costs involved inintroducing automated office equipment. Un-

fortunately, many firms grossly underestimate

the need. In a number of surveys, workers and

managers in automated offices have cited lack

of adequate training as one of the major prob-

lems related to the implementation of office

automat ion equipment .62 Training is discussed

in more detail in chapter 3.

Incentives for Users

The in t roduct ion of new technology can

cause, or at least be associated with, changes

in the way people do their jobs; in the way

they in teract wi th other people ; and in the

amount of power, authority, and self-deter-mination, they have at work. To the extent

— — — — —‘ -See ~~r ‘~xample, Iioney.well Technalysis, Office Automa-

tion an d th e 11’orkplace, Ilone~rwell, Inc., No\renlher 1984; andKelly Ser\’ices, Inc., T he KelIJ Iieport cm People in the I;lec-tronic Office, results of sur~e~w performed h~ Research andForecasts, Inc.. three \olumes, 1984.

that people perceive the changes associated

with a new system as changes for the worse,

“disimplement at ion’ or dam aging resist an ce

can result. Many successful implementations

have featured incentives to encourage users

to accept the new system, acquire new skills,

or accept changes in the social or organiza-tional context. While benefits for the firm, such

as increased productivity, may be important

to some workers, more personally relevant re-

wards are also important, for example higherwages, opportunity for other training or ad-

vancement. However intangibles such as pro-

tecting t he worker ’s self-esteem ar e also ex-

tremely important . In this regard, involving

workers in the change process can in itself be

an incentive.

[The employee] should see himself as the

master of the machine, not its servant; notas a victim of the office design, but as a par-ticipan t in it . . . When invited as collabora-tors, many office workers will respond withenth usiasm to office system aut omat ion.

63

‘ Hammer and Zisman, op. cit., pp. 34-3,5.



Ch a p t e r 5

Office Automation and the

Quality of Worklife



C o n t e n t s

Page

Section I: Stess and the Quality of Worklife . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ~ 126Sources of Stress. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127Strategies for Alleviating Adverse Stress Responses. . . . . . . . . . . . . . . . . . . . . . . . . . . 136

Section II: Office Automation and Health, Illness and Disease. . . . . . . . . . . . . . . . . . . . 137

Visual System Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139Musculoskeletal System Outcomes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141Reproductive System Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144St res s-Relat ed Ou tcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148

Section III : Int erven tions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151Office Design and Workstation Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151Public Policy and Quality of Worklife . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155Research Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162Labor-Man agem ent Relat ions a nd Office Automa tion . . . . . . . . . . . . . . . . . . . . . . . . . . 163

TablesTable No. Page

5-l. Working Conditions Likely to Produce Stress Responses in Offices . . . . . . . . . . . 1275-2. Exposures in the Office Other Than the Video Display Terminal . . . . . . . . . . . . . 138

5-3. Epidemiological Criteria for Assessing Causality . . . . . . . . . . . . . . . . . . . . . . . . . . . 1395-4. individual and Work Environment Factors Associated With

Visual System Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1405-5. Visual System Outcomes: Known Acute or Potentially Chronic. . . . . . . . . . . . . . . 1405-6. individual and Work Environment Factors Associated With

Musculoskelet al Ou tcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1415-7. Musculoskeletal System Outcomes: Acute or Potentially Chronic . . . . . . . . . . . . . 1425-8. Reported Cases of Reproductive System Outcomes in Computer-Mediated

Workplaces by Work Site and Job . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1455-9. U.S. Occupational Exposure Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

5-10. international Radiation Protection Association Occupational ExposureLimits to Radiofrequency Electromagnetic Fields . . . . . . . . . . . . . . . . . . . . . . . . . . 147

5-n. Workers’ Compensation Claims for Employees Working atVideo Display Terminals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156

5-12. Examples of Mental Stress-Mental Disability Claims forWhite-Collar Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

5-13. Union Membership by Industry and Occupation . . . . . . . . . . . . . . . . . . . . . . . . . . . 166

FiguresFigure No. Page

5-1. Characteristics of the Office Setting That Can Contribute to anIndividual’s Quality of Worklife . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

5-2. The Proportion of VDTs Installed in New Office Space Comparedto Existing Space, 1984-90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

5-3. A Comparison of Workers’ Compensation Claims for Mental Stressand Other Occupational Diseases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

5-4. Employed Wage and Salary Workers Covered by a Union or EmployeeAssociation Contract in 1983-84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166




Figure 5.1 .—Characteristics of the Office Setting ThatCan Contribute to an Individual’s Quality of Worklife

Fundamental elements

Work process

OrganizationI

Tec hnology IPhysical envionment

Huma-computerinteraction

Individual

Building designOffice design

Workstation design

The subjects discussed in this chapter are:

station design and labor-management re-

lat ions.

A discussion of labor-management relations

ends this chapter because many of the prob-

lems cited in chapters 4 and 5 can potentially

be solved or alleviated through some form of

w orker invo lvem ent in the dec i s ionm aking

process, such as collective bargaining.

SECTION I: STRESS AND THE QUALITY OF WORKLIFE

Stress is a term often used in both conver-

sation and scientific debate to describe trouble-

some experiences in daily life, ranging from

th e illness of one’s child to an acrimonious ses-

sion with the boss. Some stress is routine, the

daily hassles of work. But, typically, eventsthat precipitate stress responses alter or in-

tensify daily routines and roles of worklife.’

Characteristics of office automation that lead

to changes in the work role can thereby pro-

duce stress responses in the worker.’

Work-related stress is the psychological or

biological response to conditions in the work

environment. Stressors are the conditions that

cause stress.6Stress can be either good or bad,

but “good” stress is usually called “challenge.”——. .——‘1.eonard 1. Pearlin, “Role Strains and Personal Stress, ”

Psychosocitd Stress: Trends in Theory an d Research (New York:Academic Press, 1984).

A worker’s role is defined organizationally by the jobheshe occupies.‘This model of stressor and stress response is a common

model used and was originally developed by Hans Seyle andWalter Cannon in the 1920s and 1930s. For a good overviewof this model of stress see, Hans Seyle, The Stress of Life (NewYork: McGraw-Hill Publishing Co., 1956).

Office automation, by changing the conditions

of work, can elicit psychological and biologi-

cal responses; i .e. , produce stress.

Psychological stress responses to working

condit ions include challenge, boredom, anxi-ety, mental fat igue, depression, satisfaction

or dissatisfaction, and feelings of security orinsecurity. Biological responses can include

chronic or periodic arousal ,7muscle fa t igue,

headaches , and psychosom at i c sym ptom s .

This list is not exclusive. Any of these can oc-

cur among office workers. Office automation

offers the organization a unique opportunity

to create working condit ions that challenge

the individual worker and at the same time

decrease the frequency of adverse stress re-

sponses.a

—-——-—-Chroni~ arousal refers to neura l, hormonal, and immuno-

logical responses to externa l stimuli. In man y instances t heterm n eu r o h o rmon a l arousal is used to refer to these distinctstress responses to indicate the controlling role played by thebrain in initiating them.

“Traditional stress models emphasize that stress responsesfollow a U-shaped curve. Too little environmental stimulationleads to underload and stress responses such as boredom. Too



A stress response sometimes comes from an-

ticipation of an event as much as from the

event i tself . The anticipation of a computer

going “down ,’ for example, can produce stress

responses. New technologies often lead to new

and conflict ing expectations.

The term “technostress” has been used to

describe consequences of office automation:

T e c h n o s t r e s s i s a m o d e r n d i s e a s e o f a d a p -

tation caused by an inability’ t O co p e w i th n ew’

co mp u ter tech n o lo g ies in a h ea l th y ’ man n er - .

I t man i f es t s i t s e l f in two d is t in c t b u t r e la ted

ways: in the struggle to accept computer tech-

nology, and in the more special ized form of

o v e r i d e n t i f i c a t i o n w i t h t h e c o m p u t e r . ’)

The stress response is not technologically

determined, although the word “technostress”

conveys that impression. Many conditions that

produce a s t ress response in the automatedoffice are not the result of the new technol-

ogy, and solutions to the problems can not

often be achievecl through modifications in the

technology. The consequences are contingent

on how an organization implements new of-

fice technologies. Most office workers look for-

ward to working on computer sys tems that

automate manual tasks they would rather notdo.

10

Table 5-1 shows a list of conditions that pro-

duce stress. These stressors are not unique to

office work: they are also found, for example,in factory work. In fact, some people talk about

the office becoming the factory of the future.

Table 5-1 .—Working Conditions Likely to ProduceStress Responses in Offices

Working conditions in all offices: Increased workload coupled w!th. a) IImlted job

control, expanded job controlRepetltlve task(s} In the jobMachine pacing of work

Lack of tIme for training to acqulre new skillsCompeting roles at workLack of career o p po rt LI n I t Ies I n t hc organ i7at 10 rl

Working conditions in automated offices: Electronic mon Itoring as a form of su pervlslc)n and

employee monltorl ngElectronic monitoring as a form of task feedbackHigher expectations for speed of work coupled ~lth

computer system response delaysOff Ice work dependence on computer system an(~

system delaysThe computer med I at Ion of work and/or the pro blerms

with the human computer d~alogSocial Isolatlon with the primary I nteractlon the

computerIncreased soc I al contact and soc [al part IC i pat 10 n VI;)

computer networks‘ {~~)Ff,~ Off e $ 11 Ill I fq } i i . . I L ~ IT . t

These conditions have always been felt in of-

fices; new technologies can intensify them.

They can also ameliorate them. Typically, the

adverse condit ions occur together and espe-

cially affect lower level jobs. Most have been

associated with low job satisfaction or withillness, Ea ch can be alleviated with work re-

design strategies, contributing to better em-

ployee heal th and a t t i tudes toward work.

Table 5-1 also shows a list of office condi-

tions characteristic of office automation that

produce stress that may permeate all levels

of the organization.

Sources of Stress

Factors that bring about stress include in-

creased workload, decreased control over work,

repeti t ive work, machine pacing, inadequate

training, ambiguity in role, consciousness of

limited career opportunities, computer moni-

toring of work, unattainable expectations for

speed, the abstraction inherent in computer-

mediated work, and increased social isolation.

Workload and Control

Office automation can increase the number

of tasks a person has to complete; increase the




complexity of the tasks; speed up the pace; lems, at tempts are typically made to exert

or increase the amount of informat ion needed greater organizat ional control over what th e

to complete a task.’]Even the change to an worker does. This can be achieved more easily

on- line sys tem from a batch process ing sys- through office automat ion. Greater organiza-

tem can increase workload.12

tional control tends to increase the problems

These increases may or may not be transient.of repetitive or machine paced jobs; offering

The ability to modify work strategies is a co-- workers even less control and resulting in aponent of th e worker’s contr ol over t he job.

]3 vicious circle. The productivity of the worker

If the worker has the ability to modify his/heris stabilized below optimal performance level.

work strategies, the adverse stress responses Two patterns appear to be developing. The

can be buffered and transient . When the worker key difference is the level of control . When con-

has little control, the adverse stress responses trol is decreased, ei ther through embeddingtend to persist. Workload and job control in decisions in the system, electronic monitor-

conjunction affect attitudes about the job, the

organization, and t he worker’s health .

Computer-based communication networkshave been shown to lead to increased work-

load by making the transmittal of documents

easier and thus more frequent. This leads tothe professional having to sift through many

memos to find the relevant one; the case of

information overload. This also may be a tran-

sient effect that will disappear as the orga-

nization learns to utilize the system effectively.

A primary motive for office automation is

increased productivity, but many stress re-

sponses lead instead to increased absenteeism

and turnover (especially under good economic

conditions when jobs are plentiful). These re-

sponses have also been associated with de-

creases in performance and even with someinstances of sabotage.14

To alleviate these prob- — ---

‘‘W’orklo~d is the level of demands the job places on theworker. Technological change can lead to decreases in theamount of time spent at a particular task. However, manystudies have documented that workload more often increaseswith office automation: Jon Turner, Computers in Bank Cieri-ca l Fun ctions: Im plications for Product i \ ’i t~’ and the Qual i t~’

of Life, Ph.D. dissertation, Columbia University, 1980; MichaelJ. Smith, et al., “’An In\’estimation of Health Complaints andJob Stress in Video Display Operations, ” Hum a n Factors, vol.23, No. 4, 1981, pp. 387-400; Rob Kling, The Zmpac t s of Com-

puting on the W’ork of J fanagers , Data Anal~’sts , and Clerks,J$’orking Paper, Public Policy Research Organization, Univer-sity of California, Irvine, 1978.-Jon A. Turner, Computer i l ledia ted Wrork: The Interpla.v

Between Technolog~r and S tructured Jobs–Claims Represent-ati~’es in the Soc ia l Securit&v Administration, W’orking Paper,Department of Computer Applications and Information Sys-tems, New York University, 1985.

‘Control is the ability of the employee to arrange work interms of speed, task priority, and ways of performing the task.

‘‘Ilrod, op. cit.; SE W also Gavriel Salvendy and M.J. Smith

(eds. ), hfachine Pacing and Occupational S tress (I,ondon: Tay-lo r & Francis, I,td., 1981).

ing, social isolation, or change in the job (e.g.,

the development of a single repetitive task),

the interaction between increased workload

and decreased control leads to adverse stress

responses. Alternatively, when the increase in

workload is associated with better opportuni-

ties to arrange the work, this can produce posi-

t ive stress responses, or challenge, for em-

ployees.

Repetitive Tasks

Office automation can result in repeti t ive

tasks, which lead to increased anxiety, bore-

d o m , a n d d i s s a t i s f a c t i o n w i t h w o r k . T h e

introduction of a word processor or microcom-

puter can, however, also reduce the repetitive-ness o f t a sks—for exam ple , t he sec re t a ry

makes a few corrections rather than retyping

a page.

Taking breaks from the monotonous repeti-

tion provides psychological relief, but some-

times a need for breaks is overridden by the

pressure of work. ”

Machine Pacing

When control over when to do a task is de-

termined by the computer system, tasks are

said to be machine paced.16

When da ta en t ry

or other tasks are machine paced, the office

begins to mimic the factory assembly line. Ma-

chine pacing both increases the workload anddecreases control. It can lead to anxiety, de-

—.—.——]F3rod, op. cit., p. 43.“A task is said to be machine paced when the worker has

no control over the initiation of the work c~’cle or the durationof the work cycle. Typically machine pacing is associated withshort-cycle repetitive tasks.



130 q Automation of America “s Offices

I IPhoto credit Cornmunlcattons Workers of Arner(ca

In the communications industry, workers can be continuously monitored. These charts show the monitoring of employeesby the Average Work Time System. Every call is timed and the total volume of calls handled per day by all workersis then used to calculate an average number of calls for a given period of time. An AWT figure of 100 means that the

operator’s performance was average

mation to find out, for example, how many

files were completed in a given period of time,

and modify her performance accordingly. The

firs t of ten produces adverse s tress response

and the la t ter posi t ive chal lenge.

With electronic monitoring for supervision,

maximum consistency and reliability in per-

formance are sought. One distinction betweentraditional work monitoring and electronic

monitoring is that the former is intermittent

and the latter continual. Continual monitor-

ing places added pressure on the employee to

produce at the pace and level established by

the machine. This leads to increased anxiety,

fatigue, psychosomatic complaints, and job

dissa t i s fac t ion .21 The employee, knowing he/

she will be expected to perform at a specified

-’13ecause the terminal provides the worker with all the nec-essary information to complete any task, there is no need forthe employee to Iea\’e the workstation. This constrained pos-ture for extended periods of time is a key element in \isual

and musculoskeletal problems.



734 q Automation of America Offices — — . — —

Box A.–Expert System Used in Insurance Underwriting:An Example of the Decisionmaking Process

A publishing company in California has decided to insure their data processing facility. Theyhire insurance agent Smith to find the best possible policy for them. Mr. Smith approaches Ms.Jones of Insurance Company West to develop a policy for the data processing facility housed

in a 25-year old brick building.Ms. Jones goes to the computer terminal and starts a file called Publishing Company Ac-

count. She then accesses the expert system to get assistance in defining the parameters of thepolicy. First, she must enter information about Mr. Smith, the agent. The computer system hasa large database of agents the company works with, describing the type of work they do, theirreliability and the quality of the information they provide. (This database is updated quarterlyby the company to enter information on new agents and update the information on old agents.)The system evaluates Mr. Smith. Uncertainty coefficients are then estimated by the computersystem based on information about Mr. Smith. The expert system uses this coefficient to deter-mine the most appropriate questions (prompts) to Ms. Jones. Any equations used in final recom-menda tions by the system t ake int o accoun t t he agent ’s un cert aint y coefficient.

Then Ms. Jones enters the basic information about the facility. The computer responds thatin California, 20 years ago, reinforcing bars were not mandatory in brick buildings. Therefore,

earthquake damage must be excluded from the policy. The system may then prompt Ms. Jonesfor information about smoking-is it permitted in the data processing facility, and in what rooms?The system prompts Ms. Jones about whether flammable solvents are stored in the room. Avalue may be assigned to designate the importance of this information. The system then com-bines this information with other information. It prompts Ms. Jones when necessary, and comesto a decision about the policy just as an expert underwriter would.

SOURCE: Baeed on an interview with Steve Weyl of Syntelligence,

to perform the same task over and over within

the rules defined by the computer system. In

the extreme case, the worker monitors infor-

mation as it comes to the screen, but all judg-ments are made in the system or by some other

person at another location. For workers whose job involved in teract ion wi th people , th is

change can mean a loss of the sense of the

meaning of the work.

Computer-mediated work is characterized by

a human-computer dialog. The quality of thedialog is important to the quality of working

life. The user gets from the software informa-

tion about the current state of the system, the

work, how to proceed or return to an earlier

part of the process, the future stages of theproduction process, and the consequences of

further command sequences. If the software

does not provide the needed information, thereis decreased control over the work, bringing

Inc., Santa Monica, CA, 198S.

anxiety, and job dissatisfaction.36

The worker

may use the system less and less, or not at-tempt to fully use the system capabilities; a

circle develops leading to further anxiety andless productive use of the new office technol-

ogies. A satisfactory human-computer dialog

can counter the sense of abstraction, giving

the operator a greater sense of control. Thus,

transitory problems with office automation

may be alleviated with appropriate attention

to the human-computer dialog.

When the dialog uses concepts and phrases

tha t m atch t he operator’s ta sk vocabulary ,37

this encourages the use of the system and in-

creases the likelihood of greater productivity y.

.——

“’J on Tur ner and Robert A. Ka-asek, ‘* Stjftware ~rgc)nOrn-k s : Effects of Compu ter Applicat ion Design Param eters onoperator Tasks Performance and Health,’’”llrg~~~~lj~’s, ~’o].ZT, No. 6, 19S4 , PP . 663-6!30.

Turner and Karasek, op. cit.



Ch 5—Off/cc Autormtion and the Quality of Worklife q 1 3 5

However, as users become more advanced they

begin to prefer more formal dialog.38

M e n u

driven systems guide the novice user; as the

user becomes more knowledgeable, this may

become tedious; the user feels held back by

the system. This can also produce anxiety,

boredom. and job dissatisfaction. More “tran-si t ionali ty in the way that people and com-

puters interact or interface will alleviate this

source of stress.39

In a dialog based on transi-

tionality, the user can designate changes in

the human-computer dialog as he/she becomes

more proficient.

Social Participation or Isolation

The office is a social environment, and as

the technology changes, the social relat ion-

ships of work may also change. This is impor-

tant because the social group can be a buffer

between the worker and other characteristicsof the work environment .4” Communication

and social participation in the work process

is central to the productivity of the work unit

and the maintenance of the organizat ional

culture.

This social network can be particularly im-

portant in a dynamic work environment. At

times of heavy workload, when peak worker

performance is required, the resulting adverse

stress responses affect the employees capa-

bility to perform. A social environment capa-

ble of ameliorating these condit ions for theworker is often not considered in evaluating

the affects of office automation on the quality

of working life. Yet, new office technologies

can either create more opportunities for com-munication and supportive interaction or close

off channels.

There is a tendency for workers to spend

more and more of the day interacting with a

computer terminal. In Japan, researchers have

recognized this potential :

There will be more need for lounges and dis-cussion rooms a nd t he like, to break t he rou-

tine of stress from the machines. As tasks be-come more mechanical and isolating, moregroup activities and worker clubs and incen-tive systems need to be developed t o keep upteam spirit and morale.”

The worker may spend so much time at the

terminal because he/she is electronically mon-

itored and paced or because there is no need

or opportunity to interact with others, result-

ing in social isolation, which has been shown

to be associated with depression, anxiety, job

dissatisfaction, muscular fatigue, and psycho-

somatic symptoms.42

When the computer becomes the pr imary

source of interaction in the office, coordina-

tion of the work process is transferred from

the social to the technological milieu. .4 tech-

nological form of communication develops and

both work and communication tend to become

more formalized. Whether this will adversely

impact the quality of worklife is unknown at

the present. One of the primarly reasons for

soc ia l i n t e rac t ion i s t o com m unica te va lue

judgments via both verbal and n onverbal mean s.The content of the communication may be im-

portant although not directly pertinent to thework process. For example, the employee may

be performing poorly because of circumstances

at home, or a n illness; when evaluat ion is ba sed

primarily on computer monitoring, supervisors

m ay no t r ecogn ize these c i r cum s tances43

Alternatively, increased social contact can

be provided via the computer system or via

user groups, because computer-based commu-

nication can remove both t ime and distance



136 Automation of America Offices —

constraints on communication.44

This can lead

to greater employee involvement and commit-ment to an organization along with increased

job satisfaction.

Strategies for Alleviating Adverse

St ress ResponsesThe strategies for alleviating adverse stress

responses simultaneously encourage challenge,

or posit ive stress responses. Three different

approaches concentrate on different parts of

the model that was shown in figure 5-1 andhave different goals. Stress management pro-grams focus on the individual, job redesign

programs focus on the job, and sociotechnicalprograms focus on the work process. No sin-gle approach is always adequate. A participa-

tory style of management in the implementa-

tion of new office technologies will help to

identify the methods appropriate for a success-ful implementation.

Stress Management

Stress Management refers to stress reduc-tion programs tai lored to the needs of thei n d i v i d u a l ,

45providing training to deal with

conditions either at work or home.4G

These pro-

g ram s can inc lude m ed i t a t ion , p rogress ive

muscle relaxation and biofeedback, and cog-ni t ive/behaviora l ski l l s . The advantages of these approaches are that they do not require

any changes in the work process, organization,or the physical environment. They assume nofault for the stress responses on the part of

either management or the worker, but place

on the worker the responsibility of coping with

adverse stress responses.

“In one Swedish study, it was found that 50 percent of thesystem messages would not have taken place without the sys-tem. Cited in Alexia Martin, Office Automation: Catalyst for Change–Managing the Transition to the Automated Office,SRI Research Report No. 694 (Stanford, CA: SRI International,1984).

‘ I,awrence R. Murphy, “A Comparison of Worksite Relax-ation Methods, Huma n Aspects in Office Automation, 13. G.F,Cohen (cd. ) (Amsterdam: Elsevier Science Publishers, 1984),pp. 257-265.

“ Recently, new software has entered the market that as-sists the worker in managing stress. One such program is Relax,which uses biofeedback techniques along with muscle relaxa-tion methods for managing stress. See Joseph Hager, “TheStress Manager, ,, ~>cjr ~ror]d, September 1984, PP. 22~-232

Data have not shown conclusively that these

programs are cost effective. Their disadvan-

tage is that working conditions are not modi-

fied to remove the source of the adverse stressresponse. In fact, research has shown that torealize the benefits of stress management typi-

cally requires extensive and costly training of

the worker, not the typical market offering of a two-day seminar. There is no credentialing

of the trainers and there are vast differencesin the quality of the training. Therefore, al-

t h o u g h s t r e s s m a n a g e m e n t p r o g r a m s a r e

popular, the employer is often faced with hav-ing to make a decision about them without

sufficient information about the quality of the

training and the likely results.

J ob Redesign

Job redesign or task redesign are both ways

to modify the working conditions to changestress responses. Office automation presents

an opportunist y to develop job or task redesignstrategies. The central thesis of job design is

that through changes in characterist ics of a job such as feedback, autonomy, task iden-tity, and skill variety, the internal motivation

and thus the performance of a worker is en-

hanced.

Task redesign focuses specifically on task(s)

rather than on a job. The scientific manage-ment philosophy is a method of task redesign,which in office automation primarily involves

changes at the human-computer interface andthe allocation of tasks between the worker and

the computer system.

U nl ike s t r e s s m anagem ent , j ob r edes ign

changes the conditions of work. When jobs are

designed with little meaning and little respon-

sibil i ty, and the worker has no informationabout how well he/she is performing, there can

be motivational problems.47

For example, the

overrationalization of clerical work results inrepetitive jobs, lacking responsibility and offer-ing little scope for personal development.

4g

— — — —‘

-Richard J. Hackman and Greg Oldham, l trork liedesign

(Rea ding, MA Addison-Wesley Publishing. 1981).‘“These types of jobs may lead to high labor turno~rer, ab-

senteeism, and recruitment problems. This leads to inefficien-cies through lost time, recruiting and training, and costs asso-

(continud)



140 Automation of America’s Offices — .

Table 5.4.—individual and Work Environment FactorsAssociated With Visual System Outcomes

Individual:

AgeUncorrected refractive errors

Work environment:

Glare on the screen

Flicker and jitterResolution of charactersHigh contrasts between source document and screen

Tasks requiring long continuous looks at the screenwithout a break

Air humidityHigh visually demanding task, like data entry and data

acquisi t ion

Low control jobs where the worker is unable to take abreak to relieve the load on the visual system

NOT = A~though the professional who wo~ks-at the VDT IS not as llke~y to reportas many vtsual problems as people doing data entry acqulsltlon or dialogtasks It IS important to recognize they tend to report more symptoms thanworkers not us I ng [he V DT For a comprehensive revl ew of the I I terat u re

see Ulf Bergqvlst, ‘Video Display Terminals and Health A Technical andMedical Appraisal of the State of the Art Scancffnavfarr Jouma/ of W o r k

Errv/ronrnenf an d Hea/th VOI 10 SupP 2 1984

SOURCE Off Ice of Technology Assessment

Table 5-5.—Visual System Outcomes:Known Acute or Potentially Chronica

Known acute outcomes:

Asthenopia:b

Burning eyesItching eyesIrritated eyes

Perception problems:Double visionBlurred vision

No existing data shows that working at a VDTcan lead to the development of cataracts,

61bu t

neither has the VDT been thoroughly absolved.

While in some industries people have worked

at VDTS for years, no study has examined the

prevalence of cataracts in such groups of work-

ers. No long-term study has yet shown eitherclinically observable changes in the eye func-

t ions or pathological changes in the eye.

There is evidence that work at a VDT leads

to more frequent changes in eye glasses.62

This

has been attributed both to the aging of theworkers, and to a greater tendency for VDT

workers, as compared to others, to identify

minor visual problems. A possible alternative

explanation is the development of acquired my-

opia (nearsightedness), which is characteris-

t ic of close visual work such as reading. If

working at the VDT is found to increase the

chance for acquired myopia, the visual health

of a large sector of the population will be af-

fected. As the debate about the effects of VDTs

on the visual system of workers continues,

there is a growing need for a well-designed lon-

gitudinal study to determine whether the acute

conditions persist. Since little is known about

potential biological or biomechanical mecha-

nisms for the initiation of pathological changesin the visual system attributable to new of-

Potential chronic outcomes: fice technologies, research should also focusAcquired myopia here.

aThere are no c-h ron IC outcomes that have been observed I n any c I In Ical Invest I

gallons of VDT operatorsbAStheflOpla IS a term used to describe vtsual fatigue or weakness NO clear defl Eye exams are recommended by the Na-

n It Ion of visual fatl gue IS employed In the research and it Is sometl mes referred tional Insti tute for Occupational Safety andto as visual strain

SOURCE Off Ice of Technology AssessmentHealth (N IOSH) before beginning VDT work

and pe r iod ica l ly the rea f t e r . G 3 In many in -

a terminal is directly proportional to the num-

ber of workers reporting symptoms and to the

extent of their complaints. That complaints

cannot be tied to organic change does not, in

other words, mean that they are not “real.”

There is also evidence that visual problems

can influence the development of musculoskele-

tal symptoms. The acute outcomes in table

5-5 can be reduced with changes in the work-place, such as appropriate lighting levels, com-

puter terminal design, workstation and job re-design, and prescriptions to correct refractive

errors.

“’National Research Council, Video Displays, Work and Vi-sion: Panel on the Impact of Video Viewing on Vision of Work-ers (Washington, DC: National Academy Press, 1983). How-ever, in a recent workers’ compensation case, the worker receivedan award for incipient cataracts. The workers compensationboard found there was a recognizable link between the employ-ee’s occupation and disability-see, Legal Rights for VDT Users(Cleveland, OH: Working Women Educational Fund, 1985).

“Wlf Bergqvist, “Video Display Terminals and Health: A

Technical and Medical Appraisal of the State of the Art, Scan-dinavian J ournal of Work, Env ironm ent, and Health, vol. 10,SUpp. 2, 1984.

‘ ‘J. Donald Millar, Assistant Surgeon General and Directorof N IOSH, Statement before the Subcommittee on Health andSafety, Committee on Education and labor, U.S. House of Rep-resentatives, May 15, 1984.



—— —..

Ch. 5—Office Automation and the Quality of Worklife q 143

- -

Photo credit Communlcat(ofls Wor/ters of America

Workers adjust to their working conditions. Sometimes this can lead to musculoskeletal strain,

The first two, cervicobrachial syndrome and

prolapsed lumbar intervertebral discs, can po-

tential ly develop among either professionalsor clerical workers.

73 They can be related to

increased t ime spent sedentary and in con-

strained postures, which could be blamed on

the job or the design of the office or worksta-

tion, but most likely is related to all three.

Cumulative trauma disorders are more likely

to develop among workers doing highly repeti-

tive keying operations at the VDT for extended

periods of time, mostly data-entry clerks who

key as much as 12,000 keystrokes per hour.

—————-——

“A prolapsed intervertebral disc occurs when the nucleus

pulpous of the disc protrudes outside the annulus fibrosis. Thedisc tends to protrude onto a nerve root causing pain. In thelumbar region this pain radiates down the leg. Kelsey estimates

the incidence of prolapsed lumbar intervertebral disc at around0.1 to 0.5 percent per year (Kelsey, op. cit., 1981, p. 151) inthe population of ages between 24 and 64 years.

These are the wear and tear disorders. Many

of the early warning signs (tingling, numbness,

and pain) of these chronic conditions can bealleviated with changes in the working condi-

t ions .74

There is a relationship between visual sys-

tem outcomes and musculoskeletal system out-

comes. For example, a person who is near-

sighted most likely will get a pair of readingglasses that typically allow the person to read

clearly at about 33 cm. However for work at

the VDT, a person is on average only as close

as 50 cm from the screen. The worker thenleans forward, and the posture results in mus-

“Much of the research on the prevention of cumulative

trauma disorders is based on redesign of the machines in as-sembly line operations. See %eventing I l lness an d Injury in

th e M’orkplace (op. cit. ) for several examples of the preventionprojects.




culoskeletal strain. As the pain gets worse is between 10 and 20 percent.78

No site has

through the day, the worker adjusts by mov- enough data to show conclusively any asso-

ing her body back in the chair, increasing the ciation between office automation and any ad-

visual distance, which can lead to visual strain. verse reproduct ive outcome.79

NIOSH recommends that a worker take peri- A Finnish study looked at the relationship

odic rest breaks every 2 hours when doing work between occupation and spontaneous abor-

a t t he V DT to preven t acu te a s thenop ia and t ions , and found tha t indust r ia l and cons t ruc-

musculoskeletal fatigue.75

This can be enforced tion workers had one of the highest rat ios

through organizational rules, through a job (13.01), and clerical and managerial workers

redesign strategy giving the worker a variety one of the lowest estimated ratios for spon-

of tasks to break up the VDT work, or by al- taneous abortions (9.91);80

the lowest ratio was

lowing the worker the discretion to take breaks in administrat ive work (8.16).

when she feels the need. The last is especially

advantageous in se t t ings where the work is

unpredictable or there is a high worker-to-VDT

ratio with competition for terminals, but may

demand more flexibility than an organizationwould normally provide. Sometimes people will

not take breaks unless they are required.

Reproduc t ive Sys tem Outcomes

Many occupational hazards affect the repro-

duc t ive sys t em . 76 The concerns about the re-

productive hazards of working in an automated

office focus primarily on the VDT. Most of

the early studies considered only female oper-

ators, but both genders should be considered

in discussing reproductive system outcomes.

The concern over working at the VDT de-

veloped because of reported clusters of spon-

taneous abor t ions and bi r th defects among

VDT operators. Table 5-8 shows a list of the

work sites where these clusters have been re-

por t ed . N o adequa te exp lana t ion has beenoffered for these observed clusters, 77 which in-

clude a wide variety of pregnancy outcomes

with the majori ty being spontaneous abor-

tions. The estimated prevalence rate for spon-

taneous abor t ions in the general popula t ion

—‘r’-M-ifiar~_op. cit.; this recommendation has been challenged

in the scientific community.“bFor a complete listing and a discussion of the potential

control technologies see Reproductive Hazards in th e Work- place, Office of Technology Assessment, Washington, DC, 1985.

‘-The argument is made that these clusters are chanceoccurrences. The rate of spontaneous abortions is not at oddswith the normal rate that occurred during the time period of the reported clusters. For a lengthy statistical discussion onthis see Bergqvist, op. cit.

Two studies in Sweden and Japan examined

the relat ionship between VDT work and re-

productive system outcomes. Lit t le informa-

tion is available on the J apan ese study .8’ The

Swedish study infers VDT exposure from oc-

cupations; the measure of work at a VDT is

i n d i r e c t . 82 N e v e r t h e l e s s , t h i s r e t r o s p e c t i v e

7KIn an analysis of the ability of women to recall whetherthey had a spontaneous abortion or not; one in four cases of spontaneous abortion was not reported. Gestational age of the

time of abortion was the major determinant of recall. AllenJ. Wilcox and Louise F. Horney, “Accuracy of SpontaneousAbortion Recall, ” American J o u rmd of Epidem iology, vol. 120,No . 5, 1984, pp. 727-733.“’There are several methodological prclblems with examin-

ing reproductive hazards in the workplace. First is the problemof selection bias. It is known that a predictor of an adversepregnancy outcome is prior adverse outcomes. Women who havea full-term pregnancy tend to leave the work force, and there-fore women with prior adverse pregnancy outcomes will be overrepresented (Gosta Axelsson “Selection Bias in Studies of Spon-taneous Abortion Among Occupational Groups, ” Journal of Occupational Medicine, vol. 26, No. 7, 1984, pp. 525-528).“’The ratio is calculated as the number of spontaneous abor-

tions times 100 divided by the number of births. K. Hemminki,M. L. Niemi, I. Saloniemi, H. Vainioh, and E. Hemminki, “Spon-taneous Abortion by Occupation and Social Class in Finland, ” International Journal of Epidemiology, vol. 9, No. 2, pp. 149-153, 1980.

“’Conducted by the General Council of Trade Unions, it hasonly been reported in “Japanese Miscarriages Blamed on Com-puter Terminals, ” New Scientist, vol. 106, No. 1457, 1985, p.7. Among 4,500 women, 250 became pregnant or gave birthafter work at the VDT and 91 had problems with pregnancy.There was a reported association between hours per day, work at the VDT, and problems with pregnancy or labor: for morethan 6 hours VDT work per day—66 percent had problems;for 3-4 hours VDT work per day–46 percent had problems;for less than 1 hour VDT work per day–25 percent had prob-lems. It is impossible to draw any conclusions from this datasince no information on the research design is known.“JBengt Kallen, An Epidemiologic Study of Work With

Dataterm ”nals and Pregnancy (En E pid em ”olog”sk S t u d i e over Arbete med Dataskarm och Gravidite t) , translated by AnitaDvorak, research report from the University of Lund, Sweden,1985. Data reported herein is taken from a second report, Ad

(continued on p . 146)



Ch. 5—Office Automation and the Quality of Worklife 145

.

Table 5-8.—Reported Cases of Reproductive System Outcomes inComputer-Mediated Workplaces by Work Site and Job

Companycity (date)

S e a r s - R o e b u c k / -

Dallas, TX

(5/79-6/80)Toronto Star/ Toronto, Ontario(5/79-5/80)

Air Canada/ Montreal, Quebec(2/79-4/81)

Defense Department/ Marietta, GA(10/79-10/80)

Defense Department/ Marietta, GA(10/80-10/81)

Pacific NorthwestBell Telephone/ Reston, WA(7/80-12/81)

Solicitor GeneralOffices/Ottowa,Ontario(4/79-4/82)

Surrey MemorialHospltallVancouver,British Columbia(1978-82)

Non~VDT

i miscarriages1 premature birth

8 full-term3 full-term

Outcomes

VDT

2 miscarages4 full -term

b

Job

Financial recordsprocessing clerk

a

Classified adsprocessing clerks

4 birth defects

7 miscarriages6 full-term

NIAC

Part-t i meticket agents

NIA 3 birth defects7 miscarriages5 full-term

14 full-term

NIA

NIANIA

2 birth defects1 still born

N 1AN 1A

4 miscarriages1 premature2 respiratory diseases

1 full-termNIA

NIA3 miscarriages1 birth defect1 premature1 bronchitislful l-term1 full-term


Accountingdepartment clerks

N 1AToronto, Old CityHallMinistry of AttorneyGeneral (1980-81)

United Airlines/

San Francisco, CA(1984)

Southern BellTelephone/Atlanta.GA (3/81-9/83)

General Telephone/ Alma, Ml(1983-84)

ClerksSecretaries

23 miscarriages

61 full -term

d

NIAAirline

reservationclerk

Telephoneoperators


NIA


Telephoneoperators

12 miscarriages2 still births3 premature15 full-term

Library/ Aarhus, Denmark

Department of PublicEmployees/Runcorn,England(1974-82)

NIA 8 miscarriages2 full-term

NIA

NIA8 miscarriages4 still births

Full-timeVDT operators

12 malformations

a Compares on Iy fu I I.t[ me VDT operators with non-VDT operators who may have worked as much as 6 hours per month at

the terminalbFul{ term refers t. the healthy dellvery of a n e w b o r n after three trimesters These are commonly termed Ilve births

CN 1A means no lnformatton reporteddTh, s excludes 23 Induced abortions and 9 full-term del!venes of wives of employed men

SOURCE Off Ice of Technology Assessment, compiled from several repofts and news sources



146 q Automat ion o f Amer ica Off ices

study found that women who worked at the

VDT were 50 percent more likely to have mis-

carriages (crude risk ratio was 1.5 with 95 per-cent confidence limits of 1.1-1.9) than otherwomen of similar age and occupational group.

With adjustment for smoking and stress, con-fidence in the risk ratio being greater than one

decreased.83

For all types of adverse reproduc-

tive outcomes, there was a significantly greater

risk for those who spent over 40 hours per week

at the VDT. This suggests that further inves-

t igat ions are needed that d i rect ly measureVDT work and follow a group of men and non-

pregnant women to see whether there is an

excess of adverse reproductive system out-

comes. No epidemiological study has providedrel iable data compar ing VDT to non-VDT

operators.

Two explanations other than chance have

been offered for the clusters–stress, and ra-diation emissions. There is no epidemiologi-cal evidence linking stress in office work (eitherphysical or mental) to spontaneous abortions

or still births. But while no evidence exists,no research has thoroughly explored the issue.

The greatest interest has been in the impact

of radiation84

and whether radiation from the

VDT is the single source exposure. There isno evidence that ionizing radiation above es-

tablished safe thresholds is being emitted from

currently sold terminals.85

Ionizing radiation

from the VDT is not a likely explanation, ac-

cording to NIOSH, the Federal Drug Admin-istration, and the Government of Canada.

86Th e

possibil i ty of nonionizing radiation must be

considered; but future developments in f latpane l d i sp lay t echno log ies m ay even tua l ly

replace cathode ray tubes as the dominant

human-computer interface.

Recent concern has focused on very low fre-

quency radiation, part icularly the magnetic

pulse generated from the coil of the cathoderay tube. This concern developed because

studies in Spain related a magnetic pulse tomorphological abnormalities in chicken em-

bryos.87

The evidence has not been confirmed

in any other investigation trying to reproduce

the patterns of electromagnetic radiation emit-

ted from a VDT.88

Current ly , there are in ter -

national efforts to study the effects of pulsedelectromagnetic exposure on chick embryo de-velopment, but measurement of this and otherforms of nonionizing radiation in the field is

difficult. Further research should be concernedwith the development of reliable instruments

for the monitoring of radiation being emitted

from VDTS.

Based on current evidence, no long-term risk is associated with very low frequency radiationemitted from the visual display terminal, butcontinuing evaluation is warranted in light of

Hans Malker, Critical Comm ents on the Report “An Ep i d em i o -l og i ca / S t ud y of Work With Video Screens and Pnsg-nancy Out-comes, ” Memorandum, Swedish National Institute of Occupa-

tional Safety and Health, Feb. 2, 1985.“This risk ratio dropped only 10 percent when the effects

of smoking and stress were entered into a logistic regressionanalysis (adjusted risk ratio 1.4 with 95-percent confidence limitsof 1.0-1.8). No data was reported on the effects of chemical ex-posure or heavy lifting on the relationship of work at the VDTand miscarriages. If the relationships persist after adjustingfor these potential confounders along with other predictors of miscwriages (e.g., prior spontaneous abortions ~d parity) then

the researchers can make a stronger inference. This will alwaysbe limited by the absence of a direct measure of VDT use.

“Three major types of radiation are associated with biologi-cal effects. They differ by the energies involved. Ionizing radi-

ation has the most energy and is known to cause cancer andbirth defects. Microwaves and radiofrequency nonionizing ra-diation have been associated with fertility problems and bloodabnormalities. Extremely low frequency and electromagneticnonionizing radiation is the least energetic of the three catego-ries and has not been associated with any adverse biologicaleffects.

——‘r’ William E. Murray, “Video Display Terminals: Radiation

Issues, ” IEEE Computer Graphics and Applications, April1984.“’Millar, op. cit.; FDA, Drug Bulletin, vol. 14, No. 1, April

1984; Environmental Health Directorate, Investigation of Ra-

diation Em ”sw”ons From Video Display T erm”nals, Departmentof National Health and Welfare, Ottawa, Canada, 1983.““This evidence comes from two reports: J.M.R. Delgado, J.

Leal, J.L. Monteagudo, and M.G. Garcia, “EmbryologicalChanges Induced by Weak, Extremely Low Frequency Elec-tromagnetic Fields, ” Journal of Anatomy, vol. 134, 1982, pp.533-551; and A. Ubeda, J. Leal, M.A. Jimenez, and J.M. R. Del-gado, “Pulse Shape of Magnetic Fields Influences Chick Em-bryogenesis, ” Journal of Anatomy, vol. 137, 1983, pp. 513-536.*“Arthur W. Guy, Health Hazards Assessment of Radio

Frequency Electromagnetic Fields Em ”tted By Vid eo Display

Terminals , report prepared for IBM Office of the Director of Health and Safety, 1984; Kjell Hansson Mild, Personal Com-munications, Swedish National Board of occupational Safetyand Health, 1985; S. Maffeo, M.W. Miller, and E. L. Carsten-sen, “Lack of Effect of Weak Low Frequency Electr~Magnetic

Fields on Chick Embryogenesis, ” Journal of Anatomy, vol. 139,No. 4, 1984, pp. 613-168.



148 q A u toma t i on o f America Offices

in collective bargaining with Equitable Life

Insurance the r ights of employees to leave

VDT jobs where the believed risk for an ad-

verse pregnancy outcome is high. These meas-

ures would at a minimum alleviate fears.

Stress-Re la ted Outcomes

Work-related stress is not new to offices, but

recent epidemiological evidence has called at-

tention to the potential long-term consequences

of s t ressful of f ice working condi t ions . One

study of the health records of 22,000 workersin 130 occupations found that clerical work-

ers had the second highest rate of stress-relateddiseases.” Analysis of the Framingham Heart

Study data showed that women clerical work-ers developed coronary heart disease (CHD)

at about twice the rate of other women work-

ers and women at home.94 The workplace fac-tors that predicted the development of CHD

among clerical workers were a nonsupportive

boss and low-job mobility. Any conclusions

about the contribution of the new office tech-nologies to the incidence of disease must thus

consider that women clerical workers were al-

ready at a greater risk for the development

of certa in st ress-related diseases. The n ew tech-

nology may or may not intensify those char-

acteristics of the work environment that are

associated with the elevated risk, increasingone’s chances of developing disease; they could

also improve working condit ions, decreasingthe likelihood of disease.

There are no reliable estimates of the costs

to the organization or to society of stress-re-

lated i l lnesses, absenteeism, tardiness, em-

ployee turnover, decreased quality and quan-

tity of output, unscheduled machine downtime

(due to emp loyee ta mper ing) and worker’s com-

pensation awards. These outcomes can lead

to increased medical care costs and decreased

organizational effectiveness.

‘4{Mich~ei J. Smith, Michael J. Colligan, and J.S. Hurrell,

“A Review of NIOSH Psychological Stress Research–1977, ”

(lccupatiomd Stress: Proceedings of a Conference on Occup,~-

t iona l Stress (Washington, DC: U.S. Government Printing Of-fice, 1977).

‘(’Suzanne G. Haynes and Manning Feinleib, “Women,

Work and Coronary E{eart Disease: Prospective Findings Fromthe Framingham Heart Study,

q

American Journal of Pub]IcS}Iealth , Iol. 70, 1980, pp. 133-141.

Stress-related outcomes can be divided into

those that are acute and transient95

and those

that are persistent and enduring. Anxiety and

depression have been shown to be related to

myocardial infarction, angina pectoris, and

coronary death.96

Therefore, correction of work-

ing condit ions that produce these stress re-sponses can help to prevent stress-related dis-

eases .97

As impor tant as are acute condi t ions , the

potential for chronic diseases is the key pub-

lic health issue. The population potentially at

risk in offices is large. If conditions that can

lead to chronic illness and disease can be iden-

tified, management can use this information

to guide implementations.

The biological plausibility of changed work-

ing conditions leading to a pathological change

in the body has been the subject of debate fordecades. Chronic arousal is one currently ac-

ceptable biological pathway (see box B for an

example of a plausible link to disease). Chronic

arousal is a biological adaptation to the envi-

ronment. When one continues to respond dailyto the same stimuli, arousal can become part

of the normal biological adaptation to, for ex-

am ple , w ork— a m e t h o d o f a c t i v a t i n g t h e

body’s resour ces to meet th e dema nds. This

can lead t o a form of ‘hea lthy ma lada pta tion,

in which the worker completes tasks, but at

some biological costs. The eventual cost can

be illness due to lowered immunological resis-

tance, or chronic illness that lowers the abil-

ity to perform, such as cardiovascular disease

or peptic ulcers. The danger is hidden in that

the chronic heightened state of arousal does

‘ Stress can contribute to the development of acute visualand musculoskeletal system outcomes. For example, musclefatigue can be the direct result of a stressful working condi-tion, which can stimulate brain stem activity, which in turncan cause muscle fatigue.

“C. David Jenkins, “Psychosocial and Behavioral Factors, ”Prevention of Coronar~’ Heart Disease: Practical Managem ent of the Risk Factors. Norman M. Kaplan and Jeremiah Stamler

(eds. ) (Philadelphia: W. B. Saunders, 1983), pp. 98-112.““This type of prevention strategy may be found to be themost cost-effective, since it has the potential to reduce the long-term development of disease. Also, if the working conditionsthat produce stress responses in workers are modified, this mayalter certain behavioral outcomes including smoking, drinking,and overeating—all considered socially acceptable ways to copewith the stresses of life, but primary determinants of prema-ture morbidity and mortality.



Box B.—Chronic Arousal: The Link BetweenDisease, The Case of

Ch. 5—Office Automation and the Qualify of Worklife 149

Working Conditions and the Natural History of Cardiovascular Disease*

Ear ly theories of stress a nd disease held th at hum ans instinctively respond t o challengingconditions from th eir environmen t t hrough a ctivation of pituitar y and adren al gland functions.Walter Cannon in the 1930s showed the importance of the sympathetic adrenal system in the

flight-or-fight syndrome. He showed there were limits to how well the system could adapt tostimuli; afterwards bodily harm could result. OnIy in the last 20 years have scientists begunto unravel the complex interrelationship between the brain, immune system, and endocrine system.

There are competing models of this complex system, but several conclusions can be stated.Sympathetic adrenomedullary (SAM) stimulation is accompanied by evaluated blood pressureand heart rate, heightened myocardial oxygen requirements, increased levels of circulatingepinephrine (E) and norepinephrine (NE), elevated plasma concentrations of free fatty acids (FFA),and increased plasm a r enin a ctivity. These can predispose the individual to cardiovascular dis-ease (CVD). The r elease of th e neu roregula tor, catecholamine, a s a consequ ence of SAM activityis central to the most prominent theories of stress and CVD. In its efforts to mobilize reserveenergy resources, catecholamin es hydrolyze triglyceride stores into FFA and glycerol. FFAsare eith er u tilized in the production of energy or t aken up by th e liver a nd a dipose tissue t henresynthesized into triglycerides that are secreted as a component of very low-density lipoproteins

(VLDL). VLDLS have been shown to be significant components of the atherosclerotic process.When catecholamin es ar e chr onically secret ed in grea t excess of the body’s ener gy requirem ent sto meet the demands of the work environment, the abundance of FFAs can ultimately resultin damage to vascular walls caused by circulating VLDLS. Damage to vascular endotheliumcan also occur as a result of increased arterial blood pressure or turbula.nce caused by SAMhemodynamic responses. Damaged vascular endothelium is more susceptible to atheroscleroticdeposits than healthy vessel walls. These processes suggest several possible pathways betweenthe challenges created by working conditions and the development of cardiovascular disease.

a’1’hig Sxtion is b a s ~ on a S1. l r nrna ry prepared by Dr. Andrea LaCroix. For a full description see Andrea LaCroix, Occupation Ex~sureto High Deman d/ Low Control Work an d Coronary Heart Disease Incidence in th e Frarm ”ngha m Cohort, doctoral dissertation, Universityof North Carolina, Chapel Hill, 1984. A more complete description of the various biological procesaes can be found in The Instituteof Medicine, Research on Stress and Human Health (Washington, DC: National Academy Fress, 1981).

not necessar ily corr elate with t he worker’s att i-tudes about work. High motivation and satis-

faction does not obviate the possibil i ty that

a person could be at risk.

Three working conditions have been associ-

ated with chronic arousal:

q social isolation or lack of social support;

lack of control over the timing, speed, and

variety of tasks; and

heavy workload (especially repetitive and

machine-paced tasks).

Each of these conditions has also been postu-lated as likely to arise from office automation.

No evidence has shown that all three must oc-

cur to elicit deleterious biological responses;

however, in some jobs they all occur.

Epidemiological evidence has shown the

most consistent links between heart conditions

and workload and control. In a 6-year prospec-tive analysis, men with jobs characterized by

a heavy workload and limited job control were

found to have 1.4 times the normal risk of CVD

m o r b i d i t y .98

In a case-control study of my-

ocardial infarction and occupational exposures,it was found that hectic work and low control

over work tempo and skill variety were asso-

ciated with myocardial infarction in men un-

der 55.99

In a study of Swedish workers who

had changed jobs, those whose new job had

greater control had fewer coronary symptoms

“’The CHD morbidity measure was a self-report indicator of

chest pain, dyspnea , hypertension, and heart weakness. R. Kara-

sek, et al., “Job Decision I.atitude, ,Job Demands, and Cardi-o}’ascular Disease: A Prospective Stud} of Swedish N!en, Amer-ican J ou rn a l of Pub l ic l{ealth, \ ol . 71 , No. 7, 1981, pp. 694-70,5.‘II. A] fredsson, et a],, “M~.ocardial Infarction and I)s~’cho-

social Jt’ork l~nyironment: An Analysis of the Male SwedishMrorking Force, ” Social Science and Aledic ine . \ ’ol. 16, 1 W2,pp. 463-467.




than workers whose new job had less control. l00

In the only American prospective study, wom-

en who described their job as having a heavy

workload with limited job control had a three-

fold greater risk of developing coronary heart

disease (CHD) as women reporting a heavy

workload but having control over their work.Men did not exhibit the same relationship. At

greatest risk were clerical women, who had a420 percent greater chance of developing CHD

(relative risk 5.2 with 95 percent confidence

interval of 1.80-15.08). These associations per-

sisted after controlling for the traditional risk factors for CHD.

10 1

Based on the available evidence, lower level

staff appear to be at greater risk for the devel-

opment of stress-related diseases. This how-

ever need not be true with office automation

because the changes in the working conditionscan affect all levels of staff. Alternatively, of-

fice automation can be implemented so as to

add control and encourage more social inter-

action.

Currently, the evidence for a relationship be-

tween stress-related diseases and VDT work

is still sparse. A principle problem in drawing

conclusions is that the long latency of chronic

diseases prevents early recognition. However,

in the natural history of disease certain early

indicators could be expected such as psychoso-

matic symptoms (sleeping problems, dizziness,

nausea, and stomachache), high blood pressure

or angina pectoris.102

Only preliminary evidence

exists for the likelihood of deleterious long.

term health effects on office workers, or spe-

cifically on VDT workers. Most studies show

that support staff who work at a VDT reportm ore psychosom at i c sym ptom s than e i the r

other support staff or professionals who work

at VDTS. These studies, in general, also show

that women report more psychosomatic symp-

toms, as do people in jobs characterized by

—— .—““’R. Kar~sek and B. Garden, Managing Job Stress, Work.

ing Paper, Columbia University, Department of Industrial Engi.neering and Operations Research, 1984,

‘(’’ LaCroix, op. cit.

“’’These can also be explained by other factors such as si t

uations outside of work or biological predisposition. Researchefforts should in the future attempt to differentiate betweenthe risks associated with work and those associated with lei.

sure. Also, physical and psychosocial working conditions canproduce similar adverse stress responses and should be differentiated in future research.

little control over pace, a heavy workload, and

lack of social support. This is consistent with

the general literature on stress-related disease.

No study can fully answer the question—what

contribution to the risk of disease can be at-

tr ibuted to office automation?

But two recent studies suggest that there

is a potential for these psychosomatic symp-

toms to develop into chronic conditions. In

a cross-sectional study of clerical workers in

the communications industry, those who worked

at the VDT were at about a two-fold greater

risk for the development of angina pectoris.10 3

This is the first study to demonstrate a rela-

tionship between automated office work and

a valid precursor of CVD. A second study of

Finnish workers found that workers in auto-

mated offices were at a 106 percent higher risk

(relative risk 2.06, 95 percent confidence in-terval 1.43-2.69) for one or more chronic ill-nesses.

104These projects point to the need to

examine the potential effects of office auto-

mat ion to determine under what condi t ions

a worker is likely to be at a greater risk forthe development of a chronic disease.

—.“’’The analysis of angina was restricted to a sample of 650

women. There were no significant differences between respond-ents and a 10-percent sample of nonrespondents. For a fulldescription of the results of the study along with the limita-tions of the study see, Suzanne Haynes and Andrea LaCroix

(University of North Carolina at Chapel Hill), “A Cross-SectionalStudy of the Health of VDT Operators in the Telephone Indus-

try, ” unpublished manuscript, 1985. The measure of anginaused was the Rose Angina Questionnaire. Several studies haveshown that this self-report measure is as valid and reliable apredictor of angina pectoris as a physical exam by a physician.

(Lawrence M. Friedman, et al., “Assessment of Angina Pec-toris After Myocardial Infarction: Comparison of ‘Rose Ques-tionnaire’ With Physician Judgment in the Beta- Blocker HeartAttack Trial, ” American Journal of Epidemiology, vol. 121,NO. 4, 1985, pp. 555-563. )“’”The ratio reported is after adjustment for age, sex, base-

line health status, health risk factors and baseline systolic bloodpressure. The risk did not change when ergonomic strain, jobstrain and social support from the supervisor were taken intoaccount. There was a 21-percent increase in the risk when thecontrol over the pace of work was taken into consideration.Again, the unanswered question is whether the job was charac-terized by low control prior to automation or whether working

conditions were exacerbated by the automation of the work process? The chronic illness measure was composed primarilyof heart disease (70 percent) with cases of cancer, chronic mus-culoskeletal disorders, and gastrointestinal diseases. These re-sults are preliminary and further analysis is currently beingcarried out. For a description of the study see Mary Haan,“Health Effects of Automated Office Work, ’ paper presentedat the Office of Technology Assessment Symposium on TheImpacts of Office Automation and Computer-Mediated Work on the Quality of Worklife, December 10-12, 1984.



.—..

Since the evidence relating working condi-

tions in automated offices to stress-related dis-

eases is still limited, it may be thought prema-

ture to begin job and organizational redesign

strategies. The major dilemma facing man-

agers is whether it is more cost effective to

wait and make job and organizational changeslater, or to use the new technologies to usher

Ch. 5—Office Automation and the Quality of Worklife q 151—

in job and organizational changes. The major

dilemma facing public health officials is that

by the time the population of VDT users hasworked long enough to manifest chronic out-

comes there will be few people to use as con-

trols, since most office workers will be working

at the VDT.

SECTION 111: INTERVENTIONS

Office Design and Workstation Design

More and more organizations consider the

design of the office, building, and workstationas integral parts of the new technology. These

characteristics of office environments can con-

tribute to quality of worklife both directly, and

indirectly by ameliorating stressful workingcondi t ions ,

Office Design

The introduction of new office technologies

into a building can affect the way the build-ing performs —the distribution of office space,heating, ventilation and air conditioning, pow-

er and wiring, and acoustics.105

R unning o f

cables through offices can be the cause of falls.

Office design can balance the impersonali ty

of some computerized office tasks. However,

new buildings will only accommodate about5 percent of the computer terminals installed

between now and 1990 (see figure 5-2). The sin-

gle greatest area of impact will be the retrofit-

t ing of older buildings to accommodate new

technologies. Retrofitting can be as simple as

putting in a new lighting system or as com-

—— -— .—1t has been estimated that only 2 percent of the costs of

conducting business in an office building over 40 years aredevoted to building design. Six percent goes to operation andmaintenance and 9.2 percent to labor. Therefore, improvementsin the quality of worklife through building design offers a po-tential cost-effecti~e ie~’er for organizations. This estimate isbased on 1971 dollars, but the differences in scale still exist

today, see Francis T. Ventre, Documentation and Assessment of the GS A PBS Bui lding Svys t ems Program: Fina l Report and

Recommendations, NBSIR 83-2777, General Services Admin-istration, Washington, DC, 1983. This general ratio of costshas been reproduced in another 7 year study of office design

and its impact on the quality of work (Michael Brill, presenta-tion at Conexion ’85, Atlanta, GA, Nov. 6-9, 1985).

Figure 5-2.—The Proportion of VDTS Installed in NewOffice Space Compared to Existing Space, 1984-90

40M

30M

20M

10M

1984 1986 1990

Year

= N e w b u i l d i n g s

Most video display units wil l be instal led in existing office

space. Even if every person in new office construction inthe United States had a VDU, only about 5 percent of theVDUS would be in new buildings. Therefore, accommoda-ting them is mainly a retrofit job. (Assuming approximately200 gross square feet for each workstation with a VDU,then if the height of each bar represents the total space oc-cupied by workstations with VDUS, the shaded part of eachbar represents the cumulative total of VDUS in new officespace.)

SOURCE Michael Bell, Harbinger Group Inc 1985

plex as complete rebuilding of the internal

structure of the building. When new office tech-nologies are haphazardly introduced without

considering the extra demands placed on the

building, new health and performance prob-

lems can develop or old ones can be amplified.

Office Space

Office automation allows the redesign of

workspace to accommodate private and shared




work. Allocation of space is always a critical

factor in offices; it signifies status and or-

ganizational commitment to the worker. It pro-

v ides som e con t ro l ove r in t e r rup t ions and

privacy and encourages or discourages social

interaction, factors associated with job satis ”

faction and performance.

A personal computer and attachments take

about 12.5 square feet of office space, which

increases individual workspace needs. 106 With

the cost of office real estate rising, new tech-

nology is sometimes being crammed into in-

appropriate spaces that can lead to shifts in

status, and awkward work postures associated

with visual and musculoskeletal strain. Noise

levels can be distracting, especially for work-

ers in an open plan office,107

and devices such

as acoustical printer covers may be needed to

reduce noise levels. Changes in office layoutmay be necessary to reduce the isolating ef-

fects of computer work.

Air quality is a major problem in modern

offices. Heating and cooling problems can be

exacerbated by office equipment that gener-

ates heat, and by changes in lighting that are

made to accommodate VDT users.108

Hot spots

caused by concentrations of office equipment

can change the way the building distributes

———————

“hIn one study, “Office Research Into Buildings and Infor-mation Technology (OR13 IT)” it was found that new information

technology only increased the secretaries’ space requirementsby 50 percent (Duffy, Eley, Giffone, and Worthington–Ar-chitects, ORBIT Report, 1983).

“’”It has generally been argued that open space offices aremost beneficial to workers doing repetitive and boring tasks;they provide needed social stimulation. Alternatively, peopledoing creative work require private space. However, this hasrecently been challenged by researchers who have found thateven workers with boring and repetitive jobs prefer privatespaces to open spaces and giving it to them increased their

job performance (E. Sundstrom, et al., “Privacy at Work: Ar-chitectural Correlates of Job Satisfaction and Job Performance,

Academy & M anagement Journal, vol. 23, 1980, pp. 101-1 17).“wit is generally estimated that a workstation and operator

can generate 18.0 Btu/square foot of heat throughout a build-ing. For discussion of these problems see American Societyof Heating, Refrigerating, and Air-Conditioning Engineers,ASHRAE Standard 62-73. Standards for Natural and Mechan-ical Ventilation (New York, 1973); ASHRAE Standard 55-1981.Thermal Environmental Con&”tions for Hum an Occupancy (NewYork, 1981); ASHRA Standard 90-75. Energy Conservationin New Bu ilch”ng Des@ (New York, 1977); and A N S 1 / A S H R A E S tand ard 62-1981. Ventilation for Acceptable Indoor Air Qual-it.v (New York, 1981); also Ventre, op. cit.

air, heat, and cooling, and make indoor air pol-lution and thermal discomfort worse. I t is

recommended that in refitting a building forextensive office automation, the building be

remodeled as a set of microzones composed

of comparable offices with localized control of

the heating, cooling, and ventilation system.

Works tat ion Des ign

The workstation includes the table or desk

holding the terminal, the chair, and the equip-

ment that an operator users. In many offices

these have not changed, and the microcom-

puter merely replaces, or even sits next to, the

typewriter. Yet several characteristics of the

V D T109

dif fer f rom convent ional of f ice tech-

nologies and impose di f ferent physical de-

mands on the worker :

q

q

q

q

The terminal is self- luminous.There is a transient display on the screen,

whereas the display in pr inted text i s

cons tan t .

VDTs usually have highly specular curved

glass surfaces that reflect l ight .

In fo rm at ion i s p resen ted in a ve r t i ca l

plane as compared to the horizontal plane

of paper or the angled plane of the type-

wri ter .

In conventional offices the illuminance has

been kept high for reading, with other light

sources, such as windows, contributing to theillumination. For VDT work, much lower illu-

mination is best.110

But the worker often looks

back and forth from the VDT to printed text

and other equipment, so a compromise is re-

quired; task lighting (lamps) can be used for

additional illumination where needed. Tradi-

— — —“’’The discussion of VDTS usually is about the monochro-

matic raster scan CRT, which is like a television screen withsome additional electronics. Other kinds of VDTS that maybe much more common in the future are the plasma panel, liq-uid crystal, and electroluminescent displays. See App. A fordescriptions of the technology.

“(’The American National Standards Institute recommends

a general lighting level of 750-1600 I UX for traditional desktopreading; other groups recommend no more than 200 IUX fo rrooms where VDTS are used. American N ational S tandard Prac-tice for Office Light ing, ANS l A132.1 (1973); AT&T Bell I.ab-oratories, Video Display Term ”nals; Preliminary Guidelines for selection, Installation , and Use (1983);NIOSH, Potential Health Hazards of Video Display Term ”nals (1981).



Ch. 5—Office Automation and the Quality of Worklife 153

t ional office and office furniture design as-

sumes a depressed line of sight, but the verti-

cal position of the VDT brings windows, ceiling

lights, etc., into the line of sight, causing glare.

The reflective surface of the screen can also

contribute to eye strain.

On a VDT the display is transient and there

is a characteristic flicker (assuming that the

VDT is a cathode ray tube) which is often im-

perceptible to the worker, but can probably

lead to visual fatigue and asthenopia although

it has not been linked to visual performance.111

The readability of the screen is also related

to the structure of the dot matrix used to cre-

ate characters, the contrast between the char-

acters and the background, and the viewing

distance of the person from the screen. In-

creases in the size of the matrix have been

shown to increase reading performance, 112 bu tthis is not within the control of the user or,

generally, the purchaser. The contrast between

characters and screen can be controlled by the

user, and should be placed for ease of use. The

fonts used in VDTS are chosen by engineers

for convenience in design, and are less easy

to read than print fonts evolved through years

of practical experience and user preference.11 3

They assume a set viewing distance between

viewer and screen, but some people lean back

in their chairs and put the keyboard on their

lap or in other un likely places.’” This is espe-

cially likely when the worker has such a smalltable or desk that cannot hold documents aswell as the keyboard and screen. Many office

furni ture des igners have evident ly not rea l -

— —“If the refresh rate is at least 65 flashes per second, there

is no perceptible flicker; VDT refresh rates are about 30-70 Hz.Television set flicker has occasionally been associated with pho-tosensitive epileptogenic seizures, but the refresh rates knownto induce such seizures are low, from 8-14 Hz. It is thus highlyunlikely that such seizures would be induced by VDT work.‘“A 14-percent increase in reaction time and a 10-percent

decrease in errors was shown in a study by Haubner, et al.,Vi s u a l Dispiay Units–Characteristics of Performance, Com-

mission on International Lighting, 20th sess., 1983, as reportedin Bergqvist, op. cit.

‘‘ ‘National Academy of Sciences, op. cit.“For further discussion see l+;. Grandjean, W’ . Hunting,

and M. Pidermann, 4’VDT Workstation Design: Preferred Set-tings and Their Effects, Human Factors, ~ol. 25, No. 2, 1983,pp. 161-175,

Photo credl( O~(fca/ C o a t / r i g Labora(or/es /fJc

One way to control glare and enhance readability is touse a filter

ized that office workers frequently use both

paper and a terminal in the same task. The

visual and musculoskeletal strain that can re-

sult from the wrong viewing distance is best

managed by providing fully adjustable equip-

ment so that each user can adapt the work-

station design to fit his/her own needs. A tilt-able screen and adjustable desktop can solve

many problems.

The keyboard is likely to remain the domi-

nant input technology for most office work-

ers;115

keyboard work has been associated with

carpal tunnel syndrome and cervicobrachial

syndrome. The physical characteristics of the

——‘‘ ‘The usual QL$’ERTY keyboard dates back to the 1870s,

and was recognized as an international standard in 1966 al-though it has been challenged by the Dvorak ke~board, witha different arrangement of the keys. Some studies indicate theDvorak would improve typing speed by 25 percent and shortenthe time needed to learn to type. It was designed (after W’orldWar II) to avoid excessive wrist movement b~ ’ locating the

most commonly struck keys in the center row, possibl~’ reduc-ing musculoskeletal strain, There is currentl~. a resurgence of interest in the Dvorak, but both employers and employees areseemingly unwilling to undertake the retraining that would benecessary to make the change. See ,Jan Noyes, ‘ ‘The QWERTYKeyboard: A Review, International Journal of Alan - i l lach ineStudies, vol. 18, 1983, pp. 265-281.



154 q Autornation of America’s Offices — . — — — — —

keyboard associated with precursors of these

syndromes, such as its height, can be altered.

Some keyboards are attached to the terminaland resemble the typing keyboard in heightfrom the table (generally over 40 mm); othersare detached and built lower, which has many

advantages since a determinant of musculo-

skeletal symptoms in forearms and wrists is

the ability to intermittently rest the arms or

wrists on the table.116

A detachable keyboard

can also be arranged for comfort and viewingdistance.

Chairs are critical to the comfort of any of-fice worker; and with office automation peo-ple tend to spend longer blocks of time in one

place. The chair should allow one to change

the seated posture without adopting an awk-

ward position; 117 and it should be easily ad-

justable. To prevent lower back problems, of-

fice chairs should have an adjustable lumbarback support and the back rest height should

extend beyond the lumbar region to the thoracicregion and be adjustable for height, angle, andpressure. The seat should also be adjustable

to allow people of different sizes to get abouta 90-degree angle between upper body and

thighs.

Table height is also important. If used al-

ternately by several workers it should be eas-

ily adjustable to accommodate different heights.D esks shou ld no t r e s t r a in knee and th igh

movement, and should have enough space forworking documents, screens, and keyboards

to be moved around.

On e of the most important elements of of-

fice design strategy is to make sure that of-

fice workers understand why adjusting light-ing, furniture, and temperature controls is

“’’Operators may not prefer suggested optimal keyboardheights and their preference may not affect performance. TeresaBurke, “Effects of Keyboard Height on Typist Performance

and Preference, ” Proceedings of th e H um a n Factors Society,

28th Annual Meeting, 1984, pp. 272-276. See also Grandjean,op. cit.

“ Most keyboard operators maintain an erect posture foronly 2 to 3 minutes at a time. Standards and recommendationsare usually based on this position, even though studies shc~w

that people prefer leaning slightly forward or slightly backward.

When tables andior chairs are not adjustable, the usersometimes must assume awkward postures. Thiswoman may eventually develop neck cramps from

continually looking down

Photo credlf M/cbae/ Sm/th

Som etime s the worke r finds her own way

to sit comfortably

important, and how to do it.118

A Finnish study

found that if data-entry workers were trained

to recognize ergonomic problems and preven-

tion strategies, the level of clinically recognized

“’This has in fact been mandated in the OSHA Act (Sec.21c), which says that the Department of Health and HumanServices must provide for “the establishment and supervisionof programs for the education and training of employees andemployers in the recognition, avoidance, and prevention of un-safe or unhealthful working conditions,



Ch. 5—Office Automation and the Quality of Worklife q 155 — — —— — —— -- .-

neck, shoulder, and elbow problems was sig- In developing standards or guidelines, current

nificantly reduced over a 6 month period.11 9 tax codes should be examined to ascertain that

they wi l l not ac t as a barr ier to in tended

P u b l i c P o l i c y a n d Q u a l i t y o f W o r k l i f e change.

Public policy interventions must be consid-

ered in light of both the scientific evidence andthe political and economic climate. Many orga-

nizations look to new technologies to provide

them with the competitive edge, and some ar-gue that health and safety regulations inhibit

the full use of new technologies and furtherinnovations. A report issued by the President’s

C om m iss ion on Indus t r i a l C om pe t i t i venessrecommended that no new health and safety

regulations be established; society should not

seek to eliminate risk, and risk below mini-

mum levels should be left unregulated, or to

indus t ry se l f - r egu la t ion .120 Execut ive Order

12291 (1981) provided that except where ex-pressly required by law, the costs of a regula-

tion should not exceed its benefits. This must

be considered in discussion of the potential

effects of office automation. Cooperative ac-

tions by employers and employees, when they

are sought in good faith and are successful,are in theory a more cost-effective strategy

than regulation because they can be self-en-forcing.

Investment tax credits have encouraged the

adoption of capital-intensive technology to im-

prove the efficiency and productivity of thework process, yet often working conditions

that emerge from this technology adoption pro-

duce a dverse str ess responses.’” Tax policies

can also directly affect the way physical char-

acteristics of the office are designed. For ex-

ample, some experts suggest that technicali-ties in the way depreciation is allowed have

encouraged open plan offices so that partitions

separating office spaces can be depreciated.

‘ ‘R. Kukkonen, et al., “Prevention of Fatigue Amongst

Data k;ntry operators,’” unpublished manuscript. Using a quasi-experimental design, the researchers were able to demonstrate

significant decreases in neck and shoulder symptoms, back symptoms, and clinically defined neck’ shoulder tenderness andhardening.

- ‘Report of the President’s Commission on Industrial Com-petitiveness, as cited in The Occupational Health and Safet~’

,Vews]etter, ~ol. 15, No. 5, p. 3, 1985.‘- hlichael Beer and James W’. Driscoll, “Strategies for

Change, ” Im prot’ing Life at I! ”ork, op. cit. 1977, pp. 364-453.

Workers ’ Compen sa t ion

Under common law, employers have a duty

to exercise reasonable care in protecting their

employees from harm in dangerous situations.

Remedies under the common law of torts have

been proposed for many heal th and safe typr oblem s.’” But in the United States, the laws

creatin g worker s’ compen sat ion gener ally make

this system the exclusive remedy for employee

disability,123

although in many instances this

exclusionary principle has been circumvented

by third-party liability suits in which the em-

ployee sues the manufacturer of equipment or

material (e.g., the thousands of suits againstJohns Manvil le as the producer of asbestos

materials) .

Work ers’ compen sat ion does not cover sp on-

taneous abortion, miscarriage or birth defects,

since this class of injury does not impair the

-These typically fall into three categories–negligence,product liability, and strict liability. In negligence actions, theemployee must demonstrate that the employer was negligentir. the maintenance or inspection of equipment or did not ade-quately warn the employee about risks inherent in its use. Theseactions must be shown to cause proximate harm to the em-ployee and not to be a part of normal dangers inherent in the

job. Since it is very difficult to demonstrate a causal link be-tween VDT use and any adverse health outcome, this area oflegal action has limited utility. The same analysis can be ap-plied to product liability and strict liability?’. William Presser,

Handbook of the Law of Torts, 4th ed. (St. Paul: Wrest Publish-ing, 1971).

“Workers compensation is a broad disability>. insuranceprogram in which awards based on loss of earning power are

paid to workers whenever they are injured on the job, Underworkers’ compensation the employee must establish that thecondition arose from employment. (T?’picall~’ the terms proxi-mate cause, producing cause and contributing cause are usedto refer to the relationship between the working conditions andthe injury or disease. ) lf’here a claim is upheld, a schedule of payments is set up for the worker based on some formula thatdetermines the extent that the worker is disabled or suffersa decrease in wage-earning capacity. The clear intent of the

statute is to compensate all work-related injuries. (This sectiondraws on the work of the National Council on Compensat ionInsurance report, Emotional Stress in the11‘orkplace–,NTeu. I.e-gal Rights in th e Eighties, New York, 1984. ) When an injuryis found to be covered by a workers’ compensation act, it isusually held that the statutory compensation is the exclusiveremedy and any recovery at common law (tort law) is barred.(Presser, op. cit.)




worker’s earning power.124

It has allowed for

compensation for stress-related diseases and

disabil i t ies along with visual and musculo-skeletal system injuries. Table 5-11 contains

th ree exam ples of workers’ compen sat ion claims

for injury in automated workplaces. The work-

er must show a causal link between work inan automated office and the injury. Currently,for the VDT operator there is very little di-rect causal evidence for visual and musculo-

skeletal injuries and for stress-related injuries.

Where an organic cause can be found to ex-

plain the injury the claim is easier to inter-

pret. Thus, demonstrating that some charac-

terist ic of the automated office environmentled to a biological change in the worker is the

clearest vehicle for establishing a compensa-

tion case. These conditions while impairing the

work er’s a bility t o work , may n ot be medically

detectable, so the primary instrument for iden-tifying illness and injury to the office workeris through the reporting of symptoms. Thus,

it is difficult to demonstrate proximate cau -

sali ty.

If the condition predated employment or was

aggravated by conditions outside the job the

claim may be disallowed or the compensation

reduced. For the VDT operator who goes home

and watches television (also a cathode ra y tube~

or has personal problems that produce adverse

stress responses, it is difficult to argue that

the work was the source of the injury, although

“’John Parry, Jeanne Dooley, David Rapoport, and JohrTaylor, “Are VDTS Hazardous to Your I.egal Health?” Men

t a l and Physical Disability Law Reporter, vol. 8, No. 4, 1984pp. 342-360. For a more complete discussion of the workerscompensation system and its evolution see Reproductive Ha z

ards in th e lt’orkplace, op cit.; or Peter Barth and H. AllanHunt, V’orkers’ Compensation and Work-Related Illnesses an a

Diseases (Cambridge: MIT Press, 1980).

workers who spend over 7 hours a day at a

terminal may make such an argument effec-

tively. In addition, many chronic debilitating

visual and musculoskeletal injuries do not oc-

cur suddenly and unexpectedly, so that claims

are likely to be awarded only in States that

accept gradual developments of an injury overt ime. .

The work ers’ compen sat ion system was mea nt

to also serve as a preventive measure; forcing

employers to pay for injuries and diseases aris-

ing from employment should encourage them

to develop preventive strategies. Emerging of-fice problems may develop into compensata-

ble disabil i t ies, but the current work forcewould not benefit from the incentives for pre-vention created by the rise in compensation

claims. Yet t oday’s em ployee cann ot sue th e

employer in most States through the common

law of torts since visual, musculoskeletal, and

stress-related condit ions are compensable.

Mental Disability.–There has recently been

an increase in worker s’ compen sat ion claimsrelated to mental stress. The California Work-

er’s Compensa tion In stitut e found th at stress

claims doubled from 1980 to 1982, while claimsfor other disabling work injuries decreased dur-

ing the same period.125

Workers’ compensation

for mental disability arising from employment

is greatest among younger workers, as shown

in figure 5-3. Mental stress is significant by

itself, and may also predict future developmentof stress-related diseases. If it does, any in-

crease in claims because of office automation

could be costly to society. Table 5-12 provides

several examples of successful workers’ com-

“’California Worker’s Compensation Institute, Bul let in ,Apr. 20, 1983.

Table 5-11. —Workers’ Compensation Claims for Employees Working at Video Display Terminals

Job Problern-

— .Word processing Stress of 6 to 8 hours ‘VDT work per day - ‘“

Insurance claims processor Repetitive work al VDT lead to wrist painWord processing Severe headaches

Sensitivity to lightVisual pain

aset!led prlo~ to wkwwfltbClalm awarded

SOURCE Legal Rlgbfs for VDT Users (Cleveland OH Working Womels’ Educational Fund, 1985)

Injury- Nervous brea~down

a

Carpal tunnel syndrome b

Accommodative spasm a

-.



Ch. 5—Office Automation and the Quality of Worklife 15 9—

t ion and s t ress responses , to provide S ta tes

with the most recent scientif ic evidence for

making decisions. Clearly, automation is the

dominant change in office work and many men-

tal disability claims in the next two decades

are likely to revolve around the effects of the

new office technologies.

Standards or Guidelines

Since ergonomic factors in office equipmentare important to the health of the American

worker and the productivity of American busi-

ness, there have been proposals that ergonomic

standards or guidelines be developed, either

by governm ent or other inst itut ions. ’3’ A re-

cent discussion of regulatory policy pointed

out that health and safety regulations should

focus on threshold l imit values on exposure

as oppposed to means for reducing exposures u c h a s d e s i g n s t a n d a r d s .

132S t a n d a r d s c a n

only be developed with the appropriate meas-

u r e m e n t t e c h n i q u e s .133

W o r k i n g c o n d i t i o n s

that produce adverse stress responses can be

measured in many different ways and scien-

tists disagree on which ways are best. There-

fore, the development of standards for work-

ing conditions that produce psychological and

biological stress responses in individuals may

be an option to consider only when there are

valid and objective measures of the working

conditions.13 4

Any standards development process would

have to consider issues raised in the recent

benzene standard case decided by the U.S. Su-

preme Court and the noise standard case de-

— .——- —‘ “In 1981, the Science and Technology Committee of the

House of Representatives held hearings, “The Human Factorin Prod uct ivi ty. These hearings are the most recent attemptto gather information about the role of human factors in indus-trial competitiveness (see, The Human Factor in Innovationand Productivity, U.S. House of Representatives, Committeeon Science and Technology, Subcommittee on Science, Tech-nology, and Research, 97th Cong., 1st sess., 1981).

“LDouglas Ii. Ginsburg, “Administrative Efforts to En-

hance the Opportunities for Self- Regulation,” I ,abor Law Jour-nal, vol. 3,5, N o. 12, 1984, pp. 731-735.

1‘Becker, op. cit.

‘ “Edward E. I.awler, “Should the Quality of Work Life beI.egislated?” 7he Personnel A dm inistrator, vol. 21, No. 4, 1976,pp. 17-21. See also, Edwin A. I.ocke, “The Case Against I.egis-lating the Quality of Y$’ork I.ife, ” The Personnel ,4drnin is t ra-tor, vol. 21, No. 4, 1976, pp. 19-21.

cided by the U.S. Circuit Court of Appeals inRichmond, Virginia, which exemplify the im-

pact judicial decisions may have on occupa-

tional health and safety policy. In the noise

case the judges invalidated a standard on the

grounds that it might on the basis of medical

examiniations require employees to take ac-

tions concerning hearing loss caused by non-

occupational factors.13 5 While progressive hear-

ing loss can be identif ied through medical

exams, the exams can not distinguish between

loss result ing from occupational and nonoc-

cupational sources of noise. The ruling has been

reversed by the same court. If upheld, it would

have probably severely restr icted the devel-

opment of Federal s tandards for automated

offices where most exposures are chronic and

confounded by nonoccupational factors.

The Supreme Court in 1980 upheld an earlierlower court decision striking down the 1978

OSHA benzene standard. They found (5 to 4)

that OSHA had not es tabl ished a threshold

limit for benzene posing a significant risk to

the worker. The Secretary of Labor must dem-

onstrate that a workplace threatens the worker

with a significant r isk of harm.13 6A l t h o u g h

providing limited guidance as to what signifi-

cant risk means or how it should be calculated,

the Supreme Court decision has demanded a

more rigorous scientific treatment of occupa-tional safety and health standards. 37 The set-

t ing of standards designed to improve thehealth and well-being of the office workers

would have to take into account this decision.

However, standards can be developed and

adopted voluntarily .There are three general

types of standards; engineering, informational,

and adminis t ra t ive . Engineer ing s tandards

(which include design standards) establish al-

ternative means of interfacing with the tech-

nology or al ternative means of building the

technology to ensure the health and safety of

— . —‘ “Reported in the Occupational Sa fe t, \ ’ an d Health I.etter,

vol. 15, No. 1, 1985, p. 2.)“Industrial Union Department, AFL-C1O v. American Pe-

troleum Institute, 448 U.S. 607 (Supreme Court, July 2, 1980).For a full discussion of the implications of this decision

for OSHA standards setting see, Pre~’enting Illness and In -jur.~’ in the Workplace. op . cit.




the worker . Informat ional s tandards include

product labeling, instructions for proper use,

and other means of transferring information

from the employer or manufacturer to theworker. Administrative standards establish or-

ganizational policies such as rest breaks. A

key policy issue is how to ensure that thestandards development process is based onsound scientific evidence.

13 8

Design Standards.—The possibility of officeand workstation-design standards has received

much attention, spurred on by bills introduced

into at least 18 State legislatures, and by the

development of standards in other countries.

The Governor of New Mexico has issued an

executive order (No. 85-1 1) mandating ergo-nomic guidelines for State employees. Suchproposals and actions are based on the assump-

tion that there are definable and measurable

characteristics of both the office and the work-

station that, if modified, will improve health

and worker performance. A major issue is

w h e t h e r s t a n d a r d s s h o u l d b e v o l u n t a r y o r

required-self-regulation or governmental reg-

ulation. It is ar gued th at self-regulation is more

flexible, and standards can be tailored to meet

the specific office automation application. How-

ever, a second question is whether many orga-nizations would voluntarily pay the front-end,

or retrofitting cost that might be entailed.13 9

’

Another issue is that of fairness; standards

development committees composed of specialinterest groups are often suspect. Especially

i n p r o m u l g a t i n g m a n d a t e d s t a n d a r d s , b a l -

anced groups of consumers, producers and

other affected parties may be preferable for

the development and enforcement of s tand-

a rds .14 0

A major impetus for currently proposed

State bills is a concern over the inadequacy

of voluntary standards for these reasons. One

option at the national level would be to estab-lish a national commission to oversee stand-

ards development or to empower the NationalBureau of S tandards wi th such dut ies .

14 1

A third problem is that of the appropriate

level of specificity for design standards. The

level of specificity in State bills varies widely,

indicative of the uncertainty as to the most

effective way to modify the work environment

to accommodate new off ice technologies .14 2

Internat ional s tandards ref lec t d i f fer ing ap-

proaches, different populations, and differentgoals. The very specific German standards aremeant to standardize the building and produc-

tion of office equipment, while Swedish stand-

ards are more like guidelines to be used in

negotiation between the unions and manage-

ment. Japanese guidelines are not binding and

are very general.

Other major i ssues in s tandards develop-

ment are how to define enforcement mecha-

nisms for government standards and how to

e n s u r e t h a t t h e d e v e l o p m e n t o f s t a n d a r d s

spurs ra ther than impedes the development

of more protective technology in the future.

Standards can be established at either the Fed-eral, State, or organizational level by the use

of procurement schedules.143 California, NewMexico, Massachusetts , and Wisconsin have

all developed procurement guidelines for the

purchase of workstation equipment in the pub-

lic sector.

““An examination of the currently proposed office stand-ards for State bills demonstrates problems in the standards

development process; general lighting levels vary from 500 IUX

or less to greater than 700 IUX. International standards alsodo not agree. There is no general national or international con-sensus on the best way to establish standards for office auto-mation. The lack of consensus may reflect the generally agreedneed to maximize flexibility in current design to accommodatea variety of future needs. This need for flexibility is clearlyreflected in the mechanisms for controlling glare in proposedState bills, which range from installing indirect lighting; toantiglare.filters; to proper placement of the terminals with re-spect to windows; to task lighting; to screen hoods.

“qFrancis Ventre, “Transforming Environmental Research

Into Regulatory Policy, ” Responding to S ocial Chan ge, BasilHonikman (cd.) (New York: Halstead Press, 1984).

“’’Ginsburg, op. cit.“Currently, the National Bureau of Standards coordinates

within the Federal Government and assists the private sectorin the procedures and policy for the development and applica-tion of standards; however, they have no enforcement powers.

“’Currently, the Human Factors Society in conjunctionwith the American National Standards Institute is developinga set of standards for the physical and perceptual ergonomicsof visual display terminal workstations. These standards con-

tend that ergonomics is highly applications dependent and looksonly at word processing, data-entry, and data-inquiry tasks.

“’0. Ostberg, et al., “Ergonomic Procurement Guidelinesfor Visual Display Units as a Tool for Progressive Change, ”T he Procd”n gs of the Eleventh International S ymposium onHum a n Factors in ‘1’elecornm um ”cation s, Sept. 9-13, 1985,Cesson-Sevigne, France.




An alternative to mandated standards is the

development of guidelines articulating goals.

Both Sweden and Japan have established goals

for worksta t ion des ign. In Japan, these are

wholly voluntary; in Sweden the guidelines are

presen ted as t he govern ment ’s posit ion and

are used in collective bargaining. Guidelinesrecognize the variability yin the way office tech-

nologies can be implemented. They can be

established within the broader context of an

institutionalized change process. In some coun-

tries this is environmental legislation; 149 for

example, the Work Environment Act of Nor-

way (1977) says, “An effort shall be made to

avoid monotonous repet i t ive jobs and jobswhich are determined by a machine . . . to such

an extent that the worker is prevented fromaltering his rate of working. ” Such acts give

those involved in the change process a national

policy against which to evaluate their efforts.Such goals and guidelines are only as effec-

t ive as the commitment on the par t of em-

ployers and employees to cooperatively achieve

them, and on the part of government to moni-

tor and actively encourage their progress.

Research Needs

Congressional hearings have addressed the

issue of possible hazards of VDT work,150

a n d

much has been wri t ten on the subject , but

workers still wonder if new technology is dan-

gerous. A possible public policy response isto encourage research on various illness and

disease outcomes associated with the computermediation of work, both to answer the questions

in the minds of the public and to demonstrate

..— ... —-—“

L’Federal Republic of Germany: The Works Constitution

Act of 1972; The Netherlands: Working Environment Act of 1980; Norway: Work Environment Act of 1977 (also knownas the Act Respecting Workers’ Protection and the WorkingEnvironment); Sweden: Working Environment Act of 1974; Den-mark: Act Respecting the Working Environment; German Dem-ocratic Republic: Labour Code as Amended June 1977, Thes{~

acts deal with all working conditions, including office auto-mation.

“’’U.S. Congress, Committee on Science and Technology,Subcommittee on Investigations and Oversight, Potential

Health E ffects of VDT Term ”nals an d Ra&”ofrequency Heatersand Sealers, 97th Cong., 2d. sess., May 12-13, 1981. U.S. Con-gress, Committee on Education and Labor, Subcommittee onHealth and Safety, OSHA Oversight: Video Display T erm ”-

nals in the Workplace, 98th Cong., 2d sess., 1984.

the feasibility y of using new office technologies

as both a public health and a productivity tool.

The OSHA Act (section 20) mandates con-

t inued research and demonst ra t ion projects

exploring emerging problems including psy-

chological factors (such as stress) created by

new technologies. Office automation is one

technological change with such a broad ex-

posure that Congress may wish to insist thatthe Department of Health and Human Serv-

ices put high priori ty on investigating the

health and safety issues, demonstrating prac-

tices to reduce any potential effects, and dis-

seminating such information.

There is a need for at least three directions

in the research. The first is to follow office

workers over t ime to develop risk est imates

of the relative contribution of office automa-

tion to the natural history of a disease, focus-ing on those populations at greatest risk today

(clerical and technical workers), and also con-

sidering the changes in the work of managers

and professionals. This field research should

be complemented by lab research to test rela-

tionships between working conditions and bio-logical processes.

The second is t o define th e appr opriate meas-

ures of the physical conditions of work. Field

evidence that compares objective measures of

the physical environment to subjective meas-

ures of the quality of worklife is limited. Thetools for measurement must be sharpened and

refined to assess the many subtle causes and

outcomes characteristic of office work. If it

could be demonstrated that subjective meas-

ures are valid indicators of the physical envi-

ronment and discriminate the various health,

pe r fo rm ance and job a t t i t udes , l e s s cos t ly

evaluations of the work environment would

be possible.

Third, intervention and field evaluation stud-

ies are needed to verify claims that changes

in ergonomic or other working conditions canimprove worker productivity and reduce health

problems. These efforts should focus on highrisk groups of office workers or identify high

risk working condit ions and develop modifi-

cation strategies.



Ch. 5—Office Automation and the Quality of Worklife q 163 — . .

The Health Promotion and Disease Preven-

tion Amendments of 1984, which establish re-

sea rch cen te r s fo r d i sease p reven t ion andhealth promotion across the country, admin-

istered by the Centers for Disease Control .These centers could conduct the research proj-

ects mentioned above.

Finally, it is important to know the true ex-

tent of the problem. How prevalent are poorworking conditions? Section 20(a)(7) of the

OSHA Act stipulates that the Department of

Health and Human Services conduct industry-

wide studies of the effects of chronic low-level

exposures on the health of workers. This need

for reliable data also points to a need for a

centralized data collection system for moni-

toring the emerging problems. There is now

no single source of this data. The current in-

dustry and occupational surveillance systemsare disparate and difficult to link together. In

testimony before Congress the Assistant Sur-

geon General noted:

The activities do not provide a comprehen-sive epidemiologic surveillance of occupa-tional diseases and injuries in the UnitedStates . . . Unless our efforts are targetedtoward comprehensive data collection andsynthesis, the confusion will only grow worse.

151

The current data col lec t ion sys tem at the

Bureau of Labor Statistics (BLS) is not able

to identify the extent of office automation in

white-collar occupations. There is a need to

develop not only reliable indicators of national

trends in morbidity, but also broad national

descriptions of those working conditions likely

to place the worker at highest risk. The Job

Training Par tnership Act of 1982, Sect ion

462(b) states: “ the Secretary shal l mainta in

descriptions of job duties, training and edu-

cation requirements, working conditions, and

characteristics of occupations. There is a need

to further refine the definitions used in the

Dictionary of Occupational Titles to reflect the

current changes in the workplace. An earlyr

]Assistant Surgeon General J. Donald Mdlar, cited in Oc-

cupational Iflness Data Collection: Fragmented, Un reliable, and Sevent -y Years Behind Comm unicable Disease Surveillance,U.S.Congress, Committee on Government Operations, House Re-port 98-1144 (Washington, DC: U.S. Government Printing Of-fice, 1984).

warning system could be developed by l ink-

ing these data sources.152

This would allow re-

searchers and policy makers to estimate the

relative severity of problems among different

classes of workers.

L eg i s l a t ion r ecen t ly in t roduced in to the

House of Representatives would establish an

early warning system to identify workers at

an increased risk for occupational disease (H.R.1309). This bill could be amended to include

language establishing a national morbidity sur-

veillance system for the development of chronic

diseases related to technological changes.

Labor -Management Re la t ions and

Office Automation

As has been pointed out, one strategy for

improving quality of worklife is through stand-ards development, and a second is the setting

of goals or objectives, incorporated in public

or private sector guidelines. Another way to

work toward goal-directed change is through

collective bargaining. In Europe, there is much

emphasis on involving worker representatives

in office automation planning. In some coun-

tries there is a national or local work council

to which industry supplies information about

office automation plans. This creates the frame-

work for monitoring how well organizations

are moving toward established goals, minimizi-

ng the need for government enforcement.15 3

This process of involving workers in technol-

ogy planning is part of a process called co-

determination, a phrase that has gained some

populari ty in this country.

While the legal r ight to be kept informed

about technological change has not been ex-

— — —‘ “For the importance of linking databases to inform policy-

makers, and current impediments see, Legal and A dm in i s t r a -tive Impediments to the Conduct of Epidemiologic Research,Task Force on En~ironmental Cancer and Heart and I,ung Dis-ease, 1984.

1 ~ Federal Republic of Germany: Works Constitution Act of 1972; The Netherlands: Works Council Act of 1979; Norwal’:

Work Environment ,4ct of 1977; United Kingdom: Emplo~-ment Protection Act of 1975; France: Act No. 82-915 of Oct.28, 1982 and Act No. 82-689 of Aug. 4, 1982; Sweden: Act Rep-resenting Co-Determination of W’ork, 1976. For further detailsee Automation, Il”ork Organization, and Occupational Stress(Geneva: International I.abour organization, ]984).




tended to American workers, the National La-

bor-Management Relations Act guarantees the

right to bargain collectively with management.

Thus rather than intervening directly in of-

fice automation related quali ty of worklifc

problems, the Federal government can choose

to leave this to industry self-regulation, judi-cial decisions, and labor-management relations,

with National Labor Relations Board inter-

ventions when they are called for.

Collective bargaining could function as a fo-

rum for resolving quality of worklife issues

related to office automation.154

The Nat ional

Labor Relations Act (NLRA) established col-lective bargaining to reduce the need for gov-

ernment regulation by providing bargainingpower to all par ties.’” But th e ability to use

collective bargaining as an avenue for discus-

sion of stress, health, and ergonomic problems

surrounding office automation is l imited by

the low level of participation of office workers

in collective bargaining units.

Fair representation in this process also de-pends on judicial decisions and National La-n —— .

“’’There are other mechanisms through which workers canparticipate in organizational decisionrnaking about technologiczdchange, but they are specific to an organization or industry.There has been, for example, great interest in the Japanesesystem of quality control circles. One observer notes: “Prede-cision joint consultation to solve the problems of manpowerand employment due to drastic technological changes devel-oped around 1960, and . . . built up to become a basic part of

the later Japanese industrial relations. . . . This practice oftentakes the place of collective bargaining in Japanese industry.Akihiro Ishikawa, “Microelectronics and Japanese IndustrialRelations, ” Microprocessors, Man power, an d S ociety, MalcomWarner (cd. ) (New York: St. Martin’s Press, 1984).

In Germany, the development of Work Councils at the local

shop-floor level came after World War II. These councils areseparate from unions in Germany and make many decisionsat the local shop-floor level. These alternatives to collectivebargaining never developed in the United States to any signif: -cant degree.1“’NLRA gives employees the right to organize and join a

union. At least 30 percent of the employees of an organizationmust petition NLRB to have an election, and to win certificz,-tion as a bargaining representative the union must win the votesof a majority of the employees. Once the union is certified, theemployer is obligated to enter into collective bargaining over

wages, hours, and other terms and conditions of employmentto develop a contractual agreement, which typically will last1 to 3 years. NLRB does not oversee specific contract terms,but can be asked to intervene if either party does not act ingood faith. Any worker has the right to file an unfair laborpractice char= if she believes constraint, coercion, or discrim; -nation has been used.

bor Relations Board (NLRB) decisions about

the scope of the law and whether a series of

acts and amendments designed to deal primar-

ily with blue-collar occupations applies equally

well to white-collar occupations. A complicat-

ing factor is that in white-collar work, distinc-

tions between management and labor tend tobe blurred. In recent cases over whether a

group of workers has the r ight to organize,

the courts have been confronted with prob-

lems of determining whether professionals are

w o r k e r s o r p a r t o f m a n a g e m e n t , a n d w h o

makes decisions for the employ er.156

As office

automat ion leads to task bundl ing, the dis-

t inct ions between management and workers

will blur further. A recent Supreme Court

decision reemphasized earl ier questioning of

the intent of Congress in several sections of

N L R A :157

was the in tent to prohibi t cer ta in

types of collective bargaining over technologi-cal change? Current laws may require clarifi-

cation in this regard.

While some labor contracts contain clauses

concerning automation, negotiation about the

decision to automate is not construed as man-datory by either NLRB or the courts. How-

ever, it is also not clear that management has

an absolute right to automate. The employer

does have the right to determine equipment

needs and the size of the work force, and can

change the nature and scope of the business,

but only if it does not affect contract termsand condi t ions of employment . Technology

bargaining has become a focus of the collec-

tive bargaining process and the extent of em-

ployee rights and employer prerogatives is

decided on a case-by-case basis by NLRB and

the courts.

—

“’Marina Angel, “Professionals and Unionization, ” Min-nesota Law Review, vol. 166, 1982, pp. 383-457.

‘“In NLRA v. International Longshoremen Association,AFL-CIO, et al. (Case No. 84-861, June 27, 1985), the courtsaid “The only question thus to be decided . . . is whether Con-gress meant, in enacting Sec. 8(b)(4)(B) and 8(e) . . . to preventthis kind of labor-management arrangement designed to fore-stall possible adverse effects upon workers arising from chang-ing technology. ”



Ch. 5—Office Automation and the Quality of Worklife q 165 —.—

The strategy of using collective bargaining

for addressing quali ty of worklife issues re-

lated to office automation is limited both by

the relatively small number of office workers

covered by union agreements and by the na-

ture of the process; both topics are addressed

below.

White Collar Unions and

Worker Representat ion

According to BLS statistics, only 19 per-

cent of all U.S. workers belong to labor un-ions and among office workers the level of un-

ionization is much lower. About 14 percent of

clerical workers belong to unions and about

17 percent are in bargaining units covered by

union contracts.158 Professional specialty work-

ers have a higher level of unionization, 23 per-

cent, but this reflects the large number of

teachers belonging to unions or professional

associations. Only 6 percent of executive, ad-

ministrative, and managerial workers belong

to unions.}59

Unionization of office workers tends to fol-low industry lines; in industries where manu-

facturing workers are highly organized (see

table 5-12) they are more likely to belong to

unions than in other industries, such as theinsurance industry, where office automation

has been heavily adopted. The figures showlevels of union membership for broad indus-

try categories; the first two rows include mostoffice workers.

16 0It has traditionally been dif-

ficult for unions to organize office workers,

primarily because of their close relat ionship

with management and identification with the

middle class. In every occupational category,

the number of workers covered by a union or

‘Bargaining units cotrer all workers whether or not the~’

belong to the union.‘Paul 0 , Flaim, ‘‘ l~ew Data on Union Members and Their

I+; arnings, to be published in ?tfonthi.~’ Labor l?e~.iew.

‘ ‘Office workers are represented by a large number of un-ions including the Communications W’orkers of America, Of-fice and Professional Employees (OPE I U], the Newspaper Guild,the United Food and Commercial Workers, the Service I+~m-

ployees Internat~onal Union (SEIU), American Federation of (jovermnent I+; mployees (A FGI?), American Federation of State,County, and hlunicipal Employees (A FSCME~), and others. Dis-trict 925 is a new nationwide office workers union formed bySE IU and Nine to Five: the National Association of WorkingWomen, in 1981.

employee association contract decreased slightlyfrom 1983 to 1984 (see figure 5-4).

The influx of women into clerical jobs may

have re tarded un ionizat ion, ’” because they

were a ready supply of low-paid workers, and

have historically been slower to join unions.

It has been suggested however that the changes

in the office workplace brought on by office

automation will increase the level of unioniza-

tion among clerical workers, in those places

where office work is becoming routinized and

more like factory work. Alternatively, office

automation can improve jobs; if unions can

present themselves as mechanisms for ensur-

ing these improvements, they may have greater

appeal to office workers.

A policy question to be considered then iswhether the Federal Government should take

steps to encourage technology-related bargain-ing in labor-management negotiations, and alsoencourage other mechanisms to improve the op-portunity for office workers to be representedin discussions a bout office aut omat ion.

Technology Bargaining

Tradit ional subjects for collective bargain-

ing have included wages, fringe benefits, and

hours. Increasingly unions are also dealing

with questions of health and safety, electronic

monitoring, and job security. Technological

change is also a major issue, but technologyis a difficult subject for collective bargaining.

One recent survey found technological change

provisions present in fewer than 20 percent

of current agreements .162

Labor organizations

can seek to deal with technological change is-

sues by trying to influence: 1) the introduc-

tion of new technology per se; 2) the changingnature of the jobs; 3) changes in skills require-

ments or status; or 4) work force reductions.

The choice of what technology to use (for

manufacturing or for office work) has tradi-

tionally belonged to management, and many

“’Roberta Goldberg, Organizing &’om en Office Workers: Dissatisfaction, Consciousness, an d Action (New York: Prae-ger Publishers, 1983).

“-Cited in Km’in Murphy, Technolo~”cal (’hange Clauses inCoilectitre Bargaining Agreements, Department for ProfessionalEmployees, AFI.-CI(), Publication #81-2, August 1982, p. 5.



766 Automation of America’s Offices —

Table 5-13.—Union Membership by Industry and Occupation —

Industry

Transportation, Financial ~communication, insurance,

Occupation Totala Mining Construction Manufacturing utlities Trade real estate Service Government

All occupations .156 17.9 24.3 26.5 396 82 2,7 - 72 359Management/professional specialist 52 1.7 86 40 11 1 18 17 67 381Technicians/ sales/administrative 80 3.3 2,9 10.4 34.8 6.6 22 5.1 302Service 87 (b) (b) 352 490 44 12,4 86 394Operator/fabricator/ laborer 33.6 32.9 25,7 392 471 204 (b) 11 3 362

aTb~ totals j“~l”d~ agriculture, fOreSrw, and fishery occupations which are not listed separately. Thts number includes Private sector union membership, excluding

government membershipbThe data do not meet publication standards

SOURCE Larry T Adams, “Changing Employment Patterns of Organized Workers, ” Month/y Labor Rewew, February 1985 pp 25-31, uses data from Current PopulationSurvey, Bureau of Labor Statistics

Figure 5-4.—Employed Wage and Salary Workers Covered by a Union or Employee Association Contract in 1983.84

Exec utive, adm inistrative, 1,& manager

I

Professional

Tec hnicia ns

Sales

Administrative &

clerical support

1983 1984

0 5 10 15 20 25 30 35

Percent of work force

1SOURCE. Paul O Flatm, “New Data on Unton Members and Their Earnings, ” 10 be publlshed In the Month/y Labor Rewew

l abor ag reem ent s inc lude a “m anagem ent

rights clause’ tha t gives mana gement sole au-

thority over “processes and types of machin-

ery and equipment to be used, types of prod-

ucts to be manufactured, quality of materialand workmanship required, sell ing prices of

products . . .1 63

..————— -‘

h’ Murphy, op. cit., p. 5.

NLRA does not specifically identify tech-

nology as a subject for the bargaining proc-

ess. There has been no definitive decision onwhether or not management has a duty to bar-

gain about implementation of new technology.In the pas t , the NLRB has:

. . .shown a willingness to extend t he dut y tobargain over the introduction of technologi-cal change to the decision making stage. The



Ch. 5—Office Automation and the Quality of Worklife . 167

cour t s have t ended t o r es t r i c t t he du t y , r e -

qu i r i ng on l y t ha t t he empl oyer barga i n wi t h

l a b o r o v e r t h e e f f e c t s o f i t s u n i l a t e r a l d e c i -

sions . . .16 4

In recent years, both the NKRB and the Su-

preme Cour t have tended to favor manage-

ment prerogative to effect unilateral change.Yet, a recent Supreme Court decision has par-

tially countered this trend. In a decision re-

garding the longshoremen, the Supreme Court

ru l ed tha t :

El i mi nat i on o f work i n t he sense t ha t i t i s

made unnecessary by i nnovat i on i s no t o f i t -

se l f a r eason t o condemn work p reserva t i on

agreements . . . ; to the contrary, such elimi-

n a t i o n p r o v i d e s t h e v e r y p r e m i s e f o r s u c h

a g r e e m e n t s .16 5

Modified forms of the management r ights

clause have given the union or the employeesright to advance notice of technological change

and in some cases the r ight to consultat ion

in the change. While there is no single blue-

print , advance notice and joint consultat ion

seem to be the hallmarks of building a cooper-

ative dialog between labor and management;

they reduce opposition and resistance to the

change.16 6

T he C om m unica t ions Worker s o f

America (CWA), in its agreements with AT&T

and the Bell operating companies, has negoti-

ated the right to advanced notice.16 7

Consultation might in rare cases mean par-

ticipation in the planning and implementation

of technological change, but more of ten i t

means the right to negotiate about the adjust-

ment mechanisms that wi l l accompany the

change, for example, layoffs or retraining.

‘ ‘Nicholas A. Ashford, “The Impact of Office Automation

cm the Qualit>r of W’orklife: Policy I replications, paper pre-sented at the Office of Technolo~ Assessment S~’mposiumon the Imp acts of Office Automation and Compu ter- hlediatedMrork on the Quality of l~rorklife, Dec. 10-12, 1984, p. 30,

“ ~’Vationai Labor Relations Board v. National Longshore-

m en Assn., op. cit..

“ Ste~en Deutsch, ‘ ‘Technological Change and Labor-

hlanagement Relations, ” draft report to the Bureau of Labor-Management Relations and Cooperati~e Prograrm, Departmentof I,abor, 19/i5; used with permission.

‘ Dwight 13. Dayis, “\\’orkplace High Tech Spurs Retrain-ing El fforts, ” Iiigh Technology, November 1984, pp. 60-62.

In Europe, advance notice and the provision

of information are usually the first steps in

collective bargaining agreements.168

A dvancenotice typically means that management must

give the workers and thei r representa t ivesenough time to consult, negotiate, and prepare

for the changes. Implementation of the newtechnology can be made contingent on a col-

l ec t ive ba rga in ing agreem ent . S om e agree -

ments specify that the employee be involved

in any job redesign.16 9

Close cooperation of unions and manage-

ment in planning automation systems is rare.

The NLRA precludes any person acting in the

interest of the employer from being a member

of the union. ’70 Historically, this has meant

that supervisors were excluded. Therefore, if

decisions of the pla nn ing of techn ological cha nge

are construed to be employer or managerialdecisions, union members may be precluded

from actively participating in some stages of

the decisionmaking.

One policy question for Congress to consideris whether the NLRA needs revision so that thetraditional boundaries and relationship betweenlabor and management does not prevent a coop-erative planning process.

Cooperative planning is not easy to achieve.

Union leaders may be uninformed about tech-nological choices, long-term company, plans or

indus t ry cond i t ions . M anagem ent dec i s ionsm ay be m ade a t t he na t iona l headquar t e r s

while labor negotiations may take place on a

regional basis. Even in Norway, where white-

collar unionization is high and where law re-

qui res management to inform unions about

———-—“ ’

hExamples of the collective bargaining agreements are

provided in i4u toma t ion , }i’ork Organization and Stress, op.cit., 1984.

‘h’’ For example: “The employees shall, individuall}~ or in

groups, be given proper information . . about condi~ions atthe workplace that affect their own job . . . The employees shallbe given an opportunit~’ to take part in designing their o w n

job situations as well as in the work of change and develop-

ment that affects their jobs. Agreem ent on Effic ienc~’ an d Participation SAF-I.OPTK. Swedish I?mpio.\ ’er Confedera-tion (Stockholm: Andren & Helm, 1982).

‘“f ’ Recently, in the case Yeshiva University v. The NLRB,

the Supreme Court ruled that faculty members were managerialemployees and therefore not entitled to organize under theNLRA, see NLRB v. Yeshiva Univ. , 444 U.S. 672 (1980).



C h a p te r 6

Confidentiality and Security Issues

With Office Automation



—

C o n t e n t s

Privacy, Confidentiality, and Security–Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Office and Data Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Period 1960-78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Political and Legislative Climate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Third Phase of Office Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Handling of Client Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Security and Confidentiality Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Privacy Issues in Work Monitoring. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Security and Confidentiality in Automated Public Offices . . . . . . . . . . . . . . . . . . . . . . . .Government Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Special Concern About Employee Privacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Accidental Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Comparisons With the Private Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Policy Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

171

172

174

175

17817817 9

181

182183183184185

185



Chapter 6

Confidentiality and Security Issues

With Office Automation

Protection of privacy or confidentiality inrecordkeeping (and security measures to ac-complish such protection) is a concern that hascontinued from the constitutional era of quill,pen, and copybook through the invention of the telegraph, telephone, typewriter, micro-phone, duplicating machine, large-scale man-ua l filing systems , teletype, electr ic account -ing machinery (EAM), and first-, second-, and

‘This chapter as a whole draws on a report to OTA, Pri-vacy and Security Issues in the Use of Persona) Information

About Clients and Customers on Micro and Persona) ComputersUsed in office Automation, prepared by The Educational Fund

for Individual Rights, Alan Westin and I.ance Hoffman, prin-cipal investigators, 1985.

th ird-generation comput ers. How much dat aabout individuals and groups is needed? Whowill use the data? How does one determinewhat information about oneself should or mustbe made available to oth ers? What uses willbe made of the information?

2The third phase

of office automation—small computers linkedor networked—further raises these questions,as the ubiquitous placement of computing de-vices in offices gives more people more oppor-tunities to access records.

‘Alan Westin, “New Issues of Computer Privacy in the

Eighties, ” Proceedings of ZFIPS 11’or]d Congress, Paris, France,1983.

PRIVACY, CONFIDENTIALITY, AND SECURITY–DEFINITIONS

Since analysts from various fields and dis-ciplines write about privacy and security is-sues, there are differences in the use of termsand concepts by these practitioners. In thebroadest sense, privacy is a set of values deal-ing with individuality, autonomy, personalspace, and personal information.

3Privacy deals

with the rights of an individual to limit others’access to information about oneself, and thesocial or legal ru les by which s uch claims a reaccepted or rejected in particular contexts.Viewed as a desirable attribute of the data andthe way it is handled, this is better termed“confiden tia lity’ ‘—the p rotection of pr ivacy.Secur ity dea ls with a dat a-collector’s capa c-ity to safeguard the existence and integrityof the data it has collected and to provide theproper degree of confidentiality as set by or-ganizational or legal policy.

‘For a general discussion of privacy and how it is definedand used in policy see, Priscilla M, Regan, “Personal Informa-tion Policies in the United States and Britain: The Dilemmaof Implementation Considerations, Journal of Pub l ic Poiiq’,vol. 4, No. 1, 1984, pp. 19-38.

Confidentiality and security are related butnot synonymous. Confidentiality addresses theuse of data about individuals. Security is con-cerned with the accidental or intentional theft,modification, or destruction of data. Breachesof security may compromise privacy; for ex-ample, the theft of a mailing list stored on mag-

netic tape is a result of poor security and maycompromise the privacy of individuals on thatlist. The brea ches of secur ity ma y also be un -related to privacy or confidentiality.

4

Respect for privacy in office automation in-volves three components:

1. Data collection—what personal informa-tion is relevant, necessary, and sociallyaccepta ble for an organizat ion to collectto carry out its missions?

2. Protection—when should an organizationrecord and preserve identified personal

data, who should have access to it within

‘A representative discussion by EDP experts of the rela-tion between privacy and security considerations appears inAlexander Gaydasch, Jr., Principles of EDP i l fanagem en t(Reston, VA: Reston Publishing Co., 1982).

171



172 q Automation of Am erica’s Offices

the collecting organization, and underwhat circumstances can it be released out-side the organization to third parties?

3. Notice and access–when can the subjectof data collection know that an identifiedrecord has been created about him or her,

have th e right to examine the record, andbe able to challenge the accuracy, com-pleteness, or proper use being made of therecord?

Survey evidence suggests that American:~’concerns about privacy are rising. A LouisHarris Survey indicated that during the periodof 1970-78 American concern about the hvi~-

sion of privacy rose from a bout 33 t o 64 per-cent.

5This public concern was a factor in bring-

ing about Federal privacy legislation. Therewas a lso a sh ift in employee attitu des about

the prerogatives and responsibilities of em-ployers with regard to employee data, addingfurther impetus to Federal policy activity. By

‘>Th e Dimensions of Privacvv: A National Opinion Research

S urvey of Attitudes Toward Privac~r, conducted for Sentry I 1-

surance by Louis Harris & Associates and Alan Westin, 1973.

1983, another survey by Louis Harris6indi-

cated that the proportion of the public con-cerned with privacy had increased further,from 64 to 77 percent.

This chapter is concerned with both con-fidentiality and security issues raised as moreand more organizations introduce new officetechnologies, in both the private and publicsectors. While privacy or confidentiality andsecurity are interrelated, this chapter first dis-cusses confidentiality and privacy issues, thensecurity issues in the protection of personaland client data.

7

‘Louis Harris & Associates, Inc., The lioad After 1984: The Impact of Technology on Society-A Nationwide Survey of thePublic and Its Leaders on the New Technology and Its Conse-quences for American Life. Harris study No. 832033, 1984.

“Confidentiality and security of data involved in off-shoresourcing of data-entry work are discussed in ch. 8. Issues of software security are being addressed in another OTA report,intellectual Propertey Rights in an Age of Electronics and In-

formation (winter 1985). Issues related to the security of Fed-eral information systems are being covered in the OTA report,implications of Federal Government Information 7’echnolog.y

(winter 1985). Privacy issues in electronic surveillance are cov-ered in Electronic Su rveillance and Civi l I.iberties, OTA-CIT-293 (Washington, DC: U.S. Government Printing Office, Oc-tober 1985).

OFFICE AND DATA PROTECTION

Much of the r ising concern about confiden-tiality and security has been occasioned boy

the a dvent of comput ers and large data ban ks,and these concerns have repeatedly been sub-

jects of congressional action, resulting in newlaws.

8End-user computing, in which many peo

ple may access an d u se organizational dat a-bases, raises new questions about how claimsto privacy can be respected and the confider~-tiality of information be assured. In a recentsur vey of privacy an d securit y professiona ls,almost half, 47 percent, believed that as a re-sult of the third phase of office automation

‘In the mid-1960s, a Senate investigation was held to exanl-

ine the kinds and amounts of personal information collectedby the Federal Government. This investigation is consideredby many to be the beginnings of the national expression c~ fconcern about the collection and use of computerized personalrecords systems. (U.S. Congress, Senate Committee on the Ju-diciary, Subcommittee on Administrative Practice and Proce-dures, Government Dossier) (Washington, DC: U.S. Goverrl-ment Printing Office, 1967).

th ere is a tr end for broader or more detailedpersonal information to be collected.

9Concur-

rently, this proliferation of computers is lead-ing to decreasing compliance by managers withgovernment-privacy regulations (45 percent).Networking, computer-based messaging sys-tems and electronic mail will exacerbate theseproblems still further as personnel data canbe circulated among more people.

Computer crime legislation passed in the98th Congress established penalties for indi-

‘Westin and Hoffman, op. cit., 1985. This survey was nota representative sample of all types of organizations affectedby office automation. Rather, the participants were chosen based

on their reputation in computer and business circles as active,advanced, and unusually skillfull users of office-systems tech-nology and as leaders in dealing with the employee-relationsand organizational change aspects of new office technologies.However, there is a paucity of quantitative data on the extentof the privacy and security problems. Thus, the informationreported from this survey should be treated as indicators of problem areas and not as indicators of the extent of the problem,



Ch. 6—Confidentiality and Security Issues With Office Automation q 173

viduals convicted of theft, fraud and abuseassociated with Federal computer systems.The first indictment and conviction under thenew Computer Crime Act involved a personconvicted of misrepresenting himself as a validuser of the computer system, establishing asuper user code allowing future access to thecompu ter h e worked on an d oth er systems t owhich it was linked.

As organizations rely more and more oncomputer-based information to conduct theirbusiness and to keep track of their personnel,the privacy rights of clients and employeesmust be considered. Coupled with the fact thatthe purchase and installation of microcom-put er systems is often h apha zard an d uncon-trolled within organizations, an appropriatedegree of confidentiality is more difficult to

assur e when a ccess to dat a is widely distr ib-ut ed. Personal informa tion is required to ef-fectively run a business, and with telecommu-nications linkages between computers andbetween organizations information can be col-lected in greater quantity and shared more eas-ily. Client information can be processed at theclient’s workplace and sent via phone lines toth e organizat ion’s compu ter system for p roc-essing. Office a ut omation a lso raises quest ionsabout traditional security measures in centralelectronic data processing (EDP) environments.The purchase and use of computers in office

automation is not controlled by a single de-partment. Once microcomputers are linkedwith larger computer systems, any individualon the system has the potential for unlimitedaccess and distribution of information.

Before the recent wave of office automation,the principle users of a computer system wereprofessionals, and the two chief dangers weretheft of funds or data by employees, and thatof novices external to the organization break-ing into the system. The dispersal of computersth roughout an organization h as extended ac-

cessibility to noncomputer-professionals. Thecompu ter professional’s sociocultur al systemhad within it values, beliefs, and concernsabout privacy and security of information.

‘Counterfeit Access De\’ice and Computer Fraud andAbuse Act of 1 9X4, Public I.aw ‘38-473.

Today, people who never participated in thesociocultural system of EDP environments,who have not been informed about the finepoints of the law and ethics of protecting con-fidentiality or assuring data security, haveeasy access to an organization’s databases.

Violations can result from carelessness as wellas through intent.

This chapter differentiates current officeautomation issues from the confidentiality andsecurity problems that have been present inmany organizations for two decades as partof an EDP system. This distinction betweencentralized and end-user automation is prob-ably transient and likely to disappear as officestie their small computers into the larger EDPsystems highly integrated information sys-tems. The transient nature of current systems

is important for policy considerations later,and the distinction is useful in discussing newproblems that arise with office automation.

Three developments in office automation arecentral to confidentiality and security issues,not only because they deal with the techno-logical changes mentioned above, but with howthe

q

q

q

technology is procured and installed:

the arrival of stand-alone word processorsand text editors in the late 1970s, per-ceived as higher-order typing instrumentsand generally procured and controlled by

office administration staffs or user de-par tments ;the move to widespread professional mi-crocomputers, now available at prices andwith features that allowed organizationsto procure them for stand-alone work, andnot only when linkage to on-line main-frames and minicomputers was involved.Generally, these ma chines were orderedby user departments; though often withEDP-department guidance; andthe explosion of personal computers (PCs)in the early 1980s, for professional, sales,and executive use as stand-alone comput-ing devices, and increasing linkage of suchPCs to minis and mainframes. PCs in mostorganizations were ordered by individualsor by user departments, with limited guid-ance or control by EDP departments orcentral administrative service functions.




Each of these developments fostered newways of carr ying out office work . By 1984-85,each of these three original types of stand-aloneterminal/software machinery were being linkedto minicomputers and mainframes. This build-ing of communication between computers makespossible access to central or distributed data-bases. In the survey of computer security pro-fessionals mentioned above, 64 percent believedthat the spread of electronic mail and messag-ing systems poses a real problem in maintain-ing confidentiality. The ability to download(take data from) or upload (add data to) main-frame databases, using small computers, makesit possible for any employee with access to thebuilding or computer to generate a file of per-sonal inform at ion. Sevent y-six percent of th esurvey respondents felt the automated office

environment allowed more people physical ac-cess to workstations and disks as comparedto earlier waves of automation. Finally, theinterconnection of microcomputers allows theexchan ge of data with in un its or across un itsof the organizations, independent of mainframesystem controls.

The following quote demonstrates the ca-pabilities of the convergence of the various of-fice technologies:

In IBM we now have a world-wide networkof more than 1,500 mainframes and 200,000

terminals. Any user at any terminal can senda message or a file to any other user. A userat any of those more than 200,000 terminalscan connect to any application in any of those1,500 systems. Programs and even entire ap-plications spread spontaneously through thenetwork, usually without management direc-tion or intent and often without managementunderstanding or knowledge. Employees canaccess the network from their homes. Somevendors and contractors use it . . . [DP] man-agement did not plan it. They bought it andbuilt it but they were just as surprised as any-one else when they saw what ‘God had

wrought. ’

11

“W.H. Murray, “Security Programs, Functions, and Con-cepts for the New Computer Economics, ” Proceedings of the1 lt h Annu al Compu ter S ecurity Conference (Northboro, MA:Computer Security Institute, 1984).

THE PERIOD 1960-78

EDP systems made it possible for client datato be:

q

q

q

q

q

collected and recorded more easily;analyzed, compared, and collated morefully;distributed to or made accessible to morepeople within the organization;amalgamated with data on individuals ob-tained from other organizations havingcomputerized record systems; anddisseminated more widely, both in intra-organizational networks and in responseto specific demands from other organi-zations.

These capabilities made it possible to pro-vide more customized and personal servicesby business and government. They also raisedthe possibility of greater aggregation of data--computerized databases can break down the

vital compartments and boundaries that helpedkeep client information confidential. This is

what the pr ivacy-and-data banks debate of the1970s was about.

12

There were a lso several aspects of int erna lorganizat iona l contr ol in t he 1960-78 era , be-fore end-user computing, that provided theframework for carrying out new privacy rulesthat were developed:

q in the EDP era, small staffs of EDPprofessionals ran the data centers and con-trolled access to automated files; and

centralized security procedures of access

and audit were available to check (if nec-essary) that termin al users followed thelegal a nd organizational ru les.

“For an early discussion of the debate see, U.S. Senate,Committee on the Judiciary, Subcommittee on ConstitutionalRights, Federal Data B anks and Constitutional R ights, 1974.



Ch. 6—Confidentiality and Security Issues With Office Automation 175 — - — .

Comput er-system securit y measu res origi-nally evolved from manual techniques forphysical security carried over from the elec-tronic accounting machines of the 1950s. Usu-ally physical security (locking up sensitive carddecks and tapes) was the prime technique. As

first and second generation batch processingcomputer systems were introduced, followedby remote terminals and third generation sys-tems, computer security techniques becamemore technological and sophisticated. Passwordswere used to restrict access to informationbased on a user ’s or t erm inal’s pr ivileges oron the type of function being performed. Afew system s, especially th ose involved in n a-tional defense, used cryptography or encipher-ing. Some systems provided other mechanismsto assist proper authorization, most notablythe hardware rings provided by the GE/Honey-

well machines of the late 1960s and early 1970s.During this period, it was hard enough to geta program to run at all on a given hardwaresystem, and security took a back seat to otherdesign criteria such as correctness, speed, cost,and utility.

As third generation computer systems be-came more common in industry and govern-ment, the use of data within organizationscha nged and n etworks were built up. Rath erthan use one computer center, one or more sys-tems could be accessed via user terminals. In-

deed, commercial time-sharing networks grewto service th e needs of organizat ions wit houtthe resources or inclination to start their ownnetworks. Minicomputers (minis) appeared,but in cont ra st t o today’s microcomputer sys-tems, minis were generally still purchased andoperated by data processing specialists withinth e organizat ion.

At the same time, there was growing publicawareness of potential loss of privacy and prob-lems of fairness or due process. Thus, the secu-

rity of computer systems took on added im-portance and led to additional safeguards suchas logs, journaling, of important operationsand more specific policies with respect to com-put er securit y, as a m eans t o guara nt ee con-fidentiality and accountability. However, the

most sensitive narrative information was stillnot computerized at this time; it remained onpaper in manual files. Thus, most problemsinvolving personal data in the 1970s still wereassociated with paper records. In the early1980s, medical, banking, credit and employ-ment information was placed in large data-bases, beginning the current rapid move tostore personal, employee, and client dataon-line.

The advent of commercial products to en-hance computer security, such as the ACF2

access control package for IBM mainframesand various vendors’ versions of the NationalBureau of Standards Data Encryption Stand-ard had not yet been introduced. Leading man-ufacturers were starting to take seriously thetask of educating users about these issues. Anadvance guard of computer practitioners werebecoming knowledgeable about computer secu-rity issues. “Second-generation” technologi-cal security issues (e.g., the idea of kernels insoftware engineering)

13were just starting to

be investigated.

‘‘A security kernel is a small nuclear piece of the operatingsystem that controls access to other parts of the computersystem—either information or data. This nucleus itself mustbe tamperproof so that its programs maj not be modified, al-lowing system operators to verify whether it has implementedthe systems security policy through the programs. See G.J.Popek and C.S. Kline, “ Issues in Kernel Design, ” Ad~-ancesin Computer Seczmit.}r, Rein Turn (cd. ) (Dedham, MA: Artech130use, Inc., 1981), pp. 139-144; and R.C. Summers, “An O\rer-view of Computer Security, ” Il?ltf SJwtems Journal, vol. 23, No. 4, pp. 309-325. This de~’elopment has been primarily inthe Department of Defense; there are no commercially a\ail-able security kernels.

THE POLITICAL AND LEGISLATIVE CLIMATE

The response of American society to both ied,14

By the late 1970s, a detailed latticework the social change aspects of privacy protec-tion and the computer-based handling of per- ‘See for example, J$’. H. YI’are, “ Information Systems Secu-

rit~r and Pri\’acy, ” (’mn mu nications of th e ,4(’11, ~ol. 27, No.sonal data by organizations has been well stud- 4, 1984, pp. 31.5-321,




of laws, regulations, organizational policies,and social expectations regarding privacy pro-tection in EDP systems had been put intoplace. Codes of “fair information practices”were embodied in law or organizational stand-ards to govern the collection, use, and release

of personal data on clients and customers, andto make this process visible and accountableto both data subjects and the public.

Laws and regulations were promulgated todeal with privacy in particular fields of or-ganizational recordkeeping-Federal agencies,banking, insurance, health care, education,credit-reporting, employment, law-enforcement,etc. ” The earliest statute was the Fair CreditReport ing Act of 1970 (15 U .S.C. 1681). Thisact requires all credit investigating and report -ing agencies such a s bank s an d reta il char ge

card firms to make the records they collectavailable to the subject. Fu rt herm ore, it pro-vides procedur es a llowing t he s ubject to cor-rect the information. Finally, it only allowsdisclosure to authorized customers. Since thi:sstatute, many more have been enacted pro-viding protection policies for informationprivacy.

The Crime Control Act of 1973 requires thatState criminal justice record keeping systems,developed with Federal funds, ensure the pri-vacy and security of the information collected.

The Privacy Act of 1974 (5 U.S.C. 552a) re-

stricts the collection, use, and disclosure of individually identifiable information by theFederal Government. It gives the individualrights to access the information and to cor-rect it.

The Tax Reform Act of 1976 (26 U.S.C. 6103)protects the confidentiality of personal tax in-formation. It restricts disclosure of tax infor-mation for nontax purposes.

In furth erance of such laws, and in ma nlyareas where no legislation had yet been enacted,

—.—

1’Exampl=s would be the Federal Privacy Act of 1974 ( 5U.S.C. 552a); the Federal Freedom of Information Act Amenc.-ments of 1974, and similar “jurisdiction-wide” statutes in 12States. At the statutory level, this is exemplified by the Fan---ily and Educational Privacy Amendments of 1974 (20 U. S. C’.12239), and by State medical, banking, insurance, and employee-privacy legislation.

many private and public organizations devel-oped “privacy codes” or “fair information prac-tices standards” to govern their own handlingof client or employee persona l dat a. The m o-tives for such action were a blend of concernto meet legitimate privacy concerns of clients

and employees; the desire to avoid the neces-sity of detailed legal regulation; and the judg-ment that fair-information-practices rules hada generally positive effect on accuracy, com-pleteness, and timeliness in the managementof automat ed data systems, and could be ini-tiated without heavy costs in money or effi-ciency. A few corporations such as IBM, Bank of America, and Control Data Corp. had alsodeveloped employee privacy codes in the earlyto middle 1970s, but most of the 10,000 largeprivate employers in the United States hadnot.

By the time that end-user computing beganto add new dimensions to the handling of per-sonal data in office work in the early 1980s,th ere were st ill debates among privacy advo-cates as to whether the data collection and theconfidentiality aspects of privacy had been adequat ely dealt with, in wha t wa s coming to becalled the “first-generation” of privacy pro-tection measures. In spite of the emphasis onnotice, challenge, and due process rights of data subjects, and workable procedures forstrengthening confidentiality rules, critics ar-

gued tha t t here ha d been too few limita tionson what was a ppropriate informa tion to col-lect about people’s transactions and activitiesin many sectors of business and governmentlife. They also argued that merging data fromdifferent organizations about t he sa me indi-vidual (e.g., in computer matching programs)threatened to shatter basic confidentialitystandards.

There was also debate among informed ob-servers and the media about whether the nec-essary machinery with which to enforce pri-

vacy rights had been created, and about otherquestions—the implementation of the FederalPrivacy Act of 1974, the desirability of a con-tinuing Privacy Commission or Privacy Om-budsman (as Canada and many European coun-tries h ave), and U.S. Supreme Court rulings



Ch. 6—Confidentiality and Security Issues With Office Automation . 177 —

in matters of data collection by business andgovernment organizations.

16

The report of the U.S. Privacy ProtectionStudy Commission in July 1977 urged newlaws an d volunt ary codes in t he private s ec-

tor. What followed was a new series of stat-utes that affected information privacy.

The Right to Fina ncial Pr ivacy Act of 1978

(12 U.S.C. 3401) limits the access of Federalagencies to information about the customersof financial institutions, by describing the pro-cedures necessary to obtain that information.It also provides bank customers other assur-ances of privacy about some aspects of thebank records.

The Privacy Protection Act of 1980 (42 U.S.C.2000aa) prohibits government agents fromconducting unannounced searches of press of-

fice and file records if no person in the officeis suspected of having committed a crime.

The Electronic Funds Transfer Act of 1980states that any institution providing EFT orother services must notify customers aboutthird party access to customer accounts.

The Debt Collection Act of 1982 (Public Law97-365) establishes due process proceduresthat Federal agencies must go through to re-lease any informa tion a bout bad debts t ocredit bureaus.

The Cable Communications Policy Act of 1984 requires any cable service to inform the

subscriber of any personally identifiable in-formation collected. They must inform the userabout how the information is to be used andhow long the information is maintained on rec-ord. If the informa tion is disclosed, th e indi-vidual must be informed and restrictions areplaced on how and to whom information is dis-closed.

Only after the passage of new privacy legis-lat ion in 1978-82 protectin g bank depositors,

‘There were debates over whether new systems or applica-tions were covered by “first generation’ privacy measures; forexample, electronic funds transfer (EFT) systems, two-way ca-

ble systems, and Postal Service electronic-mail projects. Therewas also concern that plans for large sophisticated computersystems as replacements for older systems in the Federal Gov-ernment might go forward without sufficient attention toprivacy risks, for example, the proposed FBI “Triple 1“ sys-tem for processing criminal history records, and the plannedIRS, Social Security, Secret Service, and Veterans Adminis-tration systems.

and State laws on insurance, employment, andmedical privacy did broad private sector in-stitutionalization of privacy rules take place.The establishment of organizational proce-dures and regulatory or judicial enforcementof privacy was just becoming th e norm wh enend-user computing began to spread in theearly 1980s.

In the mid-1980s as office automation isspreading, an extensive set of confidentiality pro-tections for manual and EDP systems has beenput into place; but debate continues as to wheth-er these protections are adequate in scope andare being vigorously administered.

The laws above basically deal with rightsto confidentiality. Until recently, no Federallaw dealt specifically with sanctions against

the use of computers by individuals to com-mit a crime, or with trespassing by readingprivate computer files.]’ In October 1984, Con-gress passed the Counterfeit Access Deviceand Computer Fraud and Abuse Act of 1984,which makes it a felony to access confidentialor restricted information related to nationalsecurit y with out aut horization, and ma kes ita misdemeanor for unauthorized persons toaccess the data banks of financial institutions,or to use, modify, destroy, or disclose infor-mation in a government computer.

There are of course many criminal laws that

can be used in prosecuting computer-relatedcrime, but there are problems in applying manyof the laws defining theft to cases where only“virtual property” (nonphysical property) isconcerned. Thirty-three States now have com-puter crime laws, but some do not cover hackerswho penetrate systems for fun rather thanprofit. ”

‘“The Privacy Act of 1974 (Public Law 93-579) and theCrime Control Act of 1973 (Public Law 93-83, sec. 524(b)) are,however, designed to prevent misuse of Federal records of allkinds in ways that would violate the privacy of citizens.

“List provided by the National Center for Computer CrimeData (Los Angeles) includes Alaska, Arizona, California, Col-orado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho,Illinois, Iowa, Maryland, Massachusetts, Michigan, Minnesota.Missouri, Montana. Ne\ada, New Mexico, North Carolina, NorthDakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, SouthDakota, Tennessee, Utah, Virginia, Washington, Wisconsin,and Wyoming.



178 Automation of America’s Offices—.

THE THIRD PHASE OF OFFICE AUTOMATION

The Handling of Client Data

Confidentiality in an organization with newdecentralized or networked office technologies

requires consideration of a number of newfactors:

Low-security or no-security physical envi-ronm ents in offices. Except for military, diplo-matic, and a few private-sector settings thatoperate in “highly sensitive data” modes, mostorganizations have put microcomputers ontodesks in working areas that are open to pass-ing fellow workers, service personnel, invitedvisitors, or even the general public. Storageof diskettes, location of printers, and otherperipheral equipment is also usually in unse-cured environments.

More finished and relined information in office automation systems. In most organiza-tions, word processors contain finished cor-respondence, memoranda, documents, charts,and reports. These stored materials may con-tain sensitive personal information on clients,proprietary data of the organization, informa-tion confidential to particular employees orunits, and data about terms of contracts andother legal responsibilities. While much rawdata and some reports of this kind are in main-frame storage, the information in word proc-essors or professional/executive microcomput-ers is generally more complete, revealing, and

easily found, because it includes explanatorytext .

More readily accessible information in office com put er systems. An interloper, whetheran employee or someone from outside, whoseeks to extract sensitive data from the main-frame database generally has to know special-ized mainframe software codes, as well as howto deal with special security protections thatmost organizations have built into mainframedata bases. With m icrocomputers, u nskilled in-terlopers are more able to call up data onscreens, print out documents, or copy disk-ettes th an they would be in EDP systems.

The mobility of microcomputers and their data-storage media. Dumb terminals con-nected to mainframes are known to the sys-tem, and their uses are usually logged or mon-itored. Microcomputers can be moved aroundwithin organizational offices without central

control or notice, and portable versions canbe taken home or on trips. Information is ar-chived on floppy discs rather than magnetictapes.

Less sophisticated office aut omation users.While 10 percent of organizational personnelmay have been using terminals in the middle1970s, either in EDP units or as EDP-trainedoperators in users’ departments, at least 25to 35 percent of personnel in large organiza-tions are probably using microcomputerstoday, and eventually this may approach 100percent. Typically, new users have not beeneducated about confidentiality issues or secu-rity protections.

Uncontrolled channels of data communica-tions. Electronic message systems, bulletinboards, and microcomputer networks encour-age users to send messages to everyone usingthese systems or to create their own distribu-tion lists. As a result, messages with confiden-tial data can move around either anonymously,or without control for their confidentiality.Fraudulent memos can be circulated for polit-ical purposes without an easily traceable ori-gin. Reproducing machines, and before them,mimoegraph machines had the same effect, of cour se; computer s m erely allow th is commu -nication to be done in the privacy and safetyof one’s own office or home.

19

Wide ability to add information to or copy

or extract information from corporate databases.Controls over alteration of data or unauthor-ized access become critical.

20Microcomputers

can be used to attack the security of main-frame and mini data, and obtain confidentialclient data improperly. This can in fact be donefrom any terminal, including those developedfor mainframe use, but more understandable

This situation may seem trite, but a recent State supremecourt ruling stated that an employee’s privacy had been vio-lated by an interoffice memorandum. “S,JC Outlines Rules onE~mployer Rule in Workers’ Privacy, ” Boston Globe, July 7,1984; as cited in Philip Adler, et al., “Employee Privacy: Legaland Research Developments and Implications for Personnel

Administration, ” Sloan Management Review, winter 1985, pp.13-22), In this case upheld by the U.S. Court of Appeals, FirstCircuit on Aug. 6, 1984; the memorandum was on paper.

“’This does not address. the problem of unauthorized usersexternal to the organization accessing the databases. One com-monly suggested procedure is the use of tiered passwords foraccessing the computer and then the particular volume or filethe information is stored in.



Ch. 6—Confidentiality and Security Issues With Office Automation 179

software instructions are expanding the num-ber of persons able to probe password secu-rity, attempt unauthorized entry, or alter con-fidential data.

Little or no hardware or software security protections. Because of the ways that word

processors and microcomputers entered officework, there was neither a perceived necessityor an assumed “market demand’ for built-interminal hardware protections such as lockson the machines. Similarly, in buying or de-signing software for office systems, organiza-tions have generally not specified audit trails,cryptographic protections, and other measuresth at could ha ve been insta lled–though atadded costs.

Unpredictable individual and group behavior.There is no way to predict with any assurancehow office employees and managers will usethese powerful new capacities. There will besome conduct by insiders and outsiders aris-ing out of the new opportunities in microcom-puter use that pose risks, and this has to bethe perspective from which managers assessrisks to confidentiality and security.

Security and Confidentiality Issues

The potential vulner abilities to client dataemerging in office a ut omation can involve ei-ther new situations created by microcomputeruse, or can be extensions of familiar risks inmanual and EDP recordkeeping. The types of

potential end-user conduct that could violateexisting pr ivacy standa rds are discussed be-low. ”

Data Collection

Microcomputers permit the creation of anyfiles or databases that the end user wishes tomaintain. Either without awareness of or indeliberate disregard of privacy, end users may

I+; xamining such potential twlnerabilities in office automa-tion follows the studies of EDP s~stems impact done by theNational Academy of Sciences in 1969-72; the HEW Ad\risory

Committee in 1972-73: and the U.S. Pri\acy Protection StudyCommission in 1975-77. Hopefully, the examination of poten-tial office automation ~wlnerabilities can benefit from the ex-periences with risk-assessment and reality-testing that werede~’eloped in 1969-77 EDP studies, as well as the practical ex-periences gained o~’er the past decade in administering the stand-ards promulgated (for client data) as the ‘*first generation’ of pri~ac?’ and securit?r rules.

put personal client information into “their”files that violate laws, regulations, organiza-tions rules, or ethical guidelines. If there isno auditing or physical inspection of end-userfiles, then management may be unaware of such conduct, and suffer legal sanctions or

have the companies reputation compromised.

Confidentiality

End users may take client information fromcentral files and merge it or match it with otherclient data in ways that violate privacy stand-ards. Through electronic mail and message sys-tems, end users may send confidential clientinformation inadvertently to those not enti-tled to have it, especially if “automatic” dis-tribution lists are used.

Subject Notice and AccessWhere end users create files improperly or

record confidential data they should not haveaccessed, failure to inform clients that suchfiles ha ve been created an d might be used inmaking decisions about clients could be a vio-lation of several basic privacy laws (the Fed-eral Privacy Act, State fair information prac-tices acts, Fair Credit Reporting Act, Stateinsurance privacy acts, etc.), as well as the or-ganizational r ules of many ban ks, insura ncefirms, brokerage houses, medical facilities, edu-cational institu tions, an d other pr ivate orga-nizations. Failure to provide opportunities forindividual clients or potential clients to exam-ine and challenge these files would be a viola-tion of such laws or rules.

It is critical to distinguish the privacy is-sues generated by the transition from manualrecord systems to EDP systems, from thoseof the current progression from centralized todecentralized computing. The arrival of EDPbrought a bout revolutionary increases in t woar eas: 1) da ta -collection capa cities (redu cingcosts a nd t ime const raint s, magnifying dat a-

analysis capabilities, etc.); and 2) data-sharingcapacities (circulating personal data within andbetween organizations). The response in termsof privacy laws and organizational codes was:1) to increase the visibility of organizationalactivities affecting sensitive personal data



180 Automation of America Offices

(changing these from private “kitchen work’to public notices and descriptions, with spe-cific rights of data-subject inspection chall-enge); 2) to stipu lat e broad r elevan cy an d so-cial a ccepta bility st an dar ds for da ta collection;and 3) to provide rules and procedures for con-

fidentiality or data sharing.

The use of microcomputers in the office hasthe

q

q

q

foIlowing char acterist ics:

They do not significantly increase thescope of data-collection capacities over ex-isting EDP systems. However, becauseof their ease of use or cost, data not en-tered into the mainframe system can nowbe entered, potentially increasing thequantity of data collected. This requiresmanagers to provide greater educationand oversight of users to see that theyknow the limitations on data collectionset by law or code, and do not violate thesein “personalistic” data recording.They do increase the risks of improper circ-ulation of personal client (or personnel)data within th e organization and to out -side organizations, threatening confiden-tiality, because they provide many moreemployees with a tool for accessing therecords or information.They do increase due process problems.To the extent that stand-alone-diskettes

and off-line storage of personal client datawould not be known to data subjects, theuse of that data for decisionmaking couldnot be challenged under privacy rules forsubject access.

Security

How to protect records from accidental ordeliberate destruction, loss, or theft is a secu-rity question. There are also differences be-tween EDP and decentralized office automa-tion. Surveys of private organizations showgeneral agreement that by the end of 1984

th ere were significant secur ity issues in u seof microcomputers, not just for sensitive cli-ent and personnel data but also for generalproprietary business information, financialdata, national security information, and legallysensitive information. These problems have

not been taken up yet by most top manage-ments, and thus the policy directives andbudget authorizations necessary to addressthis problem adequately have not existed inmost private-sector organizations. The majorproblems developing with decentralized office

aut omation are:

Lack of clear identification of sensitive information. The basic requirement for soundsecurity is to identify information that is sen-sitive and needs special protection. Any effortto protect all personal information in ordinarybusiness or government organizations wouldbe too costly and would virtually paralyze or-ganizational programs. ’z

Failure to provide adequate physical secu-rity for machines and storage media. Manymicrocomputers are not kept in locked roomsand diskettes are often not kept in locked cab-

inets or desks. Easy physical access to suchmicrocomputer equipment poses real securityrisks; for exampIe, diskettes can be copied onanother machine on or off the premises.

Failure to have key locks on terminals. Mostmicrocomputers do not have key locks thatcontrol on-off functions, enabling third par-ties to activate them.

Weaknesses in password systems govern-ing access to central databases. Microcom-puters connected to mainframes in many or-ganizations suffer from the same securityproblems as dumb terminals; users are casual

about writing down or telling their passwordsto others. But microcomputer users are prob-ably less disciplined in handling password reg-ulations than EDP-trained personnel.

No logs or journals. Though central data-bases of confidential client data are often pro-vided with audit trails, transaction logs, or

journaling capabilities, these techniques areoften not used when groups of microcomputersare connected to minicomputers or, throughthem, to mainframe files.

Not recording efforts to penetrate security.Unlike mainframe systems, microcomputer-based office systems generally do not recordefforts to enter restricted files without properidentification or passwords, or warn securityofficers that such efforts have taken place orare under way.

-’Many European countries do attempt to protect a largeamount of the personal data collected.



Ch. 6—Confidentiallity and Security Issues With Office Automation 181

Absence of either security education for users or auditing of their practices. Even if sensitive information was identified, securitymeasures were adopted, and records were keptof efforts to access databases improperly frommicrocomputers, most experts would agree

that security of sensitive client data also re-quires tha t u sers be educated a bout securitypolicies and procedures. Second, it requiresthat inspections or auditing be carried out tolearn whether security policies are beingfollowed.

When it comes to security measures neededto safeguard sensitive client data in microcom-puters and end-user office automation, currentevidence shows that: 1) the techniques for in-stalling security protections are well known;2) the process of risk-assessment and vulnera-bility analysis to determine cost-beneficial pol-

icies is well known; but 3) these techniquesand processes have just begun to be under-taken in the private sector, and are only some-what further advanced in the Federal estab-lishment. The first task in dealing with securityis not to identify wholly new security approachesor methodologies, but to stimulate organiza-tions to provide directives and resources withwhich to modify and apply known techniquesan d processes.

There are some situations in which newforms of office automation may require spe-

cial measures. For example, if combined voice/ data terminals are widely used, manufacturersmay have to provide means of preventing theundetected turning on of the microphone ca-pabilities of terminals, to ensure that neitherofficials within the organization nor outside

hackers, or more serious intruders, used theseterminals for organizational espionage.

Local area networks present particular prob-lems. Three different types of network config-urations exist and present different securityproblems. In a star network, several t erminalsar e conn ected to a cent ra l contr olling device;the central computing power can be used tocontrol data and software, maintaining a highdegree of secur ity. In a rin g configurat ion (ora loop) the workstations are arranged in a cir-cular network. Each station is linked by a

repeater mechanism that monitors all pass-ing information to see if any are addressed tothat workstation. This configuration has gainedmore acceptance in E urope than in th e UnitedStates. Because information travels around thering, any workstation has the capability of ac-cessing it. The tree or bus n etwork, t he mosteasily expandable of the three, does not requirea central controller and, security is thereforecontingent on the security capabilities of in-dividual workstations.

PRIVACY ISSUES IN WORK MONITORING

The monitoring of office work by computerswas discussed in chapter 5; but it is sometimesdiscussed as a privacy issue rather than asa qu ality of work life issue. Th e privacy issuera ised by comput er-mediated work monitor-ing is whet her th e collection of operat or per-formance data through “machine capacities”and its use to evaluate employees constitutesan intrusive form of ‘‘employer surveillance’

th at violates reasonable expecta tions of per-sonal privacv by the employee. Whatever the

pros and cons of computerized-work monitor-ing, it is probably not best posed in terms of privacy. The work is done on th e emp loyer’spremises; the activities are usually group set-tings open to view rather than individual activ-ities taking place in closed or private rooms;supervision is a normal condition of the em-ployer-employee relationship; and collectingquantitative data as to employee output has

long been used in evaluat ing and compensat -ing work performance in factories and offices.



182 automation ofAmerica Offices

Unlike the use of TV-monitors to watch as- ployees know that monitoring systems are

sembly lines, or of hidden microphones to over- used, emp loyees have a ccess t o their in divid-hear workers in cafeterias or restrooms, the ual records; and a procedure is provided forcollection of operator-production statistics contesting the accuracy or fairness of apply-generated by system software does not repre- ing records for evaluative purposes.

sent an intru sive act per se, provided that em-

SECURITY AND CONFIDENTIALITY INAUTOMATED PUBLIC OFFICES

The protection of data is a major concernin public-sector offices, especially in regard tomatters of national security, diplomacy andforeign relations; the Federal role in monetarytransactions; government funds transfers; andforeign trade. Most of the sensitive informa-tion about such subjects, however, is usually

in large computer and communication sys-tems, and is usually protected by encryptionand a variety of other mechanisms. However,shared databases and the downloading of datato microcompu ter s for en d-user compu tin g israising new concerns, especially since data thatare not per se identified as sensitive can, whenaggregat ed, reveal informa tion th at is highlysensitive.

The Federal Government collects large vol-umes of detailed personal data about citizensand in particular about Federal employees. Asearly as 1967, a study of computerized Fed-eral r ecords revealed t hat th e files cont ainedmore than 3 billion records and that over half of them could be accessed via computer ter-minals.

23Several years lat er in 1974, another

congressional committee found that 86 per-cent of the 858 known government databankswere computerized.

24Successive waves of of-

fice automation have continued to providegreater access to th ese expan ding dat a files.This information can be integrated throughcomputer matching and other techniques andth rough th e excha nge of data between agen-

cies and with St ate government s, in ways thatcause deep concern about confidentiality. Forexample, when one applies for Food Stamps,

Go\ ,ernn]ent Dossier, op. cit.‘Federal Data Bank s and Constitutional R ights, op. cit

the Department of Health a nd Hu man Serv-ices, which administers the program, matchesone’s na me with th ose in th e Int ernal Reve-nue Service (IRS) earnings file (which is in factmaintained and used by the Social SecurityAdministration (SSA) to verify eligibility. SSAchecks the data in the IRS earnings file to ver-

ify income reported by recipients of SSA retire-ment benefits.25

In general, information-handling associatedwith end-user office au tomat ion is n ot classi-fied information, but it is often sensitive in-formation, especially when aggregated incertain ways.

26Routine records, forms, and cor-

respondence often contain information thatwould allow individuals to put together andprofit from advance knowledge of governmentactions. For example, plans for siting high-ways and government facilities, impendingregulations, actions that affect interest rates,sales of minerals an d timber rights, etc., arevery tempting. Personal data about Federalemployees can be used to discourage whistle-blowing. Less often voiced, but still important,is the concern about unauthorized access to

~ According to briefings and interviews provided for OTAby SSA.-“This has chiefly been of concern to the Department of De-

fense; for example, the problem was exhaustively discussedin a planning conference held for the U.S. Army InformationSystems Command by SRI in Tucson, AZ, in December 1984.Hypothetical examples given in an informal talk concerned thepossibility of aggregating routine travel orders or schedulesfor key individuals to reveal the (undisclosed, sensitive) loca-tion and timing of small meetings; or the possibility of aggregat-ing data on materials delivery to a site to reveal informationabout development of weapons systems, However, some civilliberties specialists have long been concerned about the abilityto aggregate information from many sources about one indi-\’idual to produce a profile of his or her marital, financial, so-cial, business, professional, and political activities.



tion is the question of the ability to protect,the privacy of Federal employees. Agenciescollect and keep much personal data about em”.ployees an d even applicant s for F edera l jobs,Much more da ta is likely to be collected t ha nwould be s ought by corporat ion p ersonn el of-

fices.” These files may be, and usually are.widely dispersed and only superficially pro-tected. As files are computerized, they can,more easily be aggregated and accessed, orta mpered with. If files ar e stored in personalcomputers or can be accessed or downloaded,more and more people will have access to them.and may use them for satisfying curiosity, formischief, for exerting political pressure, or forsheer malevolence. This raises significant ques-tions about protection of privacy in Federalcomputer systems and databases.

Federal employees are the subject of muchcomputer matching, which was described earl-ier; that is, the comparison of two or morecomputerized lists of individuals. For exam-ple, Federal employee lists were checked againstlists of people earlier defaulting on studentloans. A very early example of computer match-ing occurred during the Carter Administra-tion; this was Project Match, through whichnames of Federal employees were matchedwith n am es on t he r oll of th e Aid to Fam ilieswith Dependent Children, in an effort to dis-cover ineligible recipients.

32

Accidenta l Losses

Telecommunications and computers are vul-nerable to crime, mischief, and terrorism, butthey are also vulnerable to unintended disrup-tion, a point that is sometimes overlooked. Thisincludes error or accident, and the simplebreakdown or failure of equipment; it also in-cludes dest ru ction by fire, flood, ear th qua ke,and other natural and technological disasters.

Data can also be lost permanently, or madetemporarily inaccessible, by electrical outages.As government activities become more and

“See Alan Westin, “Personnel Practices in the U.S. CivilService, ” Information Age, July 1982, pp. 149-169.

‘According to information supplied by Federal officials toOTA.

more dependent on microelectronics there isthe strong possibility-and given enough timethe virtual inevitability—of electrical failuresth at affect critical a ctivities or wh ole regionsof the country, bringing all computer-mediatedactivity temporar ily to a h alt. Em ergency re-

sponse systems may be unable to respond ade-quately because some step or link depends onoffice automation that is down because of thesame emergency. Routine recovery proceduresmay be ha mpered by loss of dat a in t he sam eincident. GAO called attention to this dangerin a strong report in 1981, identifying the needfor further emergency planning by the Depart-ment of Energy and the Federal EmergencyManagement Administration.

33

Some government operations are highly timesensitive (e.g., tra nsfer of fun ds, tra nsmit ta lof orders to the armed services, air traffic con-trol, response to natural disasters, law enforce-ment actions). Others are dependent on readyaccess to individual and case records (tax col-lection, pr ocessing of welfare pa yment s, pa y-rolls, etc.). As t he governm ent becomes morean d more depen dent on office au toma tion fororderly performance of necessary activities,the result of any disruption-whether irrepara-ble or of brief duration and narrow scope–becomes more severe.

Federal a gencies have not a dequately pre-pared for natural or technological disasters

that might wipe out electronic information,according to GA0.

34Many still have no con-

tingency plans or rely on letters of agreementfrom other agencies to supply equipment inemergencies. This course assumes that theother agency will: 1) be able and willing to liveup to its agreement even at the cost of prejudic-ing some of its own activities, and 2) will not —- —-. —...“U.S. General Accounting Office, Federal Electric Emer-

gency Preparedness IS Inadequate, EMI)-81-50, 1981.“U.S. General Accounting Office, Most Federal Agencies

Have Done Little Planning for ADPDisasters, AFMD-81-16,

1980; and Federal Electrical Emergency Preparedness Is In-

adequate, EMD-81-50 , 1981.A contingency plan should have most or all of the following

features: backup files at external storage sites, standby arrange-ments for renting processing time or services, a recovery oper-ation center, a multilateral aid agreement involving five or moreagencies, or a plan for reverting to manual (nonelectronic) oper-ation if necessary.



Ch. 6—Confidentiality and Security Issues With Office Automation q 185

have been disrupted at the same t ime by thesame events. Nonelectronic equipment is oftennot available, and reversion to manual systemsnot possible; data may exist only in electronic,machine-readable form.

The cost of downtime or time lost becausethe computer is malfunctioning, is seldom cal-culated in justifications or cost-benefit analy-ses of office automation. In most cases, thedowntime is merely an annoyance and a tem-porary problem. In some cases, it significantlyaggravates the workload peaks and degradesth e quality and timeliness of importan t serv-ices. In time-sensitive situations, such as re-sponse to local emergencies, it can mean catas-trophe.

Comparisons With the Private Sector

In spite of these problems and concerns, theFederal Government is probably well aheadof the corporate sector in attention to the needfor safeguarding privacy and security in theuse of microelectronic office automation.

35This

reflects the implementation of provisions of

. —‘

rThis is the conclusion from an OTA contracted study, F?-i-

t’ac~’ an d .9ecurit .v Issues in Office A u tmna t i o n , Alan F. \t’es-tin and I,ance <J. }ioffman, 1985. Their study used documen-tar~. material from 44 Federal agencies and inter~iews at 7agencies, Federal policies and practices were compared with

findings from site visits and interviews in approximately 100corporations and nonprofit organizations in 1982-84. The re-searchers did not do on-site studies of the implementation andefficacy of securit~’ measures in Federal agencies, but reliedon reports of the manager and staff.

the Privacy Act over the last 10 years, includ-ing annual reporting requirements; OMB guide-lines; agency implementation procedures; andcontinuing attention from congressional com-mittees, media, interest groups, and scholars.

However, if the government is ahead of theprivate sector, th is says more about th e lack of systematic attention to these issues withincorporations, than about the effectiveness of government attention. It does not mean thatthe problems have been taken care of. The par-ticular vulnerabilities of office automation sys-tems to casual misuse, and even serious abuseand fraud, are still not realized by most of theusers .

But the openness of these small office auto-mation systems, which makes them especiallyvulnerable, is probably also their best protec-

tion. The many users and the open office envi-ronment means that abuses are likely to beobserved and reported, if they are recognizedas abu ses. They will be recognized only if of-fice workers understand the ethical, legal, andpolicy issues involved and are sensitive to theirimportance. A thorough attempt to educateFederal office workers about this problem isin order.

Individual workers, however, can do rela-tively little about protecting their data in thecase of power outages, system malfunctions,

and technological or natural disasters. The pri-mary responsibility for backup and fall-back systems, and other kinds of contingency plan-ning must rest with top-level agency managers.

POLICY CONSIDERATIONS

Nearly a decade ago, the Senate GovernmentOperations Committee investigated computerabuse in both th e public and private sector;

36

as a result there have been proposals in the

‘ L’. S, Congress, Senate Committee on (io\’ernment opera-tions, ~+ot~lerns Associated Il”ith (’ompu ter Technolog\ ’in fi’ed-eral l>rogram s an d I)r i \ ’a te Industr>’: (’ompu ter .4 buses, (~onl-mitt.ee Print, 94th Cong,, 2d sess., 1976; and Computer Securit}in Federaf Programs, Committee l)rint, 9,5th (’ong., 1st sess.,1977.

last three Congresses related to computer secu-rity in general and in particular to the secu-rity of computerized government informa-tion.

37In April 1984, the House Committee

on Science and Technology issued a specialreport on Computer and Communications Se-

Federal Computer Systems Act of 1977, S. 1766 and Ii. R.H421: S. 40 and Ii. R, 6196, 1979; Federal (’omputer S?rstemsProtection Act of 1981, 11. R. 3’790.



186 Automation of America Offices -— —

curity and Privacy38

that recommended thatCongress charter a national commission tostu dy the issues an d outline a fram ework forpolicy. While recognizing the threat from“hackers and other outside intruders, ” the re-port said that the greatest threat is from per-

sonnel who are authorized users of the comp-uter resources that they attack. The reportwas highly critical of recent policy and pro-grams related to computer security.

OTA concurs that violations of data con-fidentiality are most likely to occur within theorganization by authorized users. Externalthreats, whether from hackers, ordinary thieves,political opportunists, disgruntled former em-ployees, terrorists, or others, nevertheless de-serve greater attention. But these threatschiefly concern large systems. With small com-

puters violations by insiders are most likely,and there are fewer safeguards against them.Both large systems a nd sma ll comput ers ar eat risk from accidental disruption because of natural events, human error, and technologi-cal failure.

Because decentralized end-user computingis raising new uncertainties about how welldata is protected, Congress may wish to re-examine the structure of privacy laws and thek application to these technologies, perhapsthrough a special commission or task force.

Stringent actions have been suggested. Onepossibility is t o establish a n ew aut hority toimplement, oversee, or enforce current and fu-ture statutes. This organization would haveno responsibility for collection and distribu-tion of data. There are precedents for this:Sweden for example has a Data Commissionto oversee all records and their linkage. Another

— . —“U.S. Congress, House Committee on Science and Technol-

ogy, Computer and Communications Secur it~r an d Pri\ ’ac.y, re-port prepared by the Subcommittee on Transportation, A\’iii-tion and Materials, Committee Print, 98th Cong., 2d sess., April1984.

possible strategy is to have an ombudsmanwithin each data-collecting organization. Thisis the approach used, for example, in Germany.

However, cur rent laws may be adequate t oaddress the problems of decentralized auto-mation. Whether organizations treat “officeautomation” and centralized EDP as one orseparate and distinct components of officeactivity, the critical element is to adapt exist-ing rules to apply to predictable oversights,carelessness, or misuse by some persons in thelarge end-user population, and to assign or-ganizational responsibility and continuing over-sight duties to effective units at various levelsof the organization. If organizations are not will-ing or able to create and enforce policies to en-sure that existing safeguards and guaranteesare applied in end-use computing to protect their

clients and their employees, Congress may wishto clarif y and strengthen through legislation theliabilities that such organizations incur by theirfailure.

Current laws chiefly strengthen the rightand the ability of an individual to control in-formation about himself or herself. Thus, theindividual is the final enforcer of principles of fair information use. Given the ubiquitous na-ture of the new information technologies andtheir linkages and systems integration, morespecific data collection and data protection pol-icies may become necessary as opposed totraditional policy approaches strengtheningindividual r ight s.

For Federal agencies, strong oversight at-tention is merited to make sure t hat reason-able security provisions are enforced. Specialattention should be given to the questions of:1) the ability of essent ial da y-to-day govern-ment operations to continue when computerscannot operate, 2) the need for protecting em-ployee data , an d 3) th e adequa cy of proceduresfor protecting correspondence and records withcongressional offices.



Ch a p t e r 7

Home-Based AutomatedOffice Work



C o n t e n t s

PageThe Controversy Over Home-Based Office “Work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1$9

Historical Roots. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191

The Status of Home-Based Office Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192How Many Home-Based Office Workers .Are There? . . . . . . . . . . . . . . . . . . . . . . . . . . . 192

How Many May There Be in the Future? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193Mechanisms for Home-Based Work ...,What Work Can Be Done at Home? . . .

Parties at Interest . . . . . . . . . . . . . . . . . . . .Employers . . . . . . . . . . . . . . . . . . . . . . . . .Productivity . . . . . . . . . . . . . . . . . . . . . . . .The Workers: Why Are They at Home?.The Benefits and Costs for Home-BasedFamily Considerations . . . . . . . . . . . . . . .Effects on Society . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

...,, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19819 9

workers?” : : : : : : : : : : : : : : : : : : : : : : : : : : : : 200. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204

Legal and Regulatory Barriers to Home-Based Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205

Public Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206

Encouragement or Prohibition of Home-Based Office Work...., . . . . . . . . . . . . . . . . 206Regulation of Home-Based Office Work..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208



Chapter 7

Home-Based Automated Office Workl

New information technologies allow the dis-persion of office work over time and space. As

many functions of an office become internalto comput ers, and a s comput ers ar e increas-ingly linked by communication networks, itbecomes less necessary for office coworkersto be located in the same room, or in the samebuilding. When a worker’s primary interactionis with “the system” rath er than with otherpeople, she can do her work wherever she canget access to the system–in the office, whiletraveling, or even at home.

Some futurists have predicted that the avail-ability of low-cost compu tin g power an d t ele-

communications will increase the number of Americans working at home. The dawn of the

Parts of this chapter draw on a contractor report preparedfor OTA by Kathleen E. Christensen, New York University, Impacts of Hmne-Based H-m-k on }1’m nen and T heir Families,tJanuar~ 1985.

information age will find millions of people“telecommuting” from their “electronic cot-

tages, ” that is, using computers and telecom-munications to do office work in their homes.

z

At the present, there are only a few thousandAmericans for whom working at home is a full-time substitute for working in the office, butthe number is growing and many more mightbe so employed by the mid-1990s.

-The word telecommuting was probably coined by JackNines, now at the University of Southern California, in the 19’70sand reflected the interest at that time in working at home asa means of conserving automobile fuel and reducing urban airpollution. The term is not full~. appropriate for those who arehired (or contracted) specificzdl~ for home-based work and mightnot otherwise commute to an office to do the same work. Inany case, o ‘telecommuting’ is an awkward back constructionsince it means ‘‘commuting from afar’ rather than ‘‘workingat a distance. Other terms often used are homework, remotework, telework, or flexiplace. Blue Cross calls its home-basedworkers, cottage keyers, or telenauts. The home as a computer-ized workplace is sometimes called an electronic cottage or anelectronic sweatshop.

THE CONTROVERSY OVER HOME-BASED OFFICE WORK

The term “home-based office work” de-scribes three very different phenomena. Thefirst is the practice of working occasionally

or sporadically at home instead of at the of-fice, when it suits the purposes of the worker.The primary work site is still the office, andth e worker cont inues t o be a fully part icipat-ing member of the office staff while enjoyinggreater control over when and where, and un-der what conditions the work is done. The oc-casional home-based worker is most often aprofessional. This kind of home-based work is not controversial.

In other cases the r esidence is th e primar ywork site. Some of these full-time home work-

ers are entrepreneurs—people who have foundedsmall businesses with headquarters in theirhomes. They may intend to move the businessto separate quarters as soon as it can gener-ate enough income to cover the overhead, orthey may choose to keep their business at home

no matter how successful it becomes. In anycase, these owner-managers seek work froma number of clients and set their prices based

on their perception of the value of their work and their competitive environment. Thesehome-based businesses provide a variety of professional and clerical services from wordprocessing to accounting to computer pro-gramming. This kind of home-based work isalso, for the most part, noncontroversial.

s

Finally, the residence can also be the prin-cipal work site for workers who are employedby a single organ ization, but seldom or neverwork in the central office. As employees, their

‘Christensen found that women who developed word proc-essing businesses in their home, seeking multiple clients ratherthan tied to one corporate client, thought of themselves as,and functioned as, professionals and businesswomen, in spiteof the fact that the work they were doing would be called cleri-cal work if done in an office, and the women had in fact previ-ously been clerical workers. Christensen, op. cit.

189




wages are usu ally set by t he employer. Mosthome workers in this category are clericalworkers, usually performing data entry orword processing; in some cases h owever, th ehome may be the primary site for professionalwork such as computer programming.

Most of the workers in this last categoryare women. They may decide to work at homebecaus e th ey must combine work with otherresponsibilities such as care of young childrenor elderly relatives. Some other full-time homeworkers have physical disabilities or live farfrom commercial centers.

Those who are enth usiast s for h ome-basedwork usually discuss it in terms of the firsttwo images, the privileged worker and the en-trepreneur. Those who oppose it are likely to)speak mostly of the last, the woman strug-

gling to juggle two or more full-time responsi-bilities.

There are three important variables here,which relate to controversial positions onhome-based office work. One is t he exten t t owhich the home replaces a separate office asth e primar y work s ite. Another is t he degreeto which the home-based worker functions asa separate unit providing services to the orga-nization, rath er than as an integral and par -ticipating member of the organization. Thethird variable is the degree of choice exercised

by the worker, either in choosing a job thatis home-based ra th er t ha n office-based, or inallocating his or her time between two lo-cations.

The controversy about home-based work canonly be understood in the context of other so-cial issues, including the long-range outlook for em ploymen t, t he feminizat ion of poverty,labor-management relations, protection forworkers, the adequacy of child care sytems,and opportunities for the handicapped and theelderly. If we had full employment and ample

social services, home-based work would prob-ably not be controversial at all. The concernhinges on t he quest ion of whet her , now or inthe future, some workers are forced to work at home under undesirable conditions because

the lack of certain social services deprives themof other options.

Home-based workers themselves are notdivided over th e issue; th ey would be u nwill-ing to give it up. Many have demanded theprivilege or worked hard to persuade em-ployers to grant it. Some have accepted therisks that go with free-lance employment inorder t o work a t h ome. Some ha ve made th ebasic decision to sta y at home while th eir chil-dren are young, and regard the opportunityto do paid work at home as a pleasant bonus,the icing on their cake. Others would muchprefer to work away from home but have notbeen able to find any satisfactory alternative.Their choice is to work at home, or to settlefor child care ar ran gements th at t hey regardas unacceptable, or not work at all and become

dependent on others.Congressman Newt Gingrich of Georgia in-

troduced a bill in the 97th and 98th Congresses(H.R. 2531, The Family Opportunity Act) thatwould have allowed a tax credit of 50 percentof th e cost of compu ter s bought prim ar ily for“nonrecreational use in the home. One pur-pose of the bill, which has not been rein-troduced in this session, was to encouragecomputer-mediated work at home.

4

In contrast, the AFL-CIO has called for aban on computer-mediated home-based work.

The labor organization says that it is not pos-sible to enforce health, wage and hour, andother worker protection measures in homeswithout invasion of workers’ privacy. The un-ions a re concern ed th at man y home workersare paid under piece-rate systems and aredeprived of benefits packages. They also claimthat overhead costs are shifted from employerto employee, and that the threat of sending

‘H. R. 2531 would amend the Internal Revenue code to al-low an income tax credit for 50 percent of the expense of com-puters designed primarily for educational, professional, or other

nonrecreational use in the home. It would limit the amountof such credit for a taxable year to $100 multiplied by the num-ber of qualified members of the taxpayer’s family. The bill wasreferred to the House Committee on Ways and Means and wasnot reported out. Computers used for work in the home aretax deductible; the bill called for a tax credit.




workers. These are usually women house-bound with small children, or retired people.How much work is done in this way is un-known, much of it per haps being par t of theunderground economy (that is, not reportedto IRS), but it has provoked little commentand aroused little or no controversy. The taskstha t can be done in this way are limited andpoorly paid, an d th e nu mber of work ers will-ing to do such work is also limited. Homebasedwork has not been a viable option for mostemployers or employees, nor a threat to themainstream clerical work force.

Two other categories of home-based officework have always been relatively common. Thefirst includes the clerical and managementaspects of home-based sma ll businesses tha tmost often involve crafts, personal services,and professional practices. In most communi-

ties, there are many such home-based commer-cial activities, even where they are officiallyforbidden by zoning la ws a nd other local leg-islation. Anoth er k ind of home-based work is‘‘over flow, work brought h ome to be doneoutside of regular office hours. An AT&T sur-vey in 1982 concluded that in 16 percent of households there is at least one person whofrequently brings work home–possibly asma ny a s 30 per cent of all employed people.

Few people doing office work at home, inany of these categories, have until recentl:y

been using sophisticated technology. TheAT&T survey found that most people bring-

“Robert E. Kraut (13ell Communications Research), “Tele-work: Cautious Pessimism, a presentation at the National Re-search Council’s National Executive Forum: Office Workst[i-tions in the Home, ” Washington, DC, Nov. 10, 1983, p. 3(manuscript, no date).

ing work home with them used only th e tele-phone, pencil and paper, and perhaps a calcu-lator. These, plus typewriters, are m ore th anlikely the most frequently used equipment forcottage industry offices as well.

Computers and telecommunication increase

the viability of home-based work and makeit possible for a significant portion of all of-fice work to be done at home. The informationthat is to be processed or generated, the in-structions for handling it, supervision andmonitoring of the work, interaction betweencoworkers, and distribution of the output cannow or at some future stage of technologicaldevelopment, all be done at a distance. In ad-dition, American households are becomingequipped with comput ers t ha t could be usedfor paid employment. By 1990, at least one-

third of households ma y have a PC a nd some

projections a re mu ch higher . ’z

Much of the interest in home-based work using computers arose, however, years beforethe technology was ready to allow it. In theearly 1970s, the need for conservation of gas-oline and the problem of growing air pollutionand congestion evoked much talk about thepotential benefits of decentralization of work.If or when these problems again become highnational priorities, they will surely act as apowerful stimulus for interest in h ome-basedoffice work.

“About 15.8 percent of American households have a com-puter in 1985, according to an estimate supplied to OTA byFuture Computing, Inc. (a division of McGraw Hill). This isbased on a total installed base of 15.4 million in 1985, expectedto rise to 38.8 million in 1990. They estimate that by 1990,32.9 percent of households will contain a computer.

THE STATUS OF HOME-BASED OFFICE WORK

How Many Home-Based Office of Labor Statistics’ projection.]3

But many of

Workers Are There? these estimates include those who only do cas-

Estimates of the number of home-based of-“’iHomebodies,” Forbes, September-October 1984, p. 10.

Joanne Tangorra, in an article, “Telecommuting,” Working

fice workers using electronic equipment at Woma n 7:1 1:52-54; quoted in Telecommuting, Advanced Sys-

presen t ra nge from 10,000 to 30,000. The most terns Laboratory, Wang Laboratories, Inc., educational brief,

frequently used estimate is 15,000, the Bureau1984, p. 6, says that the number of full-time home-based, com-puter-based workers is only 1,000.



ual or “overflow” work.14

Probably there areonly between 3,000 and 5,000 people who aredoing office work, using microelectronic equip-ment, in their homes for outside employers orclients, and most of these began only in thelast 4 years.

While there was much discussion of “tele-commuting’ during the oil crisis there was lit-tle or nothing in the literature discussing realexperience or examples.

l5A survey in 1970

identified few home-based workers using com-put ers. ” But some corporat ions had alreadybegun formal home-based work programs inthe United States and in other countries. Thereare now at least 40 such program s in the Un itedStates. That could amount to only a few hun-dred people. But t here m ay be at least 3,000home-based workers in zOO companies that lessformally allow employees to choose to work at home.17 This does not include man y peoplewho work at home as contractors or free-lanceworkers.

How Many May There Be

in the Future?

Some enthusiasts, such as Alvin Tofiler saythat there could be as many as 15 million home-based white-collar workers by 1990. ’8 This isloosely based on the estimate that 15 millionof today jobs could be moved to remote loca-

tions.

19

‘Jack M. Nines, University of Southern California, “AnO\erview of Office Workstations in the Home, ” presented atthe National Executive Forum: Office l?’orkstations in theHome, National Academy of Sciences, J$’ashington, DC, Nov.10, 1983.

‘ Ibid., pp. 1-2.“Joanne H. Pratt, “Home Teleworking: A Study of Its Pi-

oneers, ” Technological Forecasting and Social Change 25, 1-4,1984, p. 1.

-Patrick Honan, “Telecommuting, W’ill It J$’ork For You?”Computer Decisions, June 15, 1984, p. 89.

“Quoted in 13reathnach, op. cit., and elsewhere.‘An estimate by economist E;lisabeth Allison of Data Re-

sources, Inc., quoted by Judith Gregory, op. cit., p. 3, and Busi-ness 1$’eek, “If Home Is k$’here the N’orker Is, ” May 3, 1982,p, 66,

Ch. 7—Home-Based Automated Office Work q 193

Others project 5 million to 18 million home-based workers (up to 18 percent of the white-collar work force) using computers by 1990.

20

One estimat e is tha t 50 percent of all white-collar workers, or 26 million people, could dotheir work at home using computers.

21There

are similar estimates in other industrializednations. For example, one organization hasforecast that by 1990, 40 percent of people inBritain could be working at home.

22

All of these highly unlikely estimates (someof them even presented as projections, or atleast possibilities for the future) assume, ex-plicitly or implicitly, that some driving trendswill continue or that some existing constraintswill be eased. Factors most often mentionedas encouraging the growth of home-based work are lower equipment costs, the growth of elec-tr onic mail system s, impr oved t echn ology forlinking the home and central office, rising en-ergy costs, stable or decreasing communica-tion costs, and renewed inflation (which tendsto increase the demand for part-time workersor an externalized work force).

Some long-range social and demographictr ends seem to make it likely th at more peo-ple will be willing or eager to work in theirhomes in the future, or will see it as their onlyway to earn a necessary income. Married wom-en increasingly want an independent incomeeven when they choose the traditional role of

housewife; in the absence of alternative provi-sions for child care they may be forced to com-bine work with family duties. The same choiceor lack of choice may face people who mustcare for elderly relatives. Large numbers of

“’See for example, Lad Kuzela, “Office Old-Fashioned?” lrJ-dustry Week, Oct. 19, 1984, p. 71; and Sally Jacobs, “Workingat Home Electronically, ’ New England B usiness, May 21, 1984,p. 15, for summaries of recent forecasts and projections. Inthe Kuzela article, Dr. Jack Nines of the University of South-ern California is quoted as saying that under different sets of conditions the number of telecommuters in California, by theyear 2000, could range from 300,000 to 8 million.“R.C. Harkness, Technology Assessment of Te lecomm un i -

cations-Transportation Interactions, Stanford Research I nsti-tute, Menlo Park, CA, 1977.

-Business Equipment Trends 1983 / 1 984, compiled byKern/Ferry International for Beta Exhibitions I,td., quoted inB. C. 13urrows, “Information Technology-Its Impacts on Prop-erty Development, I.ong Range Planning, vol. 17, No, 4, Au-gust 1984.



194 q Automation 0f America of f ices

retired workers want or need a way to supple-ment retirement income on a part-time basis.Handicapped people seek the self-reliance thatcomes from an earned income. Many peoplesimply like th e idea of more flexibility in t heuse of their time, or wish to live in rural areasbut are reluctant to spend large parts of theday commuting.

However, many observers are skepticalabout the likelihood that home-based work willexpand greatly .23 The conventional office hasproven to be a rema rka bly useful an d sta bleinstitutional structure.

24It h as four valuable

characteristics that cannot be matched byhome-based work: the presence and coopera-tion of coworkers, its role in socializing theworker to the corporation an d its u nique cul-ture, the prevalence of informal communica-tion networks, and m echa nisms for str uctur-

ing the allocation of time. The office is alsoa major focus of social and recreational activi-ties for many workers.

The central office provides economies of scalein capital equipment acquisition, communica-tion and cooperation of coworkers, access tocentr al files and r eference mat erial, and th esupporting su perstr ucture of superior/subor-dinate relationships.

25Some of these benefits

are lost or attenuated with dispersion of thework to other locations. If home-based work threatens to disrupt established corporate cul-

ture, employers are likely to choose insteadto increase productivity by further automa-tion within the office.

26

. .——— .. —-.

-’Margrethe Olson has surveyed corporations experiment-ing with work-at-home programs in 1983-84 and concludes that‘.

. . . while there is continuing interest in the prospect, thereare no significant trends toward shifting large numbers intotheir homes either part or full time. ” (Margrethe H. Olson, NewYork University, “Working at Home and Telematics: Mythsand Realities, ” a presentation at the Office Automation Con-ference, Convention Center, Los Angeles, Feb. 20-22, 1984.)

-’Robert E. Kraut, Bell Communications Research, “Tele-work: Cautious Pessimism, a presentation at the National Re-

search Council’s National Executive Forum: Office Worksta-tions in the Home, Washington, DC, Nov. 10, 1983, pp. 17-18.

-’Steven S. Kawakami, Institute of Labor and IndustrialRelations, University of Illinois, “Electronic Homework: Prob-lems and Prospects From a Human Resources Perspective, ”September 1983, p. 14,“Kraut, op. cit., p. 19.

There are other factors that may well retar dthe spread of home-based office work. Man-agers and supervisors sometimes oppose it,because it calls for entirely new techniques of supervision, instruction, and quality control.Home-based workers frequently report thatthey are resented by coworkers who do notha ve that privilege.

27Many work-at-home ar-

rangements depend heavily on telephone lines;if there is a significant increase in local tele-phone rates, home-based work may be less at-tractive to both employers and employees.’

s

(In some cases, telephone costs are borne byth e home worker.)

Finally, it is generally assumed t hat furt herdevelopment of information and communica-tion technologies will tend to encourage home-based work. It is also possible however thattechnological development may make some of

it superfluous. If the use of optical scanningdevices eliminates the need for much of today’smass dat a ent ry, a large port ion of th e work now done at home may be eliminated.

Mechanisms for Home-Based Work

Work at home can be supported either byan organization or by independent, free-lanceactivity. The worker, in other words, may bean employee, or may be self-employed.

A corporation may have a formal program

under which selected employees are offered theoption, or employees may request home-basedwork (often under the condition that a super-visor also has the option of refusing to agreeto it). Other corporations informally allow in-dividual worker s to negotiate t he pr ivilege of working at home, either full time or more oftenpart time.

Most employed home-based workers havepreviously work ed for t he sa me emp loyer on-site. But some corporat ions ha ve set up pro-grams to hire workers not otherwise available

to them or able to work, e.g., handicappedworkers, mothers with small children, or subur-ban housewives.

--Pratt, op. cit., p. 7; Jacobs, op. cit., p. 19.“Honan, op. cit., p. 96.



in the home for this purpose. Sometimes a dedicated leased line is necessary for security.Other workers use personal computers or stand-alone word processors, dictating machines andprinters.

33

There ha ve been problems with equipment

in some programs, but by most accounts tech-nological problems have been minimal.

34Th e

equipment may be owned and installed by theemployer, and either lent or rented to theworker. The worker may own or lease her ownequipment .35 Blue Cross clerical workers inNorth Carolina, for example, pay their em-ployer $2,400 yearly rental for use of theirequipment.

36 On the other hand, an employerin the Netherlands pays home workers an ex-tra 2,000 guilders per month to cover the costsof operating a terminal at home.

37

What Work Can Be Done at Home?

One of the most likely kinds of office work to be done at home is professional work thatinvolves only one person’s creative activity(programming, writing reports) or contactsusually carried out by telephone (sales, broker-ing). A second kind is clerical activities thatare unitized, repetitive, and routine.

38Data en-

“In Pratt’s recent study of 59 home-based office workers,57 percent of the equipment was employer-owned terminalscommunicating with mainframe computers in the office; 31 per-

cent was stand-alone computers; and 12 percent was stand-alone word processors usually not equipped for communica-tion. Pratt, op. cit., p. 5.

“However, according to Elizabeth Carlson, second vicepresident of personnel, as quoted by Honan, op. cit., p. 96, Con-tinental Illinois curtailed its program in 1980 and again in 1981,“waiting for vendors to come out with usable equipment. ”

‘“In most of the formal corporate programs that Olsonstudied, the employer paid for installation of equipment andmonthly telephone charges; in one program employees rentedequipment from the company. Olson, op. cit., August 1983, p. 10.

““If Home Is Where the Worker 1s, ” Business Week, May3, 1982, p. 66.

“Richard J. Long, “The Application of Microelectronics tothe Office: Organizational and Human Implications, ” NigelPercy (cd.), The Arrnagement Implications of New Informa-tion Technology (London: Croom Helm, 1984), p. 106.

‘“In one study of corporate pilot programs, it was foundthat they had targeted either clerical workers, with the objec-tive of cutting overhead costs, or professional workers, in theinterest of retaining valued workers who demanded the privi-lege of working at home. These were distinct objectives andquite different kinds of pilot programs; no corporations hadboth types. Olson, op. cit., 1983, p. 7.

try and word processing can be monitored andmeasured electronically, computer checked forerrors, and pa id as piecework. Raw dat a a ndfinished work can be physically transportedbetween office and home in batches, or canbe sent by telephone. Whether professional or

clerical, this work usually does not requiremuch face-to-face supervision or collaborativeeffort between coworkers in real time.

Supervisors are least likely to be able to work at home and th ere ar e now only a few firmswhere t hey do so. This may chan ge in t he fu-ture with the spread of electronic mail, com-puter conferencing, PBX, and other electronictools that make possible cooperative document-handling and reduce the need for frequent in-teractions with coworkers.

39However, the ex-

tent to which supervisors will be inclined andwilling to replace face-to-face interaction and

supervision with electronic communication re-mains to be seen.

Financial and computer service corporationshave been most likely to experiment with work-at-home programs. Metropolitan Life, ControlData Corporation, National Bank of Chicago,Continental Illinois, Southern New EnglandTelephone, Seybold, and Aetn a Life and Cas-ualty Company have started such programs,although some of these have been terminatedor suspended.

40Small new companies have also

experiment ed with t he scheme. Few or n one

of the programs have been found in old, tradi-tional industries.

There is strong interest in work at home inother countries, but the movement has beenstrongest in t he United Stat es. In England,early enthusiastic projections of “electroniccomm ut ing” were n ot met , largely becau se of the high costs of telephone lines.

41In France,

there have been a number of experiments withworking long distance from small neighbor-hood centers rather than homes. The nationaltelecommunications authority, which spon-

sored these programs, made an explicit policy —— . — .“Olson, op. cit., August 1983, p. 7. .4“Honan, op. cit.; Jacobs, op. cit.; Wang Laboratories, op.

cit.“Ursula Huws, The New Home Workers (London: I.ow

Pay Unit, pamphlet No. 28, 1984), pp. 14-15.



—

decision that home-based work would be tooisolating. These experiments have generallynot been successful and most of the workersdropped out . ” However some pilot p rogram sfor h an dicapped workers a re n ow un derway.Sweden has also experimented with neighbor-

hood work centers, and there is reported tobe much interest, bu t little experience, withworking at home.

43 44

One multinational software company basedin Britain, with subsidiary offices in Denmark,

Ch. 7—Home-Based Automated Office Work . 197

Holland, and the United States, is deliberatelystru ctur ed so tha t n early all of its workers a rebased at home. These are computer profes-sionals, and in Europe, 96 percent of them arewomen with small children, and 95 percentwork ent irely at h ome. In th e United Stat es,

70 percent of the company’s employees arewomen, and 50 percent are fully home-based.The workers agree at the outset, they willsteadily increase both their working hours andcommitment to the company and career, astheir children mature.

45

‘lt)id., p. 19 .“Ibid.“lklonica I+jlling, Swedish Center for W’orking Life, Stock-

holm, “Remote J1’ork Telecommuting, ” presentation at IF IP-Conference on “}f’omen, 11’ork, and Computerization, ’ Ri\’adel Sole, ltal~’, Sept. 17-21, 1984.

. ———‘ Huws, op. cit.: and Nlarsha Johnston Fisher, “Firm Turns

Telecommuting Into a Realit~’, ” A l I S , No\ ’. 28 , 1 9 8 4 .

PARTIES AT INTEREST

Employers

Employers who offer home-based work haveat least one of four possible objectives: re-sponse to employee demands, social responsi-bility, access to an untapped labor pool, or costcutting. The last is apt to be the critical factorfor the future spread of home-based work.

Some corporations have begun home-basedwork programs, or allowed the option in indi-

vidual cases, to hold on to particularly valuedworkers. Some allow workers on retirementto continue part-time work from their homes.Others such as Control Data Corporation andMetropolitan Life began programs in order tooffer employment to handicapped workers.

46

A few corporations are reported to be turn-ing to home-based work as a way of recruitingotherwise unavailable but highly qualified work-ers, such as mothers of small children, or subur-ban housewives.

47Critics say that they are

trying to avoid hiring poorly educated urbanminority workers.

“ Ilonan, op. cit., pp. 88-91.‘

-Pratt, op. cit.

The strongest motivation for offering home-based work in the future is, however, likelyto be the possibility of reducing costs. The em-ployer saves money in terms of:

q floor space and associated overhead costs,q equipment costs (in some situations),

direct labor costs, andworkers’ benefits.

The office needs proportionately smaller fa-

cilities, with all of the reduced operating coststhat entails, if many of the workers are athome. There workers pay for their own floorspace, heating, cooling, and amenities; in somecases, they own and maintain the computerand other equipment. In effect, these costs areshifted to the workers.

If the workers use terminals to communi-cate with th e employer’s centra l computer , theemployer benefits by the more intensive useof the computer because workers often use it,and can even be r equired to use it, outside of peak h our s. For example, in a pilot program

run by the Army Materiel Development andReadiness Command, there was a 64 percentincrease in computer usage without additionalcost. Three homebased employees were shiftedto second and third shifts. The percentage of work time that the remote employees spent



198 q Automation of America Offices —

on-line also increased by an average of 93 per-cent.

48

Home-based clerical employees are oftenpaid less than their peers in the office, althoughthis is not always the case.

49If the workers

are paid piece-rates, the employer is not pay-ing for set-up time, time spent in collectingor delivering work, coffee breaks, bathroombreaks, discussions with supervisors, chatswith coworkers, or any of the other unproduc-tive time that office work includes. The orga-nization can define the work by task and payonly when it is satisfactorily completed.

The em ployer’s biggest cost sa ving ma ycome from flexibility-workers can be usedwhen needed and not used when work is slow,without the difficulties of firing and rehiringor the expense of unemployment compensa-

tion. This-is a great advantage for a companywith a highly uneven workload. It means, how-ever, tha t t he worker does not h ave a steadyincome .50

Many homebased workers received no bene-fits—health insurance, sick leave, vacations,pensions, etc. Of 14 corporate programs stud-ied in 1983, for example, the 6 designed forclerical workers shifted their status from full-time to permanent part-time workers, in whichcategory workers-did not receive benefits.

5

Those classified as independent contractors

are generally not eligible for unemploymentinsurance benefits when not working. Home”based employees and independent contractors

“Mary T. McDavid, “The ALMSA Work-at-IIome Prototype, ” presented at the National Executive Forum: Office Work.stations in the Home, .National Academy of Sciences, Wash-ington, DC, Nov. 10, 1983.

‘qContinental Illinois, for example, paid at-home workers

the same salaries paid to in-office workers, expecting that cost-reduction would result from reduced need for office space. Ho-nan, op. cit., p. 96.

“’’Business Week reported in 1982, for example, that “Aet-na plans to pay telecommuters by the project and to use themonly for ‘peak work, ’ leaving them without a regular salary.They will also be ineligible for health and pension benefits. ”

Blue Cross home-based data enterers are excluded from bene-fits, which for office-based workers amount to $2,000 to $3,000.The company says that those at home earn “up to $3,oOO ayear more, ” but they also pay $2,400 rent for their terminals.“If Home Is Where the Worker Is, ” Business Week, May 2,1982, p. 66.

“’Olson, op. cit., August 1983, p. 11.

studied by OTA for this project did not re-ceive any employee benefits. Entrepreneurshad purchased their own health insurance andretirement plans.

52

It has also been suggested that union-busting is, or will be, a motivation for someemployers. At pr esent , few office worker s be-long t o unions, a nd home-based workers ar elikely to be even more difficult to organize thanother office workers. The low pay for home-based clerical workers, especially piece-rates,could act over the long run to depress the payof th e ma in clerical work force. Critics a rguethat employers might use the threat of ex-panded homework programs to undermine at-tempts by office workers to organize.

In spite of seemingly significant benefits tothe employer, many companies resist the con-

cept of work at home. It involves a significantcha nge in t raditional techniques of mana ge-ment and supervision, and managers fear aloss of control over quality, quantity, and pac-ing of the product. The workers themselvessometimes complain of poor instruction anda lack of feedback from managers.

53

P r oduc t iv i ty

Almost without exception, studies show thathome-based workers are more productive thanthose in the office. Estimates of the increased

productivity of home-based workers range fromControl Data Corporation’s estimate of 15 to25 percent to other estimates of up to 60 per-cent

54and even 80 percent

55for some work-

——--_———“Christensen, op. cit. Most of the home-based workers

studied in depth were, except for those who were active en-trepreneurs who owned their own business, regarded by theircompanies as independent contractors. Since they each workedonly for one company, in most cases had been regular employ-ees until they took maternity leave, and had been approachedon the question of working at home in each case by the com-pany rather than themselves soliciting home-based work, theyprobably should still be regarded as employees.

‘ ‘Pratt, op. cit., p. 6.“’R.A. Manning, Control Data Corp., “Alternative Work

Site Programs, ” a presentation to the National Research Coun-cil’s National Executive Forum: Office Work Stations in theHome, Washington, DC, November 1983.““In a study of about 1,000 home-based workers by Elec-

tronic Services Unlimited, reported in Jacobs, op. cit., p. 15.



Ch. 7—Home-Based Automated Office Work q 199 . — .

ers .56

In part, this is an artifact of measure-ment. With home-based workers, only actualworking minutes are counted. In the office,there is a considerable amount of “wastedtime” th at is so fragmen ted th at it is not no-ticed. However, many experts believe that

much of this “wasted” time is in fact spentin informal help and support to other work-ers, or in the exercise of “invisible skills’ ben-eficial to the company .57

Home-based workers who were interviewedfor OTA said tha t t hey did not bill their em-ployers for extra work they did in correctingmista kes. Some did not request payment for,or even report, hours that they put in on aproject over and above the time that had beenestimated as required, feeling that they shouldhave been able to work faster–even thoughthese estimates of required time had been madeby the employer rather than by themselves.This kind of self-exploitation maybe commonamong those for whom home-based work isnew and regarded as a rare privilege, andshould be taken into account in assessing thereport s of high p roductivity .5*

Workers themselves tend to attribute theincreased productivity to their control overtheir schedule, their ability to work when theymost feel like working. In part, the additionalproductivity probably results from the factthat home-based workers are carefully selected,

highly motivated, and working in an environ-ment chosen and designed by themselves.

Some observers argue that all of these ef-fects a re tr ansitory an d will disappear when

‘ hlc~at’~d, op. cit. Nines concludes that gains of 20 to 50percent are common. (,Nilles, op. cit., p, 3.) In one group, 6’7percent of the workers perceived their own productivity, aswell as the qualit,y of their work, to have significantly increased.(Pratt, op. cit., p. 5.) In another study, workers reported theirperceived increase in producti~’ity to be 35 percent on the aver-age, with the self-reported range from 5 to 100 percent.

In;risible skills are important aspec~s of the job that arenot specified in job descriptions but make the worker traluableto an organization: for example, a secretar~’ chatting hospita-

bly with important \risitors, or a word processor showing co-workers features of the equipment that they have not yet dis-co~’ered,

‘Christensen notes that this response was typical for theemp loj’ed home workers, but that it was not typical for en-trepreneurs who had clear ideas about the \’alue of their timeand priced services to be competiti>’e with similar businesses,

the novelty of working at home is gone, andwhen less highly motivated or selected work-ers are involved. The cross-fertilization andmutual support that occurs in an office work-ing group are valuable. Workers learn fromeach other on the job. When there is no chance

to do this, productivity y may suffer in the longrun.

The Workers: Why Are They

a t H om e ?

Because the number of home-based work-ers is uncertain, their characteristics-age,gender, occupational status, etc.—cannot bedescribed quantitatively with confidence. Cer-tain groups are thought to be represented farout of proportion to their number in the totalwork force—women, single parents, the hand-

icapped, and retirees.

59

Professional home-based workers includeboth men and women; the clerical workers areoverwhelmin gly women , and t he evidence in-dicates th at most ha ve one or more childrenunder 6 years old.

60This is true in other coun-

tries as well as in the United States. The typi-cal home-based white-collar worker, then, isprobably not a male professional, but a youngmother doing clerical work.

61

Most of the home-based clerical workers arewomen because: 1) most clerical work ers a re

women, and 2) women are most likely to beresponsible for care of children, the elderly,—

‘“An analysis based on the 1980 census suggests that of people regularly working at home (but not necessaril~’ doingoffice work or using computers), 57 percent were women com-pared to 43 percent of those working outside the home. (RobertE, Kraut, in on-going analysis, communication of Dec. 20. 1984.)

‘“ Among those who volunteered to be interviewed b)’ 0’rAcontractor Kathleen Christensen there were two groups, roughl~.equal in size. Those who were in effect employees (althoughcalled independent contractors they worked only for one orga-nization, usually their employer before they took maternit~’leave) were all women in their thirties, married or with part-ners, and with small children. Those who were entrepreneurs.with their own companies and seeking multiple clients, weretypicall~’ older, single, with no small children. An as-~’ et-

unpublished survey of se~’eral hundred home-based workers con-firms this finding.‘‘Nlost home-based women workers with children under 17

are clerical workers, according to a major sur}’ey: Kathleen h;.Christensen, “National Survey on 14’ornen and Home-Based1$’ork ” F’amilJF C’ircle,Dec. 15, 1984 (publication of results inprogress).



200 Automation of America’s Offices — — . — —

or th e ill.62

Women are probably also most like-ly to need additional income after retirement,because they live longer than men, and are lesslikely to have adequate pensions.

Most if not all home-based workers are nowworking at home by choice, in the sense that

other jobs are available and no employers areknown to require working at home as a condi-tion of employment. In most cases, the demandfor home-based work has so far come from theworkers, not from employers, who are oftenreluctant or at least hesitant to provide thisoption. But this m ay already be changing, asorganizations become aware of the cost-savingpossibilities.

63

“Choice” in any case has a wide range of meanings. In some cases, it means that otheroptions are not available, or are less attrac-

tive to a worker for reasons over which shehas little control—staying at home is neces-sary because of other responsibilities, becauseof social inhibitions (the traditional housewife’srole), or because of physical disability. Often,however, the person has first decided that heshe want s to stay at home and care for a fam-ily; the opportunity to do paid work at homeis a secondary choice that is not a critical fac-tor in the first decision. Other people simplyprefer a lifestyle that does not include goingto an office, at least not at an y preset t imes.

These people who have actively soughthome-based work as part of a new lifestyle aremore likely to be th e professionals (includin gmales) simply because professionals usuallycan exert more control over the conditionsunder which they earn a living. Corporationsfrequent ly report th at th ey have formally orinform ally provided the option in order to re-tain valued employees. —.——

“’While women constitute 80.5 percent of all clerical work-ers, they are even more dominant in clerical occupations mostlikely to include home-based work. For example, over 96 per-cent of typists are women, but less than 23 percent of shippingclerks. Kraut, op. cit., p. 5.

“’The group of 13 “independent contractors” who workedonly for one client included nine former employees of an insur-ance company, who had been offered work to be done at homewhen they applied for maternity leave. Four others were house-wives who had each been asked to do work at home by friendsor husbands who were the proprietors of small companies.Christensen, op. cit.

Many of these professionals believe howeverth at home-based work, especially if done fulltime or nearly full time, seriously prejudicesth eir chance of promotion and advancement.They have consciously traded-off advancementfor a preferred lifestyle.

64Women managers

especially tend to believe that this choice isparticularly prejudicial to their careers; somehave done it in preference to dropping out en-tirely when th ey became m others, and in or-der to maintain their expertise and credentialsuntil they could return to work.

65

Those who look for home-based work reluc-tantly, because they must beat home, are morelikely to be clerical workers.

66They are less

likely than professionals to be able to affordprofessional child care or specialized transpor-tation for the handicapped. But even for thesepeople, the opportunity to work at home may

be cherished, in contrast to not working, orworking under less desirable conditions.

It is therefore not surprising that overwhelm-ingly home-based workers are pleased withtheir situation. This must be kept in mind whenevaluating the implications of home-based of-fice work. Controversy over home-based work does not arise from the dissatisfaction of thecurrent home-based workers themselves, butfrom the possibility of future exploitation.

The Benefits and Costs for

Home-Based Workers?

How workers assess the relative benefits andcosts to them of working at home undoubtedlydepends on the degree to which they exercisedfree choice from a wide range of employmentoptions.

All studies, and all journalistic accounts of home-based workers, indicate that most valuethe opportunity to control their own work hours. Many report that the quality of theirleisure time is also improved because they can

select and schedule recreational activities that

“Pratt, op. cit., p. 7. See also Breathnach, Honan, Jacobs,Olson, op. cit.‘“’Pratt, op. cit., p. 11. Also substantiated in Christensen,

op. cit.“For example, see Olson, op. cit., August 1983, p. 17.



. —

are not otherwise available. Many of them findthe home a congenial and comfortable work-ing environment; th is is not always th e casefor th ose who are combinin g work with childcare in crowded living quarters. Many valuehighly, the additional time spent with their

families, or the latitude to spend more day-time hours with family. The opportunity tocare for children at home rather than havethem cared for by others is the primary bene-fit for many people.

It is not always true, however, that work-ing at home allows the worker to control whenhe or she works. The home-based worker in-deed often has a double const raint , having tofit work around family needs and the timeswhen the company computer is down, such ason Sundays. Thus, they may have as little con-

trol as office workers over when they work,and they may even lose some of what is usu-ally considered family time.

Cost savings can be significant for some whogive up work in an office. Workers have re-ported savings up to $200 per month for meals,

$100 for gasoline, parking, and insurance; $100for clothes and cleaning bills. Large costs of children’s day care may be avoided.

67Those

who are ent repreneu rs a void th e cost of out -side office space and take tax deductions forthe use of their home.

Eliminating the commute to work is forman y a pr imary benefit. The average Amer-ican worker now travels over 9 miles in eachdirection, often a 1- to ‘2-hour commute.

68Th e

time and the stress spent in commuting is oftenresented even more than the cost of gasoline,insurance, car maintenance, and parking.

These cost savings of working at home donot tell the whole story. There are also addedcosts, both direct and indirect. Some workersmust lease or buy terminals. Most pay the tele-phone bills and some must pay for special dedi-

cated telephone lines. Workers generally pro-vide the furniture that they use in connectionwith t he equipment . They pay higher electr i-

‘ Pratt, op. cit., p. 5.‘‘hlotor }’ehicles hlanufacturers Association, Facts an d

Figures, Detroit, hl I, 1981.


city bills because of the equipment, and somereport additional heating

-and cooling bills.

69

Clerical home workers almost always earnless than their peers in the office, even withinthe same firm.’” Sometimes the pay rate is tech-

nically the same, but those at home are shiftedto part time or piece rates without fringe ben-efits. They usually work fewer hours than thosein offices, either because work is not regularlyavailable, because of their home-related duties,or by choice.

Part-time and piece-rate home-based work-ers usually report that their workload is veryuneven.” (For employers, the flexibility of la-bor supply is a major benefit.) The lack of aregular income can be as much of a problemas is low pay; those who are dependent on in-come from home-based work may live balancedon the edge of financial disaster.

Health insurance coverage becomes a major problem for those converted to the statusof independent contractor or part-time worker.The majority of home-based workers may becovered as dependents by the health insuranceof spouses, but th e separ at ion from employeestatus leaves others to pay the high costs of individual coverage or be without protection .72

“4Pratt, op. cit.; and Honan, op. cit., p. 97.“See for example, Olson, op. cit., August 1983. Other case

studies of home-based clerical work have consistentl.v found

that home-based workers make less than peers. However, somepreliminary analysis by Robert Kraut at Bell CommunicationsResearch, shows higher hourl~’ wages for home-based workersin a few clerical categories as compared to those not workingat home.

Reduced income is typical of the larger category of all work at home as compared to work away from the home. Accordingto the 1980 census, 10 percent of home-based workers are be-low the poverty line, compared to 6 percent of other workers.Male home-based workers have an average hourly wage of $6.77compared to $8.20 for nonhome workers; women home-basedworkers have an hourly wage of $3.06 compared to $4.80 out-side the home. In addition, home-based women workers a\’er-age 30.6 hours work per week compared to 40.2 for those work-ing away from home, 35 for male home-based workers, and 41.6for other male workers. There may be several variables invol~edin this phenomena.

Pratt (op. cit. ) also reported that many retired people foundhome-based work not worth their effort because of the low pa~,even though many enjoyed ha~’ing some work to occup~. theirtime.

“ Pratt, op. cit., p. 10.“-Among those interviewed b>’ Christensen, independent

contractors working for one client were cotrered under a hus-




and self-respect (and respect from others) thatis lacking otherwise.

84

In the few cases where effects on the mar-riage, or other personal relationships, of home-based women workers have been studied, most

husbands were said by their working wivesto be supportive and helpful—sometimes be-cause th ey welcomed t he su pplemental fam-ily income, sometimes because they recognizedits psychological importance to the worker,sometimes for both reasons. A few husbandswere said to have mixed feelings, perceivingthat work sometimes interfered with house-work; none were reported to be activelyopposed.

Most of the women said, however, that theirhusbands helped no more with housework than

they had before. The women had been, and stillwere, predominantly responsible for the house-hold work, and a few spontaneously expresseddissatisfaction or resentment of this. Mostwere unable to draw boundaries between house-hold and work responsibilities, and move back and forth between them during the day.

Even t hose home workers without childrento care for often report significant stress re-sulting from the lack of separation betweenwork and family responsibilities. Saloman andSaloman, in a paper on home-based work fromthe perspective of the sociology of work, pointout that :

Work and family life today are not onlyphysically separate entities, but each also givesrise to distinctly different role behavior thatmay have little in common. It is not only thatthe two different environments require differ-ent behavior, but that they also offer the indi-vidual a chance to express different aspectsof his or her personality .85

Sociologists define a‘ ‘role’ as a set of struc-tural demands being placed on the individual

——. —

“’Ibid., citing D.T. Hall, “A Model of Coping With RoleConflict: The Role Behavior of College Educated Women, ”

Administrative ScienceQmrterl .v 17 (4), 1972. See also J. Pleck,“The Work-Family Role System, Social Problems 24 (48), 1977.

in a given social position.86

Role conflicts canresult when the deman ds and expectat ions im-posed by multiple roles operate at the sametime. Working at home, the Saloman s ar gue,can introduce identity conflict as it eliminatesthe sequential operation of the different roles

related to home and work. For men, it has nor-mally been “acceptable for work (to) interferewith family life”; at h ome, th e reverse int er-ference may happen more often. For women,who may have more social inhibitions to over-come in establishing a career role, the conflictmay be pa rticularly severe when th e roles of mother, wife, housekeeper, employee, and ca-reer aspirant overlap in time and space.

These sociologists say that the trip betweenwork and home is often a useful separationbetween two arenas of social interaction. Thus,

eliminating the commute may be a cost as wellas a benefit.

Effects on Society

Workers and employers are part of one soci-ety and the interests and concerns of each arepart of the public interest. But society at largemay have a general interest separate from thespecific concerns of either party.

In t his case, some of th e costs th at ar e or-dinarily borne by employers or shared by em-ployers and employees are shifted to workers—for example, in the case of independent con-tractors, social security taxes, health insur-ance, pensions, and the costs associated withperiods when the workload falls below normallevels for long periods of time. For people whoare not employed, those costs ultimately maybe borne by the taxpayers. Thus, a strongtrend toward farming out work to “independ-ent contractors’ who were previously, or wouldother wise be, employees, also implies a sh iftof life-cyle costs from the employer to the gen-era l public.

“’This was a theme that recurred repeatedly in the inter-views conducted by Christensen.“’Ilan Saloman and Meira Saloman, op. cit., pp. 15-18, 21.



—

Ch, 7—Home-Based Automated Office Work . 205

LEGAL AND REGULATORY BARRIERS TOHOME-BASED WORK

Zoning laws in some communities prohibitany paid employment in residential areas.

87Th e

Int ern al Revenue Service (IRS) ha s in r ecentyears progressively restricted the income taxdeductions t ha t m ay be t aken for home offices.It is not clear under what conditions home-based workers can claim deductions, especiallyif th e workspa ce th at th ey use is not ent irelydedicated to work (many home-based work-ers use a corner of the dining room, bedroom,or living room). But when there is dedicatedspace, a recent IRS ruling says that the homeoffice is to be treated as business propertyrather than residential property, and thus partof the proceeds of selling a house that includes

a home office are not eligible for the standardexclusion from tax on the proceeds allowedto people who immediately buy another house,or who are over 55 when they sell the house.

8s

There have until recently been unresolvedquestions about the status of home-based “con-tractors’ who contract with only one organiza-tion, especially, if th ey ha ve previously beenemployees of that organization. The NationalLabor Relations Board has ruled, in similarsituations, that such independent contractorsar e in fact emp loyees. The t ax code says t ha tan yone wh o perform s services for an y personas a home worker, performing work accordingto specifications on materials furnished by theother person and required to return the fin-ished product to that person, is an employee.This holds unless that person has a substan-tial investment in facilities used for the work,in which case, he or she may be an independ-ent contractor.

89 The Inter nal Revenue Serv-ice has ruled specifically that computers withword processing capa bility a re not ‘‘ subs ta n-tial investment s’ in tha t sense, and th at home-

‘-Tammara H. Wolfgang, “M’orking at Home: The (jrowthof Cottage Industry, ” The Futurist, ,June 1984, p, 31.“’1’e]ecommuti ng Re$’iew, Dec. 31, 1984, p. 7.“ ‘Sec. 312 l(d) (3) (C) of the Internal Re\.enue Code.

based workers providing transcription serv-ices for one person or organization are employ-ees at least for certain tax purposes.

goThe ef-

fects of these rulings on home-based clericalwork are not yet fully apparent. It will openthe door for home-based clerical workers, if they choose, to argue that they are employ-ees, even if regarded by their client as con-tr actors, and t hu s, entitled to certa in workerbenefits and safeguards.

Government work-at-home pilot programshave been frustrated or terminated becauseof regulatory requirements. The pilot programof the Army Material Development and Read-iness Command wanted to use either direct

lines or telephones with a modem to connecthome-based workers to the central computer.The Army Commu nications Command deter-mined that for the government to provide tele-phone service to a home violated a Federal stat-ute;

91but employees could not use their own

telephones because another statute” placedsome limitations on government acceptanceof voluntary services from individuals.

93Th e

problem was solved by installing direct lineswithout voice capability; a legal opinion sanc-tioned occasional use of the employee’s homephone to communicate with a supervisor.

This introduced a second problem: how toprotect the government if personal propertywas damaged as a result of installing the com-munication lines or the use of government-owned equipment. This was solved by requir-ing employees to sign a “hold harmless’ agree-ment with t he government as a condition forparticipation.”--

“’’Internal Re\’enue Ser\rice, Technical .4d\’isor?’ hl[~moran-dum 8451004, Aug. 1, 1984. Index nos. 312 1.04 -00,” 3306,05-00, 3401.04-00.

‘4 Stat. 32 U.S.C. 1348.

‘ Rev. Stat. 3679, 31 U.S.C. 1342.4’McI)avid, op. cit.“That is, an agreement not to hold the go\wrnment liable

for accidental damages,



206 q Automation of America’s Offices — — .

A third problem was the question of respon-sibility y for injury to the employee while work-ing at home. Workers’ Compensation (U. S. C.,title 5, sec. 8102) covers Federal employeeson duty, but the question was how to proveth at th ey were on dut y when th e accident oc-

curred. The solution to this problem was a writ-ten work agreement stating hours to be workedeach day; participants had to formally requestchanges to their designated work schedule andget a sup ervisor’s a pproval. This of courseeliminated one of the major benefits that work-ers typically see in working at home.

Finally, this program ended when govern-ment au ditors ru led tha t t here was a risk of fra ud or abu se in sp ite of electr onic monitor-ing of work done at home.

Some of these problems also appear in the

private sector, for example, the problems withthe installation of communication lines andquestions related to the protection of homeworkers from work-related injury or illness.Installing an additional telephone line in arented residence, for example, sometimes re-quires the permission of the owner. One studyof home-based corporate employees found thathalf of them h ad no accident insu ran ce, andmost “assumed” that they were covered byWorkers’ Compensation.

95It appears to be true

that home workers are covered by Workers’

Compensation if injured while working athome, and by th e employer’s insu ra nce planif injured at the same location while notworking-if the worker is covered by employeebenefits.

96In either case, how the worker is

to demonst rat e whether or not he or she wasactually working when injured, is so far unan-swered.——. . . —

“Pratt, op. cit., p. 8.“ Honan, op. cit., p. 91.

The more general question as to how Occupa-tional Safety and Health rules apply to home-based workers is also unanswered. Laws per-ta ining t o the u se of VDTS in t he office ha vebeen proposed in 13 States but it is not knownhow these will apply to home-based employees.”

A British document illustrates that thesequestions arise in other countries. Draft regu-lations proposed by the U.K. Health and Safe-ty Commission in 1979 says that:

Home workers, properly speaking, work forthe person who puts out work t o them in th esense that they contribute to products whichhe markets. For this reason, those who putout work to home workers bear the primeresponsibility for ensuring that, so far as isreasonably practical, no risks to health andsafety arise.

98

In the next paragraph however, clerical work-ers are expressly excluded: “The Commission,particularly in the absence of evidence of risk to home workers from these processes . . . pro-pose to exclude from t hese r egulat ions all of-fice type work u ndert aken in domestic prem-ises. ” The document continues:

It is important to reemphasize that any per-son requiring a home worker to utilize poten-tially hazardous processes in connection withclerical work is nonetheless bound by the re-quirement . . . to ensure that risk is controlled.

No further reasoning supporting the exclusionis given, nor a re “potent ially hazar dous proc-esses in connection with clerical work” speci-fied or defined.

“Gregory, op. cit., p. 2.““Health and Safety Commission, Home

Regulations, consultative document (issuedsion in compliance with its duty to consultof the Health and Safety at Work, etc., Act,

Workers: Draft by the Commis-under sec. 50(3)1974, 1979, p. 1.

PUBLIC POLICY ISSUES

Encouragement or P rohib i t ion of

Home-Based Office Work actively discourage or forbid it, or 3) take nei-ther action.

The primary public policy issue in home- Parties at interest include: employers, home-based office work is whether the Federal Gov.. based workers, th eir families, oth er workersernment should: 1) actively encourage it, 2) (especially clerical workers and working women



with children), and unions. The issue also tendsto engage people with an ideological positionregar ding home an d family valu es, equity forwomen , and alt ern at ive life styles. Society ingeneral has an interest, in that some poten-tial costs may be shifted to the taxpayer when

home-based workers are converted to the sta-tus of independent contractors.

Congress, and State governments, couldtake a number of steps to further encouragehome-based work, although these are probably

necessary. These include:

revising IRS rulings on independent con-tractors and relieving employers of sometax liabilities for them, for example, re-writing social security tax provisions;resolving the problems of applying work-ers’ compensation to work performed inth e home;persuading States to grant exemptionfrom zoning and building codes for com-puter-mediated employment in residentialbuildings;providing significant tax incentives forequipment purchased for home-basedwork; i.e., a tax credit rather than de-ductions; andclarifying and expanding tax deductionsallowed on home

-office;, especially pro-

viding large deductions when all or a sig-

nificant portion of family income is earnedin the home (this would benefit somehome-owning workers).

If public policy is to discourage home-basedoffice work—or more narrowly, home-basedclerical work—the clearest option is to prohibitit, as wa s done for s ome oth er occupa tions inthe 1930s. However, this would require verycareful definition to limit the prohibition tothose kinds of office work that are subject toexploitation. The prohibition would very likelybe seen, even by some of those it was designed

to protect, a s discrimina tion against women(who would be mostly affected) or against cer-tain occupational and income groups.

There are a few ways to discourage thespread of home-based work that are largelythe converse of options for encouraging it:

q

q

q


strong enforcement of the rules requiringorganizations to treat independent con-tractors in some situations as employees,with full benefits;placing a special tax on income derivedfrom services provided from homes, for

both the employer and the employee; andhigh telephone rates for digitalized infor-mation transmitted between office and re-mote workers, which would run counterto present policies of deregulation.

Other government actions are possible thatwould both: 1) tend to discourage the spreadof home-based clerical work , an d 2) enh an cethe element of free choice for home-based work,thereby reducing the possibility that it willbe used exploitatively. These actions are:

q developing subsidized, high-quality day

care centers for children of working parents;q providing larger tax deductions for ex-

penses related to child care (or the careof elderly or infirm dependents); and

q requiring or providing further significantincentives for modifying transportationsystems and office environments to facili-tate employment of the handicapped, andproviding positive inducements for em-ployment of the handicapped.

Congress may choose not to take actions ei-ther to encourage or discourage home-based

work. There are now few important legal orregulatory barriers to its growth; therefore theoption of no-action will allow its spread. Even-tually, home-based work is likely to grow sinceit offers benefits to both employers and manyindividual employees, while the costs that itimposes on some workers are generally con-sidered acceptable in the absence of more de-sirable alternatives.

Controversy about home-based work is likelyto become a major policy issue only if and whenone of three conditions obtain:

the number of home-based clerical work-ers becomes a significant fraction of allclerical workers, so that this becomes afactor in the competitive position of of-fice workers in the job market and in ne-gotiations with employers;




q

q

cases of serious exploitation of home-based workers come to public noticethrough the media; and/orunions are highly successful in their at-tempt to organize white-collar workers

Regulat ion of Home-Based

Office Work

If, however, the Federal Government nei-ther actively promotes nor prohibits home”based office work, then issues arise regardingits regulat ion t o provide protections th at areassured to other workers. In summary, theseinclude wage and hour guarantees, assuranceof safe and healthy working conditions, theright to negotiate collectively with employers,guarantee of equal opportunity, equitable pay,and equitable access to insurance, pensions,and other entitlements.

At present, managers and professionals aregenerally exempt from the Fair Labor Stand-ards Act of 1938 (which covers such conditionsof work as wages and hours) and managers,but not professionals, are exempt from the Na-tional Labor Relations Act (right to collectivebargaining), whether they work in an officeor at home. They are assumed to protect them-selves individually by negotiation with em-ployers, although some belong to unions orprofessional organizations that bargain collec-

tively. They are however covered by the EqualOpportunity Act and other recent work-relatedlegislation.

The chief concern in r egulat ion of workin gat home therefore focuses on clerical workers.Predominantly female, nonunionized, andoften bearing heavy responsibilities as mothers(increasingly, as single parents), they are par-ticularly vulnerable to exploitation. Anothergrowing concern is the vulnerability of newimmigrants, of disadvantaged minorities, andof elderly workers to possible exploitation.

It is quite possible that States or local gov-ernments may impose regulations on home-

based work, especially with regard to healthand safety issues.

Questions with regard to regulation are:

clarification of the application of existingregulations to home-based work (e.g.,

Work ma n’s Compen sat ion);. what additional protection is needed forhome-based workers? and

what means can be devised for effectiveimplementation and enforcement of reg-ulations related to home-based work?

With regard to the last question, there areconcerns that any attempts to implement andenforce regulation of home-based work maydestroy the benefits for which it is valued (i.e.,autonomy over work hours), or may lead tounacceptable violations of the privacy of work-ers an d th eir families.

This—how existing labor standards can beimplemented and enforced for home-basedworkers—is in fact, the critical policy issuemost likely to confront the Congress in thisarea in the immediate future. It is the pointon which opponent s u sually base th eir argu-ment for an outright ban, since they maintainthat real enforcement will be extremely costly,and in practice impossible. This is the prob-lem that led to the ban on home-based work in some industries in the 1930s. However therehas been little real examina tion of the possi-

bilities an d d ifficult ies of enforcement today.It can be argued that the same difficultieswould a rise in en forcing a pr ohibition. It canalso be argued that either a ban or regulationwould be easier to enforce today than in the1930s. Reporting requirements laid on busi-nesses have proliferated, the rights of work-ers and the benefits they stand to gain bydemanding those rights are larger, and peo-ple doing computer-mediated work are likelyto be far better educated an d more sophisti-cated in understanding to what protection theyare entitled. The same technologies that makecomputer-mediated work at home possible,might be used to make it difficult to hide.



C h a p te r 8

Off-Shore Office Work



C o n t e n t s

Page

The Pr esent an d F ut ur e St at us of Off-Shore Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

How Off-Shore Offices Operate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Linkage Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Types of Data Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Examples of Off-Shore Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Factors in Moving Data Entry Off-Shore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Differing Views of Off-Shore Office Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.S. Off-Shore Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.S. Labor Organizations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Foreign Government Officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Economic Development Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Public Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Regulating or Prohibiting Off-Shore Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Regulation of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Encourage or Do Nothing About Off-Shore Office Work . . . . . . . . . . . . . . . . . . . . . . .

211

21421 4

21 521 521 6

22322322 422 522 6

22722722 723 0



Chapter 8

Off-Shore Office Work1

While the cost of electronic office equipment

declines, th e cost of employing Americans toperform routine office tasks is rising both peremployee and in the aggregate. Some U.S.firms have established off-shore offices in or-der to take advantage of lower cost labor. Someof these offices involve manual clerical work such as coupon sorting. However, advancesin information and communication technol-ogies make it increasingly attractive to movedata-entry operations off-shore. Data entrymeans converting information from ‘hard’ orpaper form into digital form so it can be storedelectronically. This entry phase of data proc-essing is commonly referred to as “keypunch-i n g , “keyboarding,” or “keying.”

High domestic labor costs could lead to aninternational division of labor in data proc-essing. Data-entry clerks in Caribbean coun-tries, for example, typically earn weekly wagesth at ran ge from about $15 (U.S. equivalent)to approximately $60, while their counterparts

“I’his chapter draws hea~’il~. from an OTA contractor re-port: (’Christopher P. Astriab, .4n .+ls.sessment ofoff-.$hore Of- fice 11’ork, prepared for the U.S. Congress. Office of ‘I’echnol-

og~’ .4ssessment, contract No, 583-0630, Feb. 28, 198.5; andfrom an additional report from Consultant Anne Posthuma.

in the United States may earn at least six times

the latter figure per week. Even with trans-portation, communications, and other costsaccounted for, total expenses for keypunch-ing data off-shore may still not equal the costof carrying out the process domestically.

z

Several data-entry facilities are presentlyoperating in th e Caribbean region, an d th eirnumber is expected to increase. Labor costsare low and the region is easily accessible andclose to the U nited Sta tes. Transporta tion a ndcommunication networks are reasonably welldeveloped, literacy rates a re high, an d th ere

are favorable tax provisions for foreign in-vestors. The Caribbean is only one region,however, in which off-sh ore offices could p ro-liferate.

These operations can be simple to imple-ment. The tools and raw materials are light,relatively inexpensive, and easy to transport.If full advantage is taken of communicationtechnologies, distance and time become almostincidental factors when choosing sites at whichto locate off-shore offices.

-F’ig-ures deri~’ed from Caribbean Central American ~\ctiondata (Washington, DC, 1982).

THE PRESENT AND FUTURE STATUS OF OFF-SHORE OFFICES

While off-shore offices have existed for the dat a pr ocessing operat ions in th e Caribbean .better part of two decades, the arrival of elec- Barbados hosts seven such firms, while Ja-tronic communication and information tech- maica hosts at least three, and St. Christopher-nologies has set the s tage for new and possi- Nevis and Hait i each host one. In these fourbly rapid growth in the near future. The countries, approximately 2,300 workers arenumber of companies entering data at off-shore directly employed in off-shore offices. Thesites are s t i ll few, and the impact of the largest such office in the region is a coupon-phenomenon on foreign and domestic employ- sort ing operat ion t hat employs approximat e-ment and economic situations is at present inly 1,200 people in Haiti.significant.

At least three off-shore offices in St. Vin-Off-shore data processing facilities are pre- cent, Haiti, and Grenada closed down in re-

dominantly located in the Caribbean region. cent years. Managerial and transportationCurrently, there are at least 12 U.S. firms with problems were the causes; the ability of the

211




employees to carry out the operations wereapparently not in question.

3In the case of

Grenada, which hosted a firm for some 10years, recent “unsettled conditions” there werecited as the cause.

4

Other countries including India, Singapore,th e People’s Republic of China, a nd Irelan dalso host at least one data-entry firm each.Approximately 27 coupon-sorting operationsare located in Mexico, one of the first coun-tr ies t o host off-shore offices. The tota l nu m-ber of people employed by these firms is notknown.

There are generally two types of firms in-volved in establishing off-shore offices. Thefirst perform only their own clerical work off-sh ore in order t o reduce labor costs. The sec-ond group are vendors wh o have established

off-shore offices to provide data processing or-word processing services to clients in theUnited States.

All signs indicate that off-shore data entrycould undergo rapid growth over the next 10to 15 years. The vendors who provide theseservices are optimistic about the future of theindus try:

In 3 t o 5 years we expect to have 300 to500 people (keying) in different locations (inJamaica). This is a large market, perhaps $50billion by 1990.

5

The growth indust ry in Barbados has tobe information services and data process-ing . . . As Barbarians acquire data process-ing skill, Barbados, with its investment intelecommunications, can develop softwareand other applications. The industry in Bar-bados . . . has tremendous opportunity t ogrow and evolve, especially given. . . the gov-ernment’s commitment to it.

G

For now, any softening of data-entry mar-kets is being offset by explosive growth of data-base services. Such growing needs will

‘Donald Marsden, Coopers, and Lybrand, St. Kitts-Nevis.

Personal interview, Miami, Dec. 7, 1984.‘Ibid.‘Mary Ramond, “Jamaica On the Move, ” Business Week

special advertising section, Sept. 17, 1985. (Gary Bechtel, presi-dent of Telemar Data Systems, Fairfield, NJ, is quoted.)‘Mary Ramond, “Barbados - 1984, ” Business Week, special

advertising section, Apr. 16, 1984.

give (data-entry firms) a big market to shootat . , .

7

In view of dramatic growth in data process-ing and expanding needs for digital data, theseobservations may be justified. There is con-siderable interest in establishing new data

processing facilities abr oad an d some compa -nies already in the business have cited expan-sion plans.

Several companies are now studying the pos-sibility of setting up keying operations inthe Caribbean. Barbados, St. Lucia, St. Kitts-Nevis, Dominica, J am aica, Trinida d-Tobago,and Grenada are all possible sites for furthergrowth.

8

Firms already in the region maybe expectedto expand, but the scale of this expansion isuncertain. A firm in Jamaica that presently

employs approximately 60 plans to expand toabout 500 employees over the next severalyears. This growth-approximately 700 per-cent—is probably exceptional, however. Thewhole industry now employs about 500 peo-ple in Jamaica. The Jamaican Governmentencoura ges th is industry, and ,Jam aica In vest-ment Promotion, Ltd.—the government devel-opment agency—has reportedly secured con-tra cts for another company t hat would requireit to expand “significantly.

While the industry has existed m the Carib-

bean for some time, investors are showingrenewed interest since the passage of the Carib-bean Basin Initiative Act by the U.S. Con-gress.

10While no specific provisions in the act

deal with data processing, the act does expressthe commitment of the U.S. Government toassist in the development of the region. Earlysigns of success in using satellites to trans-

“’The Instant Off-Shore Office, ” Business Week, Mar. 15,1982, p. 136.

“Anecdotal information from various interviews, U.S. De-partment of Commerce, Caribbean Basin Business Informa-tion Center, and others.“Audley Shaw, Director, North America, Jamaica National

Investment Promotion, Ltd., New York, personal interview,.New York, Jan. 14, 1985.“Gary Bechtel, President, Telemar Data Systems, Fair-

field, NJ, personal interview, and presentation given at the Mi-ami Conference on the Caribbean “Off-Shore Key Punch Oper-ations” square table discussion, Miami, Dec. 7, 1984.



mit data from the region are also attractingattention. Based on observations of peopleknowledgeable about t he indu stry, it is prob-ably safe to assume that at least l,000 to 2,000additional data-entry jobs could be created inthe Caribbean region over the next decade.

In Mexico, the growth potential of data proc-essing is high. An estimated annual growthrate of 10 percent has been cited, but competi-tion from the Caribbean region is anticipated.

11

In other areas of the world, growth is de-pendent on: 1) companies’ willingness to estab-lish operations at great distances from theUnited States, 2) the type of data they are deal-ing with (i. e., the lead time available for data-conversion work), and 3) the mode of opera-tion being used (i.e., air transportation or elec-tronic transmission). At the present time, thepractice of flying hard copy to off-shore sitesand r etur ning the dat a on magnetic media isthe predominant mode of operation. Only afew firms are using two-way satellite links toany extent, and the oldest has been operatingfor a bout 3 years. Unless sat ellites are u sed,it seems unlikely that time-sensitive work would be exported to areas such as the FarEast or In dia. Air tr ansport t o these areas canbe relatively slow and complicated, particu-larly if time is of the essence.

Wage rates in these areas, however, can be

much lower tha n in t he Caribbean. In t he Peo-ple’s Republic of China, a figure of $2.00 perweek for clerical workers was cited.

12In In-

dia, the labor rat e for keyers m ay be as littleas one-tenth to one-fifteenth of the U.S. rate,which more than compensates for transportcosts , ’3 The presiden t of one firm operat ingthere estimates that it would cost approxi-mately $65 to key 10,000 characters in theUnited St at es, while he can get the sa me jobdone in India for about $7 to $10, and the qual-ity is higher. ’4

— ..— .‘lMollie Shields, Commercial Officer, U.S. Embassy, Mex-

ico City, Mexico. Telexed response to inquiry.Posthuma, op. cit., p. 5.‘ ‘Nick E}age, General Information Ser\’ices, Philadelphia.

Telephone inter~’iew, July 3, 1984.‘Ibid.

Ch. 8—Off-Shore Office Work . 213

At least one U.S. firm k eys data in Singa-pore, but this site may have been selected be-caus e th e data is then relayed to the firm’soffice in Aust ra lia. Presu ma bly, tr an smissioncosts also were an important factor. However,a World Bank report says that two-thirds of

Singapore’s t otal outpu t is s ervices an d over35 percent of these services were devoted tothe production and distribution of information.The primary information sector in Singaporecont ribu tes over 24 percent of gross domesticproducts.

15In the Far East, therefore, Singa-

pore would be a promising sit e for expan sionof data processing work.

As to the future of off-shore keying, theremay be inherent limitations on growth. Inter-national telecommunications to link off-shoreoffices with the United States may not be avail-

able everywhere or may not have the tremen-dous growth in capacity that some expect. Notall “raw” information (i.e., hard copy) can bereadily transmitted abroad for keying. Fac-simile clarity is still a significant problem, par-ticularly if operators must process large vol-um es of dat a. The u se of facsimile equipmen tdoes not appear to be cost effective as yet.Facsimile transmitters may take as long as6 minutes per page, “. . . far too long to letoverseas operators compete for time-sensitive

jobs, ” according t o one firm.16

Advances in facsimile technology will, pre-sumably, solve these problems. But the veryfact that such advances are being made maydrast ically reduce th e need to hire operatorsfor many kinds of data-entry work.

Perhaps the most important technologicalconsideration when assessing the future growthof the industry regards optical character read-ers (OCRs). As advances in the field permitthe widespread use of scanners, and the useof machine-readable documents increases, theneed for h uman intervention in data entry willbe reduced considerably.

“W’orld Bank, il’orld De\ ’elopm ent Report , 1982, NewYork, 1982.

“’’The Instant Off-Shore Off ice,” p. 136.

52-644 0 - 85 - 8




Most of the experts consulted on behalf of this study agreed that the arrival of cost effi-cient, highly capable optical scanners wouldmean the end of off-shore data-entry work. Forexample, an executive of one company believesthat his firm will stay as long as the cost-

effectiveness of satellite transmission is notoutpaced by advanced technologies that couldeliminate the need for a majority of data-entry

jobs altogether: “To say that we’ll be doingthis for the rest of our lives is not accurate;

but to say tha t we’ll pull out in th e near fu-tu re is also not a ccur ate. ”

17Others in the in-

dustry agreed. It is thus reasonable to expectthat off-shore keying may have an effectivelifetime of only 15 to 20 years, but during thatperiod it could grow rapidly and have a signif-

icant effect on U.S. clerical employment.

‘Posthuma, op. cit., p. 18. (James Marston, vice presidentof data processing for American Airlines, is quoted. )

HOW OFF-SHORE OFFICES OPERATE

Linkage Ar rangements

There ar e th ree principal met hods of link-ing off-shore data-entry sites with data sourcesand end users in the United States. All threeuse some combination of air shipment or elec-tronic transmission to move data back andforth between sites.

The least s ophisticat ed approach is to shipinformation by air in both directions. Typi-cally, paper docum ent s, microfiche, ma gnetictapes, cards or discs, or audio recordings arecollected at one or more U.S. sites for packag-ing. In the case of paper documents some pre-liminary hand sorting may occur at this time.A major U.S. airline, for example, sorts ticket

stubs according to station, flight number, andpassenger class before shipping them abroad,

Documents are then packaged and shippedto th e off-shore sit e via regula r a ir freight orovernight courier services. On arrival at thehost country airport, the packages are clearedthrough customs and delivered to the proc-essing site by courier services or employeesof the user firm. At the processing facility eachkeyer has a video display terminal that is typi-cally linked to an onsite computer central processing unit. The information on the documents

is keyed into the computer, the data is recordedon magnetic tapes, disks or cards, and shippedback to the United States, where the data canbe stored, printed on paper, or fed into a com-puter program for analysis.

The second method of linking sites involvesair shipping documents from the domesticpoint of origin to the processing site and thenelectr onically tra nsmitt ing th e digitized databack to its source or to other end users. Typi-cally, the data processing sites are linked viaterrestrial telephone lines to satellite Earthstations. The use of this method is, of course,limited by the availability and proximity of earth stations, but permits shorter turnaroundtimes. Where satellite communication facilitiesare not available it maybe possible to use sub-mar ine cable links to the cont inenta l UnitedStates. Theoretically, the reverse of this proc-ess (i.e., transmitting data to the off-shoresite and shipping hard documents back to the

United States) is also possible, but OTA foundno instances of such use.

Finally, electronic links may be used to trans-mit data in both directions. Documents arefacsimilied in the United States and trans-mitted to the off-shore site, keypunched, andthen retransmitted back to end users. Infor-mation that has already been digitized, butrequires further processing or revision mayalso be sent abr oad by simply “playing back”data on magnetic media and transmitting itfrom t he U nited St at es to th e off-shore site.

Two-way electronic links offer th e sh ortestpossible tu rna round t imes, and ma y, in fact,be the only practical method of processing dataoff-shore wh en t he a bility t o deliver it t o endusers with in a very short t ime is essent ial. A



major U.S. printing house tha t mu st pr ocessand deliver financial data to end users in aslittle as 15 hours is presently exploring thefeasibility of esta blishing da ta processing fa-cilities off-sh ore.

Types of Data Processing

The kinds of data processed off-shore andthe types of processing they require are manyand varied. Documents sent abroad for proc-essing include manuscripts; legal documents;insurance or medical records; statistical data;financial statements; coupons for food andother products; order or subscription forms;business documents such as ledgers, payrollsand the like; ticket stubs; mailing lists; con-test or sweepstakes entry forms; and audiorecordings. In most cases, the documents are

produced in large volumes on a relatively con-tinuous basis, and their conversion to elec-tronic form is essential to the end users.

Processing in ma ny inst ances is limited t oconverting t extual or t abular informa tion onhard copy into digital form so it may be morereadily reproduced, stored, manipulated, oranalyzed. One company, for example, keys inmailing lists and contestant entry forms, whileanother concentrates on keying textual andfinancial data for a Fortune 500 client base.

Processing may also involve reformattingdocuments or revising and correcting textsthat have already been proofread or edited anddigitized in the United States. The printingfirm noted previously may transmit to an off-shore site “rough’ copy that had already beenkeyed. The off-shore facility would key in thenecessary revisions to make copy ready fortypesetting.

18 Another firm reforma ts finan-cial data at its off-shore facility into standardform s for u se in t he Un ited St at es. ’g

Examples of Off-Shore Offices

The following capsule descriptions exemplifythe types of off-shore offices and the methodsby which they operate.

‘Keith Adams, R.R. Donnelly & Sons Co., Chicago. Per-sonal interview, Miami, Dec. 5, 1984,‘gBechtel, op. cit.

from airline ticket stubs for a major U.S. airline,

q

q

the keyed information is returned to the

United States via satellite

A California-based firm air-freights batchesof paper copy to its keying facility in Sin-gapore. From there, the keyed data is sentto its branch office in Australia via satel-lite. This allows the company to updatethe files of its Australian clients on a dailybasis.A Texas businessman has an arrangementwith stu dents at Tsinghua University inthe People’s Republic of China to key innumerical and narrative information fromsurveys. Magnetic tapes containing theinformation are then flown to the UnitedStates for analysis.In Limerick, Ireland, a major U.S. mar-ket research firm keys magazine subscrip-tion information. The same firm hasbranches in Port-au-Prince, Haiti, and Chi-huahua, Mexico, where product couponsare sorted and rebate lists are developed.A major U.S. international airline collectsticket stubs from its operating basesthroughout the United States and flies

them to its keying facility in Barbados.There, information on passenger class,point of embarkation, and destinations,etc., is keyed by a staff of almost, 300. Therevenue database is sent over privateleased lines via satellite to its data proc-essing office in the United States on a




q

q

daily basis. The company transmits about2.25 million characters to the UnitedStates every month. Information on dataentry personnel efficiency is transmittedback to Barbados for analysis by man-agerial staff. The airline is now soliciting

contract work in order to make its keyingoperation into a profit center.A New J ersey compan y has ent ered intoa joint venture with a Jamaican firm tokey financial data for approximately twodozen Fortune 500 clients. The data--about 50 percent t extual an d 50 percenttabular-is used for financial reports. Thefirm cited a document turnaround timeof 1 to 2 weeks. It presently flies hard copyto th e facility for keying, but an ticipatesusing facsimile equipment in th e UnitedStates to transmit information to Jamaica,

and then return it to the United Statesvia satellite. Approximately 60 people areemployed in the firm. It expects to dou-ble its size sometime in 1985.A firm in Mont ego Bay, J am aica keys inmailing lists for such companies as TheGreat American Sweepstakes and Pub-lisher’s Clearingh ouse. The responses tomass m ailings are flown to J ama ica a ndmailing lists on magnetic media are flownback to the United States.A small, Philadelphia-based firm operatesa joint venture data-entry service that em-

ploys about 20 people in Madras, India.The company concentrates on keying inpast records, and disk-to-disk conversionof dat a for clients s hifting from one k indof computer system to another. It hadoriginally used a Kurzweil optical scan-ner that translates printed characters intodigital form for st orage on ma gnetic me-dia. It found that use of the machine wasnot cost effective, and also encounteredtechnical problems regarding the capabil-ity of the machine to read accurately. It

gave the machine to a university and nowuses data-entry workers exclusively to keyin information.

—

Factors in Moving Data Entry

Off-Shore

Several general factors encourage Americancompanies to establish off-shore offices:

q

q

q

q

q

q

q

Th e

growth in information processing and in-

creased need to convert information fromhard copy to digital form;rising domestic labor costs and the avail-ability of lower cost labor off-shore;the availability of good communicationinfrastructure;the existence of suitable office space,transportation facilities, electrical power,and other support infrastru ctur e;th e availability of measures t hat can beta ken t o ensu re t he security of informa -tion in t ransit;the general absence of regulatory impedi-ments to the exportation or to the flowof data across international borders; andthe existence of politically stable and eco-nomically attractive environments in oth-er coun tr ies.

Information Market

The dir ector of one foreign governm ent in-dustrial development corporation says:

In today’s world, information resourceshave become abundant. . . and more efficientas a result of the progress stimulated by thenew electronic technology. It seems fairlyclear, to me at least, that as the U.S. econ-omy continues its transformation from indus-trial activities toward information creationand distribution, that the demands for infor-mation services will continue.

20

The need for rapid access to informationhelped to stimulate the creation of electronicdata storage and retrieval systems. Their ex-istence, in tur n, ha s accelera ted th e speed atwhich information must be generated, and in-

‘[’Fred Gollop, Chairman, Barbados Industrial Development

Corp., Bridgetown, Barbados. Gollop moderated the “Off-shoreKey Punch Operations” square table discussion at the MiamiConference on the Caribbean, Miami, Dec. 7, 1984.




creased the volume of data needed to enterinto computerized information systems, Thepresident of a U.S. firm, presently engagedin off-shore keying, notes that “. . . the his-tory of the world, which is in writing, is aboutto be put into electronic databases through-

out the world. 21

The capability and need to generate infor-mation in large volumes and on a relativelycontinuous basis is essential for the move tooff-shore data-entry operations. It is thestren gth of this growing informa tion mar ketthat makes owners of off-shore keying opera-tions enthusiastic about their future. In theabsence of an expanding information market,the viability of off-shore operations would bedoubtful. Attracting workers would be diffi-cult if work were sporadic, and cost efficiency

could decline rapidly, thus defeating the pur-pose of establishing such operations in the firstplace.

Domestic and Foreign Labor Costs

In the recent pa st, there has been a t rendtoward an international division of labor, inwhich labor intensive manufacturing work hasmoved to countries where wages are signifi-cantly lower than in the United States. Thishas allowed many American manufacturingfirms to maintain their competitiveness in in-ternational markets. The exportation of data-entry work—one of the most labor intensivephases of data processing—is now occurringfor the same reasons.

The hourly wage rate for keyers in othercountries may range from one-fourth to as lit-tle as one-fifteenth of rates paid to U.S. key-ers .

22One U.S. firm reports that it was paying

domestic keyers $9.50 per hour, whereas aver-age hourly r at es at its off-shore facility in Bar -bados are approximately $2.10.23 This is a sav-ings of 78 percent in la bor costs a lone. Whilecompanies use different methods of estimat-

ing their savings by moving off-shore, thosequestioned indicated that it is costing them

about 75 percent less off-shore t ha n it wouldin the United States to obtain a comparablelevel of labor output.

The availability of trained workers is a major consideration in choosing an off-shore site.

Because the bulk of the work done at data-entry sites involves typing (typically, 60 to90 percent of the employees of data-entry oper-ations may be keyers), a pool of trained typistsmust be assembled. Companies located inJamaica and Barbados report no apparentshortage of trained clerical workers; they in-variably had more job applicants than posi-tions.

24Young women compr ise about 99 per -

cent of the workers. One firm reported thatthe average age of its keyers is 26.

25Most of

them have at least a secondary school educa-tion, while many have completed at least some

post-secondary training.

A keying rate of 10,000 keystrokes per houris cited as an industry standard.

26Higher rates

may be achieved if conversion is limited to key-ing tabular da ta on a n umerical ten-key pad,while rates may average somewhat lower if text data is being keyed.

All companies surveyed indicated that a highliteracy rate was a primary consideration. Lit-eracy in English is strongly preferred to avoidth e complicat ions of crossing a lan guage bar -rier, although language barriers may not be

critical if keying is limited to numerical data.

However, other firms have experimentedwith using non-English speaking workers forkeying text, and report excellent results. Theworkers do not need to understand words tokey the right letters. Workers can learn to rec-ognize up to 100 characters without any priorknowledge of them, and to respond by hittingthe correct key. Because thousands of ideo-grams are used to write many Oriental lan-guages, workers literate in these languagesmay be particularly adept at character recog-

nition.

Bechtel, op. cit.‘-Page, op. cit.-’Jordan, op. cit.

-’Bechtel, op. cit.; and Jordan, op. cit.-

cJordan, op. cit.

“Bechtel, op. cit.




The ability to achieve high accuracy ratesseems to be a direct result of employing lowcost labor. In order t o assure high sta ndar dsof quality control, two or three keyers maybe given the same information to key, on thetheory that no two people will make the same

error. After copy is “double-” or “triple-str oked, ’ par ity checks m ay be condu cted tospot errors. The original copy is then checkedin order to correct those errors .27 It has beenreported that by using this technique firmshave been able to obtain very high accuracyrates even using non-English speaking keyers.

It would obviously be expensive to achievequality control in this manner in the UnitedStates. Using the hourly wage comparisoncited earlier as an example, copy triple-strokedfor one hour in th e United Sta tes would cost$28.50, while the same task off-shore wouldcost $6.30. This estimate is for Barbados,where wage rates are higher than those formost developing countries.

Some firms have noted that it is more diffi-cult to find skilled managers locally than itis to find clerk-typists. However, this was usu-ally overcome through programs to promoteand train supervisory personnel, sometimesby sending them to the U.S. office for train-ing.

28

The size of available off-shore labor poolsmay be a n importa nt considerat ion for la rgeoperations, especially in countries with smallpopulations, such as many of those in theCaribbean. U.S. off-shore offices in the Carib~-bean presently employ from 10 to as many as1,200 personnel each. At least one firm choseto locate in Jamaica because keying operationscompanies already were absorbing most of theavailable labor pool in Barbados, and biddingfor such labor “might get a little steep . . .particularly for a start-up company. ”

29

In sum, countries most apt to attract U.S.firms to off-shore offices are those with low-

wage rates and a highly literate, skilled laborforce of a size s ufficient to su pport proposed

.—— -- . . -- .‘

-Adams, op. cit.

‘Becker, op. cit.; and Jordan, op. cit.“’Bechtel, op. cit.

operations. The degree to which these charac-teristics are present promotes establishmentof off-shore data conversion.

If English literacy is not critical, then vir-tu ally an y developing coun tr y willing to pr o-vide the necessar y infrastr ucture an d having

a large pool of unemployed people could hostan off-shore da ta -entr y opera tion.

Communication Technology

Advances in telecommunication, in particu-lar, the advent of satellite communication,have encouraged the operation of off-shoreoffices. Unlike manufacturing industries, whichface high costs and pay a time penalty fortransporting raw materials and products, theinform at ion in dust ry m ay ‘‘ship’ its r aw ma -terials and products thousands of miles in

seconds when in electronic form.International communications usually take

place by satellite or by undersea cable. Theuse of sat ellites appea rs t o predomina te, butthe use of international submarine cables can-not be discoun ted, and th e desire for greatersecurity a nd r eliability of data tr an smissionsmay prompt some firms to maintain accessto both.

A number of technologies are used to pro-vide access to the international communica-tion networks. Some firms have satellite earth

stations on their own premises. Most, how-ever gain access to common-use earth stationsor to undersea cable terminals as subscribersto the local telephone system or by leasingdedicated lines. Firms transmitting large quan-tities of data generally find dedicated linesmore economical since they can be designedto accommodate high-data transmission speeds.Thus, one criterion for locating off-shore dataconversion facilities is the existence of a com-mun icat ion infra str ucture with su fficient ca-pacity to provide dedicated lines to large users.

Microwave transceivers are widely used forprivate line communications in the Caribbeanwhere an extensive microwave system is al-ready in place. It has been suggested that cel-lular telephony could also offer the capabilityof providing data links between off-shore



. .

Ch. 8—Off-Shore Office Work q 219

offices and international communication ter-minals. Cellular telephony allows voice or datacommunications without the use of land lines.It could play a significant role in bringing theinformation age to Third World countries, al-lowing them to not only catch up, but perhaps

also even surpass the phone networks thatpresen tly exist in th e developed coun tr ies.’”Accordin g to a repr esent at ive of a U.S. cellu-lar telephone company:

Cellular will provide nationwide data net-

work capability and needed mobile and fixed

services to all segments of an emerging na-

tion. It may well assume the role of the wire-line system replacement in smaller cities andin isolated rural areas. Cellular could be uti-lized to remove isolation, encourage disper-sal of industry and increase the efficiency of projects located far from the urban concen-

trations of industry.’]

Costa Rica is expected to begin installationof a cellular system in ea rly 1985, which willprobably make it the first Third World coun-try to use cellular technology as an integralpart of its telecommunication systems. Instal-lation of cellular systems in several countriescould increase the options of firms looking foroff-shore office sites.

Of importance to operators of many off-shoreoffices are the telecommunication regulationsin the host country. In many developing coun-

tries, communication networks are owned andoperat ed by the government in order to gen-erate public revenue. In some cases, all phoneequipment and services must be purchased orleased from the government, thus limitingusers’ options with regar d to th e availability,type, and capabilities of equipment.

A count ry’s r eput at ion for pr oviding h ook-up and maintenance service also deserves con-sideration. Clearly, it would not be desirableto establish an off-shore office where bureau-cratic problems or lack of well-trained techni-

cal personnel caused significant delays in— — —

Charles T. 1 lagel, .4pplication of Cellular ‘17echnolog-?’ for L~e\ wloping Countries, presented at the Miami (’conference onthe Caribhean ‘‘Communications I nfrastructures’ squaretahlediscussion, N!iami, December 1984.

‘ I hid.

service, or impeded the timely and propermaintenance of the phone network.

Facilities, Transportation, andElectrical Power

By and large it does not appear that U.S.firms have had serious difficulties in locatingfacilities in which to set up shop, especiallyin th e Caribbean. Many government s ha ve de-veloped industrial estates that rent or leasefactory space at very low rates to foreign in-vestors. In Jamaica, for example, the averagerent for su ch spa ce is a mere $.42 per squarefoot per month, or about $5 (U. S.) per squarefoot per year (1982 figures).” The leasing of space at off-shore sites is considerably cheaperth an in t he United Stat es, and in some casesso much cheaper that leasing costs may be

a minor consideration in the course of siteselection.

Space may be leased or purchased outrightfrom the private sector, depending on foreignownership restrictions imposed by govern-ment. Or, it may be possible to expand exist-ing locally owned data processing facilities,if, for example, a U.S. firm enters into a jointventure with an existing host country firm.

The qu ality of available facilities in d evel-oping countries may vary considerably. Some

‘-Caribbean Central American Action, op. cit.

Photo credlf M/v/s(r) of T r ade /~?cfustrj and Deve/oprnentS( Chmfoober and Neb/s

Off-shore data processing offices occupy a wide rangeof fact I i ties from modern office buiIdings to convertedfactory shells. This one is In St. Christopher and Nevis




office buildings may be on equal footing withth ose commonly found in th e Unit ed Sta tes,while others may be simple corrugated metalor concrete block shells adaptable to manyuses. One U.S. firm adapted such a shell forits data conversion operation in St. Kitts-

Nevis. Another spent approximately $1 mil-lion (U. S.) to upgrade an existing office build-ing in Barbados. Its facility is regarded bythe company, the Barbados Government, andthe company’s competitors as a “showcaseoperation” equal to the best facilities in theUnited States.

33

The availability of inter nat ional a ir tr ans-portation may be essential if electronic link-age arra ngements a re not being used in bothdirections. Both regular air freight and over-night courier ser vices ar e used. One r eason for

the proliferation of off-shore offices in theCaribbean is the availability of frequent, di-rect flights of relatively short duration to manyof the islands from major cities in the UnitedStates. Time in transit from New York to Bar-bados, for example, is about 4.5 hours. Thisis particularly attractive if time-sensitive doc-uments are being dealt with. It also makesit easier to ma na ge off-shore facilities, sinceU.S. personnel may get to the sites relativelyquickly if necessary.

Companies generally indicate that availabil-ity and reliability of electrical power are notmajor concerns in their site selection. Somefirms use on-site back-up electrical generatorsbecause power grids in some countries experi-ence sporadic brownouts (i.e., voltage dropsbelow specified levels) or blackouts. The costof electrical power is not a major concern; inJamaica for example electrical rates are com-parable to those on the eastern seaboard of the United States.

34

In general, facilities are less costly off-shore,although infrastructures in many countrieslack the reliability and redundancy that is

taken for granted in the United States. Thegrowth of foreign investment in less developedcountries has, in many cases, spurred govern-

ment effort s to enhan ce their infrastr uctureswith a view toward at tr acting still more for-eign capital, technology, and expertise.

Security of Data Shipmentsand Transmissions

With large amounts of data being trans-ferred across int erna tional boun daries, secu-rity of data shipments and transmissions isa concern, but has so far been a minor prob-lem in off-shore sourcing. None of the firmsinterviewed for OTA identified any specialmeasures tha t t hey take to ensure th e secu-rity of shipments. Yet the loss or interceptionof documents containing sensitive informationcould conceivably cause serious damage, par-ticularly if, for example, information on stock offerings or other fina ncial inform at ion weremade known prematurely, or if private, intra-corporate communications are intercepted.

Interception of such shipments is not with-out its difficulties. One would need to knowin advance about the nature and timing of ship-ments. If particularly sensitive documents arebeing shipped, air courier services may be usedto ensure their safety. One courier firm in theCaribbean region indicated that its shipmentsare accompanied and monitored by their per-sonnel on a continuous basis.

35 The companiesshipping the information, as well as theirclients, appear to be satisfied with its security.

Int ercepting electr onic data tra nsmissionsis another matter; it requires technical knowl-edge, and may not necessarily yield usable,understandable data because encryption canbe used. Even if unscrambled tra nsmissionswere intercepted, strings of characters maynot be useful unless one knows what to do withthem.

36In some industries such as airlines,

much information is already shared, so thevalue of information transmitted may be neg-ligible to another airline.

Nevertheless, wires can be tapped, and sat-ellite tr ansm issions can be picked up by par-ties other than the intended ones. Wiretapping

‘;The firm referred to has operating bases in Miami, NewYork, and other cities in the United States and the Caribbean.

“’Jordan, op. cit.‘iGollop, op. cit.“Ibid.




can be detected fairly easily because the am-plitude of an electronic signal is attenuatedwhen a th ird-part y taps the line.

37Identifying

unintended recipients of satellite transmis-sions can be far more difficult. In either case,however, it would seem that a considerable

amount of technical ingenuity would be re-quired to not only intercept transmissions, butmake them usable as well.

Rules and Regulations

At the present time, regulations of any sortthat bear directly on the establishment or oper-ation of off-shore data-entry services appearto be so few and/or minor that firms involvedhave expressed relatively little concern overthem.

Laws t ha t genera lly affect off-shore keying

operations are those concerning telecommu-nications. Such laws often mandate the useof government-owned Post, Telephone, andTelegraph (PTT) networks and equipment,since the PTTs of developing nations typicallygenerate revenues needed for other govern-ment functions. Firms report that these regu-lations have been more of an annoyance thana major obstacle to off-shore sourcing.

Foreign customs regulations also do not ap-pear to have been a problem for data-entryopera tions. Man y firms investin g in develop-

ing count ries ar e gran ted concessions in clud-ing the privilege of importing raw materialsand equipment duty free. The only notablecomplaint s h ave to do with t he difficult ies ingetting documents and other items clearedquickly through customs, especially on week-ends, which can be a problem for firms keyingtime-sensitive documents. However, seriouscustoms problems would probably spur au-thorities to make remedial actions to avoid los-ing sizable foreign investments.

U.S. telecommunications and customs reg-

ulations at present raise no obstacles to off-shore keying. Customs laws govern the im-portation of documents and magnetic record-ings, but ta riffs ar e extrem ely low or not lev-

Hough, op. cit.

ied at all.38

U.S. companies keying their ownbusiness data (e.g., payroll, inventory, ar-chives, etc.) may import these records dutyfree. These are classified under schedule 8, pt.7 of the Tariff Schedules of the United StatesAnnotated (TSUSA) (1981) as item 870.10–

“records, diagram s an d other dat a with regardto any business . . . operation conducted out-side the United States, whether on paper,cards, photographs, blueprints, tapes or othermedia. 39

Ordinarily, recorded magnetic tapes, cards,or discs are classified under TSUSA schedule7, part 2, subpart G as item nu mber 724.40–‘‘recordin gs on m agnet ic tape or an y mediu mother than wire. ’ ’

40 A dut y of 9@ per squ ar efoot of recording surface is specified. Thus,a duty of only $9 would be payable for a record-

ing on a standard 2,400 foot reel of .5" inchcomputer tape (which contains 100 square feetof recording surface). Even this duty may notbe imposed if the recordings originated in acountry that is beneficiary to the GeneralizedSystem of Preferences. Such countries mayexport most or all of their goods to the UnitedStat es dut y free. In an y event, recorded me-dia from data-entry operations are, by andlarge, regarded as returned U.S. goods and notsubject to duties.

41

While the physical characteristics of the me-

dia itself are not “advanced or improved” at keying operations, it can be argued that suchmedia has an intangible good—information—added to it, and is, accordingly, increased invalue. There ha s been shar p criticism in t hisregard, particularly by U.S. labor representa-tives. As one union spokesman says, “You may

—.—‘“John R. Gray, Chief, Classification and Value Di\’ision,

U.S. Customs Bureau, Miami, personal inter~iew, Nliami, Dec.6, 1984.

“’Tar iff S chedules of the United S tates An notated 1980,

Washington, 1980, p. 774.“’Ibid.‘

]’’ The Instant Off-Shore Office, ” p. 136. Specifically, they

are listed under TSUSA schedule B, pt. 1 as item number800.00–’’products of the United States when returned afterha~’ing been exported, without having been advanced in \ralueor improt’ed in condition by any process of manufacture or othermeans while abroad. ”




be importing a $10 tape with $50,000 worthof information on it. “4

2

Such claims do not appear to be exaggera-tions in view of the prodigious volume of datathat can be recorded on a given amount of mag-netic media. If recorded at maximum density(data density is dependent on the type of rec-ording equipment used), a .5" inch wide nine-track computer tape can hold 6,250 bytes orchara cter s of data per linea r inch. A 2,400 footreel of tape holds up to 94 megabytes (i.e., 94million characters). To put this in perspective,a commercial directory listing the names, ad-dresses, telephone numbers, chief executives,Standard Industrial Classification numbers,sales levels, and n um ber of employees of th etop 51,000 U.S. corporations comprises onlyabout 30 million characters.

43 This equals ap-

proximat ely 1,500 pages of high-densit y textin very small print.

The president of a domestic data-input com-pany has argued that duties should be paya-ble at least on th e labor value a dded to proc-essed tapes and disks. The directory mentionedabove, for instance, probably took at least3,000 person-hours to key at 10,000 keystrokesper hour. Using the $2.30 per hour wage forBarbados, it would cost roughly $6,900 to en-ter all of the data in the directory. His con-cern stems from the fact that his firm has lost“millions of dollars in contracts to off-shorefirms. ’44

Certain countries have erected tariff and non-tariff barriers to regulate the content andoperation of data banks, and designate themethods and routes by which data can betransferred across international borders. Wherethese regulations exist, they usually stem fromgovernm ent s’ concerns over th e pr ivacy of their citizens, national security, perceived lossof cultural independence, and concern thatun restr icted dat a t ra nsfers could lead to loss

“Dennis Chamott, Assistant Director, Professional Work-ers Division, AFL-CIO, Washington, DC, personal interview.Washington, DC, Dec. 17, 1984.

“The listing referred to is Ward’s Directory of 51,000Largest U.S. Corporations, vol. 1 (Petaluma, CA: Baldwin H.Ward Publications, 1984). The directory consists of “1,504 pages,11 “ x 91 4 “ over 30 million computer data bytes. ”“’’The Instant Off-Shore Office, ” op. cit., p. 136.

of control over economic development andgrowth.

45

Off-shore data-entry operations have notbeen significantly affected by such laws be-cause they have generally been established inthe count ries that have not enacted such laws.Many countries have not yet addressed theissues surrounding data and its transfer, andth ese coun tr ies tend to be less developed, havewage rates th at are generally lower, and wantthe jobs, training, and capital that data-entryoperations can provide. They view data entryas a basis for t he development and advance-ment of computer and computer-related indus-tr ies and capabilities.

Thus, data-entry firms presently operate ina very lenient regulatory environment. Devel-oping host countries are not inclined to kill

the proverbial “goose that laid the golden egg”by legislating against the data-entry indus-try. The benefits they obtain from it far out-weigh an y gains t o be had by levying discrimi-natory taxes or imposing other restrictions.Undoubtedly, any moves in this direction wouldquickly cause firms to relocate to countrieswith more favorable business environments—of which there are many. U.S. laws impose vir-tually no burden on off-shore sourcing. Vigor-ous debate over regulatory matters can be ex-pected to continue, however, as labor unionsand domestic firms pressure authorities to ex-tend tariff treatment to international trade indata and data processing services.

Political Stability and InvestmentClimate in Foreign Countries

The reason most frequently cited by U.S.firms in all sectors for not investing abroadis perhaps that they must deal with too manyunknowns. Political stability of a foreign coun-tr y and it s policies regardin g foreign, privat einvestment are foremost concerns of U.S. bus-inesses thinking about establishing off-shore

enterprises.

45James R. Basche, Jr., Regulating In te rna t iona l Data Trans-

mission: The Impact on Ma nag”ng International Business,Washington, DC, 1984, p. 16.



————. -.. — ..— - —-.——

Despite these problems, U.S. firms havefound that the Third World presents an abun-dance of business opportunities for those will-ing to assume th e attendan t r isks. Many de-veloping countries recognize the advantagesof permitting foreign investment to enhance

private sector development. Not only does itexpand their capital base, but it also providesnew opportunities for host-country ownedbusinesses, brings in foreign technology andexpertise, and provides training for their peo-ple, which in man y cases is th eir most abun -dant resource.

The h ost coun tr y’s invest men t p olicies ar ealso instrumental in attracting off-shore busi-ness. Specific investment incentives differ de-pending on the country, but various forms of tax relief and import duty exemptions are com-

monly used. The investment incentives pro-vided by many developing countries are help-ful to investors, and their existence is generallya good indicator of a country’s need for suchinvestment and recognition of its importance.Such incentives may, at the very least, pro-vide an appearance of political stability andcontinuity, and an indication that foreign gov-ernments are aware of the need to create fav-orable business environmen ts for investmentby industrialized nations.

Ch. 8—Off-Shore Office Work q 223 .

The U.S. Government and the governmentsof other countries have encouraged investmentin developing nations by helping firms to locatebusiness opportu nities, guar ding them againstth e effects of adver se political development s,an d pr oviding at tra ctive business incentives.

At least one American company notes thatboth United States and foreign governmentassistance was instrumental in the establish-ment of its data-entry operation in Jamaica.Of significant importance to the firm was assis-tance provided by the Overseas Private In-vestmen t Corporat ion (OPIC). OPIC is a s elf-sustaining, profit-making Federal agency (acomponent of the U.S. International Devel-opment Cooperation Agency, which also in-cludes th e Agency for Int ern at iona l Develop-ment) whose mandate is to “mobilize andfacilitate the participation of United States’

private capital and skills in the economic andsocial development of less developed, friendlycountries and areas. To do this, the agencyprovides political risk insu ra nce, direct loan sand loan guarantees, and other service, “All(of which) are designed to reduce the perceivedstumbling blocks and risks associated withoverseas investment.

46

“ <l~?rseas Prit’ate investment Corporation, corporatebrochure, Washington, DC 1984, p. 1.

DIFFERING VIEWS OF OFF-SHORE OFFICE WORK

U.S. Off-Shore Companies

For the most part, U.S. companies cite sav-ings in labor costs, as much a s 75 percent , astheir primary motivation for seeking off-shoresites for data processing.

47None of the com-

panies questioned thought that this trendwould have a very significant detrimental im-pact on U.S. employment, and some suggestedit would creat e man y new mar keting jobs inthe United States.

48

——

‘-Answers were in response to interviews conducted by thecontractor primaril~’ at the Miami Conference on the Carib-bean, Miami, Dec. 3-7, 1984. Other interviews were carried outin New York and Washington in early 1985. Astriab, op. cit,“Bechtel, op. cit.

Some companies have found that produc-tivity off-shore is often higher than in theUnited States, and standards of accuracy andemployee conscientiousness are generally high-er. One company had originally underesti-mated the capabilities of foreign workers, andanticipated a standard of performance 70 per-cent of tha t a tta inable in th e United States.After only 1 year in operat ion, t he compan y’sforeign employees keyed better than its U.S.

keyers who, on the average, had over 5 yearsseniority over their foreign counterparts.49

Atleast two other companies confirmed the claimof higher productivity .50 As noted earlier, high-—

“’Jordan, ;p. cit.‘13echtel, op. cit.; and Becker, op. cit.




duplicating that system here, and that sys-tem shuts down?

55

Off-shore offices would be very easy to shutdown, because they tend not to be very large,do not have a major impact on host countryeconomies, and are heavily dependent on vul-

nerable communication and transportationnetworks.

Foreign Government Off ic ia ls

The direct impact of off-shore data entry onincreased employment in developing countriesmay be significant and quite rapid. One com-pany began interviewing prospective employ-ees in Barbados in May 1983, commencedtraining on August 1, and began productionin October of the same year. The operation

presently employees 275 people, 80 of themmanagerial, technical, and supervisory person-nel. This suggests that keying operations, espe-cially larger ones, may provide significant jobopportunities not only for clerical workers, butalso for more highly trained workers. The samefirm let approximately $1 million in contractsto local firms t o refur bish its building. Thus,business opportunities and jobs may also becreated in other economic sectors.

Reactions of foreign government officials tooff-sh ore office work ar e very positive. Th ose

countries that already host such operationsare pleased with the results, while those thatdo not yet have such operations want them.In a n informa l survey, representat ives frommore than 20 Caribbean and Central Amer-ican countries unanimously claimed that suchinvestment projects would aid their economiesand would be welcomed.

56

Barbados has gone so far as to single outinformation services as a sector to receive ma-

jor emphasis for development. At the otherend of the spectrum, representatives of some

—

Ibid.‘ Answers were in response to informal interviews con-

ducted by the contractor at the Miami Conference on the Carib-bean, Miami, Dec. 3-7, 1984. Representatives of approximatel~’20 Caribbean and Central American countries were queried,Astriab, op. cit.

coun tr ies know little about th e phenomenon,but are eager to learn more about it.

The work is labor intensive, requires onlya moderate capital outlay, and can generateemploymen t r apidly. It is a “clean’ indu str y,without the heavy equipment, large space re-quirements, and pollution often associatedwith oth er industr ial ent erprises. The indu s-try provides, at the very least, rudimentarytraining in computer use—a rare opportunityfor workers in less developed nations. Finally,it establishes a foundation on which furtheradvancement in comput er-related indu str iessuch as software development, technical serv-ices, and data transmission may grow. The Di-rector of the Barbados Industrial DevelopmentCorporation (BIDC) elaborates:

1 know from experience in Barbados . . .

that we can offer a lower cost location (forthe industry), and answer the needs of manyindustrial companies in the United States. Iknow too that the countries in the Caribbeancan benefit from increased employment, andin the case of off-shore keypunch operations,this can be fairly rapid. And I also think wecan benefit from technical education whichwould ultimately set us on the path to higherlevels of technology in the computer servicesindustry .57

Barbados has targeted information servicesas an industry group that is expected to have

a major impact on the objectives of the Bar-bados Industrial Development Corporationan d th e Barba dian economy. Accordin g to its1983-87 Development Plan:

The Information Services industry can beexpected to generate substantial employmentin the short term . . . linkages with the moretechnically proficient computer industry . . .will be sought as a means of expanding thesector’s contribution to the economy . . . Lo-cal participation in the Information ServicesIndustry can come about through the estab-lishment of service bureaus to perform off-

shore data processing for North Americancompanies.58

Gollop, op. cit.‘Ilarbados Industrial De\relepment Corp., Indus t r ia l De\ ’el-

opment Plan, 1983-1987, 13ridgetown, Barbados, 1983.



226 q Automation of America’s Offices .

Development officials interviewed for OTAall agreed that foreign data-entry workers viewth eir jobs and stat us in a considerably morepositive light than their American counter-parts. While keying in the United States issometimes pictured as a low status, boring job,foreign workers often consider it a gatewayto opportunities that did not formerly exist(as do many minority workers in the UnitedSta tes–see chapt er” 12).

Over-dependence of countries on informa-tion ser vices is not seen as a problem at thispoint because the industry is presently sosmall. In addition, many developing nationsopt for diversification of industrial develop-ment as a key ingredient of a more stable econ-omy. They want to avoid heavy dependenceon traditional industries such as tourism oragriculture, with their characteristic seasonal

fluctuations in income and employment.

Economic Development Organizat ions

Development organizations are in essencethe ‘middlemen” in regard to the developmentof off-shore office work. They view the expan-sion of the sector in the much larger contextof economic development, are supportive of its growth, and reaffirm the arguments putforth by U.S. companies and foreign govern-ments in favor of such growth. “The sheernumber of jobs (off-shore data processing) cre-

at es is th e main at tr action of th e indust ry inthe view of developing countries, ” says oneofficial of a private, nonprofit developmentorganization .59

This development expert claims t ha t n ega-tive rea ctions, if an y, in developing coun tr iesusually come from the more educated sectorsand the labor movement, or, as he put it: “peo-ple who ar e not worr ied about ha ving a job.

60

Those citizens of developing countries whoview U.S. investment as exploitative are thosewho are generally of higher economic status

“’Gordon Hunt, Director, Investment Services, Carib-bean/Central American Action, Washington, DC, personal in-terview, Washington, DC, Dec. 18, 1984. This claim was alsoaffirmed by Gooch, op. cit.

“’Ibid.

and are not in need of the job opportunitiesthat result from such investment.

Some experts favor investment in develop-ing country private sectors as opposed to justpublic-infrastructural development projects.”According to this argument, in many cases

developmental aid programs have not achievedtheir intended pu rposes. For example, whilegood roads may indeed have been built, pri-vate businesses a long th ose roads a re n eces-sary for the general advancement of the econ-omy. While the wages paid to workers in thesebusinesses may be extremely low by U.S.sta ndar ds, this should not be considered ex-ploitative.

Rebutting arguments from U.S. labor thatthe flow of clerical work out of the UnitedSta tes sh ould be st opped, development orga-

nizations point to the great impetus of in-creased international economic interdependen-cy and the disadvantages of impeding capitalflows. “Business goes wh ere business can bedone, ” as one development organization officialsaid, “The flow of capital cannot be stoppedunless one wishes to control the economy, andthis runs against the whole tradition of freetrade.

62

Answering U.S. labor’s claim that wage com-petition is the only focus when selecting busi-ness sites, a development official counteredthat it has never been a case of just wage rates:

“If that were the case, there wouldn’t be a bitof work done but in China and India.

63While

this is, of course, an overstatement, higherprofits are not the only motivation for manybusinesses off-shore. For some, it may simplybe a matter of survival. Viewing the exploita-tion argument in a different light:

You will certainly get cases of exploitation,but it is far more exploitative to say (thatwe will) keep those jobs here, and pay an un-acceptably high level of wage which will makeour products unacceptable anywhere otherthan in our own economy. Plus, by doing so

‘]

Ibid.“Ibid.“Ibid.




we will ‘starve’ (the people in less developedcountries).

64

There has been massive legal and illegal im-migration to the United States from the Carib-bean. Many countries in the region have theirsecond largest, and in some cases their largest

population centers in the United States. Somesee it in the best interest of the United Statesto create jobs for people in their own coun-tries to stem this tide of immigration: ———-

“Ibid.

Do you employ those people in their owncountries or do you employ them (in theUnited States)?, because that’s where they’reall coming. Do they come up here and work illegally for sweatshop wages , . . or do theystay in their own countries, where they wouldrather be to begin with if they could make

a decent wage?65

Ibid.

PUBLIC POLICY

Off-shore office work does not have a signif-icant influence on the U.S. economy at present.Only a few dozen firms and a few thousand

employees are involved. Nevertheless, it couldgrow. If domestic wage rates remain compara-tively high and telecommunication and trans-portation costs continue to fall, market forceswill encourage more firms to investigate theoff-shore alternative. Growth could be quiterapid, at least in the short- to medium-termfuture.

In the long term, technological advances ininput technology, especially optical scanning,are likely to undermine the cost advantagesof off-shore data-entry work. Thus, off-shore

offices are likely to be a temporary phenome-non, unless some other technological advancesor economic conditions make it feasible tomove other types of office work off-shore—for example, telephone reservations or orderprocessing.

Assuming that it is temporary, the questionremains how U.S. public policy should dealwith off-shore offices. The alternatives includeprohibiting, regulating, or encouraging it.

Regulating or Prohibiting

Off-Shore Offices

Methods for limiting the growth of off-shoreoffices could include such government actionsas:

ISSUES

imposing regulation on the types of datathat can be imported,imposing restrictions on the hardware and

software used off-shore,usin g ta xes to discour age off-shore work or encourage that work be done domes-tically, and/orimposing restrictions on the use of pri-vate telecommunication lines.

Regulation of Data

Many nations have imposed restrictions ontransborder data flows for the purpose of pro-tecting the privacy of their citizens, for exam-ple, prohibiting transmission of name-linked

information to countries with less stringentprivacy laws.

The United States has data protection lawsdesigned t o restrict th e uses of name-linkeddata and assure access to the data by personsreferenced in them. These laws do not, how-ever, address the “front-end’ issue of how orwhere information may be entered into elec-tr onic data bases. Nor does U.S. law r estrictthe flow of data across international borders.

It is not clear that privacy protection is nec-essarily a good motivation for U.S. regulationof off-shore offices. Even if it were, the enact-ment of privacy protection laws governingtransborder data flows would affect other in-dustries, such as banking, and the internal




operation of many multinational corporations,as well as off-shore keyers.

A more direct approach to discouragingestablishment of off-shore offices is to simplydesignate data entry as a phase of processingthat U.S. companies must, in virtually all cir-

cumstances, carry out within our own bordersif th e dat a is destined for eventu al sale. Thiswould, in effect, const itu te a local conten t r e-quirement.

Because such a requirement implies th at thedata being ent ered is a commodity, th is typeof restriction may not be applicable to certaintypes of data—e.g., revenue, personnel, pay-roll information, and the like-reserved for theexclusive use of a business, and not mean t tobe sold. “Buy national” requirements couldfill this gap by mandating that off-shore data

entr y could not be resorted t o unless domes-tic alternat ives were un available. Brazil andCanada for example, have imposed regulationsthat require certain phases of data processingto be conducted within their own borders.

66

If viewed in a broad context, however, im-position of such regulations may serve to stim-ulate reciprocal actions by other countries.Thus, more harm could be done to the U.S.data processing industr y tha n could be coun -ter-balanced by benefits of restricting a par-ticular phase of data processing to our own

shores.

Restrictions on Hardware and Software

In lieu of limiting the kinds of data that couldbe entered off-shore or requiring that data en-try be carried out domestically, requirementsthat U.S. equipment be used could be imposed.In essence, this would constitute another “buyna tional’ requ iremen t. Th is might effectivelypreclude the establishment of keying opera-tions in some countries, since, as previouslymentioned, foreign communications author-ities often monopolize telecommunication equip-

ment markets and require that their locallymanufactured equipment be used. However,man y coun tr ies do not even ha ve a comput er

“Joan E. Spero, “Barriers to International InformationFlows, ” Telecommunications, November 1983, p. 68.

industry, and U.S. computers and modems arealready usually the equipment of choice foroff-shore firms.

Taxation Alternatives

In theory, duties could be imposed on the

data that is keyed off-shore and subsequentlyimported into the United States by physicalor electronic means; the data could be treatedas a commodity or primary good imported forconsumption. Alternatives might be to levyduties on the labor value added to data keyedoff-shore, or to impose a trigger price tariff th at would keep t he pr ice of off-shore k eyingabove domestic levels.

In practice, however, levying any such tariffswould be fraught with difficulty. First, thisshotgun approach to regulation would prob-

ably affect all data importers, of which off-shore keyers area very small minority. In addi-tion, a method for determining the value of data would have to be developed. Value mightbe related to proposed end use or might bebased simply on the basis of the volume of data imported (e.g., a duty might be levied forevery kilobyte—one thousand characters-of data). The latter seems inherently inequitable,since some kinds of data are much more valu-able then others. The former seems nearly im-possible to enforce, unless customs officialsare going to play back and analyze every com-

puter tape.Imposing dut ies on da ta imported via t ele-

communication presents even more oneroustechnical and political problems. The sheer vol-ume of transmissions to the United States andth e man y routes t hey may follow present lo-gistical problems of inestimable proportionsfor monitoring. In the future, the increaseduse of direct sa tellite link s bet ween off-shoreinstallations and domestic offices will makethe imposition of border controls on data flowsextremely difficult, if not impossible.

67

In any case, it seems clear that on-site mon-itoring by government authorities and/or wire-ta pping on a grand scale would be necessary

“-Ibid.




to police electronic data flows. Even if this weretechnically feasible, it is doubtful that reve-nues accrued by a government could justifythe efforts made to collect them.

Putting technical and economic considera-

tions aside, moves toward monitoring dataflows in the United States would undoubtedlyencounter many political obstacles. The prac-tice would cast a clear shadow of authoritari-anism, and have a very inhibitive effect on busi-ness and communications in general. A fargreater purpose than stifling a minor indus-try would obviously be in order if the practicewere adopted. In sum, while the objective tocurtailing off-shore keying could readily be at-tained through tariff legislation, a more tightlyfocused approach wouldpriate.

seem more appro-

Restrictions on DedicatedTelecommunication Lines

Limiting the availability of leased privatetelecommunication lines to off-shore keyingoperations or prohibiting their use for this pur-pose would unquestionably deter the estab-lishment of such operations, because it woulddirectly effect one of the lifelines of the indus-tr y. Since leased lines appear to be the m ostcost effective way to transmit large volumesof data across international borders, off-shorekeyers relying predominantly on telecommu-nication capabilities to operate would be acute-ly effected by any such restrictions.

Regulations of this sort could, of course, beapplied only to the U.S. side of any communi-cation link (e.g., the down-link from a satellitesending data to the United Stat es, a t erres-trial cable in U.S. territory, etc.), since the for-eign ends of such links are out of American

jurisdiction. Nonetheless, this strategy couldbe effective since the regulations could be ap-plied specifically to off-shore data-entry firmswithout impinging on the rest of the data proc-

essing industry.

Restricting access to dedicated lines mightbe accomplished by specifying a limitation onthe number of lines available to off-shore key-ers in different regions. Implicit limitations

might be achieved by imposing stiff tax penal-ties or surcharges on data-entry firms leasingsuch lines.

Several coun tr ies already use this stra tegyto protect their internal data processing in-

dustry and it is quite effective in curtailingundesired activities. In Japan, the Ministryof Posts and Telecommunications, through theinternational telecommunication authority,KDD, kept two large U.S. data processingfirms out of the country’s market by first deny-ing them dedicated lines, and then restrictingtheir use so that the firms could not marketall of their services.” The Deutsche Bundepostin West Germany requires users of leased linesto use th e public-dat a n etwork. In 1982, theauthority declared that it would permit theuse of int ern at iona l leased lines only if some

phase of data processing were conducted inGermany before data was transmitted out of the country.

69Brazil has enacted many restric-

tions on th e use of leased lines. For inst an ce,firms may not use them to access databaseslocated outside the country.’”

Short of limiting access or prohibiting off-shore data-entry companies from using leasedlines, legislation could require telecommuni-cation carriers to impose usage-sensitive rateson these firms. A number of foreign govern-ments have expressed interest in usage-sen-

sitive rates, since they fear the loss of reve-nues that could result from reduced use of theirpublic networks.” One international data proc-essing service estimated that the introductionof usage-sensitive rates would raise its oper-ating costs by 700 percent.

72In the face of such

cost increases, many off-shore data-entry firmswould probably have to close up shop.

Regulations on leased lines could, therefore,offer a relatively “clean” approach toward dis-couraging off-shore keying; impeding othertypes of dat a flows could be a voided becauserestrictions could be tightly focused. To be

—

‘‘Spero, op. cit., p. 68.‘ ‘Ibid.Ibid.,Jussawal]a and Cheah, op. cit.. p. 292.Spero. op. ci~., p. 68.




truly effective, however, such restrictions wouldprobably have to go hand-in-hand with someform of customs regulations so that controlcould be extended over firms who import datarecorded on magnetic media.

Encourage or Do Nothing About

Off-Shore Office Work

Encouraging off-shore offices is discussedin th e same section a s a “do noth ing alterna -tive” because the current status of telecom-

—

munication and customs regulation already fa-vor the growth of this industry. Inaction willundoubtedly assure the continued export of data processing work for so long as the mar-ketplace provides the needed incentives.

Fur th er encoura gement might be achievedthrough increased activity of international de-velopment agencies. For example, the Over-seas Private Investment Corporation couldmake more loans available and otherwise stepup efforts to help U.S. firms find suitable loca-tions and establish keying operations off-shore.



C h a p t e r 9

The Automation of

Federal Government Offices



C o n t e n t s

PageFederal Procurement and Acquisition of Office Automation . . . . . . . . . . . . . . . . . . 234

The Three Phases of Federal Office Automation . . . . . . . . . . . . . . . . . . . . . . . . . . 234Laws and Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235The Federal Inventory of Office Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238

Acquisition Strategies and Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239The D ilemm a of Pr ocur eme nt Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241

What Will Office Automation Mean for Federal Office Productivity? . . . . . . . . . . 242Evaluations of productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243

Implications for the Federal Work Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244Size of the Work Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244Changes in the Mix of Federal Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246Shifts Among Occupational Categories and Grade Levels . . . . . . . . . . . . . . . . . . 246Unanswered Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250Part-Time and Temporary Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251Women in the Federal Work Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252Quality of Worklife. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252

Labor Management Relations and Federal Unions . . . . . . . . . . . . . . . . . . . . . . . . 254International Comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255

Effects of Office Automation on Public Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256A Case Study of Expanding Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256Changes in the Nature of Delivered Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258

Effects on Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258

FiguresFigure N o. Page9-l. Paid Civilian Employment of the Federal Government, 1881-1983 . . . . . . . . . 2459-2. Changes in the Distribution of Federal Employees by Occupation,

1975 and 1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2479-3. Change in Distribution of Federal Employees by Grade Levels, 1974-80 . . . . 248

9-4. Distribution of Federal Employment by Grade Level 1975 and 1983 . . . . . . 2499-5. Full-Time White-Collar Employment in the Federal Work Force by

Grade Level and Sex, 1974-75 and 1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253



Chapter 9

The Automation of

Federal Government Offices

Automat ion of Feder al Governm ent officesis generally keeping pace with automation inthe private sector. The effects are likely to beat least as significant in government officesas in corporate offices. But the forces that drivechange are not the same, and the consequenceswill not necessarily be the same. Governmentis not business, although it is often arguedthat it should be business-like in its approachto delivering services.

Federal office automation is preceding onthe reasonable assumption of significant ben-

efits. Large investments of public resourcesare involved, and most Federal employees willbe affected. Thus, a close look at the potentialconsequ ences of Federa l office a ut omat ion ismerited,

The Federal Government is in effect the Na-tion’s largest office. It occupies 2.6 billionsquare feet of office space; it has 332 account-ing systems and over 100 payroll systems; andit employs about 1,7 million white-collarworkers.

1

Opinions vary widely as to how well and how

rapidly the Federal office is being automated.One trade journal concluded that “governmentis pioneering some leading-edge office auto-mation programs and in many respects isah ead of th e private sector because t he Rea-gan Administration is emphasizing automa-

It is in fact surprisingly difficult to ascertain how manywhite-collar Federal employees there are, or indeed how manyFederal workers there are in all, at any one time. The Officeof Personnel Management, the Bureau of Labor Statistics, andthe Bureau of the Census all publish figures, but they are nevrerthe same figures. The total given varies widely depending onthe time of year or month; or whether it is a monthly averageor an estimate or a survey; or whether and how the count treatstemporary workers, part-time workers, intermittent workers,postal workers, census takers, CIA and NSA workers, congres-sional employees, judicial-system employees, student interns,fellows, etc.; and on how many of the approximately 106 payplans OMB chooses to count. All of these are traps for the un-wary analyst.

tion in the effort to increase efficiency. Someexperts say with equal confidence that gov-ernment offices are behind the state-of-the-art.Comparisons based on many case studies how-ever indicate that while some large corpora-tions are far ahead of Federal agencies in usinginformation technologies, the government isat least keeping up with the private sector asa whole. Among major institutional sectorsit has been the largest user of computer-basedinformation systems.

3

Some agencies are behind their closest pri-

vate sector counterparts. For example, the Fed-eral Reserve Board does not compare with lead-ing financial institutions in terms of eitheradvanced applications or the proportion of crit-ical work that is automated. On the other hand,some agencies are at the frontier in specificoffice automation applications; InternationalRevenue Service (IRS) is one example. Mostagencies are in the mainstream in terms of penetration and in terms of advanced applica-tions of hardwar e an d softwar e. ’

Federal agencies were among the first insti-

tutions to adopt large computers. In the lastfew years, they have been adding small com-put ers an d word pr ocessors t o augment t heirlarge-scale data processing. For the next fewyears, a major trend will be the linking of microprocessors, mainframe computers, andother devices into integrated office systems;and the networking arrangements that willconnect office to office, headquarters to field

‘Office Administration and Automation, September 1984,p. 56.

‘John Leslie King and Kenneth L. Kraemer, “ InformationSystems and Intergovernmental Relations, ” Pub l ic S ector Per-

formance, Trudi C. Miller (cd. ) (Baltimore: The Johns HopkinsUniversity Press, 1984), p, 103,

‘This judgment is based on materials supplied by Federalagencies and comparisons drawn from the literature and fromOTA contractor case studies; and specifically, on the conclu-sions of an OTA contracted report by The Educational Fundfor Individual Rights.

233



234 Automation of America's Offices

offices, an d Feder al agen cies to extern al sys-tems and databases.

This section looks briefly at the effects of office automation that can be detected now,and the effects to be expected over the next15 years. After a discussion of Federal procure-

q

ment and acquisition policies with regard t ooffice au tomat ion, t he r est of the chap ter looks

q

in succession at the following questions:

q

q

q

q

Are t here m ajor problems in Federal a c- q

quisition of information technology?Will automation make Federal officesmore efficient, or more productive?If so, can th at benefit be tra nslat ed into q

lower labor costs, and lower Federalbudgets?What are the potential effects on the size

and structure of the civil service, and whatare the implications for recruitment, clas-sification, and retention of Federal work-ers and for budgetary and personnelpolicies?What are the implications for career ex-

pectations and opportunities of Federalwhite-collar employees?How will automation affect the qualityof their working environment?Will automation affect the relationship of government and citizens—will it changeth e availability or qu ality of governm entservices?Could it affect the exercise of authority,accountability, responsibility, and the qual-ity of decisionmaking?

FEDERAL PROCUREMENT AND ACQUISITION OFOFFICE AUTOMATION

It is the declared policy of the present Ad-ministra tion t hat informa tion is a n economicresource and should be managed efficiently.The empha sis has been on r educing th e costof information-handling rather than on increas-ing information services.

Federal agencies ha ve had wide latitude in

making decisions about office automation. Thepolicy has been to keep governmentwide re-quirements and restrictions to a minimum.Critics charge that this has led to uncontrolledproliferation of small computers, and that thelack of compa tibility among th em is prevent -ing the realization of expected benefits of auto-mation. On the other hand, overly detailed andrigid specifications in procurement of majorinformation systems, including local area net-works, is said t o preclude vendors from find-ing innovative ways to meet governmentneeds, and to result in purchase of equipment

that is already far behind the state-of-the-artwhen it is inst alled.

The Three Phases of

Federal Off ice Automation

The adoption of mainframe computers in thelate 1950s

5led almost immediately to devel-

opment of large centralized-computer centers.The Office of Management and Budget (OMB)

and the General Services Administration (GSA)were soon given governmentwide authorityover a ut omat ic data processing (ADP) policyand standards. During the 1960s and 1970smany of the major activities of governmentbecame dependent on computers for manage-ment functions such as planning, program con-trol, financial and payroll operations, procure-ment control, auditing and inspection, andother government functions. The acquisitionprocess was framed around centralized ADP

‘The first general data processing computer, UNIVAC I,was acquired by the Bureau of the Census, in 1951.



Ch. 9—The Automation of Federal Government Offices . 235

and the communication functions that weredeveloping in parallel.’

In th e 1980s however th e dominan t t hemein Federal office automation has become thespread of end-user computing. It is difficultto distinguish the effects of these two phasesof computerization since decentralized com-puting does not replace, but is superimposedon, centralized computing. Now personal com-puters and word processors are often net-worked and part of an integrated system. Fed-eral procurement policy, and accounting andinventory practices also blur distinctions be-tween these two kinds of office automation.

Most Federal agencies now have word proc-essing, spread-sheet packages, automated doc-ument transmission, and calendaring. The othermost frequently used functions are electronic

filing and computer graphics. Many agencyheadquarters communicate by computer withtheir field offices nationwide.’

Personal computers are being used more andmore by man agers a nd pr ofessiona ls as wellas by support staff. The National Academyof Public Administration, in a 1983 report, as-sumed th at this reduces the load factors andutilization rates of mainframe computers, andsaid that this cast “serious doubt on the fu-tu re r ole of many of the lar ge centr al comput erservice centers that have been built up. . . over

the last 10 to 15 years.

8

But experts gener-ally do not believe that ADP centers will besuperseded by distributed processing. Rather,as sma ll and lar ge comput ers ar e linked, theADP center will be the locus and guardian of the agency data to which all managers andprofessionals will increasingly have access andmake contributions.

—.

‘ International Data Corp., Procurement Information Man-agement Service, “Federal Acquisition Strategies for OfficeAutomation, ” research paper for Continuous Information Serv-ices Clients, March 1983.

‘According to an office automation survey compiled by the

Information Management Assistance division of the Office of Information Resources Management, General Services Admin-istration, November 1984. Thirty-one departments and agen-cies responded to the survey.

‘National Academy of Public Administration, I?e~ritzziizingFederal Management: Managers and Their Overburdened S.F’s-

t ems , November 1983.

Some large Federal computers are, however,already obsolete or will soon become so.

9“Ob-

solete, ” in this case, does not mean that theyare no longer functioning, but merely that morecost -effective t echn ology is ava ilable. Th e oldsystems require repeated patching and modifi-

cation, maintenance costs are high, and spareparts sometimes not available. Older com-puters sometimes have limited on-line proc-essing capacity because they were designedfor 24-hour operation and not for the peakscaused by many end-users.

When these computers are replaced, data-bases often have to be converted, and new soft-ware packages developed or adopted. This isexpensive. The incompatibility of equipmentfrom m an y vendors is a lso causing pr oblems.

Laws and PoliciesThe Paperwork Reduction Act of 1980, Pub-

lic Law 96-511, was a milestone in governmentinformation management. ’” In addition to re-ducing the paperwork burden imposed on busi-ness by government, the act was aimed at im-proving efficiency and effectiveness in the useof inform at ion. It promu lgated t he concept of information resources management (IRM),meaning the integrated management of allbasic information-handling activities and func-tions. The sections of the act dealing withinformation-resources management cover every-thing from conventional libraries to central-ized ADP syt ems, a nd h ave a direct effect onoffice automation.

The act r equired each agency to appoint aninforma tion-resources man ager.

11It charged

‘The Grace Commission criticized the government for al-lowing its data processing systems, which in the early 1970swere state-of-the-art, to fall behind; according to the Commis-sion about 60 percent of the government’s then 17,200 com-puters were in need of replacement or significant upgrading.However, in a recent review of 100 “major systems, GSA con-cluded that only 5 percent are “totally supported by obsoleteADPE systems, ” and that obsolescence ‘‘is not as extensive

as has been claimed. ” See Assessing ADPE Obsolescence in Major Federtd S.ywtems, U.S. General Services Administration,February 1985.

“The act built on the recommendations of the Commissionon Federal Paperwork (1975-77).

“The act specified that these officials should be at the levelof Assistant Secretary. Since the number of these positions

(continued)




OMB, assisted by GSA, with reviewing in for-mation resources management in each agencyat least every 3 years. OMB has largely dele-gated this responsibility to GSA. ’2 In prac-tice, each agency conducts its own review, forwhich GSA provides a voluminous handbook

or set of guidelines. The agency reviews arethen reviewed by GSA.

OMB has sta ted two basic tenets th at gov-ern its approach to information-resources man-agement:

13

q Information is an economic resource andshould be managed in the same way thatother economic resources are managed.

q Information-resources management shouldentail the management of the total infor-mation life cycle from collection to dis-semination.

OMB provides guidance on all matters of budget allocation and procurement in Federalagencies, but this guidance is not specificenough to materially affect the acquisition of office automation equipment.

14GSA does pro-

vide guidance to agencies on this subject, al-though agencies still make their own basic de-cisions.

Twenty years ago, in 1965, the Brooks Act(Public Law 89-306) gave GSA sole authorityto procur e ADP syst ems. ’5 Alth ough th is au -

in each agency is limited by law, the responsibility was gener-ally given to the Assistant Secretary for Administration orthe equivalent. These are now referred to as Senior DesignatedOfficials or SDO’S, and there is typically an Office of Informa-tion Resources Management under them, with a director whoacts as the IRM and represents the agency on the InteragencyCommittee on Information Resources Management. There isan Office of Information and Regulatory Affairs in OMB thatcoordinates OMB responsibilities for implementation of thePaperwork Reduction Act.

“Letter of delegation of June 13, 1983, and TemporaryRegulation 10.

“Executive Office of the President, Office of Managementand Budget, Improving Government Information Resources

Management, March 1982, p. I, hereafter cited as EO P/ OM B 1.“0MB guidance on procurement (which comes from the

“M” or management side of OMB, and specifically from theOffice of Federal Procurement Policy or OFPP) is of courseto be distinguished from OMB review of agency budget requestson the “B side of OMB, which certainly does affect the levelof office automation procurements.

“’DOD computers and related devices were exempted if theequipment was “a mission critical computer resource. ” DODhas argued that if any office automation system is tied into

thority is premised on large-systems procure-ment it remains the basic authority for pur-chase of office automation equipment. If officeequipment contains data processing compo-nents it must be bought under GSA stand-ards and rules governing competitiveness in

procurement. Procurements of microcomputersand word processors,

16when u nder $300,000,

are handled under a GSA schedule (ScheduleC), which means that there are simplified pro-cedures for competitive bids from already au-thorized vendors. When the total value of aprocurement exceeds certain thresholds (forADP equipment in general it is now $2.5 mil-lion) GSA usually issues to the agency a Dele-gation of Procurement Authority, based oninformation provided by the agency about the

just ificat ion for t he pr ocur ement . The agencythen draws up specifications and goes throughits own competitive bidding p rocedur e. (GSAcan withdraw this delegation or change theth resh olds.) GSA acquisitions do not a ccountfor all, or even for the preponderance of, Fed-eral-agency microcomputer acquisitions.

The Competition in Contracting Act17

t ha ttook effect April 1, 1985, created simpler pro-cedures for using GSA’s ADP Schedule inmicrocomputer purchases under $300,000.GSA has an approved list of 45 microcom-put ers, available from 36 suppliers a t specialFederal rates. In addition, a GSA Computer

Store carries 15 brands (not necessarily on thelist); this is designed to encourage the selec-tion by end users rather than leaving the choiceto an agency’s centra l-pur cha sing agent . GSAhas published several attractive booklets of

a mission-critical computer resource system then it is also ex-empt from GSA procurement regulations. Statement of Un-dersecretary of Defense DeLauer on Mar. 4, 1983, accordingto International Data Corp., op. cit., p. 22. The question of whether this applies to word processors has been under reviewseveral times and the outcome is not clear.

“)Word processors were not included under ADP equipment

until late 1983 (SPMR Temporary Reg. F500, Oct. 25, 1983).‘“Part of the Deficit Reduction Act of 1984. The CIC Act,aimed at increasing competitiveness in procurement, makesit more difficult to buy from a preselected sole source, but de-fines as competitive, awards that are made under a GSA Multi-Award Schedule Program such as the ADP program. An agencymay also exclude a specific vendor in the interest of maintain-ing alternative sources.



Ch, 9—The Automation of Federal Government Offices . 23 7

advice to help agencies in buying and manag-ing microcomputers.

18

GSA also ha s resp onsibility for m ost of th ema ny comm on-user telecommun icat ion facil-ities used by Federal civil agencies. If an

agency wants to make a major change in com-mon-user services (e.g., Wide Area TelephoneService, or WATS, lines) to implement officeautomation communications, GSA must ap-prove.]’

The GSA authority under the Paperwork Re-duction Act (and by delegation from OMB)was until recently exercised through two differ-ent services. The Aut omat ed Data and Tele-communications Service, which dealt withADP equipment, and part of the National Ar-chives and Record Service, which dealt with

records management, micrographic, and wordprocessing equipment, have been merged tocreate the Office of Information ResourcesManagement.

20

In April 1984, a number of policies and reg-ulations related to information resources andtechnologies were consolidated in a FederalInformation Resources Management Regula-tion (CFR Pt. 41, ch. 201). Amendments tothe Paperwork Reduction Act have been in-troduced in Congress aimed at strengtheningsome aspects of the law.

21

Other agencies have roles in office automa-tion procurement. The Institute for ComputerScience and Technology in the National Bu-reau of Standards develops standards for ADPand communications equipment, develops tech-nical guidelines, and prepares a yearly fore-cast of developments in computer technology,including office automation.

22The General

“office of Information Resources Management, U.S. Gen-eral Services Administration, Managing End User Computingin the Federal Government, June 1983, and End User Guideto Bu . v i n g Small Computers, August 1984,

“DOD manages its own procurements of communicationstechnology.

“’Another part of GSA’s National Archives and RecordsService became the independent National Archives and RecordsAdministration.

-’S. 2433 (amendments of 1984); H.R. 2718 (amendments of 1983); hearings were held in the House in April 1983 and inthe Senate in April 1984.

‘-Recent budget cuts have abolished the planning office of ICST, leaving in doubt the question of whether these forecastswill be done in the future.

Accounting Office (GAO) has general audit-ing power over all government expendituresand has repeatedly evalua ted office au toma-tion acquisition programs.

The Pr esident ’s Pr ivate Sector Sur vey on

Cost Cont rol (the Gra ce Commission), whichwas highly critical of government managementprocedures, asked, “Can impr ovement of in-formation systems create cost savings andefficiencies and facilitate managerial decision-making throughout the Federal Government?”

23

The report concluded that it could, and thatthis offered the “opportunity for savings andrevenu e of $15.2 billion over 3 year s, an esti-mate that included both office-microelectronicequipment and large systems. The survey teamsaid that the acquisition process was inade-quate, characterized by excessive procedural

steps , a confusin g ar ra y of policies an d dir ec-tives, lack of qualified personnel, and deficienttraining and supervision. The survey team rec-ommended stronger, centralized, govemment-wide policies for information-technology ac-quisition and management, but not necessarilyless discretion for the agencies, although it isnot clear how both objectives can be preserved.

The Administration has stressed the impor-tance of planning, and OMB, GSA, and theNational Bureau of Standards together pre-pare a 5-year plan, updated every 2 years, to-

gether with guidelines to assist agencies inplanning. A new OMB circular, 85-12, will pro-vide agencies with further guidelines to be usedin planning. Agency managers, however, oftenexpress a feeling of futility in doing long-rangeplanning for information systems because theirbudgetary constraints are constantly chang-ing. Neverth eless, the desire t o link per sonalcomputers and word processors to mainframesand minicomputers, and to other devices, ispushing Federal agencies toward planning andcoordination of equipment acquisition, prob-ably more effectively than could be done by

instituting government-wide requirements.

“The Executive Committee to carry out the survey wasestablished by Executive Order 12369, June 30, 1982. See: Presi-dent’s Private Sector Survey on Cost Control, Management Office Selected I ssues, vol. VII 1, ‘‘Information Gap in the Fed-eral Government, winter 1983.




The Federal Inventory of

Office Automation

Expenditures for information technology forFederal agencies grew from about $10.4 bil-lion in 1983 to $13.9 billion in fiscal year 1985,

increasing 19 percent in the first year and 13percent in t he second.

24This is a mu ch lar ger

growth than that for Federal expenditures asa whole. About a third of these expendituresare for defense-related agencies.

The government has been spending about1.4 percent of its budget on information tech-nology; this is perhaps somewhat less thanthe rate of spending by private corporationsin the services and manufacturing sectors,

25

in spite of the greater intensivity of whitecollarwork in government (about 80 percent of the

Federal work force are white-collar workers,compared to about 55 percent of the total ci-vilian work force). The average length of timein ser vice for Federa l comput ers in 1982 was

just under 7 years, and decreasing as old sys-tems are replaced.

The purchase of equipment (capital invest-ment) accounts for only about 19 percent of these expenditures, compared to 36 percentfor commercial information services (ADP,etc.). The rest is for equipment leasing or rentaland for personnel costs. Federal policy has gen-

erally been to encourage purchasing ratherthan leasing; it is more cost effective, and theproport ion of systems t hat are leased ha s de-clined from 36 percent in 1970 to 12 percentat present.

26 But some procurement specialistsquestion this strategy since leasing wouldmake state-of-the-art technology more read-ily available.

—-— - .- -“Office of Management and Budget, General Services Ad-

ministration, and Department of Commerce, A Five-Year Plan for Meeting the Automatic Data Processing and Telecommu-nications Needs of the Federal Government, vol. 1, April 1984.

Hereafter cited as Five Year Plan, 1984.“’Thomas G. Cody, “How Senior Execs View Info Technol-ogy, ” Government Computer News, July 1984, p. 64.“In 1960, over 80 percent of computer systems used in the

Federal Government were leased; by 1970 this had droppedto 36 percent, from 1977 to 1983 it was about 9 percent, andsince then it is rising again, to 12 percent in 1984. Five-Year Plan, 1984, pp. 1-3.

In r ecent years, the lar gest absolute increasesin expenditures for information technologieshave been in the Department of Defense (DOD),the Department of Energy, and the Depart-ment of Health and Human Resources. Buta number of small agencies that had lagged

behind h ave ha d bigger percentage increasesin order to catch up with the pace; for exam-ple, the Office of the U.S. Trade Representa-tive (USTR), the Departm ent of J ust ice, andthe Securities and Exchange Commission.

DOD is by far the largest user of office auto-mation among Federal agencies with about 67percent of the stock. DOD however also hasthe largest share of all Federal white-collarworkers (about 40 percent of them). One meas-ure of the extent to which an agency has auto-mated is the comparison between its share of

total Federal office automation, and its shareof the Federal whitecollar work force. The ra-tio of DOD’s sh ar e of aut omation t o its s ha reof the white-collar work force is a modest 1.68compared to 8.24 for the Department of State,3.41 for the Environmental Protection Agency,and 3.34 for the National Aeronautics andSpace Administration.

27

In 1982, the Federal Government had in itscomputer inventory about 13,667 major sys-tems with over 20,000 central processing units.This inventory is not complete nor accurate.”

Moreover, GSA will no longer at tem pt to listsystems costing less than $50,000, and hasrecently discontinued its tracking of commu-nications use and costs. It is therefore impos-sible to say how much office automation equip-ment the government owns. In ear ly 1983, theGeneral Service Administration said that“there are estimates” of 82,000 word proces-

———‘

qInternat~onal Data Corp., op. cit. These percentages are

for 1982-83; more recent figures are not available.‘“GSA, Automatic Data Processing Inventory, April 1984.

GSA guidelines require agencies to report all systems with aCPU but agencies nevertheless differ on their interpretations

of the guidelines-e. g., some do not include word processingsystems and some do. An on-line version of the inventory isbeing developed, but it will not include systems costing lessthan $50,000. GAO concluded in March 1985 that “GSA’s database of the government’s inventory of computer equipment hasbeen inaccurate for some time. ” (U.S. General Accounting Of-fice, Effective Management of Computer Leasing Needed toReduce Government Costs, IMTEC-85-3, Mar. 21, 1985, p. 11 1).



sors in government off ices , 29 b u t t h e s e e s t i -

ma t e s we re ba se d on l y on o l d ru l e s -o f - t humb

a b o u t g o v e r n m e n t ’ s s h a r e o f c o m p u t e r p u r -

chases. Most agencies are not sure how many

pe rsona l c omput e r s o r sma l l word p roc e s sor s

t h e y h a v e . A c c o u n t i n g a n d i n v e n t o r y c a t e g o -

ries differ across agencies in how they catego-

r i z e l e a s i n g a r r a n g e m e n t s , p a c e d p a y m e n t s ,

e t c .30

Age nc y IRM of f i c i a l s ne ve r t he l e s s c om-

plain about surveys or audits aimed at clarify-

ing these quest ions; audits are seen as a heavy

b u r d e n t h a t d e t r a c t s f r o m m o r e p r o d u c t i v e

w o r k .

M u c h o f t h e o f f i c e a u t o m a t i o n e q u i p m e n t

now be ing bought i s low cos t ; dec i s ions about

personal computers are in this sense not much

di ffe rent f rom dec is ions about desks and type-

wr i t e r s . Ove r -e l a bora t e r e gu l a t i ons a nd c on-

trols could be needlessly cost ly. Organizat ionsne e d t he f r e e dom t o e xpe r i me nt i n o rde r t o

ident i fy the most useful t echnology for them.

H o w e v e r , m o n i t o r i n g a n d i n v e n t o r y c o u l d b e

done wi t hou t a f fe c t i ng t he r a nge o f c ho i c e .

Current procedures for inventory of officeautomation equipment make it difficult to as-sess the status, l;evel of capital investment, andrate of investment. Projections of future officeaut omat ion, futur e costs, an d futur e benefitsare therefore unreliable, and effects hard tomeasure. This is a problem for agency plan-

ners a nd decisionma kers tr ying to assess thecost-effectiveness of automation.

‘<U.S. General Services Administration, Office of Informa-tion Resources Management, Ma na~”ng End User Computingin the Federal Government, June 1983, p. 3.“’U.S. Office of Management and Budget, U.S. General

Services Administration, and U.S. Department of Commerce, A Five Year Plan: Meeting Automatic Data Processing and Telecommunications Needs of the Federal Government, April1983, pp. 12 1-146; National Bureau of Standards, Future In-

formation Processing Technology–1 983. Special Publication500-103, pp. 177-179; International Data Corp., “Federal Ac-quisition Strategies for Office Automation,” research paper forContinuous Information Services Clients, ” by the ProcurementInformation Management Service, March 1983, p. 32; and Dr.Richard J1’erling, “Applications of Information Technology inGovernment, ” July 1984, contractor report for the CIT Gov-ernment Information Systems Assessment, OTA.

Ch, 9—The Automation of Federal Government OffIces . 239

Acquisition Strategies and Problems

Within OMB and GSA guidelines each agen-cy makes its own decision about office auto-mation acquisition. OMB Circular A-109 re-quires every agency to have an acquisition

str at egy; some of th ese str at egies ha ve beenwidely criticized.

31A series of GAO reports

has faulted agencies for:32

not complying with guidelines and regu-lations,not studying alternative methods of ac-quisition,leasing rather than purchasing,using vendor-specific programming lan-guage,not adequately analyzing agency missionand needs,

failing to have a long-range plan,not consolidating individual small-volumeorders,purchasing equipment in excess of needor likely use,failing to properly inventory equipment,lack of accountability in controllingequipment,failing to issue or enforce departmentwidepolicies,not separating short-term objectives fromlong-range plans,failure to use word processing to reduce

the cost and size of the work force,faulty cost/benefit analysis,not realizing maximum productivity gains,underestimation of operating and main-tenance costs, anduse of untested technology.

. —

“For example, a National Academy of Public Administra-tion panel {op. cit. ) concluded that only a few agency leaders“are really aware of how swiftly change is being forced on their

organizations as a result of rapid office automation. ” As a re-sult, the panel said, acquisitions are often haphazard and poorlyplanned and fail to meet their objectives.Wee U.S. General Accounting Office reports CED-81-15,

Oct. 23, 1980; AFMD-81-55, Apr. 21, 1981; HRD-81-74, Apr.21, 1981; HRD-81-106, June 30, 1981; CED-82-1 13, Sept. 30,1982; GGD-83-103, Sept. 1, 1983; IMTEC-84-11, May 25, 1984;and AFMD-82-54, Sept. 21, 1982.




Noncompatibility

Some of the most difficult decisions aboutacquisitions strategies involve the value of compatibility of small systems and devices.Some Federal executives insist that it is most

important to get office equipment that is use-ful now; diversity will help the agencies deter-mine what kinds of automation are most suc-cessful. Noncompatibility is a minor problem,they say; by the time it becomes cost-effectiveto tie systems t ogether, it will be time to buynew up-to-date equipment. The experience andlearning gained meanwhile will carry over.

This seems to be a minority position. Thetying together is already going on, and formost agencies noncompatibility is certainlya problem. However, this problem may be an

unavoidable cost of competitive procurement.Moreover, cumbersome attempts at coordina-tion and control during the first few years of personal computers would almost certainlyha ve great ly delayed th e au tomation of Fed-eral offices and put the government far behindthe private sector in the pace of adoption.

Becau se the government is a major mark etfor office automation, it is often urged to forceth e development of indu str y-wide standa rds,or to develop its own standards. Many expertsth ink h owever t ha t since the development of voluntary standards is proceeding, it wouldbe preferable in the long run for governmentnot to force this issue by intervening morestrongly. There appears at present to be littlepressure for such intervention.

Inappropriate Choices

Many day-to-day problems come about be-cause of the selection of equipment by man-agers who do not understand the mechanicsor flow of work in their own offices. The sup-port staff is often not consulted, although theycould bring to the decisionmaking valuable in-

formation that is otherwise not available. For-mal description of work procedures often bearsonly nominal relationship to the real processof moving a form, a lett er, or a report out t hedoor. How smoothly the movement proceedsis affected by a myriad of details from how

the office furniture is arranged, to what elsehas to be done at the sam e time. Hardware,software, or auxiliary furniture can improvethis workflow or it can disrupt it, dependingon characteristics that may appear unimpor-tant or irrelevant to those who are not actu-

ally doing the work.

The Complexity of Options

The procurement of networking technologiesinvolves much higher costs and longer-livedsystems th an th e choice between st and alonedevices. Mistakes are more serious. Even inprocuring simple systems, the procurement op-tions are becoming complex. To get a telephonesystem for a new office, the Federal executivemust now choose between buying and leasing.If the budget only has operating funds, not

capital investment funds, lease financing isnecessary .33

Privatization

An agency’s evaluation of its needs for com-puters and related equipment has also beencomplicated by confusion over Administrationpolicy about contracting with private organi-zations for information-related services. OMBCircular A-76 requires the contracting out of services that can be performed more cheaplyby th e privat e sector. Man y agencies h ave con-tracted for data entry or word processing torelieve the load on old systems and avoid theneed for new systems. Some have become de-pendent on outside sources for training andsupport of office automation instead of devel-oping the capabilities that they will need inthe future.

Recent studies of productivity factors re-sulted in revision of A-76 to emphasize 14 ma-

jor categories of services in contracting out.These include ADP, data entry and keypunch,audiovisual, and mail and file services. Agen-cies are now required to consider three options

—internal performance, use of another gov-ernment agency, and outside contractors. They

“Patrick J. Keogh, Chief of the Economic Analysis Branchof GSA, “Deregulation is Challenge to Procurement Officials, ”Government Computer News, November 1984.



Ch. 9—The Automation of Federal Government Offices q 241

are s t i l l e n c o u r a g e d to contract out as many profe s s i ona l p roc e dure s a nd t he i nc re a s i ng l y

se rv i c e s a s pos s i b l e , i f t hose s e rv i c e s woul d de ma ndi ng sa fe gua rds a nd c he c ks i mpose d by

r e q u i r e m o r e t h a n 1 0 F e d e r a l e m p l o y e e s .3 4

C o n g r e s s t o e n s u r e f a i r c o m p e t i t i o n .

OMB recently reported that cost compari-sons are now going aga ins t p r iva t iza t ion in

about half of the act ivi t ies reviewed, a muchhigher percent than in the past . This has been

a dva nc e d a s a n i nd i c a t o r t ha t gove rnme nt i s

be c omi ng more e f f i c i e n t i n c a r ry i ng ou t i t s

a c t i v i t i e s .

The Dilemma of Procurement Policy

I n t h e i r own audi t s and reviews, agenc ies

f r e q u e n t l y i d e n t i f y p r o b l e m s s u c h a s t h o s e

GAO l i s t e d a bove . For e xa mpl e , t he Inspe c -

t o r G e n e r a l o f a m a j o r a g e n c y3 6

i n a 1 9 8 5

p o s t - i n s t a l l a t i o n r e v i e w o f m a j o r s y s t e m s

listed a number of failures: no clarification overwho has cont rol over the projec t , no de te rmi-

na t i on o f t o t a l -use r r e qu i re me nt s , poor p l a n-

ning and des ign, l ack of coordina t ion be tween

t wo use r g roups , a nd a c qu i s i t i ons oc c ur r i ng

at field level, resulting in incompatibility. Mis-

takes of thi s kind can and should be avoided

a s b e t t e r p r o c e d u r e s a r e d e v e l o p e d .

Bu t at t he same time, for la rge r sys tems,agency procurement procedures may be too

elaborate and too rigid.37

For advanced Sys-tems, including the computer networks that

are becoming a high priority goal in most agen-c i e s , t he p roc ure me nt p roc e dure s o f t e n r e su l t

i n spe c i f i c a t i ons t ha t a re p re c i se , e l a bora t e ,

a nd r i g i d . Th i s c re a t e s ma j or p rob l e ms . The

a ge nc y c on t ra c t s o f f i c e r f i nds h i mse l f c a ugh t

i n a t e ns i on be t we e n t he a ge nc y o r p rogra m

officer’s need to solve old problems or achieve

n e w g o a l s w i t h a d v a n c e d t e c h n o l o g y o n t h e

o n e h a n d , a n d o n t h e o t h e r h a n d , c u s t o m a r y

“Eric Fredell, “OMB Restricts Contracting Out in A-76Revision, ” Governm ent Computer News, November 1984.

‘5

Myron Struck, “Workers Break Even in Cost Studies, ” T h eWashington Post, Apr. 11, 1985, A19.

‘This was typical of audits and reviews shown to OTA byagencies; there is no intent here to single out a specific agencyfor criticism or otherwise, and the agency is therefore not iden-tified.

‘Based on discussions at workshops for Federal agency of-fice automation specialists held by OTA in October 1984 andJuly 1985, and on many other written and spoken communica-tions from Federal officials.

To guard against violations of establisheds a f e g u a r d s , t h e contracts officer tends to in-

sist on elaborate specificat ions before request-ing bids. As a result, the development of thet e c h n o l o g y m a y outrun the procurement cy-

c l e , a nd e qu i pme nt ma y be be h i nd t he s t a t e -

of-the-art by the t ime i t is instal led. Vendors

h a v e n o o p p o r t u n i t y t o p r o p o s e a l t e r n a t i v e

spe c i f i c a t i ons t ha t c ou l d p rov i de more i nno-

v a t i v e w a y s o f m e e t i n g a g e n c y n e e d s .

Overspecification is particularly likely to oc-

cur wi th informat ion technologies because con-

tract ing officers usual ly are not experts in the

technology and are unable to rely on their own

p r o f e s s i o n a l j u d g m e n t a b o u t h o w d e t a i l e ds p e c i f i c a t i o n s m u s t b e . C o n t r a c t i n g o f f i c e r s

are themselves at severe risk i f there are too

ma ny c ha l l e nge s t o t he i r a c t i ons on g rounds

o f i n a d e q u a t e c o m p e t i t i o n a n d t h i s m a k e s

t h e m e v e n m o r e c a u t i o u s .3 8

An additional complication with competi-t i ve ne s s i n r e ga rd t o i n fo rma t i on- t e c hno l ogy

p r o c u r e m e n t i s t h e d e s i r e f o r c o m p a t i b i l i t y

wi t h e x i s t i ng e qu i pme nt . I f t he p roc ure me nt

i s dec ided on the grounds of compat ibi l i ty , i t

m a y b e f a u l t e d f o r n o n c o m p e t i t i v e n e s s ; i f

g r e a t e r c o m p e t i t i o n r e s u l t s i n p r o c u r e m e n t s

t h a t r e q u i r e a d d i t i o n a l h i g h e x p e n d i t u r e s t o

c ompe nsa t e fo r nonc ompa t i b i l i t y , t he de c i s i on

ma y a l so be f a u l t e d .

Overspecification, according to industr y ex-per ts , can result in procurement specifications

t ha t r e f l e c t obso l e t e a pproa c he s t o t e c hn i c a l

problems, or specificat ions that no vendor can

e x a c t l y m e e t , a l t h o u g h s e v e r a l v e n d o r s m a y

ha ve a l t e rna t i ve a pproa c he s t ha t woul d so l ve

the technical problem, perhaps at less cost than

i s e n t a i l e d i n me e t i ng t he gove rnme nt spe c i -

f i c a t i o n s .

‘Federal contracts officers have a warrant, giving themsign-off authorit~’ on contracts up to a specific dollar limit. If there are serious challenges to their decisions about competi-tive contracts they may not only get a poor performance evalu-ation, but can lose their warrant, or have their sign-off author-ity reduced, which would seriously damage their future careeroutlook.




In some cases, a t t e m p t s to make p r o c u r e - policies that give agency managers wide discre-

me nt s more c ompe t i t i ve a nd t o i nc re a se a c - tion in formulating acquisition policies, has kept

countabi l i ty resu l t in procedures that seriously pace with private sector office automation, andobstruct the accomplishment of agency respon- that the opportunist y for increased productivity

sibilities. will not be unduly limited by procurement-re-

in s pite of th ese pr oblems, OTA concludes

lated problems.

that office automation, under Administration

WHAT WILL OFFICE AUTOMATION MEAN FORFEDERAL OFFICE PRODUCTIVITY?

Nearly all observers agree that Federal of-f ice automat ion i s increas ing agency produc-

t i v i t y . Bu t be c a use t he re i s no a gre e me nt on

t he de f i n i t i on o f p roduc t i v i t y , t h i s be ne f i t i s

h a r d t o m e a s u r e a n d d o c u m e n t .

Ba se d on pa s t e xpe r i e nc e a nd a na l ogy wi t h

the pr iva te sec tor , the ga in in product ivi ty i s

p roba b l y f a r be l ow t ha t whi c h i s e ve n t ua l l y

poss i b l e . A mi x t u re o f o l d a nd ne w t e c hno l -

o g y i s r a r e l y c o m p l e t e l y e f f e c t i v e . W o r k e r s

us ing the new technology must cope wi th ex-

i s t i n g p a p e r - b a s e d d a t a , t h r o u g h p r o c e d u r e s

bui l t up a round older work ac t ivi t i es , coordi -

na t i ng wi t h o t he r o f f i c e s t ha t ha ve no t be e n

a u t oma t e d , i n a bure a uc ra t i c s t ruc t u re o rga -

n i z e d t o f i t t he e a r l i e r pa t t e rns o f workf l ow

and task sequenc ing, and in a workplace envi -

ronme nt t ha t wa s no t p l a nne d wi t h t he ne w

t e c h n o l o g y i n m i n d .

Moreover, the training that is given to work-

ers us ing the new technology i s c lear ly inade-

quate. Most of them are learning on their own,

a nd f rom e a c h o t he r . Th i s t a ke s t i me t o a c -

c ompl i sh , a nd a l so c u t s i n t o t he t i me t ha t i s

spent in di rec t product ion of output , both for

learners and teachers. Managers, too, are st i l l

s t rugg l i ng t o l e a rn ne w t e c hn i que s fo r ma n-

a g i ng t he a u t oma t e d o f f i c e . (Fe de ra l t r a i n i ng

i s a l so d i sc us se d i n c ha p t e r 3 . )

Evalua t ions of P roduc t iv i ty

The General Accounting Office estimatedthe cost of the government work force as $81b i l l i o n in 1980 and on that basis calculated

a potent ia l savings of $12 bi l l ion, or 15 per-

cent, t h r o u g h t h e use of office automat ion.39

I t i s no t c l e a r how t h i s e s t i ma t e wa s c a l c u-

l a t e d , bu t t he 15 pe rc e n t e s t i ma t e r e c ur s f r e -

quent ly in agency projec t ions of increased pro-

d u c t i v i t y .

The f i r s t round o f a ge nc y re v i e ws o f t he i r

i n f o r m a t i o n - r e s o u r c e s m a n a g e m e n t , a s r e -

q u i r e d b y t h e P a p e r w o r k R e d u c t i o n A c t , b e -

gan in 1982. These reviews varied in scope and

ob j e c t i ve ; some we re de s i gne d t o a s se s s sys -

t e m p e r f o r m a n c e , s o m e e v a l u a t e d t h e e f f e c -

t i ve ne s s o f sys t e ms i n d i r e c t suppor t o f spe -

c i f i c p r o g r a m a r e a s , a n d s o m e c o n c e n t r a t e d

on t he e f fe c t s on a dmi n i s t r a t i ve r e spons i b i l i -

t i e s a n d b u d g e t s .4 0

The reviews were intended to address progress

i n r e d u c t i o n o f t h e p a p e r w o r k b u r d e n , i m -

proved del ivery of services, el iminat ion of ac-t i v i t i e s t ha t dup l i c a t e p r i va t e s e c t o r sourc e s ,

b u d g e t s a v i n g s , i m p r o v e d p r o d u c t i v i t y , i m -

proved technology, and improved management

c on t ro l s . Bu t f e w c i t e d spe c i f i c p roduc t i v i t y

ga i ns t ha t c ou l d be qua n t i f i e d . The se s t a t us

reports illustrated why it is difficult if not im-

possible to specify, either in advance or in ret-

rospect, the direct productivity y benefits of of-

f i c e a u t oma t i on . F i r s t , i n fo rma t i on re sourc e s

m a n a g e m e n t g o e s b e y o n d o f f i c e a u t o m a t i o n

“AS quoted by the U.S. General Services Administration, Of-

fice of Information Resources Management, Managing End User Computing in the Federal Government.

‘“OMB then targeted and monitored 66 of the reviews, be-ing conducted by 26 agencies. Executive Office of the Presi-dent, Office of Management and Budget, Improving Govern-ment Information Resources Management: A Status Report,March 1983. Hereafter cited as EOP/ OMB 2. See also EOP/ OMB1, cited previously.



Ch. 9—The Automation of Federal Government Offices . 243 — . —

and some of the gains come from reorganiza-t i o n o r i n c r e a s e d m a n a g e m e n t a t t e n t i o n . S e c -

ondly , in most cases , au tomat ion is no t a one-

t i m e , s e l f - c o n t a i n e d e v e n t a n d c o m p a r i s o n o f

c l e a r - c u t b e f o r e a n d a f t e r m e a s u r e m e n t s a r e

n o t p o s s i b l e .

Many agencies have provided OTA with sys-

tem p lans and evaluat ion repor ts in which they

m a d e e s t i m a t e s o r p r o j e c t i o n s o f p r o d u c t i v i t y

g a i n s f r o m o f f i c e a u t o m a t i o n . F o r e x a m p l e ,

a n a t u r a l r e s o u r c e a g e n c y r e c o u n t s c u t t i n g

staff in one field office from 370 to 120 when

m u c h o f t h e w o r k w a s a u t o m a t e d b y a n e w

co mp u te r sy s t em. Th e r e a r e a l so man y e s t i -

m a t e s o f f u t u r e s a v i n g s . A s c i e n c e - o r i e n t e d

a g e n c y e s t i m a t e s t h a t 1 0 p e r c e n t o f t h e w o r k

h o u r s o f a d m i n i s t r a t i v e p e r s o n n e l a n d 3 p e r -

cen t o f th o se o f i t s sc i en t i s t s’w i l l b e s a v e d .

A n o t h e r a g e n c y e x p e c t s t i m e s a v i n g s o f 1 0p e r cen t f o r ad min i s t r a t iv e p e r so n n e l an d 2 0

p e r cen t f o r p r o f ess io n a l s , an d th e e l imin a t io n

o f s o m e t e c h n i c a l p o s i t i o n s . T h e s e e s t i m a t e s

are persuasive in context, but they use so many

d i f f e r e n t w a y s o f e s t i m a t i n g o r a g g r e g a t i n g

t h a t t h e y c a n n o t b e e v a l u a t e d o r c o m p a r e d .

A l t h o u g h n o t c a l l e d o u t a s a c r i t e r i a f o r

ev a lu a t io n in th e s t a tu s r ep o r t s , t h e r e ap p ea r

t o b e m a n y c a s e s w h e r e i n f o r m a t i o n t e c h n o l -

ogy has resu l ted , o r can resu l t , in serv ices to

the publ ic that would not be possib le wi thout

i t .4 2

B u t i n t h e i n t e r e s t o f r e d u c i n g t h e F e d -

era l def ic i t , there has been more emphasis on

a t t e m p t s t o r e d u c e o r c o n s t r a i n t h e g r o w t h

o f g o v e r n m e n t s e r v i c e s t h a n o n e x p a n d i n g

t h e m .

O M B , w h i l e s p e c i f y i n g p r o d u c t i v i t y a s a n

evaluat ion cr i ter ia , has no t def ined i t nor pro-

vided a metric for it. OMB says only that with

t h e t e c h n o l o g y “ t h e F e d e r a l G o v e r n m e n t

sh o u ld b e ab le to u t i l i ze av a i l ab le r e so u r ces

in a mo r e e f f i c i en t an d e f f ec t iv e man n er . ’4 3

— - . —“Fifteen percent of the 20 percent of their time that the

scientists spend on administrative duties.‘For example, the automation of the Occupational Safety

and Health .Administration technical Data Center allows0S11A to respond yearly to several thousand inquiries by go\r-ernment agencies, workers and their unions, employers, publicinterest groups, and the general public.‘lEOP 021111 1, p. 12.

P ro d u c t i v i t y co u l d mean more or better work

per formed or serv ices del ivered ; i t could mean

d o in g th e same wo r k a t l e ss co s t .

The Merlin Experiment

One example of productivity assessment is

a n O f f i c e o f P e r s o n n e l M a n a g e m e n t ( O P M )

evaluat ion of the General Serv ice Administ ra-

t ion’s Mer l in System, insta l led in GSA’s West-

ern Region in Ju ly 1983.44

M e r l i n i s c o m p o s e d

o f 8 4 p e r s o n a l c o m p u t e r w o r k s t a t i o n s l i n k e d

b y a l o c a l a r e a n e t w o r k a n d u s e d b y m a n a -

g e r i a l , t ech n ica l , an d sen io r c l e r i ca l emp lo y -

ees . The OPM study was based on systemat ic

m e a s u r e m e n t a n d e v a l u a t i o n o f w o r k b e f o r e

and after the installation. In 39 of the 47 cate-

g o r i e s o f t a s k s s t u d i e d , o u t p u t i n c r e a s e d “ r e -

m a r k a b l y ” : O P M r a t e d t h i s ‘ ‘ a s t r o n g o v e r a l l

i m p r o v e m e n t . The volume of ou tput per em-p l o y e e h o u r w e n t u p i n 1 4 o f 1 9 c a t e g o r i e s .

Cost per unit of output was reduced in 79 per-

cen t o f th e ca teg o r i e s . I n so me ca teg o r i e s i t

was possible to compare the same kinds of out-

put with and without use of Merlin, in the same

t i m e p e r i o d ; 1 0 o f t h e 1 7 c a t e g o r i e s s h o w e d

i m p r o v e d u n i t t i m e w i t h M e r l i n . O P M a l s o

found a reduct ion in contract p repara t ion t ime,

i m p r o v e d t i m e a n d p r o j e c t m a n a g e m e n t , a n d

a ‘ ‘ mar k ed r ed u c t io n ’ in t ime sp en t in mee t -

ings, due to the system’s communicat ions ca-

p a b i l i t i e s . O P M ’ s f i g u r e s a p p e a r t o i n d i c a t e

about a l -percent cost sav ing for the organiza-t ion as a whole (across about 4 .4 person years

spent in all tasks done by the organization) .45

No information is given about the cost of Mer-

l i n o r i t s a n t i c i p a t e d l i f e t i m e .

Incent ives

In the private sector, increasing the outputand/or the quality of the product should in-

c r e a s e t h e o r g a n i z a t i o n ’ s m a r k e t s h a r e a n d

ul t imate ly i t s p rof i ts . This incent ive does no t

“U.S. Ge~eral Services Administration, Office of Informa-tion Resources Management, Merlin Imp r o \ ’emen t s , January1985.

‘ App. D of the cited report gives “total time and totalcost” for sample 1 (preMerlin) as 9,200.6 hours and $132,160,10or S 14.36 per hour; for sample 2 (post-Merlin) as 9,763.0 hoursand $138,731.30 or $14.21 per hour.




ope r a t e in government. On the contrary, a gov-

e rnme nt o rga n i z a t i on t ha t pe r fo rms i t s work

at less cost typical ly finds i ts budget reduced

for the fol lowing year, usual ly with no reward

for t he ma na ge rs who a c h i e ve d t he c os t r e -

duc t i on . Ins t e a d , i f t he y ha ve fe we r e mpl oy-

ees they may lose status and find their chances

of a higher grade level significantly prejudiced .46

The a l wa ys p re se n t pos s i b i l i t y o f a c ros s - t he -

boa rd budge t c u t s e nc oura ge s Fe de ra l e xe c u-

t ives to keep staff levels above the minimum

that is necessary so that cuts can be absorbed

“For example, a 1980 U.S. General Accounting Office re-port concluded that productivity rates achieved by Federal pay-ment centers varied by 600 percent, and added that the GAOauditors were told by payment center managers that there werestrong disincentives against raising productivity, of the kinddescribed here. GAO, Improving the Productivity of FederaJPayment Centers Could S a v e Millions, FGMSD-80 -13 , Feb. 12,1980.

without damaging their ability to get the work done.

New York City undertook to automate its

muni c i pa l o f f i c e s unde r a s t rong d r i ve t o r e -

d u c e c o s t s a n d i n c r e a s e g o v e r n m e n t reve-

n u e s ,47

and high level officials say that progressi s be i ng ma de t owa rd t he se goa l s . The sa me

p r e s s u r e s a r e o p e r a t i n g w i t h i n t h e F e d e r a l

agencies, and there is every reason to ant ici-

pa t e t ha t t he r e su l t s w i l l be muc h t he s a me .

P r o d u c t i v i t y a s m e a s u r e d b y o u t p u t a n d b y

labor costs is l ikely to increase; whether this

i s a c c ompa ni e d by i mprove me nt i n t he qua l -

i t y o f gove rnme nt s e rv i c e s i s muc h more un-

c e r t a i n .

“According to a case study of municipal office automationdone for OTA; see app. B for a summary.

IMPLICATIONS FOR THE FEDERAL WORK FORCE

If office automat ion does increase produc-

t i v i t y i n Fe de ra l o f f i c e s , i t c ou l d a l l ow Fe d-

era l whi t~col la r employment to be reduced (or

i t c ou l d a l l ow gove rnme nt s e rv i c e s t o be e x-

panded wi thout a proport iona te increase in em-

p l o y m e n t ) . A u t o m a t i o n m a y a l s o :

q c h a n g e t h e nature of the work and the

skill requirements of some jobs,q effect the number of people needed in

some j ob c a t e gor i e s ,

q c r e a t e n e w j o b s a n d o c c u p a t i o n s , a n d

m a k e o t h e r j o b s o b s o l e t e .

Such effects would chan ge the r elative num-

be r o f pe op l e ne e de d i n t he ma j or c a t e gor i e s

of Fe de ra l j obs— profe s s i ona l , a dmi n i s t r a t i ve ,

technical , and clerical ; and also affect the dis-

tribution of people at each grade level and sal-

a r y l e v e l .4 8

S u c h c h a n g e s i n t h e s t r u c t u r e o f

the Federal work force, as well as the size of

the work force, wil l st rongly affect total labor

c o s t s a n d t h u s t h e c o s t o f g o v e r n m e n t . ——- .-—.

In the Federal civil service, employees hold a grade levelin one or the other of approximately 100 pay plans used bythe executive branch. About two-thirds of them are coveredby the largest pay plan, the General Schedule (GS). This hasgrade levels from 1 (the lowest) to 18. The employee’s gradelevel determines the range of salaries that he or she can obtain.

These potential changes should be consid-e r e d in work force projections, in planning, and

in deve loping pol ic ies about personnel recrui t -

ment , rewarding and promoting, retent ion, and

re t i r e me nt . The re i s no i nd i c a t i on t ha t OPM,

OMB, or other cent ra l agenc ies of government

are s tudying the impl ica t ions of such changes .

Since Federal offices have been using com-put ers for a bout 20 years a nd h ave been ra p-id ly a u tom a t ing over the last 5 to 10 years,

indicators of such change should already beapparent with careful statistical analysis. This

a na l ys i s ha s no t be e n done on a sys t e ma t i c

basis. However, OTA concludes that there are

a t l e a s t s o m e g e n e r a l i n d i c a t o r s t h a t s u c h

c h a n g e s a r e u n d e r w a y .

Size of the Work Force

If office automation is affecting Federal em-

p l oyme nt l e ve l s , t he n h i s t o r i c a l g rowt h ra t e sshould be s lowing or revers ing. Growth of the

Federal work force has in fact slowed, stabi-

l i z e d , a nd t he n be e n re ve r se d ove r t he pa s t

15 years. It is not necessary to argue that of-

fice automation has been the cause of this de-

c l ine . The volume of government employment



Ch, 9—The Automation of Federal Government Offices q 245

depends strongly on the political philosophyof the Adminis t ra t ion in power and of Con-

gre s s a bou t t he s c ope o f Fe de ra l Gove rnme nt

r e s p o n s i b i l i t y a n d t h e s e r v i c e s t h a t g o v e r n -

me nt shou l d p rov i de . I t i s a l so s t rong l y a f -

fec ted by popula t ion growth and economic ex-

pa ns i on . Howe ve r , g i ve n a po l i t i c a l i mpe ra t i ve

t o r e duc e t he c os t o f gove rnme nt a nd he nc e

t o sh r i nk Fe de ra l e mpl oyme nt , i t c a n be a r -

gue d t ha t o f f i c e a u t oma t i on ha s a t l e a s t a l -

lowed and faci l i tated a reduct ion of the work

fo rc e .

Federal employment has grown every dec-

ade of our hi s tory except the 1920s . (See f ig-

ure 9-1. ) I t has not , however, kept pace with

growth in popula t ion or in the economy.” Fed-

e ra l e mpl oyme nt g re w by 73s pe rc e n t dur i ng

the 1930s and the New Deal , 88 percent dur-

i n g t h e 1 9 4 0 s a n d w o r l d w a r , 2 3 p e r c e n t i nthe 1950s , and 24 percent in the 1960s .

50T h e

——

“’Federal employment has steadily decreased relative to thesize of the economy and the national population, from 3.7 per-cent of U.S. civilian employment in 1960, to 2.9 percent in 1982,and from 13.1 (executive branch) Federal workers per 1,000population in 1960, to 12.2 in 1982. The Federal proportionof total public sector employees has declined from 33 percentin 1950 to under 18 percent in 1980 (U.S. Department of Commerce, Statistical Abstracts)

‘ Bureau of the Census, Historical Statistics of th e Uni tedStates, Part II, Series 308-317.

Figure 9.1 .—Paid Civilian Employment of theFederal Government, 1881-1983

1881 1891 1901 1910 19201930194019501960 197019801991

Year

SOURCES Data from 1881-1960 based on U S Department of CommerceBureau of Census li~s(orical Abstracts of the U S Co/on/a/ T/rnesto 7970, fart // Series y 308-317 Washington DC 1975 Data from1970-1983 based on U S Department of Commerce Bureau of Census Stat(st/cal A bsfracfs of fhe Um fed States. N 523, Washl n gtonDC 1985

g r o w t h in the 1960s was perhaps in part re-

l a t e d t o t he Vi e t na m Wa r , bu t i t wa s c ha ra c -

t e r i z e d by i nc re a se s i n t he numbe r o f pos t a l

worke r s a nd t he numbe r o f ge ne ra l a dmi n i s -

trat ive, clerical , and office service workers in

n o n d e f e n s e a g e n c i e s .51

Thus , i t wa s p roba b l y

r e l a t e d t o t h e t r e n d t o w a r d a n i n f o r m a t i o n -

i n t e ns i ve e c onomy a nd t o po l i t i c a l i n i t i a t i ve s

s u c h a s t h e W a r o n P o v e r t y .

Bu t from 1970 to 1980, Federal employmentgrowth slowed; it grew only 2 percent in that

de c a de . ” Dur i ng t h i s pe r i od t he Fe de ra l work

f o r c e w a s – l i k e t h e c o u n t r y ’ s g e n e r a l l a b o r

f o r c e – b e c o m i n g m o r e t h o r o u g h l y w h i t e - c o l l a r .

The rat io of white-col lar to blue-col lar Federal

workers changed from 2.9: 1 in 1960, to 4:1 in

1980. Yet a t the same t ime the growth of the

Federal whit~collar work force has also slowed;

i t g r e w m o r e t h a n 1 3 p e r c e n t f r o m 1 9 6 0 - 6 5a n d a g a i n f r o m 1 9 6 5 - 7 0 , b u t o n l y 7 p e r c e n t

from 1970-75 and 3 percent from 1975-80. This

change was at least coincident with the speed-

ing up of office automation, which began about

1 9 7 4 .

Every 2 years from 1960-74, th e nu mber of General Schedule and Merit Pay employees(about two-thirds of all Federal white-collaremploy ment)

53grew about 3 percent; from

1974-84, the average growth rate each 2 years

was only 0.3 percent. This may also be an in-

d i c a t o r t ha t o f f i c e a u t oma t i on wa s ha v i ng a ne f fe c t .

Such ind ica tor s do not of course establish

a c a use -a nd-e f fe c t r e l a t i onsh i p . Ne ve r t he l e s s ,

t h e c u m u l a t i v e e v i d e n c e t h a t a u t o m a t i o n o f

whi t e -c o l l a r work c a n a t l e a s t a l l ow e mpl oy-

—— -- --“Department of Defense employment increased 15 percent

from 1960-70, but it was 43 percent of total Federal ci~’ilianemployment in 1960 and only 41 percent in 1970. (Stat. Abstr.1984, table 535.) But General Administrative Clerical, and Of-fice Services increased 20 percent and postal workers increasedby 26 percent.

“Stat. Abstr. 1984, table 535, p. 333.

“There are over 100 pay codes or schedules for Federal ex-ecutive branch employees, although some co~’er only a handfulof workers. A few, such as those used only for Foreign Serviceemployees, the Tennessee Valley Authority, or the VeteransAdministration, co~er thousands of employees. However, theGSGM pay codes cover about 67 percent of all white-collarworkers, and a higher percentage of those who are administra-tive or clerical.

52-641 0 - 85 - 9




m e n t g r o w t h t o b e c o n s t r a i n e d o r r e v e r s e d

w h i l e t h e a m o u n t o f i n f o r m a t i o n - h a n d l i n g i n -

c r e a s e s , i s p e r s u a s i v e .

Changes in the Mix of Federal Jobs

There are now 8 percent fewer people in the jobs grouped under “General Administrative,Clerical, an d Office Services” th an th ere were

i n 1 9 7 5 .54

A closer examina t ion of thi s group,

whi c h c on t a i ns a bou t one -qua r t e r o f a l l Fe d-

e ra l worke r s , a l so sugge s t s t ha t o f f i c e a u t o -

mat ion i s br inging about bas ic changes in Fed-

e ra l o f f i c e work a nd i n Fe de ra l j obs .

For example, four job titles within thisgrouping have disappeared since 197555—cold-

t ype c ompos i ng ma c h i ne ope ra t i on , d i c t a t i ng

m a c h i n e t r a n s c r i p t i o n , e l e c t r i c b o o k k e e p i n g

m a c h i n e o p e r a t i o n , a n d c a l c u l a t i n g m a c h i n eope ra t i on . Toge t he r t he y a c c oun t e d fo r 8 , 500

j obs i n 1975 , a l t hough e ve n t he n t he y we re

on the way to becoming obsolete jobs. In 1975,

there were a l ready 42,500 computer opera tors ,

special ists , and aides; that number has grown

b y 9 , 0 0 0 .5’

Some job titles have changed as the tech-

n o l o g y associated with them changed-for ex-

ample , ca rd punch opera t ions has become da ta

t ranscr ipt ion. The number of people who pre-

sumably spend much of the i r t ime typing (now

k n o w n a s k e y b o a r d i n g ) m a y h a v e g r o w n d e -

spi te the spread of word process ing. In 1975,

there were over 7,146 dictat ing machine t ran-

s c r i b e r s ( a c l a s s i f i c a t i o n t h a t d o e s n o t n o w

exis t ) , 72,895 c le rk- typis t s , and 62,373 secre-

taries. By 1983, there were 11,780 fewer clerk-

typists but 29,100 more secretaries, a 7-percent

“’U.S. Office of Personnel Management, Federal CivilianWork force Statistics: Occupations of Federal White-Collar and

Blue-Collar Workers, MW 56-18, Oct. 31, 1983, table E, andU.S. Civil Service Commission, Federal Civilian Manpower Sta-tistics: Occupations of Federal Wh ite-collar Workers, SM 56-11, table F-1. Postal workers have been removed from the 1975data to make it comparable to 1983 data.

“The only entirely new job title is equal opportunity spe-cialist, although as noted the title of some job classifications(as identified by code number) has changed.

“The extent to which people displaced from eliminated jobsmove into newly created jobs cannot be answered from thisdata. However, it appears from OPM print-outs that most of the over 7,000 dictating machine transcribers were women; mostof those in computer specialties are men.

o v e r a l l increase. Secretaries, who have more

d i ve r se du t i e s a nd ma ke h i ghe r s a l a r i e s t ha n

c le rk- typis t s , now make up 60 percent of thi s

g r o u p o f w o r k e r s , a s c o m p a r e d t o 4 4 p e r c e n t

i n 1 9 7 5 .

Shif ts Among Occupational Categor ies

and Grade Levels

T h e s e c h a n g e s in and among job classifica-

t ions imply that there wil l a lso be changes in

the shape of the Federa l work force—the di s -

t r i b u t i o n a m o n g m a j o r o c c u p a t i o n a l c a t e g o -

r i e s ( p r o f e s s i o n a l , a d m i n i s t r a t i v e , t e c h n i c a l ,

and clerical) and across grade levels and sal-

a ry leve l s . Such changes have occurred in the

las t decade , a l though undoubtedly many forces

a re ope ra t i ng t o a f fe c t t h i s t r e nd . The d i s t r i -

but ion in t e rms of the major occupat iona l ca t -

egor ies i s squar ing up. The proport ion of c le r-

ica l workers i s dec l ining, and the proport ions

of t e c hn i c a l , a dmi n i s t r a t i ve , a nd p rofe s s i ona l

workers have been growing (a l though the share

made up by profess iona ls i s now beginning to

shr ink s l ight ly) . (See f igure 9-2. )

Clerical Workers

In October 1983, about 25 percent of Gen-eral Schedule (GS) employees were clericalworkers . In 1975, more than 31 percent were

clerical workers. The figures for both years ex-

clude postal workers (who were removed fromOPM’S occupat iona l survey be tween 1979 and

1981); wi th them inc luded, more than 45 per-

cent of white-collar employees were in the cler-

ica l grouping in 1975. Nine ty percent of Fed-

e ra l c l e r i c a l worke r s i n 1983 we re i n g ra de

leve ls 3 through 6, wi th another 3 percent in

g r a d e s 1 a n d 2 .5 7

.

——‘“As a reference point, there were over 305,000 Federal cler-

ical workers in grades 1-6 in October 1984. At the high endof the scale are secretaries and claims, payroll, legal, and travelclerks and statistical assistants; average grades for these jobclassifications are between 5 and 6 (roughly $16,000 to $17,000

in 1983) and there are about 110,000 people in such jobs. Atthe low end of the clerical scale are messengers, clerk-typists,mail and file clerks, and computer clerks, with average gradesof 2-4 ($12,000 to $14,000). The breakdown of workers in eachcategory by grade level is based on an OMB computer printoutas of Mar. 31, 1983, while the total numbers for each categoryare for October 1983. This should not, however, cause any ma-

jor misstatements.




Figure 9-2. —Changes in the Distribution of FederalEmployees by Occupation, 1975 and 1983

1975

Technical (180/0)

Admlnlstrative(24 %)

professional ( 19°70) ‘ Other (8 O.)

1983

Technical (22 O/. )

A d m i n l s t r a t l v e

(28 O/. )

Clerlcal (31 0 /0)

Clerical 25%)

0/0 )

Professi onal (22°/0)

SOURCES 1975: U S CIVII Service Commlsslon, Federal Ciwlfan Manpower Sfa-

f~stfcs Occupat~or?s of Federa/ kVh/te.Co//ar Workers, Oct 31, 1974and 1975, SM 56.11, Washington, DC, 1975, and 1983: U S Off Ice ofPersonnel Management, Federa/ C/v///an Workforce Stat/sf/cs Oc-cupations of Federa/ Wh/te-Co//ar and B/ue-Col/ar Workers, Oct 31.1983, MW 56-18, Washington DC, 1983

I n i n t e rna l Fe de ra l a ge nc y doc ume nt s a nd

i n a ne c do t e s t o l d by Fe de ra l o f f i c e a u t oma -

t ion managers, i t is frequently said that gov-

e rnme nt c l e r i c a l worke r s , onc e t r a i ne d i n t he

use of office automation, are often hired away

by private sector industries that offer higherwages. This is alleged to be true especially in

f ie ld off ices in some sec t ions of the count ry.

This disparity is largely at lower sa lary levels;34 percent of Federal data processing work-ers made under $23,400 in 1983, compared to

22 percent of those in the private sector, ac-

cording to figures derived by the Congressional

Budge t Of f i c e . Howe ve r , 35 pe rc e n t o f Fe d-

eral data processing special ists earned $35,400

or more , c ompa re d t o 33 pe rc e n t o f t hose i n

t h e p r i v a t e s e c t o r s”

‘-U.S. Congressional Budget Office, Reducing Grad es of the

General S chedule Vt’ork Force, September 1984, p. 43.

Technical Workers

About 22 percent of GS employees in 1983

( n e a r l y 3 3 2 , 0 0 0 ) w e r e t e c h n i c a l w o r k e r s o r

pa ra profe s s i ona l s w i t h suc h d i ve r se t i t l e s a s

e c onomi c s a s s i s t a n t , c ommuni c a t i ons spe c i a l -

i s t , t a x t e c hn i c i a n , a nd e qua l oppor t un i t y a s -

s i s t a n t — 1 2 0 t i t l e s i n a l l . I n 1 9 7 5 , o n l y 1 8

p e r c e n t ” of t he Fe de ra l worke r s ha d t e c hn i -

c a l r a t i ngs . Th i s t r e nd p roba b l y r e f l e c t s t he

development of an information society in which

sc i e n t i f i c a nd t e c hn i c a l i n fo rma t i on i s a ma -

j o r f a c t o r i n a l l e c onomi c a c t i v i t y . ’ ”

Administrative Workers

Another 28 percent of GS workers in 1983

(432 , 000) , we re c l a s s i f i e d a s a dmi n i s t r a t i ve ,

compared to 24 percent in 1975. Nearly 11 per-

cent of all Federal white-collar workers are su-

pervisors; just over 2 percent are cal led man-agers, or top-level executives. (The lat ter are

u s u a l l y i n t h e p r o f e s s i o n a l r a t h e r t h a n t h e

a d m i n i s t r a t i v e c a t e g o r y . )61

A b o u t 9 0 p e r c e n t

o f a dmi n i s t r a t i ve worke r s i n 1983 we re l ow

and middle-level managers in grades 9 through

15, with nearly another 10 percent just below

i n g r a d e s 5 t h r o u g h 8 .62

P r o g r a m m a n a g e r s ,

he a l t h sys t e ms a dmi n i s t r a t o r s , a nd c omput e r -

s y s t e m s a d m i n i s t r a t o r s , f o r e x a m p l e , h a v e

a ve ra ge g ra de l e ve l s o f 13 o r ove r . Pa s spor t

and visa examiners and social insurance claims

e xa mi ne r s a re a t t he l owe r e nd o f t he r a nge

and have grade levels under 9. Again, it is the

administrat ive classificat ions with lowest grade

l e ve l s t ha t a ppe a r mos t l i ke l y t o be r e duc e d

i n numbe rs a s some of t he i r t a sks a re a u t o -

mated, i f the experience of their closest coun-

terparts in the private sector, insurance raters,

a n d u n d e r w r i t e r s , c a n b e g e n e r a l i z e d .

“U.S. Civil Service Commission, Federal Civilian Manpow- er S tatistics: Occupations of Federal Whi teCo l la r Workers, Oct.31, 1974 and 1975, SM 56-11, pp. viii and x. The 1975 figureshave again been revised to exclude postal workers. See tableB of the CSC publication.“The grade levels for technical jobs vary widely (the 90 per-

cent range is from GS 4-11) but the a~’erage grade is 7.14 (a\’er-age salary $21,000 in 1983].

‘ ‘U.S. Office of Personnel Management, Federal CivilianWork force Statistics: Occupations of Federal White-Collar and

Blue-Collar Workers, Oct. 31, 1983, MW 56-18, p. 8.( The average grade for administrators is 10.9 (average sal-

ary $32,000 in 1983).




Professionals

Jus t over 22 percent of Federal workers were

p r o f e s s i o n a l s in 1983, as compared to 19 per-

cent in 1975. Again, this increased proportionis probably re la ted to changes in American

society and economy as well as to office auto-

ma t i on . In 1983 , 94 pe rc e n t o f p ro fe s s i ona l s

were in grade leve l s 9-15. The i r average grade

l e v e l w a s 1 1 . 7 w i t h a n a v e r a g e s a l a r y o f

$36,000. ( In 1983-84, however , the proport ion

of profess iona ls in the Federa l work force was

r e d u c e d s l i g h t l y f r o m t h a t i n 1 9 8 0 . )6 3

Changes In and Among Grade Levels

These changes have squared up the Federalstructure, v i e w e d in terms of occupational cat-

e g o r i e s , s o t h a t t h e i r p r o p o r t i o n s , w h i c h i n

1 9 7 4 r a n g e d f r o m 1 8 t o 3 1 p e r c e n t , a r e n o w

more nearly equal, from 22 to 28 percent, withadministrat ive rather than clerical occupations

a s the l a r ge s t group. Paralleling these shifts,

the number of workers at each grade level has

a l so changed. (See f igure 9-3. ) In 1974, 41.9

p e r c e n t64

of Federal workers were in the lower

grades 1-6, where clerical workers are concen-

-— ..-.

“About 3 percent of Federal workers are usually classifiedas “other or unspecified, ” usually because their jobs are beingreclassified during the counting period.

“The figure for both years excludes postal workers; if theyare included for 1974, the percentage becomes 41.6 percent.

Figure 9-3.—Change in Distribution of FederalEmployees by Grade Levels, 1974-80

51

4 —

3 —

2 -

1 —

o

–1 —- 2 —

–3 —

: ; ~

GS 1-6 GS 7-8 GS 9-14 GS 15+Grade level

SOURCES: u.: +wil Service Commission, federalCivl/ian Manpower Stafh3tics:Occupations of Federal White-Co//ar Workers, Oct. 31, 1974 and 1975,SM 56-11, Washln@on, DC, 1975; and U.S. Office of Personnel Man-agement, Federa/ Civi/ian Workforce Statistics” Occupations of Fed- eral White-Co//ar and B/ue-Co//ar Workers, Oct 31, 1983, MW 56-18,Washington, DC, 1983

trated. By 1980, it was 38.6 percent. The per-centage of workers in grades 7 and 8 remained

much the same (11.4 percent in 1974, 11.5 per-

c e n t i n 1 9 8 3 ) . B u t t h e p r o p o r t i o n i n g r a d e s

9 through 14, where most of the profess iona ls

a n d s u p e r v i s o r y a d m i n i s t r a t i v e w o r k e r s a r e

concentrated, has grown from 45.1 to 49.4 per-

c e n t .65

( C o n g r e s s i o n a l B u d g e t O f f i c e ( C B O ) ,

t a k i ng s l i gh t l y d i f f e re n t pa ra me t e r s , s a ys t ha t

t he pe rc e n t a ge o f pe op l e i n mi dd l e -ma na ge -

ment grade levels 9 through 15 has grown from

3 3 t o 3 7 p e r c e n t s i n c e 1 9 7 4 . )6 6

The e s t a b l i shme nt o f t he Se n i o r Exe c u t i ve

Se rv i c e (SES) w a s i n t e n d e d to i n c r e a s e t h e

re tent ion of senior Federa l execut ives by pro-

v i d i n g t h e m w i t h t h e o p p o r t u n i t y f o r h i g h e r

rewards (bonus pay) in return for s o m e sa c r i -

fice in job securi ty. It is general ly agreed that

it h a s not worked well; many SES people be-l i e ve t ha t t he y ha ve be e n ma de more v i s i b l e

a nd t he re fo re t he pa r t i c u l a r t a rge t o f r e duc -

tions in force (RIFs) and salary caps or freezes,

and most of the few bonuses have gone to a

r e l a t i ve f e w of t he h i ghe s t r a nk i ng pe op l e .6 7

Pe opl e t e nd t o t h i nk o f bure a uc ra c i e s a s

shaped like a pyramid. The Federa l work force

is sha pe d more l i ke a very flat tened figure 8

or hour-glass. There are relat ively few people

i n t he l owe s t g ra de s , a l a rge bu l ge a t g ra de s

5 a nd 6 , a na r row wa i s t r e p re se n t i ng g ra de s

7 t h r o u g h 1 0 , a n o t h e r l a r g e b u l g e a t g r a d e s11 and 12, and a rapid drop-off in numbers in

grades 13 through 15. The number of positions

at g r a d e s 16 through 18 and in the Senior

E x e c u t i v e S e r v i c e ( e q u i v a l e n t t o g r a d e s 1 6

through 18) is l imited by law and is less than

0.5 percent of al l Federal jobs. (See figure 9-

4.) The figure eight is g e t t i n g squashed down,

the bulges growing wider, and the top and bot-

t o m f l a t t e n e d .

— . — — . -——.65

Figures supplied by OPM in advance of the 1984 analysisof Federal civilian work force statistics now in progress, andcompared to OPM occupational statistics for 1974 and 1980,see previous cites.

‘U.S. Congressional Budget Office, op. cit., p. x.“’Sar Levitan and Alexandra B. Noden, Working for the

Sovereign: Employee Rdationsin the Federal Government (Bal-timore: The Johns Hopkins University Press, 1983), pp. 94ff.




Unanswered Quest ions

The Question of “Overgrading”

The average grade level for the civilian work force, not su rpr isingly in view of cha nges de-scribed above, increased from 8.03 to 8.51 be-tween 1974 and 1983. As a result, salaries in-creased 4 percent (in equal dollars) and about1.3 billion was added to payroll costs.

68Th e

President’s Private Sector Survey on Cost Con-trol, an d others, have charged tha t t he CivilService is “overgraded, meaning that gradesare too high in comparison with earlier levelsand with the private sector.

69

The Congressional Budget Office (CBO) con-cluded that the growth in the proportion of nonclerical jobs accounted for about two-thirdsof the half-grade increase. They attributed

most of the additional increase to promotionsgranted by some managers to compensate forrepeated caps. 70 An earlier OPM analysis (1980)said that 60 percent of the half-grade rise wasdue to “changes in the occupational mix of the workforce, citing the disproportional de-crease in the clerical work force.

71

Neither the Private Sector Survey report,OPM, nor the Congressional Budget Office ex-plicitly addr essed t he effect of the in crea singprofessionalization of government work norof the penetration of information technologies

in the office. CBO did acknowledge “the chang-ing char acter of governm ent al work’ in iden-tifying the factor of growth in nonclerical

jobs,72

but did not explicitly raise the ques-tion of how the declining proportion of cleri-cal jobs might be related to office automation,

——

‘“U.S. Congressional Budget Office, op. cit.“’The Administration has proposed reducing the number of

positions graded GS 11-15 by shifting 8 percent (about 40,000 jobs) to lower grades; this would be done over a period of 4years, as vacancies occur. This would save $3.9 billion overa 5-year period. See U.S. Congressional Budget Office, op. cit.,p. xi.

‘[’R. Mark Musell, “Reducing Grades of the General Sched-ule Work Force, ” LRS84-12344 (Washington, DC: U.S. Con-gressional Budget Office, 1984).

“’’Average Grade Trend 1974 -1980,” prepared by JamesHall, Program Management Information Section, Work ForceInformation Division, U.S. Office of Personnel Management(manuscript, unpublished).

“’Ibid, p. x.

nor did it point out that the Federal work forceis far more thoroughly white collar than theprivate sector work force. CBO also pointedout that while the government has more mid-dle- and top-ranked workers than the privatesector, it also pays them much less; “Federal

and private sector salary distributions werealmost identical” in proportion going to peo-ple at those levels.

CBO noted that only 43 percent of Federal jobs were, at that time, below grade 11 com-pared with 61 percent in equivalent levels inthe private sector. Again, it did not specifi-cally note the greater proportion of white-collarwork in the public sector.

Neither CBO, nor OPM in its own analysis,have given attention to the implications of of-fice automation for future work force size,

grade distr ibution, a nd payroll costs. Neith erhas systematically analyzed the forces behindthe changing character of governmental work,nor acknowledged that these forces are likelyto grow stronger in the future. There appears,in fact, to have been no major executive branchstudy of the possible effects of office automa-tion on t he F edera l work force or la bor costs.Considering the current emphasis on cut tingthe costs of government, the high prioritygiven to increased productivity, and the strongtrend toward procuring information technology

to accomplish these goals, this is surprising.Whether the potential increase in productivity

because of office automation, and the consequen-tial possibility of shrinking the size of the work force, will more than compensate for the needfor more h ighly paid technical and professiona lworkers is a question that should be studiedthoroughly. To both reduce the clerical work force and artificially hold down average gradelevel and salary could mean that the governmentcannot attract and hold the people it needs forexcellence.

The lack of systematic analysis and plan-ning for changing work force needs makessome Federal workers anxious about their jobs.In discussions and workshops with Federalclerical employees concern is often expressedabout wha t it may mea n for job secur ity and



Ch. 9—The Automation of Federal Government Offices 251

the opportunity for promotion. Some of thisconcern m ay be u nr ealistic an d exaggerat ed;it could be alleviated if officials could talk withtheir workers about current effects and theimplications for the future. They cannot hon-estly do that at present because little or noinformation is available about the effect thatoffice automation is now having on Federalemployment.

How Jobs Are Classified

As discussed in chapter 4, office automa-tion changes the nature of work and the skillsrequirements for m any jobs. In both th e pri-vate sector and the public sector, this leadsto an expectation that job descriptions andpersonnel classification schemes will be revised.

OPM uses a point/factor rating system inassigning grade levels.73

Brief definitions of the factors do not mention any considerationof equipment that is used in the work. Thefirst and most heavily weighted factor is“knowledge required, ” defined as “the natureand extent of the informa tion or facts t hat theworker must understand to do acceptablework. ” It is not clear whether more knowledgeis required t o operat e a word p rocessor t ha nto operate a typewriter, or whether using aspread-sheet program takes more or less spe-cial knowledge than using a bookkeeping ledg-

er. In some cases automation requires lessknowledge about the process being carried out,in other cases it requires additional abstr actthinking or ability at problem solving. It ap-pears that Factor No. 1 could be interpretedso as to accommodate necessary technologi-cal skills, and thus jobs could be reevaluatedand their grade level moved up or down, if theirnature changes because of automation.

. . . . —The factors are:1. knowledge required hy position { 1,850 points, 41 percent

of maximum total),2. supervisory control (650 points),3. guidelines (and judgment needed to apply them) (650

points),4. complexity’ of work (450 points),5. scope and effect of work product (450 points),6. personal contacts with nonsupervisors (220 points),7. physical demands (50 points), and8. work en~ironment (.50 points).

The point range for grades 1- 6 is 190 to 1,350 points; for grade9— 1,855-2, 100; for grade 15—4,055 and up. The maximum to-tal is 4,480 points.

Unless this is explicitly recognized, however,it is likely that there will be challenges to thefactor evaluation system, especially if work-ers believe that they are mastering new skillsnot recognized and explicitly valued in theirold job descriptions. Catherine Waelder, Gen-eral Counsel of the National Federation of Fed-eral Employees, has already said that “the fac-tor system is new but its sta ndar ds and valuesare old. ” She points out that if not continu-ously revised, the system will “fail to accountfor t he a bility needed to use developing t ech-nological r esources essent ial in m an y profes-sions. . . .“

74

Part-Time and Temporary Workers

Government use of part -time an d temporary

workers is determined by many factors; it mayor may not increase because of office automa-tion. The Federal Employees Part-Time Ca-reer Act of 1978 was passed after several yearsof effort by members of the Senate and Houseof Representatives who were responding tourging of female constituents wanting to pro-tect career opportunities in government whilereserving time for at-home child care. Unionsobjected on the grounds that it would take

jobs n eeded by over t hr ee million women a c-tively seeking full-time employment who couldnot afford to support their families on part-

time employ ment.75

The act required agencies to do feasibilitystudies, establish annual goals and timetables,and review and monitor part-time work oppor-tunities. Part-time Federal employment did in-crease by almost 14,000 from 1979 to 1981,to a high of 57,184; but in 1981 in the strongeffort to reduce Federal employment, part-timeworkers were laid off at a higher rate than full-time employees, and by 1984, the number of part-time workers had declined by roughly2,000. In a 1982 review of th e Pa rt -Time Ca-reer Act, GAO found that most agencies werenot conforming to its requirement s. 76

“Statement in IIearing on 11. R. 4,599, Federal l]a~’ I;quit.}

Act of 1984, op. cit., p. 248.“’William G. J4’hittaker, Federal Legis la ti tre Interest in

Alternative Patterns of It’ork: An O\ er~’iewr, U.S. Congress,I.ihrary of Congress, Congressional Research Service, Mar. 31,1980.

‘ U.S. General Accounting Office, Par t -Tin le ll~mp)o.~rn]entin the Federal Gox-ernm ent, Jul~T 1 !2, 1982.




OPM is now again encouraging part-timeand temporary employment on the groundsthat it is cost-effective.

77If office automation

allows the work force to be reduced an d keptlean, part-time and temporary workers arelikely to be used to augment permanent staff

when th ere is a short-term increase in the work-load; thus temporary and part-time Federalemployment is likely to increase as along-termtrend. Since the objective of part-time work is from an employer’s perspective to allowrapid, flexible adaptation to changes in work-load, the number of part-time workers will fluc-tuate widely .78

Women in the Federal Work Force

Several bills now before Congress deal withquestions of pay equity and comparable worth

in the Federal civil service. Comparisons of job content and skill requirements will be mademore complex as office automation changesthe nature of the work. While many clerical

jobs have traditionally been considered wom-en’s work, ” the degree of gender dominancediffers significantly by grade level. (See fig-ure 9-5. ) In the occupational category of Gen-eral Administrative, Clerical, and Office Serv-ices, women predominate at grade levels 1thr ough 9, and men a t gra de levels 10 through15. In grades 2 through 6 the percentage of work ers wh o are female varies from 78 to 90percent.

79In grades 7 through 9, the propor-

tion of women ranges from 71 down to 61 per-cent, an d at levels 10 through 15 th e propor-tion decreases with each level, from 41 to 10.3percent. Thus, while office services jobs arethought of as a group as “women’s jobs, ” theirgrade level distribution is not much differentfrom their distribution in the Federal work force as a whole for women. About 62 percentof female Federal employees are in grades 1through 6, as compared to 20 percent of maleemployees. Only 10 percent of female Federal-— —-. —— —-----

“’Since January 1985 agencies have been allowed to keeptemporary workers for up to 4 years; the previous limitationwas 1 year.Wee ch. 2 for a general discussion of part-time and tem-

porary work as related to office automation.“Grade 1, which is held by fewer than 150 workers (many

of them messengers) is only 66 percent female.

workers are in gra des 14 and 15. As a r esultof their concentration in lower level jobs,women (who hold 46 percent of Feder al Gen-eral Schedule jobs) have an average salary thatis 62 per cent of men ’s a verage.

80

It is estimated that three-quarters of thelowest ranking Federal jobs (by grade level)are predominantly women’s jobs.

81Since of-

fice automation is most likely to bring aboutreductions in lower level Federal jobs, womenworkers are those most likely to be maderedundant. This could lead to a statistical im-provement in the position of women in the Fed-eral work force, as a group, since their aver-age grade level should rise as a result. Thisstatistical “improvement should not obscurethe fact that the job losses will be dispropor-tionately suffered by women.

Quality of Worklife

Again, the case study of office automationin New York City

82offers some possible indi-

cat ors of presen t a nd futu re effects on a civilservice work force. In automated municipaldepartments, new tasks were learned that cutacross traditional occupational definitions, butth ere was little or n o evidence of job upgrad -ing in clerical and technical (paraprofessional)positions. Neither old or new job ladders pro-vide a r eady path for t hese workers to move

up in the hierarchy of jobs, and some rungsof th e job ladder ha ve been removed by aut o-mation of intermediate tasks and responsibil-ities. In some jobs, abstract and conceptualknowledge is becoming more important thantraditional skills, but this change has not beenaccompanied by an increase in pay scales. This

. — —““In the ‘Federal Wages Schedule (blue-collar workers)

women are only 9 percent of the total, and their average wagesare 79 percent of men’s average. Among all FWS and GS work-ers (83 percent of all Federal workers) women are 38 percentof all employees and their average salary/wages are 68 percentof men’s average. U.S. General Accounting Office, Options for

Conducting a Pay Equity S tudy of Federal Pay and Classifica-tion Systems, GAO/ GGD-85-37 , Mar. 1, 1985.“

]Statement of the Honorable Michael I). Barnes of Mary-

land, Hearings on H.R. 4599, Federal Pay Equity Act of 1984,before the Subcommittee on Compensation and Employee Ben-efits of the House Committee on the Post Office and Civil Serv-ice, 98th Cong., 2d sess., pt. I, Apr. 3-4, 1984.“Greenbaum, Pullman, and Syzmanski, op. cit., ch. 1,




is becoming a union issue and apolitical issue Labor Management Rela t ions andin the city. Federal Unions

The observations m ade on qua lity of work -life and the automated office environment inchapter 5 generally apply to the Federal of-

fice as well as to the private sector. Physicalconditions ar e probably not a s good in publicsector offices as in many private sector offices.Turnover of facilities and office furniture isprobably slower so that new technology is evenmore likely to be inserted into old settings.Fur nitur e, lighting, and space layout is ofteninappropriate for microelectronic equipmentnow in use.

One issue likely to be controversial is theuse of computer monitoring and pacing of work.

83Federal labor law h olds tha t a pplying

work measurements and using these to evalu-at e employees are m ana gement prer ogativesand need not be negotiated with unions repre-senting Federal employees.

84However, agency

management can if they so choose bring theunions into discussion of work standards andmeasurement. Unions have attempted to raisethe monitoring issue at some agencies butthese attempts have been rebuffed as “non-negotiable’ under the management r ightsclause. Arbitration rulings have upheld agencymanagement when work monitoring was chal-lenged, for example, in the Social Security Ad-

minis t ra t ion.

——— . —‘See ch. 5, for a general discussion of computer monitoring

of work.“Civil Service Reform Act of 1978, Code of Federal Regu-

lations, title V, sec. 7106 (a) (A) and (a) (B), “ManagementRights. ”

The discussion in this section on work monitoring, where nototherwise cited, is drawn from an OTA contractor report, pre-pared by the Educational Fund for Individual Rights, AlanWestin, principal investigator, February 1985. The report isbased on site visits and interviews in seven Federal agenciesbetween 1982 and 1984, supplemented by a letter of inquiryto 78 Federal agencies, bureaus, and departments in Septem-ber 1984 to which 44 agencies responded with letters and ac-companying documentation. Follow-up telephone interviewswere held with 12 agencies that reported significant activityrelated to work monitoring.

In the civil service, managers have less con-trol over subordinates than in the private sec-tor, because of civil service r ules a nd protec-

tion. Managers themselves are subject to man)-of the same rules, regulations, and restrictionson wages and on bargaining as are their subor-dinat es. Many Federal ma nagers a nd profes-sionals belong to professional associations thatserve much the same functions as unions;

85for

Federal employees, this means lobbying Con-gress rather than bargaining for pay and ben-efits, since these ar e set by legislative action.

8G

Federal unions will not be able to mount ef-fective resistance to reductions in employmentas these become possible, but they may be ex-

pected to monitor cha nges in job cont ent , jobclassifications, and compensation as a resultof office automation. The position that thelargest unions have taken and will take on suchissues as stress, risks to health from CRT use,

87

These include the Federal Management Association, theProfessional Management Association, and the Senior Execu-tive Association (the latter open only to those in grades 16-18and the Senior Executive Service).

Until 1961, membership in unions by Federal workers wasnot recognized officially, and there was no provision for collec-tive bargaining. However, about 13 percent of nonpostal work-ers and a much higher percent of postal and blue-collar workershad already joined. Between 1963 and 1969 the membershipmore than quadrupled, from 180,000 to 843,000. PresidentKennedy affirmed the right to join unions and a very limitedright to collective bargaining in 1962 in Executive Order 10988,and the area for collective bargaining was slightly enlargedby the Civil Service Reform Act of 1978. But Federal unionsare still generally precluded from bargaining about wages andfringe benefits, hiring, firing, work assignment, disciplinaryactions, and contracting out. Levitan and Noden, op. cit.

Federal employees do not have a right to strike, and maybe dismissed and subjected to felony charges if they do strike.The Supreme Court has upheld this ruling, saying that the em-ployees’ rights under the First Amendment and other Constitu-tional provisions must be balanced against the right of govern-ment to regulate the behavior and speech of its employees, Thedismissal of the air controllers when they struck illegally islikely to discourage other strikes for some time. William B.Gould, A Primer on Am erican Labor Law (Cambridge: MITPress, 1982), p. 171.

Thirty-nine States have some form of legislation protectingthe right of public employees to organize and bargain collec-tively. See William B. Gould, op. cit.

“Federal employees are not covered by the OccupationalSafety and Health Act but agency heads are responsible formaintaining standards consistent with the act (Executive Or-



Ch. 9—The Automation of Federal Government Offices q 255 —

or access to training, will be important. Fed-eral u nions h ave already a dopted guidelinesor model contract provisions on VDTs, whichth ey distribute to bargaining committ ees foruse in agency negotiations. Their activism mayincrease in the future.

Federal white-collar workers are more likelyto be represented by a union than are thosein t he pr ivate sector. About 54 per cent of GSworkers are covered, although only about one-third of those are dues-paying members.” Inthe national labor force, only 8.5 million white-collar workers, about 17 percent of the total,are members of unions.

89

Those covered by Federal unions are pre-dominantly women and predominantly in cler-ical categories. Although figures are not avail-able, it is likely that Federal unions have hada net loss of members in the last several years.

In te rna t iona l Compar isons

The International Labour Organization (ILO)says that in developed and developing coun-tries’ public sector employment:

In respect of information processing, it ismost likely that the over-all impact of c o m -puterization lies no t so much in the threat

of redundancies, but in future limits on growth

in clerical and related employ ment.g O

—.—

der 12196, Feb. 26, 1980); and Federal emplo?ees ha~e the rightto compensation for disability, death, or in]uries sustained inperformance of their work (Federal Employees CompensationAct, 5 USC sec. 8101 et seq.).“About 61 percent of the Federal work force is represented

by unions, but this includes 86 percent of Federal blue-collarworkers. Dues paying membership is harder to determine; un-ions are not required to make these figures public, See Sar A.I.evitan and Alexandra B. Koden, ii’orking for the So~rereign:

Ernp]ovee Relations in th e Fecferaf Go}’ernm ent (Baltimore: TheJohns Hopkins University Press, 1983), pp. 15-20. Federal white-collar workers are chiefly represented by the American Federa-tion of Government Employees (34 percent of those who areco~.ered by union bargaining), the National Association of Go\ F-ernment Employees (4 percent), the National Federation of Fed-eral Employees (7 percentl, and the National Treasury Employ-ees Union (5 percent). The first two of these are part of theAFL-CIO; the other two are independent.‘Iienry Le\’in, “Jobs: A Changing Workforce, ” Chance,

I’ol. 16, October 1984, pp. 32-37.“’International Labour Organization, The Effects of Struc-

tural Changes and Technological Progress on Employment inth e Pub l ic Service, Report I II, Joint Committee on the PublicService, 3d sess. (Geneva: International Labour Organization,1983), p. 30.

The I LO notes that this will have its most seri-ous effects “on t he prospects of women seek-ing to return to the work force and on schoolleavers. ”

Nearly all governments are trying to im-

prove efficiency and hold down costs, the I LOnotes, citing evidence that many advancedcountries have made cuts in their public work force as a resu lt of informat ion techn ologies.For example, Canada had a net reduction of 12 percent in employment in government sec-retarial positions from 1975-80. Within thatgeneral category, the number of typists de-clined by 35 percent and the number of ste-nographers by 68 percent, while secretariesincreased by 17 percent and operators of of-fice-composing equipment increased by 97 per-cent .

91

Evidence of employment effects in centrallyplanned developed nations are, according toILO, unreported or ambiguous. In developingcountries, wherever statistics are available,they often show a shortage of qualified com-puter personnel.

92

A technology forecast done for the FederalRepublic of Germany by a consulting firm sug-gested that if the government adopted a strat-egy of maximum use of information technol-ogy, 75 percen t of all p ub lic sector office jobscould be standardized, and 38 percent auto-

mated.” The ILO recognizes, however, that“owing to cost, lack of planning, a desire tomaintain existing work arrangements, or sim-ply bureaucratic inertia such comprehensiveplans will materialize only slowly, ” and a morelikely scenario for most countries is the grad-ual introduction of components and systemsthat can later be linked, as the need arises.

94

Rapid development of telecommunicationstechnology has affected postal workers inmany countries, although employment levelshave not fallen dramatically. Rather, they have

shown slower growth rates in recent years, and —. .-— —

“Ibid.‘-11.0, op. cit., p. 28.“’J. Sleigh, et al., The Manpower Implications of Microelec-

tronic Technolo~’ (London: Her Majesty’s Stationery Office,1979), pp. 77-79, cited in 11.0, op. cit.

“11.(), op. cit., p. 17.




in some countries staff reductions or hiring most countries are all public service jobs) and

freezes occur red desp ite increas es in t he vol- some do not.95

ume of mail traffic. As to the future, some gov-ernments expect reductions in postal, tele-graph, and telephone occupations (which in “ILO, op. cit., p. 42.

EFFECTS OF OFFICE AUTOMATION ON PUBLIC SERVICES

Productivity increases do not necessarilylead to a reduction in labor force numbers orcosts. Complementary or alternative objec-tives may be to increase the volume of prod-ucts or services delivered, or to improve theirquality. Or, increased productivity may merelymean coping with, instead of being overwhelmedby, an increasing workload.

Because our economy increasingly dependson in forma tion as a r esource and a driver of growth, t he office work load is inexorably in-creasing. The primary objective in office auto-mation is sometimes merely to accommodatethis increased workload.

96One final m eaning

of increased productivity is the creation of en-tirely new information-related services for cus-tomers, clients, or constituents.

There ha s been rapid change in th e globaleconomy, and America’s role in that economy,since the 1960s. There have also been signifi-cant changes-particularly during the 1970s—in the expectations that our citizens have aboutinvolvement in Federal decisionmaking, andthe demands tha t t hey make on governmentagencies related to information about publicresources and public expenditures. In allow-ing Federal agencies to meet th ese demandsand to accommodate the increased workload,office automation quite possibly helped toavoid serious pr oblems a nd disru ptions t ha tcould have weakened the U.S. position of worldleadership.

Many managers and professionals report

tha t t he quality of ana lysis, reports, an d otherforms of decision-related services is improvedby office automation, which allows large data-

‘Alan Porter, David Roessner, et al., Office AutomationOutlook, 1985-2000, contractor report for OTA, February 1985.

bases t o be collected, ma nipu lat ed, ana lyzed,modeled, and systematically applied to pol-icy formulation and decisionmaking. This im-provement is more difficult to document andmeasure than other forms of increased produc-tivity.

It is also possible, however, that office auto-mat ion ma y lead to a chan ge in th e nat ure of some government services and even to theirdeterioration. For example, services could be-come overly depersonalized and standardized,inflexible, and unresponsive to changing needs,if the t echn ology itself is allowed t o drive th edesign of the service or delivery mechanisms.

A Case Study of Expanding

Responsibi l i t ies

The h istory of office aut omation in th e Of-fice of the U.S. Trade Representative is oneillustration of office automation providing the

means of meeting new challenges and avoid-ing disruptive overload in carrying out newgovernment responsibilities.

97

The Trade Act of 1974, authorizing U.S. par-

ticipation in a new round of multilateral tradenegotiations, elevated to cabinet status theposition of Special Trade Representative andassigned that officer responsibility for repre-senting the United States in the negotiations,and a dministra tion of th e Trade AgreementsProgram under t hat and other existing acts.

---“This section is drawn from an OTA contractor report, Wil-

liam Neufeld, Office Aut omation in th e Office of th e U.S. Tra d e Representative, February 1985. OTA is indebted to the Officeof the U.S. Trade Representative for cooperation in allowingthis study to be made and in facilitating the research by thecontractor. The case study is also summarized in app. B.



Ch. 9—The Automation of Federal Government Offices . 257

The Office of the Special Trade Representa-tive, which until 1972 had only about 30 em-ployees, had grown to about 126 employeesby 1980, when it became the Office of the U.S.Trade Representative. In 1980 it was assignedovera ll responsibility for form ula tin g an d co-

ordinating foreign trade policy among all gov-ernment agencies, representing the UnitedStates in all trade negotiations regarding theGeneral Agreement on Tariffs and Trade(GA’IT), East-West trade, international invest-ment , commodity agreements, t he Organ iza-tion for Economic Cooperation and Develop-ment, and the UN Conference on Trade andDevelopment.

98These developments reflected

the growing importance of world trade in theU.S. economy.

During the 1960s, the small agency hadneeded more and more data to use in develop-ing positions for multinational negotiations.There was no central database on trade vol-umes, tariff rates, exports and imports, etc.Data was kept or r eport ed by many differentagencies, in different forms, and categories.The Washington headquart ers and the Genevanegotiating office relied on different sets of data collected from different sources, whichmade policy coordination difficult.

Planning to build a computerized trade data-base began in the late 1960s, but not until 1977did an integrated database begin to function,

serving many agencies and lodged for admin-istrative purposes in a large computer systemat the National Institutes of Health.

99The de-

velopment of the intera gency tra de data basehelped pave the way for office automationwithin USTR. It did not come about piecemealbut was systematically planned and imple-mented over a 5- or 6-year period, to mesh withth e large computer system. It h as so far costonly about $2 million (including about $1 mil-lion investment in hardware).

. --

‘“The P~es[dent in 1984 proposed to Congress the creationof a Department of International Trade and Industry, withUSTR under the direct control of the Secretary of that De-partment.

‘qRenamed the Trade Policy Staff Committee Trade Net in

1984, the system provides a number of member agencies withdata directly available through dial-out computer terminals.

Through a combination of central computeroperations, personal computers, and stand-alone and shared-logic terminals the USTRstaff now has the capabilities of word proc-essing, spreadsheet analysis, on-line data man-agement, graphics, correspondence control, in-

ternal electronic mail, telemail, facsimile, andtelex. Users can access the general database,and also a ‘‘magazine’ containing USTRschedules, recent trade and labor summaries,and economic news. They can call up trade dataon bilateral trade balances, imports and ex-ports, domestic and foreign trade actions, andGATT documents. They can communicatethrough their terminals with the members andstaff of the Trade Policy Staff Committee (thenine agency committee that provides analy-ses an d r ecommenda tions to th e senior levelTrade Policy Committee) and of its subcom-

mittees, and can electronically transmit doc-uments to them. They can communicate bytelemail with the Geneva office, USTR ambas-sadors, and staff members on t ravel, and canuse this method of transferring documents be-tween Geneva and Washington. Hard copyoriginal documents can also be facsimile.

In interviews, nearly all professionals on theUSTR staff and half of senior managers saidthat they use terminals extensively, for up to75 percent of their working hours. Profes-sionals who were interviewed say that they

can complete a project in half the time it wouldtake without their computers. They also re-ported that the increased productivity had al-lowed them to clear a backlog of work thatalways built up in the past. Senior staff re-ported that they could ask for work on shorterdeadlines . Some mem bers of th e professionalstaff reported that because of electronic com-munication and transmission of documents,the time required for review and clearance of trade-policy positions has in many cases beencut in half.

At least in the perception of many profes-sional staff members, the USTR has been ableto take on a continually expanding workload,and maintain or improve the quality and paceof performance at the same time, because of information and communication technologies.



258 Automation ot America’s Offices

The staff has grown little if any during the5 years in which office automation was imple-mented. 1°0

Changes in the Nature of

Delivered Services

Standardization and depersonalization of governm ent services is a possible out come of office automation. In the OTA case study of municipal agencies in New York City,

101r e-

ferred to earlier, an agency providing socialservices to disadvantaged clients reorganizedthe application and recordkeeping process so

—.—. —““In 1980 after reorganization and expansion of responsibil-

ities, the Office had 116 permanent full-time staff plus 10 As-sistant U.S. Trade Representatives, or approximately 126 peo-ple. In 1984, it has 122 permanent staff members. But USTRhas always used detailees from other agencies, and some con-

sultants and part-time people. When this case study was donein 1984, the inclusion of such people brought the number of people working at USTR to 183; the number of such peopleon hand in 1980 could not be determined.

“’’This material is drawn from an OTA contractor report,The Effects of Offi”ce Automation on the Pub l ic Sector Work -

force–A Case Study, prepared by the Labor Institute (Profes-sor Joan Greenbaum, principal investigator), February 1985.

as to use standardized coded forms. When in-accurate or incomplete information is fed intothe computers it cannot be detected until latestages of the process, at which time the caseha s to be put on hold. Case workers sa y tha tsome clients do not understand computerized

forms and throw them away; others are intimi-dated by them an d th row them a way. Manyof the municipal employees say that the qual-ity of the services they deliver has been de-graded.

The Federal Government also delivers someservices directly t o individuals and households;for example, social security checks. With of-fice automation some element of personalattention to the difficulties or foibles of recip-ients may be lost. The less educated or sophis-ticat ed, and th ose with language limitations,ar e more likely to be una ble to cope with for-mal, unfamiliar processes. Thus, as the deliv-ery of government services is automated, spe-cial procedures may be needed to assure thatthe access that some people have to services,or the attention paid to their needs, is not in-advertently degraded.

EFFECTS ON GOVERNANCE

Bureaucracy–a hierarchy of authority, spe-cialization of functions, and formal channelsof communication and command-is the basicstructure of government as it is of all complexformal organizations. Bureaucracy is a valu-able form of organization because it allows ex-pertise to be harnessed, focused, and directedtoward collective ends.

Bureaucracies serve both despotic and demo-cratic societies. In a highly technologized so-ciety, it can be argued that democracy can ex-ist only because bureaucracy provides a wayof using experts without being ruled by ex-perts. Policy can be made by political repre-sentatives, and implemented by the hierarchyof specialists under their control and oversight.

But as bureaucracy becomes larger and morecomplex, the specialization of functions at thelower ra nk s can become extr eme—’’ra tionali-

zation’ of tasks makes the work routine, mo-notonous, and finally mindless. The managersmay spend increasing amounts of time cor-recting and coordinating, and little time do-ing anything productive. Some political the-orists argue that in the electronic era, elaboratebureau cracies m ay be u nn ecessary. Informa -tion and communication technologies may of-fer a way to replace overly large and complexbureaucratic structures with more autonomousunits assuming responsibility for an entire job.

This prescription would be hard to imple-ment in government without some sacrificeof accountability. Those who want to trans-

form bureaucracies into “democratic work groups” tend to see formal channels of com-munication and control as a byproduct of specialization of functions, or to imply thatth ey are an tith etical t o participat ory democ-racy. But formal communication channels are



Ch. 9-The Automation of Federal Government Offices . 259 —

also a mechanism for achieving accountabil-ity, including accountability of bureaucrats topolitically responsible policy m ak ers. Withingovernment, for example, communication typi-cally moves through a series of nodes of au-thority.

102The flow of information also involves

in many cases a flow of authority. The pres-ence of an authorizing signature on or withthe information may give it force—that is,cau se someth ing to happen. It may create ormake binding the acknowledgment of an obli-gation. At least it acknowledges the receiptof the information. The signature, in otherwords, expresses a personal responsibility orvalidation of the information or some actionassociat ed with or flowing from it . Findin g afully adequate electronic substitute for thehan dwritten signatu re, as a n easily recogniza-ble and widely accepted validation for the ori-gin and receipt of messages, is only one aspectof the problem and probably a minor one.

103

Electronic sign off may merely replace thebuckslip and the paper-based signature of au-thority and accountability.

But a signature is only one example of theset of procedures that in a government bu-reau cracy are designed to cont rol and st and-ardize behavior. The procedures usually in-clude the designation of particular, formalchannels of communication through which in-formation (and authority) must flow. The flow

is limited to these designated channels not onlyfor the sake of efficiency and control, but tomak e it audita ble in th e fut ure. These proce-dures not only guarantee control, for those atthe top of the bureaucracy, but they also pro-tect the general public; they are the means of ma king p ower la wful, of limiting it s exercise

‘ ‘-The di&ssion here draws heavily on Ronald M. I.ee.“.Automating Red Tape: The Performative vs. Informative Rolesof Bureaucratic Documents, ” Office: Technolog~ and People,vol. 2 (The .Netherlands: Elsevier Science Publishers B. V., 1984).pp. 187-204.

“ Many organizations rely on the use of a combination of identification numbers or names and passwords to substitute

for a signature. A few are developing techniques based on theconcept of public key encryption, a mathematical techniquedeveloped in 1977 at the Massachusetts Institute of Technol-ogy (E.MMS, vol. 9, No. 13, July 1, 1985). Many people den~’the need for electronic signatures, on a practical basis, sayingthat messages sent by computer are no different from mes-sages sent by telephone or telegraph.

within agreed on boundaries. Some politicalscientists fear th at reliance on t elecommuni-cations both within and between organizations(e.g., electronic mail) makes it difficult to con-trol or to monitor the flow of information andblurs the location of both authority and respon-

sibility. For example, changes in a databasemay be made without an authorizing signa-ture, or instructions may be transmitted tocont ractors by persons without adequa te au -thority for fiscal commitments.

Thus, bureaucratic procedures, including for-mal channels of communication, are integralparts of the concepts of due process and ac-countability. But to the extent that informa-tion and communication technologies offer newopportunities— and perhaps new temptations–to ignore, evade, and erode those established

channels, care must be taken that they do notdiminish the accountability of government offi-cials. The rules and established channels couldpersist, ossify, but be ignored.

The principle of accountability, carried toextremes, leads to inscribed, detailed, and in-flexible rules for every process and procedure.Information technology may provide a healthycorrective, making information so generallyavailable that bureaucratic authority is con-stan tly challenged in a productive, rat her tha na disruptive, way. But when information is

electronic rather than paper-based, it prop-agat es more r apidly, is less closely identifiedwith its source, is both more accessible andat the same time more opaque to the casualseeker. It ma y tend t o be used less responsi-bly. The public could find itself less able thanbefore to identify and hold responsible thepropagator, or the user, of information.

On the other hand, as information becomesthe subject of formal resources management,it is also possible for its u se t o become so en-cumbered with safeguards and procedures thataccess to it is reduced for both the public and

the experts. None of these untoward conse-quences is inevitable. But the pervasivenessof new information technologies does meanthat government information-handling is likelyto change in unanticipated ways.



260 q Automation of Am erica’s Offices

Over a decade ago Kenneth Laudon pointedou t

104that information about a government

organization affects that organization in fourways:

it affects the organization’s reputation

with the public, with its primary constit-uents, and with its employees (and, al-though not mentioned by Laudon, withthose who oversee the organization inCongress);

q it a ffects th e organizat ion’s a ut onomy—the more public information there is aboutthe organization’s inner workings, the lessindependent the role it can play in for-mulating policy;

q th e loss of full cont rol over int ern al in for-mation tends to make an organizationdefensive and may lessen its own propen-

sity to self-evaluation; andincreased public information constrainsthe informal accommodations an organiza-tion can make with influent ial actors inits environment (congressional critics, in-terest groups, other agencies, etc.).

In short, when the flow of information withinand from an organization becomes less con-trollable, the organization tends to react inways tha t a re sometimes desira ble, from th estandpoint of democratic responsiveness, andsometimes not desirable. It cannot be assumed

a priori that information technology makes in-formation management more efficient, fromthe viewpoint of organization managers; norcan the relationship between information man-agement and effective performance of an agen-cy’s mission be fully anticipated.

Anoth er m ajor concern is th e way in whichinformation technology may be used either toincrease governm ent ’s collection a nd use of information about individual citizens, or to in-crease citizens’ access to information aboutgovernment. Abuse of the capability to col-lect, aggregate, and use information about

citizens, to violate the citizen’s privacy, or tomake the citizen more visible to governmentand more susceptible to its control, has been

“’’Kenneth Laudon, Computers an d Bureaucratic Reform

(New York: John Wiley & Sons, 1974).

—

a pervasive concern. These issues are beingaddressed in an oth er OTA report, an as sess-ment of government information systems.

105

Many ent hu siasts for informa tion technol-ogy anticipate that it will greatly increase cit-

izens’ ability to know what government is do-ing and how, and to use that information toevaluate, influence, and participate in publicdecisionmaking. Four kinds of informationabout government are of primary interest tocitizens, especially to citizens actively attempt-ing to monitor or to participate in public deci-sions:

106

q

q

q

q

information about decisionmaking, pol-icies, and practices internal to an agency–budgeting and progr amming priorities,planning, key appointments and assign-ments, the locus of authority for specific

actions an d decisions, th e actions of spe-cific officials, etc.;evaluations, reviews, stat us r eport s, andother policy-relevant information from ac-tors external to the agency, such as admin-istration officials, congressional oversightcommittees, etc.;intermediate and final outcomes of spe-cific cases and decisions, especially indi-vidual client problems such as social secu-rity eligibility or income tax appeals, andother personal data; and

information about the costs of agency de-cisions and actions to citizens-paperwork burden, personal records disclosure, ineq-uities in application of regulations, etc.

Citizen access to the first two kinds of in-forma tion ha s been widened by the F reedomof Information Act and other laws. Particu-larly when organized into public interestgroups, citizens are generally able to obtain

(“Government In formation S ystems, forthcoming fromOTA Communication and Information Technologies programlater in 1985.wThis analysis draws on that of Donald A. Marchand and

Mark E. Tompkins of the University of South Carolina, pre-sented before the panel on Information Control Policy at theAnnual Conference of the American Society for Public Admin-istration, Phoenix, AZ, 1974, and later published as ‘‘ Informa-tion Management and Use in Public Organizations: Some Im-pacts on Citizen Participation, ” State an d L ocal Governm ent

Review, September 1981, p. 103.




such information readily. Information technol-ogies make it easier and less costly for anagency to supply such information whendemanded by citizens. Some agencies are giv-ing citizens direct access to such data throughinformation systems.

The citizen has much less access to infor-mat ion a bout th e sta tu s or progress of his orher individual dealings with government agen-cies as a client ; for example, in ap pealing in-come tax decisions. Here the individual is de-pendent on the agency to give up information,and has no means, technological or otherwise,to access it directly. But the agency can useinformation technology to collect, or at leastto aggregate, process, use, and disseminateinformation about the client. In this case, “theclient’s inform at ion-processing relat ionsh ip

with the public agency is likely to be one-sided. . . . th e client m ust reveal informa tionabout himself to get services from the publicorganization.

107

The thrust of this argument is that infor-mation technology improves the agency’s abil-it y to get or use information about the citizenas client, but does not improve the client abil-ity to know about the progress or outcome of his or her own case as it is handled by anagency. But even the first kind of benefit can-not always be assumed; that is, that agencieswill have better data about clients. As alreadynoted, New York City social services workersreported that many of their clients ignored,failed to underst and, or were intimidat ed bystandardized forms, and also that erroneousinformation fed into the automated systemcould not be caught and corrected until latein the process. 108 In this case information tech

-

nology may have degraded the client informa-tion going to the agency, without improvingthe citizan/client control over it or access to it.

The fourth kind of information, about thedirect and indirect costs of government action

to the public, is diffuse and hard to make spe-cific. Citizens have difficulty in figuring outexactly what a change in policy or procedureswould cost them in taxes, additional paper-

“’-Marchand and Tompkins, op. cit., p. 106.“’The Effects of Office Automation on the Pub l ic S ector

14rorkforce-A Case Stud.~’, op. cit. (OTA contractor report).

work, narrowing of options, or political power.The same is true in many cases for those whowould benefit from govern men t a ction. Thus ,“the poor, ” the “disadvantaged,” or the “smallbusinessman’ who are targets of governmentprograms, may not even know that they are

or would be affected.Information technology could be of help to

both citizens and government agencies in mak-ing this k ind of data available.

109Office auto-

mation could improve the ability of agenciesto target the recipients of their servicesthrough conducting surveys and analyses, im-proved special census counts, and collectionand analysis of information about clients asa group. It can be designed to improve thehandling of client correspondence and to al-low customized response to inquiries. How-

ever, inform at ion technology can also be im-plemented in such a way that relationshipsbetween government and constituents are fur-ther standardized and dehumanized, or infor-mation delivered to constituents becomes sohighly technical a nd jargon-laden as to becomeuseless to those who are not h ighly educat edor even to those who are not specialists in fieldssuch as contract law, taxes, or health deliv-ery. Mechanisms such as forms for request-ing information from, or delivering informa-tion to, a citizen are often designed for theconvenience of the computer, or data proces-

sor, rather than for clarity to the citizen.This creates a real possibility that informa-

tion technology, unless used with care and judgment, could further increase the disadvan-tages confronting those who are already educa-tionally and economically disadvantaged. Theeffects of information technology on the de-livery of government services, and more im-portantly, on the quality and equity of gover-nance, must be carefully monitored so thatcorrections can be made if needed.

—

“W

This is not the conclusion of the authors cited above,Marchand and Tompkins, who conclude on the contrary thatinformation technology is of little direct help to either the agencyor “the citizen as victim. ” They argue that because informa-tion technology and the ability to access and use it is not equallyavailable to all, it has distributive effects on the ability of citizensto use information about government to monitor and influencepolicy; current information policy has regressive distributiveeffects—it benefits the well-to-do more than the disadvantaged.



C h a p te r 1 0

Office Automation in

State and Local Governments



C o n t e n t s

State Government Office Automation Plannin g and Procurement . . . . . . . . . . . . . . . . .

The Exten t of Aut omat ion in Local Governm ent s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Perspectives on the Effects of Public Office Automation . . . . . . . . . . . . . . . . . . . . . . . . .The E ffects of Local Govern men t Aut omat ion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exam ples of Office Automa tion in St at e and Local Govern men t . . . . . . . . . . . . . . . . .The State of South Carolina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .New York City.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unanswered Questions About Information Technology and Governance . . . . . . . . . . . .

Figure

265

267

269269

271271275

279

Figure~No. Page

10-1. An Example of a Statewide Integrated Communication Network for South Carolina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273



Chapter 10


State and Local Governments

There ar e 50 Stat e an d about 78,200 localgovern ment unit s’ in th e United St at es. Tomake general statements about their activi-ties is always difficult; one of the benefits of a Federal system is that the diversity of theirapproaches to problem-solving provides a liv-ing laboratory for public policy formulation.

The workload in State and local governmenthas increased more rapidly in recent decadesthan that of the Federal Government. Betweenth e end of World War II a nd 1980, State an dlocal government employment increased stead-

ily to a high of 13.3 million. It has since slightlydeclined, as pressure for increased adminis-trative efficiency and cost reduction hasgrown. As a percent of total public sector em-ployment, Sta te governm ent employment in-creased from 16.5 percent in 1950 to 23 per-

This includes about 3,000 counties, 19,000 municipalities,17,000 townships, 15,000 school districts, and 26,000 specialdistricts (when they are fiscally and administratively separatefrom other governmental units). At the beginning of World WarII there were about 156,000 local government units, or 49 per-cent more. The big reduction was the elimination of over 93,000school districts during the 1950s and 1960s, by consolidations.

cent in 1979; local govern ment ’s sh ar e grewfrom 50 t o 59 percent .’ Feder al bu dget cut sand t he pha se out of Federal grant program scould bring about a massive transfer of admin-istra tive responsibility from centr al t o Stat eand local levels of government. This providesa further strong incentive for seeking greaterefficiency.

These governments are automating theiroffices at different paces and following differ-ent str at egies, and th e consequences will bedifferent for each governmental unit. Much

of th e inform at ion now available comes fromthe limited number of case studies of individ-ual jurisdictions. Many of these case studieshave a narrow perspective, being focused onpublic administration criteria of cost-effective-ness. Relatively little literature is available asyet dealing with effects of office automationon governance, policy, or political respon-siveness.

‘U.S. Department of Commerce, Bureau of the Census,Public Emp lo j~men t in 1983, GE83-No. 1,

STATE GOVERNMENT OFFICE AUTOMATIONPLANNING AND PROCUREMENT

Some State governments have gone muchfurther than others in computerizing theiroffices. Tax and finance operations, person-nel records, and routine recordkeeping arehowever th oroughly automat ed in almost a llStates. It is common for a number of Stateagencies to share a data processing center, butth ere are usua lly several or ma ny processing

centers within a State government. In plan-ning, procurement, management, and degree

of control over information processing thereis wide diversity. Some State governmentshave realized that computers represent the pos-sibility of a fundamental change in the waypublic affairs are administered, and have estab-lished long-range plans and strategies for ef-fective use of the technology. Other Stateshave not gotten beyond treating office auto-

mat ion a s merely the latest mar ginal improve-ment in office equipment. Some have let of-

265




fice automation happen to them, unplannedand incrementally, and are now struggling torat iona lize these changes.

This is reflected in procurement strategies.Some States have governmentwide masterplans for investment in information technol-ogies while some expect planning to be doneon an agency-by-agency basis as part of thebudgetary process. Many States, after somefloundering, have developed procurement con-trols and standards for large computer sys-tems, only to be taken by surprise by theinfiltration of small computers and word proc-essors, which generally fall below the thresh-old cost that requires centralized procurementapproval.

Minnesota, for example, has highly central-ized plan nin g an d cont rol of inform at ion sys-

tems, while in New York Sta te t he r esponsi-bility is almost completely decentralized. OtherStates fall along the continuum between thesepoles.

3Most States do, however, have some

central office or division that coordinates in-formation-technology procurement, if not long-range planning. This office is usually withina department of administration or general serv-ices, or in the department of finance. SomeStates, however, give the responsibility forsuch coordination to a special commi ssion. Forexample, in Florida, the Information ResourcesCommission, made up of the Governor and sixmajor State officials, reviews agency informa-tion-technology plans. In Texas, the Auto-mat ed Informa tion Systems Advisory P anel,with a similar role, has both pu blic and pr i-vate sector members.

State and local governments are regardedas the largest single market for the microcom-put er indust ry in the next few years.

4During

th e ear ly period of acquisition of governm entcomputer systems, States were concerned over

‘Many of the examples in this section are taken from anOTA contractor report, A Comparative Review of Information

Technology Management Practices in State Government, pre-pared by the Institute of Information Management, Technol-ogy, and Policy of the University of South Carolina, John C,Kresslein, research analyst, December 1984.

‘J. Robert Ippolito (Director, Division of Electronic DataProcessing, Florida Department of General Services), “Com-puter Technology Procurement: Can It Be Standardized forState and Local Governments?’” State and Local Governm ent

Review, vol. 13, No. 3, September 1981, p. 85.

their ability to maintain their control over pub-lic purchasing (especially physical specifica-tions, t erm s, an d condit ions of price competi-tion) because of the powerful market positionsof a few firms. In this large but disaggregatedand dispersed market, it was difficult for State

governments to make effective demands re-gard ing ph ysical s pecificat ions of system s orto specify the terms and conditions underwhich th ey would do business with comput ersystem vendors. The Council of State Govern-ments warned in a 1975 report that:

There are factors a t work which defeat cer-tain long-standing principles of public pur-chasin g. . . . The effects of oligopoly are m ul-tiplying.

5

This led the American Bar Association todevelop a Model Pr ocur ement Code for St at e

and Local Governments, which was publishedin 1979. Many States have since developedtheir own standard contracts and agreements.As State officials have become more knowl-edgeable and experienced with computer tech-nology the problem has eased.

But more recently, stand-alone word proc-essors and personal computers (PCs) have in-troduced a new element of uncertainty, sincetheir cost is low enough that their purchasemay not require centralized approval. It is com-mon for State agencies and local governments

to find that equipment from several differentvendors have found their way into governmentoffices with no central plan for—or even in-ventory of—their spread. For example, oneState government report acknowledges that“thousands” of PCs have found their way intolarge organizat ions by th e ‘end-user en d-around, that is, users avoiding bureaucraticpurchasing procedures by buying their PCsbelow required dollar review levels.’”

At th e Stat e level as in lar ge corporations,microcomputers and stand-alone word proc-

essors are almost always superimposed on anexisting pattern of centralized computing. A

‘The Council of State Governments, State and Loczd Gov-ernment Purchasing, Lexington, Kentucky, 1975, p. 7.

‘State of South Carolina, Division of Information ResourceManagement, Personal Computers in State Government, May1984, p. 2.



Ch. 10—Office Automation in State and Local Governments q 267

report on personal comput ers in th e govern-ment of South Carolina notes that this hascaused a rethinking of management strategy:

In 1979, when the Division of InformationResources Management began its original of-fice automation efforts, the PC was not a via-ble end-user device for integration into theState’s office system model. , . . However, wenow see the computing landscape changingto a three level model in which: Level 1 is thecorporate mainframe node; Level 2 is the de-partmental (minicomputer node; and Level3 is the personal computer node. These levelsmore closely match the organizational hier-archy. At the time of this writing (1984)DIRM has begun efforts to provide manage-ment direction and support for the PC andis developing strategies to integrate the PCinto its overall State Plan on Technology.

(Emphasis added,)’This State government anticipates, accord-

ing to the report, th at by the end of th e dec-ade there may be one PC for every State gov-ernment office worker.

State office automation is not limited tocomput ers in t he St at e House or capital city;increasingly, it is including sophisticated sys-tems to provide an interactive network be-tween dispersed nodes of government services.At least two States, California and South Caro-

lina, are planning digital “backbone” networksto link together centers of government activ-ity around the State. Alaska has an audio-conferencing network connecting 70 sites acrossthe State and 17 full-time information officesth at are a lso networked. Michigan h as a dis-tributed network throughout the capital com-plex, with a termina l in every senator’s a ndrepresentative’s office.

State legislatures, as well as administrators,are using comput ers. Most St at es ha ve elec-tronic data processing systems for statute

search and retrieval and reporting on the sta-tus of bills before the legislature.

g

. — ———‘Ibid. See the case stud~ cm South Carolina government

use of computers later in this chapter.

‘Linda Schulte, “A Survey of Computerized Legislative In-formation Systems, “ La% Library Journal, \’ol. 72, winter 1979,pp. 99-129.

THE EXTENT OF AUTOMATION IN LOCAL GOVERNMENTS

By the mid-1970s most large counties andmunicipalities were also using computer sys-tems for high-volume data processing.

9By

1980 these governments had an average of 31operating applications and as many as 30 un-der development, and were spending an aver-age of $500,000 yearly for automated dataprocessing. The systems tended to be used firstand most pervasively for departments of fi-nance. Recordkeeping and printing were other

‘James ,N. Danziger, “The Use of Automated Informationin IJocal Government, ” American Beha\ r ioral Scientist , vol. 22,No. 3, January-February 1979, pp. 363-392. A survey by the

Urban Information Systems Research Group of the Pubhc PolicyResearch organization indicated that more than 90 percent of cities with populations of 50,000 and larger, and 90 percentof counties of o~rer 100,000 people had computer systems, whileless than half of those smaller had them. Kenneth I.. Kraemer,W’illiam H. Dutton, and Alana Northrop, T he Afanagemen t of

Information S ystem s (New York: Columbia University Press,1981), p. 8,

widely sought applications.1° More recently,

however, a large number of sophisticated ap-plicat ions ha ve been developed for use by lo-cal governments, both in the processing of datafor r out ine operat ions a nd in th e ana lysis of information for broader purposes of manage-ment and planning.

11

Larger governments usually bought or leasedequipment and developed in-house technicalstaffs, often developing their own software.Others depended on contractual agreementsfor specific computer applications with a corn-

—— —— .— —-.

“’Robert E. Sellers, “Mini- and Microcomputers in LocalGovernment: Their Application and Their Impact, ” State an d

Local Go\ w rnmen t Re~’iew, September 1981, p. 91.“tJohn Leslie King and Kenneth L. Kraemer, “Information

Systems and Intergovernmental Relations, ” Public S ector Per-fo rm ance . .+! Conceptual Turning Point, Trudi C. Miller (cd. )(Baltimore: The Johns Hopkins University Press, 1984), pp.102-130.




puter services/time-sharing company. In a fewcases local governments acquired computersystems but hired a facility management con-cern to operate them, or two local governments(e.g., a city or county and a school system)developed a joint ly owned a nd operat ed com-

puter center. ’2

End-use computing is now spreading in thegovernment agencies of large cities.

13Public

Techn ology, Inc., surveyed it s m ember citiesand counties with a population over 400,000in 1983 and found tha t a mong the 50 respond-ents, 75 percent had microcomputers. By then,93 percent had one or more minicomputers,and over half had mainframes. A similar sur-vey in 1984 indicated that 77 percent of 84cities responding (80 percent response) hadmicrocomputers, and 87 percent planned to

have them by 1984. ’4 There are already hun-dreds of local government applications pro-grams available for microcomputers.

But despite the low cost of small computers,most small local governments have not yetbegun to use them. A survey in 1983 of 162local governments within the State of SouthCarolina found that 81 percent were using com-puters of some kind, but this usually repre-sented centralized computing, or large-volumedata processing. While 3 of the 6 large citieswere using microcomputers, only 3 of 27 coun-

ties, 1 of 12 medium size cities, and 6 of 53small cities had acquired them.15

The International City Managers Associa-tion (ICMA) surveyed 5,808 cities of all sizesin 1982, and found that only 13.2 percent of

“Sellers, op. cit., p. 93.“See Special Symposium on Microcomputers in Local Gov-

ernment, A Pub l ic Administration Review, vol. 44, No. 1,January-February 1944, especially James R. Grieseemer,“Microelectronics and Local Government: New Economies andNew Opportunities, ” p. 57.“’’C-TAC Survey Reveals Members’ Information-Handling

Resources, ” Public Technology, vol. 5, No. 11, November 1983.The 1984 data was reported in Joey P. George, “Who Doesthe Buying?” Government Data Systems, August-September1985.“State of South Carolina, The South Carolina Local Gov-

ernment S urvey of the Use of Compu ter an d CommunicationsTechnology, prepared by the Institute of Information Manage-ment, Technology, and Policy, University of South Carolina,1983.

them were using microcomputers, althoughabout one-third planned to buy one or moreduring the next 2 years.

16Most of those that

had computers were using them for word proc-essing and financial management.

Of the more than 19,000 U.S. municipalities,over th ree-quar ters ha ve populat ions of lessthan 6,000. These small towns or villages usu-ally provide the same basic services as largercities—utilities, fire and police protection, rec-reation, taxing functions, usually school sys-tems, and often pl anning departments. In addi-tion, they have many responsibilities underFederal programs, such as administering rev-enue sha ring and block gran ts.

17They too ar e

trying to cut costs and increase productivity.In spite of this obvious need it appears thatsmall local units, especially those in rural areas,

ar e not r ush ing to compu terize th eir offices .18

However, it is possible that the purchaseof microcomputers by small governments hasaccelerated in the last 2 years beyond expec-tations. As late as 1982, lack of familiaritywith computers was probably the major fac-tor impeding their purchase by small cities;until recently there were likely to be few com-puter vendors in small towns and this marketwas not being aggressively pursued. This mayhave changed considerably by 1985.

“Donald F. Norris and Vincent J. Webb, Microcomputers: Baseline Data Report (Washington, DC: International CityManagers Association, July 1983), as reported in Donald F.Norris, “Computers and Small Local Governments, ” Public

Administration R eview, vol. 44, No. 1, January-February 1984,pp. 7off.

“Sellers, op. cit., p. 91.‘“Another survey in 1982 looked at cities and counties in

seven Mountain and Plains States. Of 75 cities with popula-tions of 2,500 to 50,000, 68 percent were using computers; of 75 counties under 100,000, 36 percent. Smaller communitieswere less likely to have computers than larger ones—41 per-cent of those with 5,000 or fewer people compared to 76 per-cent of those with more than 10,000 people. Those with citymanagers were much more likely to have computers than thosewith mayor/council governments, and metropolitan countieswere more likely than rural counties to use them. About one-

third of those who were already using computers, but only 16percent of the nonusers, planned to buy more in the next 2years. Over three-quarters of those that were using computershad a minicomputer or “bookkeeping system’ and only 22 per-cent had microcomputers (7 percent of all the cities surveyed).Most were using their computer system for payroll and account-ing, budgeting, and utility bills. Ninety percent had only onecomputer, and only 1 percent had as many as four. Norris, op.cit., 1984.



Ch. 10—Office Automation in State and Local Governments 269 — — —-

PERSPECTIVES ON THE EFFECTS OF PUBLICOFFICE AUTOMATION

Early commentaries on State and local gov-ernm ent u se of compu ters t ended to be theo-

retical rath er t han empirical, and often took one of three basic perspectives:19

q Information technology will rationalizenot only operating procedures but the po-litical/policy process.

q Adoption of information technology willbe driven partly by “the technological im-perative” and partly by the self-seekingactions of a t echn ical elite, u ncont rolledby humane values and unresponsive topublic attitudes.

Information technology is no differentfrom other technology and other kinds of information resources, and will have nounique or discernible effects on government.

The first of these perspectives tended to befound in public administration literature, whilethe second tended to come from political scien-tists, perhaps reflecting the different relativevalues that the two disciplines place on effi-ciency and responsiveness.

Enthusiasts often saw automation as a wayof achieving the goals of the old reform move-ment, and claimed that technology would in-

crease productivity, cut costs, improve deci-sionmaking, allow better management controlof operations, improve job satisfaction, andallow str eamlin ed governm ent s to offer m oreand better services. Critics feared that it wouldlessen the responsiveness of bureaucrats tocitizens, pu t a technological elite in cha rge of the local political process, shift power fromelected representatives to hired managers, de-skill jobs, and greatly increase the costs of gov-ernment.

The Effects of Local Government

A u tom a t ion

Some local governments were indeed takenaback by the costs of office automation be-cause they had not anticipated that the life-cycle costs of the equipment, with the sup-

‘Danziger, op. cit.

port and training required, would so far exceedinvestment costs. The first phase of computeri-

zation, at least, may not have reduced laborcosts but rather stimulated the hiring of clerksbecause it required input of massive amountsof data.

2oThere were widespread expectations

of a shortage of trained personnel in local gov-ernment .

21

Other effects were mixed but generally fa-vorable. In some jurisdictions administrativecontrol was improved, and workers reportedincreased job satisfaction. There are indica-tions in many cities that office automationtends to reinforce, rat her t ha n chan ge, exist-ing patterns of bureaucratic and political pow-er .22 Some social scientists make this pointmore strongly, concluding that computeriza-tion of local government has benefited thosewho already h ave broad power and contr ol inthe local hierar chy. They usua lly argue t hat

“K. I.. Kraemer, J.N. Danziger, and tJ.1,. King, 4’I.ocal Go\-ernment and Information Technology in the United States,Local Government and Information Technology>, In formaticsStudies No. 12, OECD, Paris, 1978.

-’J. L. King, “Local Government [Jse of Information Tech-nology: The Next Decade, Public Administration Rmr iew, vol.42, No. 1, January-February 1982, p. 31.

--For example, a study of 42 cities from 1975 to 1979 foundevidence for improved administrative control and operating per-

formance, especiall~r where computers were used for routinetasks, for example, tax recordkeeping and traffic-ticket proc-essing. In applications, such as support of police detect ii’es’investigations or planning and policy anal?wis, the results weremixed or marginal, or the evidence was ambiguous. P: ffectson job satisfaction and the office work en~’ironment were saidto be beneficial; the researchers said that this was often anunplanned, unanticipated benefit.

The same survey concluded that there was some e~’idencethat office automation reinforced existing pat terns of bureau-cratic power rather than changing them. 1 n most cases, a trendtoward centralized, professionalized management in local gov-ernment seemed to be strengthened as a result of automation.The perspective of the research group in this case was clearlythat of public administrators who placed high \alue on ration-alizing government activities. They found that the most suc-cessful implementations of automation were ‘‘alwa~rs linked

with the most advanced and sophisticated technolo~’ anda highly professionalized work force; the sociotechnical approach,emphasizing “user-friendly” equipment, human relationships,and worker in~’oli’ement in planning and decisionmaking, oftenworked best from the perspective of indi~’iduals, but at the costof some sacrifice of efficiency.‘*Evaluation of Information Tech-nology in I.ocal C~o\’ernments, 1975-1979. a sur~’e~’ by the ur-ban information systems research group of the Public Policq’Research Organization, reported in Kraemer, et al.. op. cit.,pp. 27ff.




there is a need for explicit democratization of government computer strategies.

23

Local governments collect and use informa-tion for two broad categories of activity—man-agement of routine government operations,and planning and analysis.

24Most of the in-

formation systems and applications in use arefor operational purposes-management of gov-ernment revenues, payrolls, etc. But local gov-ernments must collect and use information forscores of activities; two middle-size cities, in1980, identified over 300 distinct operationalinforma tion systems (not all th en comput er-ized).

25This operat ional da ta, in su mma rized

or aggregated form, is also useful for planningand management, especially status reporting,performance analysis, and compliance analysis.

Comput er programs and models have been

developed for these purposes, including, for ex-ample, fiscal impact analysis, land use, trans-porta tion ana lysis, urban development planning,and expenditure forecasting models. Many of these are in the public domain and others arereadily and inexpensively available; but rela-tively few government s h ave used t hem, an dthese are primarily the larger municipalities.It m aybe tha t m ost local government organi-zations do not yet have the expertise requiredto use these tools, but it may also be that mod-eling does not fit the informal, pragmatic, per-sonalized mode of decisionm ak ing char acter-

istic of government close to the grass rootsof democratic government.

26

“James N. Danziger (University of California-Irvine), Com- puters and Politics: High Technology in American Load Go}T-ernments (New York: Columbia University Press, November1981).

“This analysis draws heavily on the conceptual framework provided by King and Kraemer, op. cit., see especially pp.106-110.“King and Kraemer, op. cit., p. 107.“An analysis by Professors King and Kraemer of the

University of California-Irvine concludes that in terms of pro-ducing improvements in performance, most attempts to usethese models for planning and management have been “practi-cal failures, ” because of several problems:

q

q

q

Information collected for operational use is generally not

aggregated at the appropriate level for, or organized for,planning and management purposes. I.ocal governmentscollect relatively little data appropriate for assessment of output.Models must be fitted to the expected analyses, and thislevel of analytical competence is not always readilyavailable.Behavioral and political constraints:–Data useful for performance and compliance analysis

often depends on self-evaluation by government officialsand this affects their behavior in collecting/reporting the

There are many examples of local govern-ments using information and communicationstechnologies in innovative ways that can becopied and adapted by other communities. Forexample, Jacksonville, FL, is using electronicprint ing and a local-area network t o keep itscity ordinances up to date. Amendments passedby the city council are immediately incorpo-rated in the code, and supplements are printedfour to six times yearly, whereas formerly theone supplement per year required 6 monthsand up to $50,000 to prepare. The Office of General Counsel reports that it has reducedcosts by “eliminating the need for a large staff of editorial lawyers, printers, typesetters andother personnel. ” Boston has required its licen-see for cable t elevision t o link with a coaxialcable network all public buildings, includingmu nicipal offices, schools, an d fire a nd policebuildings. The system provides electronic mail,an d t he city’s 29 word pr ocessor syst ems willbe part of the network. During the last mu-nicipal election a direct link was setup betweenthe ballot counting at City Hall and local tele-vision and newspaper offices.

27

San Diego developed a computer-based plan-ning and management system to determinethe most cost effective location for the city’sservice un its in order t o reduce tra vel to andfrom work sites. By reassigning crews andequipment among existing stations the citywill realize an immediate net cost saving of

over $445,000.28 Fort Collins, CO, installed anau tomated informa tion system for use by po-lice officers that allowed it to eliminate oneposition in the Records Department, freedroom for three additional workstations, andincreased the reliability and integrity of crimi-nal justice information.

The effect of the advent of personal com-puters in local government offices, even if itis now occurring more rapidly than was ex-— .

data–especially if it is to be used to evaluate performance.–The assumptions used in constructing models may be

unrealistic in a specific situation and location, given thediversity among American communities.

—Models tend to be used to rationalize or defend decisionsalready made for political or other reasons rather thanto help make decisions.

(King and Kraemer, op. cit., p. 108.)‘-Reported in “The Government Office, ‘ Office Adm inistra-

tion an d Automation, September 1984.‘

hInformation provided by Public Technology, Inc., to OTA

from a list of PTI computer-technology award winners, No-vember 1984.



Ch. 10—Office Automation in State and Local Governments 271.—

pected in 1982, will not be app ar ent for some uneven rate, and in many governments with

tim e, especially since they a re likely to come little attention at the highest level of man-

into use without systematic planning, at a very agement.

EXAMPLES OF OFFICE AUTOMATION INSTATE AND LOCAL GOVERNMENT

In the absence of a large body of cross-

jurisdictional comparisons, some brief case his-tories are present ed as illustra tive of what istaking place in government offices. They arenot necessarily “typical,” but they provide apicture of some of the possible outcomes of office automation for States and munici-palities.

The State of South Carolina

Sout h Carolina falls about m idway amongthe 50 States in size (it ranked 24th in termsof populat ion, in 1980) and in governm ent rev-enue per capita (38th in 1980). Like otherStates, South Carolina began to acquire com-puter systems during the 1960s and 1970s.In 1981, South Carolina was spending as muchas 6 percent of its operating budget for tele-communications, data processing, and officeautomation, but without any systematic plan,strategy, or control over these expenditures .29In buying equipment or services for data proc-

- ‘This section relies heavily on work done for agencies of the State (especially the Division of Information Resource Man-agement of the State Budget and Control Board) by DonaldA. Marchand, John C. Kresslein, and others at the Instituteof Information Management, Technology and Policy, Collegeof Business Administration, University of South Carolina.Reports, to be referenced at points in this section as “SouthCarolina (number), ” include:

1.

2.

3.

4.

5.

6.

7.

Information Resource Alanagemen t : A Statewide S t r a t -e~’, April 1983.Th e South Carolina L ocal Governm ent Su r\ ’e~’of the Use of Computer and Communications Technology, November1983.

Implementing In formation Resource J lanagemen t in StateGovernment: The South Carolina Experience, Research Re-port RR-84 -l(K-84-8), May 1984.Personal Computers in State Go\ rernmen t , May 1984.

A hfanager’s Guide for Implementing Information Re-source ,$ f a n ag em tm t ( I I iM) in a State ,4gencj’, ,June 1984.Office Automation in the Office of the Go~rernor, tJanuary1985.

Initial E}’aluation of Prcductivit} Benefits Ach ie \ e d FromS0,4PS, Progress Report No. 2, tJuly 1983.

However, neither specific State agencies, the Institute, theuniversity, or the authors cited abet’e are responsible for theinterpretation and analysis in this section, which is solel~’ thatof OTA analysts.

essing some State agencies had underesti-mat ed the costs by as m uch as 50 percent . Ina decade, expenditures for managing data hadmore than tripled; and outlays for telecommu-nicat ions in 1980 were 38 times greater th anin 1960.

30

The Governor, the State Budget and Con-trol Board, and leaders of the State legisla-tur e agreed that something mu st be done. The

time was right since the legislature was thenworking on a new Model Procurement Code.The consensus across branches of governmentwas important, because power in this Stategovernment is particularly fragmented and dif-fuse. The heads of major State agencies areelected separately rather than appointed bythe Governor, and therefore tend to have theirown u nique relat ionships with legislators aswell as their own constituencies. The Gover-nor consequently must often depend on powersof persuasion to initiate any change within theState bureaucracy.

With a powerful consensus among Stateleaders that some way must be found to cutthe burgeoning costs of information manage-ment, it was possible to take action. The Stateadministration began efforts to develop a com-prehensive information resources managementstrategy. Key officials throughout governmentwere interviewed, and State agencies wereasked to develop productivity objectives. Onthis basis a preliminary State Plan on Tech-nology was developed, and later a Master Plan.Agencies were asked t o prepare t heir own 3-

year plans for use of information technologies.The Department of General Services was re-

organized to create a new Director of Infor-mation Resource Management and a divisionby that name (DIRM) under the Budget andControl Board. Another important step was

South Carolina (5), p. 5.




the creation of a new series of personnel clas-sifications under the title Information Re-source Management, to encourage the appoint-ment of such specialists in each agency.

The State Plan, as it developed, encom-

passed office automation, telecommunications,and large-scale data processing technology.The ba ckbone of th e plan ned t echn ology is tobe a statewide microwave network for voice,data, and video transmission. (See figure 10-1.) This network, which is planned for comple-tion in 1986, will cost an estimated $16 mil-lion, but is projected to save the State $100million over the next 20 years. The State “didnot set out initially to establish its own com-mun icat ion system, ” university consultantssay, “but sought instead the most cost-effec-tive alternative with the goal of controlling

comm un icat ion costs. “31

The planners soughtand got bids from 25 private industry vendorsbut none could provide what was wanted.

Another aspect of the State Plan was a sys-tematic approach to office automation (mean-ing, in the beginning, large-scale computer ap-plications). An 18-month pilot project wasbegun in August 1981. Task forces and studygroups were formed to consider procurementand standards, ergonomic issues, trainingneeds, user perceptions, and contingency plan-ning and security needs. The major objectives

in office automation were:q

q

q

q

automation of formerly manual tasks toreduce manpower requirements,direct time-saving applications and work redistribution to reduce time and man-power requirements,time-saving applications providing oppor-tunity to do additional work, andqua lity impr ovement s in office products.

The first pilot project was purchase of threeIBM 8100s and 100 peripherals for the De-partment of General Services in mid-1982. In

the following year further advanced data proc-essing applications were installed, and tech-nical assistance was given to other State agen-cies. The Model Procurement Code passed by

“South Carolina (4), p. 15.

the legislature in 1981 provided strong inducement s for a gencies to comply with st anda rdsformulated by the Department of GeneralServices’ new DIRM. DIRM must oversee anyprocur ement of over $2,500. The Sta te wouldcoordinate long-term contracts under which

agencies would receive a significan t discoun ton computer-related purchases. Office auto-mation standards were developed in 1982 andsubsequently revised.

By September 1983, an electronic network linked the Governor’s Office with nine criticalagencies within the State House Complex—the office of the Executive Director of the StateBudget and Control Board, the Health and Hu-man Services Finance Commission, the De-partment of Agriculture, the Division of Hu-man Resources Management, the Department

of Social Services, the Office of the Secretaryof State, the Department of Insurance, the Di-vision of General Services, and the Divisionof Information Resource Management.

For automating the Governor’s Office twominicomputers were linked to host computersat DIRM and the University of South Caro-lina; there ar e 22 workst at ions, 3 dat a pr oc-essing terminals, 7 letter-quality printers, aline print er, and a da ta processing printer. Arecent assessment concluded that the resultwas a 53 percent cumulative time saving in

actual time to complete all tasks studied (ap-proximately one-half person year), with anaverage time saving per task of 5.3 percentor approximately 112 person hours per year.

32

The improvement in time to complete eachta sk was estima ted to be about 86.5 percent.Three tasks t hat were done externally are nowdone internally (answering employment appli-cation letters, approximately 10 per day; pre-paring proclamations; preparing 200 news re-lease en velopes, about twice each week) withan improvement in turnaround time of about94 percent. Nine of twelve typewriters have

been relinquished for redistribution t o oth eroffices.

“South Carolina (6). The specific tasks studied were prop-erty management certification, grant report, audit report, grantaward letters and forms, consolidated vouchers (math calcula-tions), updating office personnel lists, preparing governor’sschedule, repetitive letters, commission letters, educational sta-tistical report.



.

Ch . 10—Office Automation in State and Local Governments “ 27 3-—

L

m I r

a)

(5




More qualitatively, the assessment foundthat the successful adoption of the Governor’sEducation Improvement Act in 1984 was “par-tially achieved through the efficient and ef-fective use of the office automation capabil-ities” that were used for creating the text,

completing 100 major revisions, preparing therelated speech by the Governor with 18 majorrevisions, and performing mass mailings toconstituents, related to the act. The Gover-nor’s Executive Assista nt was quoted a s say-ing that without office automation capabilitiesthe act would not have been adopted in thatfiscal year, or would have contained a lesserprogram cont ent. Th e assessmen t concludedtha t :

. . . (0)ffice automation is indeed initially morecostly than conventional or semiautomated

techniques. It also is extremely difficult toprecisely measure the quantitative produc-tivity improvements and equally as difficult. . . to determine the return on investment . . .However, . . . (automation resulted) in the ca-pability to produce and distribute informa-tion faster and more accurately and to makemore accurate and timely decisions . . . In-deed, th e. . . technologies helped improve thelevel of service and the relationship of the Of-fice of the Governor to the citizens of thisState.

33

The Legislative Services Group also auto-mated (with 200 word processing terminals

connected to a mainframe) and terminals wereput in the offices of legislators. Through thesystem, legislators can access and track billsand a mendments an d search t he State Codeof Laws. Word processing, data processing,key-word search, and calendaring are alsoprovided.

Automating State offices was not accom-plished without significant problems. Thoseidentified at an early stage of the process werethose found in nearly every large organization–functions beyond word processing tended

to be underused because people had not beentaught how to use them; there was sometimesa mismatch between capabilities provided andthose needed; and distribution of terminals was

sometimes not appropriate so that people queuedto use them in some places while other termi-nals were idle. But four-fifths of the clericalstaff and over half of managers and profes-sionals said that the new systems had im-proved not only their productivity but their

attitudes toward their work.34

By 1983 it was clear that personal computerswere rapidly being added to State offices. Theirprices often fell below th e th resh old at whichthere is central oversight. There was concernabout the potential lack of compliance withoffice automation standards, which could causecompa tibility problems lat er, yet t he flexibil-ity that PCs offer pointed them to becomingthe “primary office automation workstation, ”university consultants said.

35

A survey of 10 agencies in early 1984 showed

at least 500 microcomput ers in u se, and th atnumber was likely to double during fiscal year1985. The Comptroller General’s Office wasusing two personal computers to design a fi-na ncial reporting system t o be used by smallState agencies.

3’ Several agencies reported that

there was a high demand for personal com-puters, and staff members were dissatisfiedand frustrated by the necessity for sharingth em. No local area networks (LANS) were yetin place in these agencies and use of sharedhard disks was just beginning. But the twoState universities were planning campus-widenetworks and four of the agencies were inter-ested in developing them.

The State now requires personal computersto be bought under a term contract, so thatall agencies enjoy the volume discount andguarantees of support negotiat ed by the Sta te.It is officially anticipated that by the end of the 1980s there may be one microcomputerfor every State white-collar worker. DIRM haspurchased software packages for PCs that provide ‘English-language-like query capability’and facilitate the downloading of data from

mainframes to PCs. PCs and mainframes willbe linked using leased or dial-up lines to allow

“South Carolina (7).“South Carolina (7), p. 26.“South Carolina (4).‘South Carolina (6), p. 2.



— —


end-users controlled, preauthorized access tocentral government databases.

Several State agencies and institutions (e.g.,the Department of Mental Retardation, theTax Commi ssion, a State technical college, and

the State university medical school) are sys-tem at ically developing t heir own long-ra nge,informa tion-resource ma nagement plans.

Throughout the process of automating gov-ernment offices, this State government hasused university experts to monitor and reporton progress and problems in achieving itsstated objectives. A broader assessment fromthe perspective of effects on delivery of gov-ernm ent services, government al responsive-ness to citizens, and on the locus and exerciseof governmental power is to be undertaken but

is not now available.

New York City

The Mayor’s Office of Operations in NewYork City cooperated with OTA in studyingthe effects of public sector office automationby encouraging and facilitating a case studyby The Labor Institute of automation in threemunicipal departments—the Department of Finance, the Department of General Services,and t he Hum an Resources Administra tion.

37

New York City has for several years been

under intense pressure to reduce governmentoperating costs and increase revenues. Majorreorganizations aimed at increasing productivitytook place in city government departmentsboth before and during office automation. Thecase study focused on the consequences of aut omat ion for th e clerical, man agerial, andprofessional work force, and on th eir per cep-tions of how it affected both them and the serv-ices that they deliver to the public.

Many of the workers who contributed theirinsights to this study said that in spite of some

early misgivings, they like office automation.However, there is at the same time a high level

~;ffects of Office Automation on the Public Sector ll”orkforce: A Case S tud~ , of Yew York Cit.}, done under an VI’*4contract by The I.abor Institute ( N“ew York): ,Joan Crreenbaum,principal in~’estigator,with Cydne~’ Pullman and Sharon Sz~z-manski, February’ 1985.

of dissatisfaction. Some—both clericals andprofessionals-felt that their jobs had beendegraded, and their own interest in the joberoded.

Most said that their own productivity had

increased; and some said that the quality,quantity, and timeliness of services deliveredby their work units had improved. But in othercases, services have been depersonalized, stand-ardized, and routinized; accountability of in-dividuals, if not of the government as a whole,ha s been decreased.

The clerical workers in the three depart-ments are group clerks, office aides, office asso-ciates, technical support aides, and word proc-essor operators. The clerical work that has beenautomated was all done manually until 1982,

but now requires personal computers, wordprocessors, Automated Forms Systems, andother systems.

38 For example, at th e Bureauof Child Support (in HRA) a clerical work unitformer ly typed between 400 and 600 letterseach week. Now a clerk enters a code to selectforms to be sent to a client from nine formstha t ar e generated by an aut omated system.Clerks at the Income Maintenance Center oncehunted for paper files on particular clients asthey were needed by eligibility specialists; nowth e files ar e called up on a cath ode ray t ube(CRT) and the needed data is printed out. per-

sonal computers are used in the Real Prop-erty Tran sfer Tax Unit of th e Depart ment of Finance to call up information on propertysales history and determine the market valueof property. Word processors are used for taxbilling, as well as for generating reports, mail-ings, memoranda, and other documents in allof the departments. In one department themost proficient typists were removed fromtheir old work units and placed in a centralproduction unit.

“Twenty-eight clerical workers took part in workshops andgroup interviews for this case study. The~r are predominantl~’women, and predominantly black and Hispanic. host ha~.e com-

pleted high school and a few have completed college; they ha~reworked for the cits’ from 2 to 10 years, and have been usingcomputerized office systems for at least a year. The clericalworkers spent most of their 7-hour workda~’s using the s~’s-Lems, and usuall~’ hate two 20-nlinute breaks, in addition to1 hour for lunch.




One goal of city govern men t is r eduction of the clerical work force and this has been occur-ring. Managers report t ha t t he objective is toredu ce the clerical work force about 15 to 20percent through attrition. The effects of of-fice automation cannot always be clearly sep-

arated from the effects of reorganization thateither preceded or accompanied it, but muchof that reorgan izat ion wa s itself for t he pu r-pose of making better use of the new technol-ogy. One work unit manager reported that theautomated systems have already resulted ina 15 to 20 percent reduction in clerical staff over 3 years.

Clerical workers said t hat when a utomationbegan, they were fearful of losing their jobsand afraid that they could not learn the newsystems. Minimal formal training was provided

by vendors. Most of the workers learned fromcoworkers, and then taught others. Now theworkers generally approve of the automation,saying that it freed them from tedious man-ual work and allowed them to learn new skills,and that they can now produce better qualitywork, at a faster rate. They also say, however,that they still need more and better trainingand t hat th ey are not being adequat ely com-pensated for what they perceive as their newlylearned and higher level skills.

Because the new systems can handle a larger

volume of work in a shorter period of time,most of th e worker s work more st eadily andtake fewer breaks.

39 Those doing data entryin many cases say that their control over theirwork has decreased because it is paced by themachine. However, those in one kind of de-centralized word processing pool (“clusters’now have relatively more variety in what theyare keyboarding and also have to prioritize it,so that they feel they have more control overtheir work.

40

“’Their union, AFSCME, has negotiated two 20-minutebreaks for VDT users in some work units, but the workers say

that they do not always take them because they are too busy.Some, however, say that they take informal breaks when nec-essary to relieve eyestrain and back discomfort.‘“In two word processing units, one a pool and one a clus-

ter, some similar effects were found, including rotation of jobsand prioritization of work; but for different reasons. The clus-ter is a smaller unit where management encourages worker in-volvement in everything from selecting equipment to organiz-ing the work. In the word processing pool the increased controlthat the workers have is due to a virtual lack of supervision.As a result, workers must work as a team to coordinate andorganize the unit’s work.

Most of the New York City clerical workerssay that even though they like the new sys-tems, t hey also suffer from increased str ess.They report increased eyestrain, backaches,and headaches. Many of the new systems havebeen installed in old offices with unsuitable

furn iture and lighting, and poor ventilation;excessive noise from printers, and wires orcables stretched haphazardly around the floor,add to the risks to health and comfort.

Almost all of the clerical workers do morework t han before au tomat ion. Some say t hatthey now have a better understanding of “thewhole picture, ” that is, what the agency doesand how. The sharing of information and co-operative learning that has occurred has gen-erally increased the interaction between co-workers. But frequently this interaction is

forced; it is an attempt to overcome problemscaused by lack of supervisory coordination,lack of formal training, and problems with theequipment. The only way that work gets doneis by the workers going into a huddle and find-ing some way to get around the problem. Theworkers overwhelmingly say that they havemore interest in t heir work now, alth ough a sthey fully master the new process some an-ticipate that it will become boring.

In New York’s city government, paraprofes-sionals, who have less formal training than

professionals, can perform some of the work of professionals and assist them in other tasks.Some paraprofessionals are now using com-puters and related devices, although usuallyless intensively than the clerical workers. Typi-cally, th ey ma y review compu ter ized files orscan dat a for 2 or 3 hours a da y interspersedwith other duties and activities.

41For exam-

ple, in t he Bur eau of Child Support (HRA) pre-assignment investigators are now reviewingforms, generated by computers, to track downinformation about absent parents who areevading child support payments. In the In-

come Main ten an ce Office (also H RA) eligibil-ity specialists us e comput ers t o review client

“Nine paraprofessionals participated or were interviewedfor this case study, They were predominantly black and Hispanicwomen between the ages of 30 and 50, all high-school gradu-ates, most with some college training, They had worked forthe city from 5 to more than 15 years and are now using auto-mated data-entry and or data-retrieval s}’stems in their work.




files for recertification of public assistanceeligibility.

The eligibility specialists also have exten-sive direct contact with clients by telephone;they help them with emergencies such as evic-

tions, fires, or illness. These paraprofessionalsrate the work they do with computers for about10 hours a week as the most satisfactory of their tasks. They report that their productivityhas increased and the quality of the outputimproved after automation. The workload hasalso increased; because more information isavailable they are now required to submit morereports, and their deadlines are tighter. Al-though many feel that they have a better senseof “the whole picture” and more control overtheir work, many feel that they are overworked,undercompensated, and that the quality of

services delivery has not necessarily improved.The preassignment investigators in the Bu-

reau of Child Support a lso rat e th eir review-ing of files by computer as the most satisfy-ing of their tasks. They have almost no directcontact with clients, using forms almost ex-clusively in processing cases. But while theyfind reviewing these forms more satisfyingthan their other major task of sending out formletters, au tomation ha s not, in their opinion,improved the quality of the services.

The paraprofessional workers also complain

of eyestrain, backpain, and headaches, eventh ough t hey spend mu ch less t ime in front of CRTs than do the clerical workers.”

Professionals in these three city departmentsvary widely in the extent to which they usecomputers or other forms of office automation,but their jobs have also been strongly af-fected.” For example, in the Department of General Services, analysts in the Commis-sioner’s Office of Management and Analysisuse Wang VS terminals or IBMs linked to a

‘-Seven of the nine paraprofessionals who contributeddirectly to this case study have had to get stronger eyeglassprescriptions since they began using a VDT.

“Fifteen professionals participated in workshops and inter-views. They included 9 men and 6 women 80 percent were white),and their ages ranged from 20 to 40, with the average in themid-20s. All have college degrees and the majority somegraduate-school training. A few have worked for the city morethan 15 years, but most less than 4 years.

mainframe comput er for da ta input or inquiry,or word processing. Tax auditors in the TaxExamina tions Un it use IBM PCs for dat a in-quiry and input, and caseworkers in the Bu-reau of Child Support use IV Phase terminalsfor similar purposes.

Before automation, tax auditors in the RealProperty Transfer Tax unit handled all aspectsof a tax audit. Particular cases and case follow-

up were a ssigned t o one au ditor. As automa-tion is being introduced, this unit, with a staff of seven, is being merged into the much largerExaminations Unit, which now handles eightkinds of municipal taxes. This represents thebeginn ing of a lar ger reorganizat ion in whichall tax auditors in th e unit will be trained tohandle all eight types of taxes. Auditors ac-knowledge that the computer generates more

information, quicker, and thus provides morecontrol over the status of each case. Yet theauditors are dissatisfied with the overall proc-ess. With the reorganization of the work unit,the tax audit procedure has become frag-mented and more clericalized. Some of the au-ditors are frustrated with what they perceiveas a decreasing need for their professionaltraining and judgment.

Analysts in the Office of Management Plan-ning and Analysis say that the improved quan-tity, quality, and accessibility of data has re-

sult ed in impr oved ser vices from t heir office.Unlike other employees participating in thecase study they do not see an increase in work because of computers. Rather, the computershave changed their perceptions of their jobs.The expansion in the amount, speed, and widerrange of reliable information has given theanalysts more varied and creative possibilitiesfor solving problems. They feel that their in-fluence has increased as they go beyond iden-tifying problems and become more involvedin working out solutions.

But caseworkers in the Bureau of Child sup-

port think that the services provided by theirunit have definitely not been improved byAutomated Forms Service. Some of theirclients, they report, ignore all standardizedforms, others are intimidated by computerizedforms and will not respond to them. Thecaseworkers say t hat the dat a fed into the sys-

~2- 6 4 4 O - 85 - 10




tern is often inaccurat e, and tha t, tha nks toautomation, errors are not caught until latein th e progress of a case, which m ust th en beheld up until the errors can be corrected. Alsothe system has generated increasing numbersof small procedures that not only increase the

amount of work but also the chance for errors.These caseworkers, before the automated

forms service was adopted, wrote or typed nu-merous letters. They no longer perform suchclerical duties,

44but paradoxically their posi-

tion is being deprofessionalized. Since they areno longer solely responsible for deciding whatletters to send out, th eir contr ol over a casethroughout its history is not as complete. Their

job title is being changed from “caseworker”to “eligibility sp ecialist . ” A college degr ee isno longer required, and the new job title doesnot have the range of possible grade levels thatwent with th e old title, so that opport unitiesfor promotion are decreased. This job degra-dation was not caused by office automation,but office automation was used to foster anongoing process.

The professionals as a group have mixed per-ceptions a bout oth er effects of aut omat ion onth eir work. They genera lly report tha t inter -actions with coworker s increased, with sh ar -ing of ideas about uses of the systems. Theycontinue to pace their own work to suit them-selves an d th e needs of a par ticular project,

as professionals generally can. Some reportan increase in “petty” supervision, apparentlybecause supervisors can review more draftsof reports and more easily ask for changes.Some see the increased use of data (becausemore is available) as an increase in their work-load, while others perceive this in terms of moreoptions for solving problems. Most think thattheir ability to perceive “the whole picture”of th eir a gency’s work is enh an ced; yet somesay this is marred by increased uncertaintyas to the long-range effects of computeriza-tion on government.

Both caseworkers and auditors, however,feel that they have lost some control over theirwork, becau se it h as been fra gmented. Case-work ers, by being r elieved of clerical a spectsof their work have also been relieved of knowl-edge about its progress and outcome. Crucial

steps are taken by other people who do notknow the whole story. Auditors do not alwayscomplete an audit they have initiated, as itmay be passed on to others. Both the case-workers and these auditors say that their over-all job interest has decreased.

Managers, those top-level administratorswho set broad policies and exercise overallresponsibility for their execution, have alsobeen a ffected by office a ut oma tion, alt houghthey may or may not use any microelectronicdevices themselves.

45Some of the top-level

managers in these departments use word proc-essors for memos, notes, dra fting mat erials,etc. Some use electronic mail and messaging.Most a lso use da ta base inquiry from time t otime; a few reported using spreadsheeting,graphics, list files, and typesetting functions.These managers used a computer from 2 or3 hours a week to as many as 15 hours. Mostlythey had lear ned by watching other s use thesystems, but a few had taken courses.

Buying microcomputers for managers to usewas said to be much harder to justify “to thecity” than buying large systems for clerical

use. Most of the purchases were approved onan experimental basis. But all of the managerssaid tha t comput ers increa sed the speed andimproved the quality of their work, and allowedthem to do new kinds of work. Almost all alsosaid that computers increase the amount of work to be done.

The managers, however, were more con-cerned about the effect of office automationon their departments than on their own work habits. Some were eager to use office automa-tion to reduce the work force and their operat-

“Their work was rationalized and restructured to relievethem of some of the paperwork, prior to automation. The cleri-cal workers who took o~’er the paper work became overloaded,and Automated Forms Service was brought in to relieve thisproblem.

‘r Seven managers were interviewed in-depth; they include adepartment commissioner, an assistant commissioner, a dep-uty general counsel, and the directors of four major offices withindepartments. They included 4 men and 3 women, between theages of 28 and 50, who have worked for the city between 1and 15 years. Their own use of computers varied from ‘‘none,to working (at home) for several years on a computer.



Ch. 10—Office Automation in State and Local Governments q 279 —.

ing costs. Oth ers felt th at th e combinat ion of civil service rules and union resistance wouldkeep that from happening in the near future,but that other changes set in motion by auto-mation would nevertheless have major impacts

on the delivery of government services. Saidthe Commissioner of a large municipal de-par tment :

UNANSWERED QUESTIONSTECHNOLOGY AND

Since the city civil service ensures that jobsand people stay, I feel that this offers us roomto experiment with using computer tools fornew uses. I see the line between clerical andmanagerial workers blending. A clerical workeris not just a clerk and a man ager is not just

a manager.

ABOUT INFORMATIONGOVERNANCE

In all public sector offices, office automa-tion is increasingly tied to and part of largerinformation systems, and the effects on qual-ity of governance must be considered as a

whole. In State and local governments thisis particularly important because this is thelevel of government most likely to impactdirectly on individuals and households on adaily basis. To the extent t hat this a ssessmenthas considered public sector offices, it has beendirected almost entirely to the effects of of-fice automation on government itself, its pro-ductivity, effectiveness, and efficiency. Therehas been only peripheral attention to the ulti-mate effects on the constituents and clientsof government offices.

A study of 42 cities, in the first phase of office automation from 1975 to 1979, foundimproved adm inistra tive cont rol and operat -ing performance, increased job satisfaction,and improvements in the offices as workingenvironments.

46 The survey also produced evi-dence that office automation reinforced exist-ing patterns of bureaucratic power, and in mostcases, this meant a trend toward centralized,professionalized mana gement at th e expenseof the power of elected officials. This was oneof very few cross-jurisdictional studies and alsoone of even fewer that looked at effects on

power relationships within government.

“‘ 1“: t’aluatif)n of I nf{)rrnation Technolog~’ in I.ocal (lo~’ern-ments, 1 W’5- 1979, a sur~’e} of the urhan information s~:stemsrest~arch ~rr(jup of the I)uhl ic Polic~ Research ( )r~aniz at Ion, t-eported in Kt-aemer, et al,, op. cit., pp. Yi’ff,

To date, the sparse and fragmented litera-ture on government office automation and onthe broader topic of government informationsystems, and the case studies reviewed above,

suggest some further questions that shouldbe th oroughly stu died. If inform at ion a nd com-munication technologies can, as now appearshighly probable, increase the efficiency of Stateand local governments and decrease their oper-ating costs, what can be done to help the citi-zens of small as well as large governmentalunits enjoy these benefits? How can officeau tomation be implement ed and man aged sothat it improves, rather than degrades, thework life of civil servants and thus attractsto government service capable and dedicatedpeople? Can office automation improve the ef-

fectiveness and responsiveness of government,as well as its efficiency?

Several aspects of governance on which of-fice automation has a direct bearing were be-yond the scope of this assessment, but are par-ticularly worth further consideration. One isthe ability of governments to gather essentialinformation needed to carry out their respon-sibilities effectively. A second is the abilityof citizens to know and understand what theirgovernm ent s a re d oing—i.e., access t o infor-mation. A third is the ability of citizens to with-

hold some personal in form at ion from govern -ment—i.e., civil liberties. Finally, there arequestions about how information technologiesaffect the nature and the equitable distribu-tion of government services.




This assessment, although it did not addressth e quest ion directly, nevertheless indicatesthat office automation can improve the qual-ity as well as the quantity of informationavailable to government decisionma kers an dplanners. It can also make it easier for the rep-resentative branches of governments to exer-cise oversight over executive agencies, and forall branches of government to increase theirana lytical a nd planning capabilities.

However, all improvements in the ability of government to gather, integrate, and use in-formation also increase the danger that thisinformation can be misused. Questions of con-fidentiality and civil liberties arise at the lo-cal an d Sta te level as well as at th e Nationallevel.

Office aut omation could a lso be used t o al-low government offices to be more effectiveand efficient in responding positively to re-quests for information about governmentactivities. The prevailing Federal policy of in-formation resources management, which isnow being adopted by many St at es, is basedon the principle that information is an eco-nomic resour ce an d is to be man aged accord-ingly. In itself this principle is not hostile tothe objective of increased public access to in-formation, but it does not necessarily includethat objective. Some States are, however, mak-

ing concerted and systematic attempts to givethe public access to government information

by means of public information systems. Theyare confronting technological, economic, andlegal problems in doing so, and have so farhad mixed results.

There are disturbing hints, although as yet

only hints, that government office automationcan change the nature of government servicesin ways that are not completely desirable. Forexample, it may standardize and depersonal-ize the way in which some services ar e deliv-ered. To th e extent t ha t depersonalization orstandardization reduces the likelihood of dis-crimination, favoritism, arbitrariness, or cor-ruption, it is good. To the extent that it makesgovernment less humane, less sensitive to in-dividual needs, and pa rticularly to the needsof the handicapped, the poor, and the ignorant,it is not good. To the extent that it results

in people and t heir personal needs an d prob-lems being regarded a s int erchan geable, ma-nipulable statistics, it is a deterioration in civil

life.

These questions, as alread y noted go beyondthe scope of this assessment. Some of them,especially t hose r elated to citizens’ access t opublic information and to the protection of privacy, security, and civil liberties, will beaddressed in a forthcoming OTA assessmentof government information systems. All of these questions should however be the sub-

ject of serious scrut iny by citizens, scholars,and decisionmakers at State and local levels.



.- —

Ch a p t e r 1 1


Small Business



C o n t e n t s

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The Importance Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Factors Affecting the Use of Office Automation in Small Businesses .

Extent of Office Automation in the Small Business Sector. . . . . . . . . .

What areCapitalSoftwareTime . . .Tr ainingSecurity

. 0

. .

. .

. .

. .

Problems? . . . . . . . . .. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .

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. . . . . . . . . .Vendor-Responses . . . . . . . . . . . . .

Future Impacts of Office Automation on SmallThe Market for Business Services . . . . . . . . .Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . .Competitiveness and Scale. . . . . . . . . . . . . . . .Employment

Policy Options

and Skills . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Table No.

11-1. Percent of Firms Using

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Businesses. . . . . . . . . .. . . . . . . . . .. . . . . . . . . .. . . . . . . . . .

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Table

by Size of

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283

284

286

287287288289289289290

290291291292292

29 3

Page

1983 V. 1985 . 286



Chapter 11

Office Automation in Small Business

Small businesses play a vital role in our econ-omy, and technological changes could affect

that role. Small businesses are often a vehiclefor basic innovations; they create new jobs;they serve small, local, and specialized mar-kets not otherwise served; and they employmarginal resources that larger companies can-not utilize effectively. This chapter providessome general background and a summary of the limited information currently known aboutthe effects of office automation on small busi-nesses.

The first pha se of office au tomat ion requiredrelatively large capital investments and much

specialized expertise, a nd was chiefly imple-mented in large organizations. The availabil-ity of small computers and software packagesdesigned for small-scale operation is recent.Manufacturers and vendors are now emphasiz-ing this mar ket. But very small firms, and inparticular beginning entrepreneurs, are oftenuncertain and apprehensive about taking thefirst steps toward automating their offices.They would like to know more about the ex-perience similar small businesses have hadwith automation, but may find that it is diffi-cult to get objective, disinterested informa-

tion. Researchers a nd expert s in th e Nat ion’sbusiness schools and universities could helpto develop a body of information to fill thisneed. Few researchers have studied the effectson small business. This chapter can provide

a starting place for more detailed assessmentsand discussions.

Purchases of office automation equipmentby small businesses are rapidly increasing asthe prices of the equipment come down andas t his m ar ket becomes a ma jor focus of ven-dors. Computer systems have been used forseveral years by entrepreneurs and consultantsworking out of their homes, but the hardwareand software used for this purpose were hardlydifferentiated from that sold for amateur, rec-reational, and educational use in the home mar-ket. Now small computers and specially de-signed soft ware packages are coming into use

by very small firms such as farms, restaurants,mom and pop stores, and entrepreneurial sell-ers of business services, as well as for the largercategory of small business, firms with up to500 employees. They are being used for manyapplications, including a ccoun tin g functions,networking with peers, and research.

There have been few or no studies on theimpact of office automation technologies onemployment, job content, productivity, or sur-vivability of the small business or beginningentr epreneurs. Because of th e importan ce of the small business in the U.S. economy, theextent of adoption of aut omat ed office equip-ment in that sector and the problems facedin implementation of automated systems bysmall businesses merit special attention.

THE IMPORTANCE OF SMALL BUSINESSES

Organizations with 100 to 500 employees,although considered sma ll businesses in lawand regulations, tend to have a well-developed

organization structure, formal procedures, andcompany policies much like those of midsizedorganizations. Over 99 percent of all firms, inthe United States, fall within this category.While such firms might not be able to use amainframe computer, they are likely to be ableto mobilize the a ssets a nd a cquire th e exper-

tise to proceed rationally and systematicallytoward some form of office automation if theychoose to do so. But with personal computers,

organizations with fewer than 100 employeescan automate. Even very small firms, such asa family business or a n ew vent ur e by one ora few people new to entrepreneurship, can au-tomate many of their office procedures byusing, for example, word processing, spread-sheets, and automated mailing procedures.

283




Such organizations are often the incubatorsof new industries, new products, and new serv-

ices. Their problems are often different in kindfrom t hose of lar ger firms. Relat ively little isknown about the factors that determine theirsurvivability and growth. For that reason, thefocus of this chapter is the question of whatis known about the potential effects of officeautomation on independent firms having fewerthan 100 employees.’ Un less other wise sta ted,th e term “small business” in t he r est of th ischapter means firms having 100 or fewer em-ployees and the term “very small business”is usually applied to those with 20 or fewerworkers .

Such small businesses are a major part of the American economy, accounting for over34 percent of th e U.S. labor force, and 32 per-

cent of sales.2

These figures do not include self-employed workers, who constituted 10 percentof the work force in 1982, making the verysmall business share of total employment evenhigher than indicated in most studies.

3They

are a particularly important part of many in-dustries, such as agriculture, construction,wholesale and retail trade, and business andpersonal services.

‘The Small Business Administration has two definitions of a small business including those with fewer than 100 employ-ees and those with fewer than 500 employees. The latter cate-gory includes 99.7 percent of total firms in the United States.

An establishment is a business located at one physical site,an enterprise is a business consisting of one or more establish-ments, and the word “firm” refers to ail establishments underthe same ownership or control.

‘Executive Office of the President, T he State of Sma l f3usi -ness: A Report of the President (Washington, DC: U.S. Gov-ernment Printing Office, March 1984), p. 73.

“’Job Generation, ” Econom”c Policy in the Eighties: TheSm a l l Business Factor (Washington, DC: Small Business Ad-ministration, June 1984), p. 6.

Nonagricultural self-employment increased by more than45 percent between 1970 and 1983. Eugene H. Becker, “Self-Employed Workers: An Update to 1983, ” Monthly Labor Re-view, July 1984, pp. 14-18.

All of the net increase in jobs (984,000) be-tween 1980 and 1982 was at tributa ble to firmswith fewer than 19 employees.

4These small

busin esses pr oduced a t otal of 2,650,000 new jobs, more th an offsettin g th e 1,666,000 jobslost by larger businesses.’

Small businesses train beginning workersin needed skills, providing two out of threeworkers with their first jobs in the private sec-tor; larger firms reap the rewards of this train-ing through increased productivity y due to theavailability of trained workers. Small busi-nesses also account for almost half of women’s

jobs and provide jobs for the elderly and thosewishing to work part-time or intermittently.In addition, small firms are said to be moreinnovative than large firms and they offer serv-ices considered too differentiated or too small

in market potential to be pursued by largefirms.

This is, therefore, an import an t segment of the U.S. economy. Should Government pol-icies aid small business in their efforts to usenew technologies such as office automation?Can the private sector be encouraged to help?Or will office automation tend to change ordiminish the role that small business plays inthe economy?

‘The State of Sm a l l Business: A Report of the President,op. cit., pp. 26-27. The 1985 edition of the same report did notupdate these figures.

‘The State of Sm a l l Business: A Report of the President,1985, p. 2. But many small business firms start up and manyothers go out of business each year. In addition, firms are con-stantly moving in and out of this classification due to expan-sion, contraction, and purchase by larger firms. This dynamismof the small business sector is thought by many analysts tobe a useful indicator of overall business cycles; these cyclesare felt by small business 3 to 6 months before they affect largebusinesses.

FACTORS AFFECTING THE USE OF OFFICE AUTOMATIONIN SMALL BUSINESSES

The factors affecting the use of office auto- ment, the growth needs of the firm, and themation technologies in small businesses cen- available labor or skills. The declining priceter around the price and availability of equip- of microelectronic equipment is making it more



—.

Ch. n-Office Automation in Small Business q 285

feasible for sm all busin esses t o purcha se. Ac-cess t o capit al, however, is often st ill a pr ob-lem. Even a few thousand dollars in capitalinvestment can be significant. High interestrates limit the ability of very small firms, andespecially new businesses, to invest in capital

equipment, and the bankers’ interest in lend-ing small amounts is minimal. Many smallfirms simply do not feel the need for computeri-zation yet, although that situation seems tobe changing rapidly.

The targeting of the small business marketby manufacturers and retailers has no doubtinfluenced many to purchase and caused mostat least to consider the technologies. The in-terest of the vendors is evident from the in-crease in advertising aimed at small businessesand the number of small business seminars

offered by vendors and retail outlets.

The retail computer store has been the mostcommon method or site of purchase becausevendors have been unwilling to develop a salesstaff to deal with small businesses. Thus, thesales effort has been largely passive. The ven-dors now are dealing with that problem bymeans of seminars oriented to small businessowners and new entrepreneurs, attracting atarget audience with which their sales forcescan deal more efficiently.

The dynamics of the firm and of the indus-

try of which it is a member affect a firm’s needfor a nd u se of au toma ted office equipmen t. Abusiness that is growing rather than stagnat-ing is likely to use it to service more clientsor provide fast er r esponse t o clients . A grow-ing firm is also more likely to have the capitalor credit to purchase n ew equipment . Stru g-gling firms sometimes expect that office auto-ma tion will allow th em t o compete more su c-cessfully with larger firms. For example, asmall travel agency may find that the addi-tion of a computerized reservation system isnecessary for it to survive and compete.

6

Businesses of less than 100 employees makeup over 45 percent of th e miscellan eous bu si-ness service industry, and an even largerproportion of another seven industries ex-pected to grow rapidly in the next decade.

7

The miscellaneous business services, the fi-

nance, insurance and real estate industry, andprofessional services (health and legal), are al-rea dy hea vily impa cted by office au toma tion.Personal services, such as beauty shops, dry-cleaning establishments and repair services arelikely to be less affected by office automation.

The a vailability of people to use t he equ ip-men t will also influence th e decision t o aut o-mate. More highly trained, specialized person-nel such as systems analysts and programmersmay be needed if the office’s activities are inany way highly specialized or nontraditional,

and only a few specialized very small busi-nesses are likely to have such people, unlessthey are themselves the owners/entrepreneurs.The higher cost to the small firm of pensionplans an d other benefits, th e costs of recruit -ing and hiring these workers, and the smallscale of operations and markets put smallerbusinesses at a disadvantage. Once they haveautomated their operations, however, they areless likely to be able to employ unskilled neigh-borhood labor, untrained new or occasionalworkers, or family employees.

The proliferation of incubator facilities thatprovide computer and telecommunicationsequipment on a shared basis to small firmsor beginning firms will provide man y of th emwith their first opportunist y to use such equip-ment. Builders are developing “smart build-ings” prewired for computer and communi-cations networks, and are renovating olderbuildings and furnishing them with electronicequipment for lease to small business/entre-preneurs. Such facilities will provide small bus-inesses wit h t he ben efits of office au toma tionat an affordable cost. The number of incuba-

tor facilities in th e Unit ed Sta tes doubled in

‘Judith Kamm and Aaron Nurck, “The Organizational Im-plications of Implementing Technology in Small Businesses”(Department of Management, Bentley College, Waltham, MA),4th Annual Bentley College Sm a l l Business Resource Center

Research Conference, spring 1984.

‘Bruce Phillips and Kim Beverly, “Employment Pro jec-tions in Large and Small Business-Dominated Industries, 1982-1995, ” draft memorandum, Small Business Administration,Jan. 4, 1985.




the last year and shows signs of continued in- small businesses using these facilities, appearcrease. They are at tra cting private investment to be successful.

8

capital as well as private-public partnerships,-’Business Incubators Are Doubling in Number Each Year, ”

and with a two-thirds survival rate for the ~d l Street Journal, Nov. 14, 1985, p. 1.

EXTENT OF OFFICE AUTOMATION IN THESMALL BUSINESS SECTOR

The lowering of prices has allowed small bus-inesses to begin heavy purchasing of auto-mated office equipment, as evidenced by sev-eral marketing studies.

Although, more large firms use computersthan small ones, small firms are increasingtheir purchases steadily. Comparison of a 1983Dun’s 5000 survey

9and a 1985

10survey show

the increases. (See table 11-1.) The increasesin purchases for small firms were 60 to 70 per-cent during this short period. In fact, firmspurchased more than twice as many computersduring this time as they had predicted theywould in the 1983 survey.

Small firms responding to the 1983 surveyused their computers mostly for accountingwhile the largest firms used them for finan-cial analysis and forecasts. By 1985, the useof financial analysis/spreadsheets had decreasedoverall and the “other category” had increased

from 8.5 to 78.0 percent, indicating heavierusa ge of specialized app licat ions.11

This con-

“Joseph Duncan, “Business Bets on Microcomputers, ” D&B Looks at Business, August 1983, p. 45.

“Du n & Bradstreet Looks a t Business, vol. 3, No. 3 (NewYork: Dun & Bradstreet Corp., May/June 1985).

“Ibid., p. 4,

Table 11.1 .—Percent of Firms Using PersonalComputers by Size of Business, 1983 v. 1985

Size of business (number of employees) 1983 1985

1-19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.50/0 23.90/o20-99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.4 36.3100-499 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,3 47.2500-999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.5 71.81,000 or more . . . . . . . . . . . . . . . . . . . . . . . . . . 65.7 85.4

All firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.9 46.1

SOURCE Joseph W Duncan, “Dun’s 5,000 Survey Shows Dramatic Increase in

Use of Personal Computers, ” Dun & Bradsfreet Looks at Bus/ness, VOI

3, No 3, May/June 1985

firms the need for specialized software and spe-cialized personnel in the small business if theyare to use computerized systems effectively.All of the surveys studied indicated that smallbusin esses ar e conservat ive in t heir choice of systems and the use to which they are put,which is mainly word processing and account-ing functions. Larger firms are apt to be moreinterested in state-of-the-art equipment andmore innovative applications than are smallfirms.

In 1980, Inc. magazine surveyed its readersand found 48 percent of the respondents thenusing minicomputers and microcomputers orsmall business computer systems;

1222 percent

were using word processors.13

Only 4 yearslater, 57 percent owned/leased microcomputersand 28 percent owned/leased minicomputers. ’4The median number of employees of these com-pan ies was less th an 25. Personal comput ersare used most often by management, followed

closely by engineers, clerical and middle man-agement; the most common use is word proc-essing, followed by accounting/bookkeeping,file/list maintenance, and records/schedules.Further automation of tasks was planned by72 percent of the respondents within the next2 year s.

The small business market for communica-tions equipment is also increasing rapidly. Itwas over $3 billion in 1983.

15The cost of tele-

‘21nc. Office T echnology 1 (Boston, MA: United Marine Pub-

lishing Co., Inc., 1980).]‘Inc. Office Technology 11 (Boston, MA: United Marine

Publishing Co., Inc., 1980).““inc. Personal Computers” (Boston, MA: Inc . Publishing

Co., Inc., 1984), and “Inc. Minicomputers” (Boston, MA: Inc .Publishing Co., Inc., 1984).

“)Frost & Sullivan, “The Small Business Communications

Equipment Market Report, ” A 1254/D-1, winter 1983/84.



phone services is high on their list of prob-lems, according to testimony before the Com-mittee on Small Business in 1984.

16Small busi-

nesses are faced with much more complexchoices n ow in th e selection of telephone an dother communications services, which inten-

sifies the cost problem.

Most businesses (66.7 percent) used theircomputers as stand alone workstations, ac-

“” Impact of Changes in the Telecommunications Industryon Small Business, ” Hearing Before the Special Task Forceon the Impact of Telephone Costs, U.S. Congress, L$’ashing-ton, DC, June 26, 1984, p, 405.

Ch. 11—Office Automation in Small Business q 287

cording to the Dun & Bradstreet 1983 survey.Larger firms were more likely to use personalcomputers in telecommunications link-ups.Very small firms often used their microcom-puters to replace a Telex or Twix communica-tions service and were comparatively strong

in their use of commercial databases.

It is evident from surveys, advertising ef-forts by vendors, and retail sales activities,that small businesses are purchasing auto-mated office equipment in increasing amounts.Some ar e pur chasing out of genuine n eed toimprove their productivity and others are pur-chasing because the competition is doing so.

WHAT ARE THE PROBLEMS?

The very small business is faced with amyriad of problems when considering officeautomation. Included among these are:

q

q

q

q

q

q

Capital-Even though the prices of equip-ment have decreased tr emendously overthe past few years, this may still be anexpensive undertaking for the very smallfirm whose access to capital is limited.Time—A large investment of time is re-quired to evaluate, purchase, and learnto operate new systems.Expertise–Small businesses often lack

the expertise and the financial capabilityto hire technology experts for evaluation,implementation, and maintenance of auto-mated office systems.Training-Small businesses often lack thetime and expertise to train operators of the new equipment. In addition, the costof training is usually overlooked whenplanning the purchase of new office tech-nology equipment. The result is neglectof the training function and underutiliza-tion of the equipment.Repair services—Equipment is often pur-chased at retail outlets and the follow-up services are not available in a timelymanner .Software-Much packaged software isavailable for small businesses but it maynot be ent irely suita ble to a firm’s spe-cific needs.

q Secur ity–Lack of knowledge about com-put er secur ity an d litt le ‘cont rol overshared information systems are a prob-lem that th e small business will have todeal with in th e futu re as proprietary andprivate information becomes more acces-sible to all employees through computer-ized system s.

Capita l

The capital needed to purchase hardwaremay actually be the lowest cost involved inconverting to automated office equipment.Once it is purchased and installed, the owner/ manager needs someone to turn to for helpwhen it does not work and the vendor mayor may not provide good support. The imple-ment ation costs, which include tr aining an dtemporarily lowered productivity, are often un-expected. The five U.S. industries that aredominated by small businesses—services; re-tail and wholesale trade; construction; finance;insurance and real estate; and agriculturalservices have capitalization rates much lower

than industries dominated by large businesses.

17

‘-Bernevia McCalip, et al., “The Sensitivity of Small Busi-nesses to Interest Rate: A Cross Sectional View, Congres-sional Research Ser~ice, U.S. Congress, I.ibrary of (’ongress,Washington, DC, May 26, 1982,



288 q Automation of America’s Offices —— — — — . — —

Photo credft Ffew/ett.packard Co

A small business owner/manager seekingproductivity through automation

This ratio will have to change if smaller busi-nesses are to automate their offices.

The switch to computers can be a costly andfrustrating experience for a small business. Acompany selling cheerleaders supplies leaseda compu ter system th at would accept phone-in orders, check customer credit limits, figureshipping charges, adjust inventory, print aninvoice, add the order to accounts receivable,and update inventory when supplies arrived.

Within 6 months, orders were piled up fromhigh schools ready to begin the football sea-son, angry customers canceled orders, and at-torneys general in three States were pressur-ing the owner t o deliver t he goods. What ha dhappened? Like many businesses, this com-pany had pur chased hardware first a nd thenpurchased software from an independent sup-plier. The owner hired, then fired a computerexpert who was unfamiliar with th e businessoperation; neglected to solve poor inventor y

control problems present before the computer

system was implemented; and failed to becomeinvolved in the switchover. The owner blamedthe equipment vendor and the software sup-plier and they blamed the business owner. Theequipment h as been r eclaimed by the vendorand t he owner is suing them.

18

Software

The problems and costs of choosing suitablesoftware are even more significant than thoseinvolved in choosin g the hardware. Largerfirms often have software designed specificallyfor their use. In these companies, program-mers can spend 60 percent of their time doingmaintenance on programs.

19This is not feasi-

ble for the small business manager. Small firmsmust make do with packaged software thatoften does not work well for them, and thedeveloper is unavailable to them for consulta-tion, A survey by the U.S. Chamber of Com-merce in 1984 found that half of the respond-ents felt the need for more information thanwas found in t heir softwar e man uals, 39 per-

cent found t he manu als hard t o understand,and 23 percent complained of not havingenough written instruction.

20General Business

Services, a firm that provides consulting serv-ices to 50,000 small business clients throughfranchised counselors, notes that many of theclient firms are purchasin g microcomputers,but only a small percentage of them are usingtheir equipment fully. The effective use of theequipment depends on the motivation of theusers and on improvement and availabilit y of helping aids such as teaching diskettes, trainedconsultants, and user friendly languages,

A small cleaning services firm bought a com-

puter when a 15-year-old bookkeeping machinebroke down. The owner was convinced by asalesperson th at a compu ter would only cost$2,000 more than anew bookkeeping machine.However, he then had to spend $8,000 for cus-tomized software. He later learned that the. — —‘“Dennis Kneale, “Garbage Out: The Wrong Equipment in

the Wrong Hands Can Turn the Computer Dream Into a Night-mare,” The Wa l l Street Journal, May 20, 1985, p. 83C.

“David Thompson, “Small Business Buyers in the RetailComputer Market,” Desktop Computing,May 1983,pp. 58-61.‘“’’sm a ll Computers Market Study, ” Natjon’s Busjness ,

U.S. Chamber of Commerce, September 1984.



—

system was too small to track all 6,000 of hiscustomers; two employees trained on the ma-chine never got it working; and a second ex-pert said fixing the system would take anadditional $8,000 in programming and equip-ment . The owner n ow stores th e comput er inan upstairs corner since he could not find acharity to accept it. He is aware of hismistakes-trying to computerize before it wasnecessary, buying hardware before software,failing to get writt en guar ant ees, and failureto plan for training cost. He feels he shouldhave hired a consultant for a second opinionbefore pur chasing t he s ystem.’*

Time

Time is a m ajor problem. An owner/mana gerwith a 50-to 80-hour workweek will find it dif-ficult to invest the extensive time required toinvestigate office automation equipment andthen learn how to operate it. The lack of timeto learn the system could quickly cause dis-cour agement. The equipment is then neitherproperly nor fully utilized. And he or she oftenlacks the knowledge needed to evaluate whetherautomated equipment is really needed. Thepressure to be competitive or to purchase be-cause peers are doing so may influence a busi-ness owner to buy equipment without the anal-ysis of needs, benefits, and costs that should

precede such a purchase.

Tra in ing

Training of personnel is another problemfaced by the very small business. The man-ager must not only know how to use automatedoffice equipment, but often must also trainemployees. Alternatively, he or she must hiretrainers or pay for commercial courses; hirenew already trained people; or depend on self-teaching software. As the costs of softwareand training can be twice that of the hardware,

this is a significant problem. Salvate’s respond-ents22

indicated that lack of trained personnel


was a problem for them. This may, however,only be a short-term problem, diminishing asexisting employees ar e tr ained, as m ore an dmore new workers are a lready familiar withcomputers from school courses, and as thereis more and more self-teaching software. Atpresent, however, it is a significant barrier toautomation for very small firms.

Bradley Schiller explores the role of smallbusiness in training workers and concludesthat this may be the most important functionof small business.

23 The economy benefits byhaving a large pool of trained workers avail-able. The a dvanta ge to the beginning workeris the opportu nity to gain mar ketable skills,un der close sup ervision, in a variet y of activ-ities—all of which are generally denied to themin larger bu sinesses. Schiller points out tha t

67 percent of male workers obtain their firststeady job with firms of fewer than 100 em-ployees.

Small businesses now provide a valuableservice to the economy and to other businessesby training new entrants to the labor force inspecific skills and in general business skills.Only the successful adoption of office auto-ma tion t echn ologies will ena ble th em t o con-tinu e th is fun ction. H owever, th ere ar e coststo th e sma ll business em ployer. Accordin g toSchiller, th ere is a genera l exodus of employ-

ees from sm all firm s t o larger firms (300,000in the past 9 years), where they obtain an aver-age of 23 percent in wage increases in t he firstyear. High turnover can be very costly to thesmall firm. The productivity of new workersis often less than wages paid and the smallbusiness may not keep the employee longenough for the increased productivity to payoff.

Secur i ty

As small businesses become more aware that

information is a primary resource they will nec-essarily be more concerned about computer

‘Kneale, op. cit., p. 84C.James Salvate, “Microcomputer Survey, ” School of Busi-

ness Administration, California State University, I.ong Beach,CA, 1984.

“Bradley R. Schiller, Human Cap i ta l Transfer I’rom Sm a l lto Z.arge Business (Washington, DC: Small Business Adminis-tration, July 1982).




security. Not only could their information beaccessed by competitors but it could be dis-torted or destroyed, deliberately or acciden-tally, by insiders. The Small Business Com-puter Crime Prevention Act (S. 1920), whichbecame effective October 1, 1984, provides for

educat ional assistan ce to sm all businesses inthe area of computer security.” Specifically,it provides th at th e Small Business Adminis-tration should, through its extensive network of counselors to small business, provide thecomput er secur ity educat ion t hat small busi-nesses lack and may need.

Hearings held in March 1984 emphasizedthe problems that the small business has withcomputer security—lack of divisions and spe-cialized employees (one employee could haveaccess to all company information), the high

cost of purchasing specialized computer secu-rity systems, lack of knowledge/educationabout the problems, and little control over theinformation systems used because of leasedcommunication lines, timesharing computers,or packaged software. Even basic securitymeasures such as audit trails are not enforcedin many small firms and separating employeeduties is difficult.

Leslie Ball, founder of the Association of Computing Machinery’s Special Interest Groupon Security (SIGSAC), testified to Congressthat small business membership and seminarat tenda nce in t ha t group was extremely low,indicating t hat th e growing awareness of th e

problems of protecting information is not reach-ing this group.

Vendor Responses

The vendors are aware of the problems facedby the smaller business in adapting to officeautomation technologies. Available but notfully utilized yet, are systems and componentsthat address these problems, such as:

softwar e with a 30-minut e learning t ime;modular systems that can grow with the

business;q self-diagnostic systems;q use of natural languages for easier re-

trieval of data;q customer hotlines for quick, accessible

help; andexpert systems that simplify managerial

tasks.25

“S m al l Bu siness Comput er Crime Prevention Act (S . 1920),Hearing Before the Committee on Small Business, U.S. Sen-ate, Mar. 7, 1984.

‘rDavid Cushing, “Vendor Watch: Perspective on Small

Business Automation, ” Venture, November 1984, pp. 123-158.

FUTURE IMPACTS OF OFFICE AUTOMATIONON SMALL BUSINESSES

The impacts of office automation will dependon the overall growth of the economy, thegrowth stage of the firm, and the growth stageof the industry of which it is a part. It willaffect the demand for certain kinds of busi-ness services, the extension of their markets,and the employment levels and skills needed.

Small business is a heterogeneous categoryincluding very small to medium-size firms, lowand high technology firms, professional andunskilled services. Within firms under 100 em-

ployees, there may be a very big differencein the effect of office automation on a threeemployee owner-managed business and a firmof 50 employees. Some jobs are similar suchas that of a secretary, and some functions aresimilar such as payroll. But compared to largerbusinesses, small firms have less uniformity

by occupation and more multifunction person-nel. Some small business firms, both high andlow technology, are dynamic and growth ori-ented. Some are not. The difference may de-pend on entrepreneurship, location, and demo-



graphics more than on technology.26

However,th e us e of available t echn ologies will eventu -ally affect their competitiveness.

The Market for Business Services

Forty-three percent of small businesses areinvolved in providing services to other busi-nesses. This industry is projected by the Bu-reau of Labor Statistics to develop the mostnew jobs between 1982 an d 1995, growing ata rate of 3.9 percent per year.

27Although these

rates are high compared to other industries,they are low compared to past years, whenbusiness services employment grew at a r at eof 7 percent per year.

The use of office automation equipment willallow firms to perform services su ch as graph ics,

printing, and forms generation in-house. Elec-tronic publishing systems can cut printing anddocumentation costs by up to 50 percent.

28

These tr ends could decrease th e deman d forthese services from small businesses .29 On theother hand, office automation technologiescould also facilitate the entrance of small bus-inesses into national and international markets.

P r oduc t iv i ty

Most businesses that have automated officefunctions feel that they have become more

productive, often by decreasing time spent onword processing. Small professional officesmay gain productivity y by adding clerical choresto the professional job, thereby eliminatingclerical jobs. Examples of this include legaloffices that use a computerized database fromwhich the lawyer can develop simple wills andother legal papers without benefit of clerical

-’Peter Drucker, “Business Innovation: Our Entrepreneur-ial Economy, ” Current, May 1984, pp. 14-18. See also, BrucePhillips, The Marketing of Sm a l l Business by Big Business

(Washington, DC: U.S. Small Business Administration, Au-

gust 1983).--Valerie Personick, “The ,Job Outlook Through 1995: In-dustry Output and Employment Projected, ” hfonth)~’ I .abor Review, vol. 106, No. 11, November 1983, pp. 24-36.‘“Maureen Nevin Duffy, “Publishing an ‘ Inside Job’ With

Today’s Technology, ” MIS, NOV. 21, 1984, p. 42.“’Carol Anderson, “SM17 Word Processing Department, ”

SA4E ,Vews, winter 1985.


help, and small advertising firms that can com-puterize all client presentation formats, allow-ing professionals to compose these withoutclerical help. Conceivably, professional firmscould also go in the opposite direction, havingthe clerical help develop the basic computer-ized will or presentation, allowing the profes-sional to spend more time on exceptional work.

Nonprofessional offices may find greaterproductivity in upgrading clerical skills to in-clude some management functions, such as in-formation gathering and organizing, in orderto decrease the need for professionals. Thesmall farmer, though reluctant to switch tocomputers, is finding that the use of computerswill aid in generating the cash flow statementsand business plans that banks are now de-manding.

30

The use of a microcomputer for administra-tive information processing such as account-ing/billing forces the manager to develop moreorganized work ha bits t ha t will improve effi-ciency and lower recordkeeping costs. It couldalso increase effectiveness by permitting morecommunication with customers and potentialcust omers and a fast er response time to cus-tomers’ needs without a comparable increasein th e time an d labor r equired. Income ta xesand other Federal paperwork t hat require agreat deal of time could be accomplished with

much less stress and time with the aid of acompu terized system .

Loss of control of information is a signifi-cant problem for the growing business; the useof a computer can alleviate this by allowingthe owner/manager to control all records.

Effective use of the equipment purchasedwill depend on the motivation of the users andon improvement and availability of helpingaids such as teaching diskettes and of trainedconsultants. However, in the effort to mini-mize costs, the use of trained consultants is

most likely to be deferred or eliminat ed th usreducing the effectiveness of the automation.

“’’Computers: How Ya Gonna Sell ‘Em Down on theFarm?” Business Wreek, Feb. 18, 1985, p. 144.




The use of office automation technologiescould a id sma ll businesses in becoming m oreefficient and effective. However, there is somerisk that firms may overburden themselveswith debt to make this capital investment,overestimating the benefits or underestimat-

ing the time it will take to realize them.

Competitiveness and Scale

A special value of small businesses is thatthey can serve small, specialized and widelydispersed markets that, in general, large firmswould have to aggregate and standardize orignore in the name of economies of scale. Ad-vanced information technologies may perturbthese special niches. They have allowed thefinancial service industries, for example, todiversify products, tailor them to special needs,

and offer them nationwide (e.g., special invest-ment funds); and conversely, by aggregatingmarkets on a greater scale, to offer more stand-ardized products (e.g., mail order life insur-ance policies with rates determined only byage, and requiring no medical examination).These offerings can intrude on specialized nichesformerly filled by small businesses. On theoth er ha nd, real esta te firms, formerly sma lland highly localized businesses, have in somecases gone nationwide. Information and com-mu nication technologies, by nu llifying t he bar-rier of dista nce and t ime, can also allow very

specialized (and formerly very small) firms tooperate in larger markets. To do so, however,will demand a high level of entrepreneurial andmanagement skill that is always difficult tomuster in a new or very small business.

Employment and Skills

A general increase in overall economic activ-ity could increase the demand for services, al-lowing small businesses to expand and/or en-couraging the formation of new businesses.The Bureau of Labor Stat istics predicts t ha tthe miscellaneous service sector, which has a

large share of small businesses, will providea large proportion of the new job opportuni-ties over the next 15 years.

31Many of these

service industr ies, such as hotels, restau ran ts,educational and medical services are labor in-tensive and, although already automated to

some degree, may not be as heavily impactedby automation as business services.

The Salvate microcomputer survey32

indi-cated however that 11 percent of the smallfirms surveyed were able to eliminate employ-ees because of the use of a microcomputer and59 percent expected to cut back on employ-ment needs in th e fut ure. A U.S. Cha mber of Commerce survey

33 also showed staff reduc-tions in 11 percent of the r espondent s’ firm sand 63 percent reported more efficient use of staff. A 1985 survey by the same organiza-

tion showed that 16.5 percent of respondentsplan to reduce hiring in the future because of automation. Since small business is the largestemployment growth area, this could have sig-nificant impact on employment opportunitiesif it is representative of all small firms.

Drennan notes that less skilled labor whichused t o be concent rat ed in ma nufacturing isnow concentrated in the service sector.

34H e

predicts slower growth in clerical jobs in of-fices, including the business service industry,which is predominantly small businesses.

In t he near fut ure, higher level skills tha nare currently required may be needed by smallbusinesses who wish t o aut omat e. However,in the long run, less skilled labor maybe neededas people become familiar with computer equip-ment in grade/high school and as t he equip-ment becomes more user friendly.

“’’Employment Projections for 1995” (Washington, DC:U.S. Department of Labor, Bureau of Labor Statistics, Bulle-tin 2197, March 1984), p. 31.Walvate, op. cit.“U.S. Chamber of Commerce, op. cit.“Matthew P. Drennan, Conservation of Human Resources

(Washington, DC: U.S. Department of I.abor Report, January1983).



Ch. n-Office Automation in Small Business q 293

POLICY

The public interest in the health of smallbusiness is well established; a strong smallbusiness sector prevents overconcentration of economic power a nd wea lth an d pr ovides op-

portunity for the exercise of initiative, innova-tiveness, independence, and challenge to ob-solete industries and firms. Small businesseshave also played a major economic role in jobcreation; training and testing of new workers;serving small, specialized, or dispersed mar-kets; and productively utilizing resources thatwould otherwise be wasted. As small firms arefaced with technological change that may bringabout structural changes in their economicenvironment, the related public policy ques-tions are:

q Will office automation make larger firmsmore efficient an d allow th em t o par tici-pate in small and dispersed markets, put-ting small business at a further disadvan-

tage? Or can small businesses also useoffice automation to become more produc-tive an d increasingly able to compete withlarger firms, in local or in larger markets?

To th e extent th at sm all businesses adoptoffice automation, will their important rolein creation of new jobs diminish?

q If small businesses do not adopt officeautomation, will the economic and social

benefit that they have provided by train-ing new workers be diminished?

Only if they remain productive and competi-tive can small businesses cont inue t o creat e

OPTIONS

new jobs, train first-time employees, servespecialized mar kets, an d u tilize mar ginal r e-sources. In the future, this is likely to requirethem to participate in economy-wide changes

in basic technologies-viable sma ll busin essesthat did not adopt the telephone, the type-writer, electric lighting, and motor vehicleswould be difficult to find. Thus, small busi-nesses sooner or later will have to use com-puters and probably some other office auto-mation.

Congress may therefore wish to consider ac-tions to encourage and assist small businesseswith effort s t o aut omat e. These actions neednot involve major programs or large expendi-tures since they would be directed only at re-

ducing the problems encountered by very smallor beginning firms tha t have th emselves madethe decision and taken steps toward improvingtheir productivity. Congress might, for exam-ple, urge the Small Business Administrat ionto expand its instructional and counseling serv-ices to small entrepreneurs who are consider-ing the use of office automation equipment forthe first time. SBA could also provide initialtr ain ing for em ployees of very sm all firm s a tlow cost, or provide a telephone advice andinformation service to supplement the ofteninadequate support services available to small

comput er users t hrough comput er stores andvendors. It could provide incentives for banksto provide sma ll low-inter est loans for th e pur -chase of computers, software, and maintenanceand support.



C h a p t e r 1 2

Office Automation and

Differentially Affected Groups:

Working Women and Minorities



C o n t e n t s

Section 1: Women in the Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298The History of Women and Work in the Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298Current and Future Labor Force Participation of Women . . . . . . . . . . . . . . . . . . . . . . 300

Section 2: Office Work and Minorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302

TablesTable No. Page12-l. Minority Employment in Administrative Support Occupations, 1950-80 . . . . . . . 30312-2. Minority Employment in Selected Occupations as a Percent of

Total Employment, 1972 Compared to 1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304



..

Chapter 12

Office Automation and

Differentially Affected Groups:

Working Women and Minorities

This chapter gives closer attention to twooverlapping groups within society who havean especially strong stake in the long-rangeimpacts of office automation—working womenand workers belonging to racial and ethnic mi-

norities. A num ber of issues a re n ow activelybefore Congress related to employment andeconomic equity for women and minority groups.This assessment is not primarily directed atexploring these complex clusters of issues. Theassessment nevertheless reveals obvious rela-tionships between office automation, as a broadtechnological, economic and social trend, andthe special concerns of working women andminorities, which have been noted through-out th e report. This chapter is int ended onlyto provide some general background on theseth emes in t he hope of cont ributing t o fut ure,

more detailed assessments of the effect of tech-nological change on these issue areas.

Many of the trends discussed throughoutthis report will affect women office workersas compared to male office workers either dif-ferently or to a different degree, because menand women tend to be concentrated in differ-ent occupat ions, jobs, and indust ries, and atdifferen t levels of organ izational h ierar chies.Economic, social, a nd legal cond itions of longstanding, largely unrelated to technology, havea bearing on how technology effects the life

of specific groups within the larger society.With office au toma tion t her e will be fewer

jobs in some occupational categories and morein others; those now held predominantly bywomen are most likely to decrease in number,

and th ose tha t women increasingly aspire tohold will change in less predictable ways. Thepossibility of working at home tends to havea different meaning for men and women be-cause their family roles tend to be, at present,

very different.Congress now has before it a nu mber of bills

dealing with pay equity and comparable worth.These issues are not directly tied to office auto-mation, but because automation will affectboth the number and nature of office jobs andth e skills th ey require, any a tt empts t o com-pare jobs within a specific formal job classifi-cation or the demands of jobs across formalclassifications must take such changes intoaccount. The resolution of these issues will of course be determined by man y oth er factors

besides judgments about the comparability of jobs. Legal and regulatory pressures as wellas economic, behavioral, and attitudinal fac-tors and explicit management decisions affecthow jobs are designed, how they are filled, andhow they are compensated.

Section 1 of this chapter provides some back-ground on t he hist ory of women ’s position inoffice work, summarizes their present white-collar occupational status, briefly discusses theevidence for pay inequity in white-collar jobs—particularly those directly tied to computer-related work—and highlights the relationshipbetween these issues and the potential effectsof office automation. The potential effects of office automation on minorities and their rela-tively recent entrance into these positions isexplored in section 2.




SECTION 1: WOMEN

The History of Women and Work

in the Office

In the early 19th century men performed

clerical work in offices as an apprenticeshipin business. This was the first step on a careerladder that led to management positions. Thetremendous expansion in commerce in the mid-19th century and the accompanying expan-sion in paperwork required a great expansionin the office work force. Many businesses grewin scale after the Civil War from small firmswith a few clerks and office boys into largecorporations with national and internationalinterests. Organizations were restructured intofunctiona l divisions an d clerical work ten dedto be broken down into specialized tasks re-

quiring an increase in supervisory positions.

The first significant recorded use of womenin an office in the United States occurred dur-ing the Civil War when, in spite of great oppo-sition, the U.S. Treasurer General, FrancisElias Spinner, hired women clerks to alleviatea severe sh orta ge of available ma le labor.

1By

1880, offices were being mechanized with type-writers and telephones. Organizations (some-times unwittingly) began to recruit women forde-skilled clerical jobs while the men retainedthe management/administrative jobs.

zFor ex-

ample, “The Bowery Savings Bank of NewYork installed its first typewriter in 1894–without r ealizing t hat only females ha d beentrained to use the new-fangled contraption. Sothe bank promptly hired its first women. . . .“

3

Although the new technology, typewriters, didnot cause the expansion in office work thatbrought about the recruitment of women, itdid facilitate the movement of women into of-fice work, in that typing was not prelabeledas “men ’s work’ an d t her efore un suit able forwomen.

4

Women were not accepted wholeheartedly

into the labor force. There was strong opposi-tion from young men who felt they would belosing opportunities because women workedfor less pay. Many people felt that womenwould lose their femininity if allowed to work in offices and would then be unsuitable wivesand mothers. Proponents argued that officework did not denigrate women but rather pro-vided them with training that would makethem better household managers, and alsoargued that the office would benefit fromwomen’s “higher moral code.’”

‘Margery Davies, Woman Place 1s at the Typewriter (Philadelphia, PA: Temple University Press, 1982).‘Joan Scott, “The Mechanization of Women’s Work, ”

Scientific American, vol. 24, No. 3, pp. 167-185.‘Sidney Feldman, “Women in Banking: An Overview of an

Underutilized Resource, ” The Bankers Magazine, vol. 166,March-April 1983, p. 70.

‘Davies, op. cit.

When the U.S. economy was mainly agri-cultural, women were an equal and importantpart of the economic team maintaining a fam-ily farm. In addition, single working-age wom-

‘Davies, op. cit., ch. 5



Ch. 12—Office Automation and Differentially Affected Groups: Working Women and Minorities 299

en were often expected to earn some i n c o m efrom a t-home work such as sewing, knitt ing,and preparation of food for sale. When womenleft th e farm to work, it was as domestic work-ers and later as factory workers. For women,this meant higher wages and increased eco-

nomic indepen dence over work at home. How-ever, t heir wa ges were still quite low and work-ing conditions poor.

When office work became available to women,there was a large pool of women to seek these

jobs, which were easier, cleaner, and had morestatus than factory jobs. Small farm employ-ment declined from three-fourths of the laborforce in 1820 to one-ha lf in 1880. Durin g th isperiod many small family farms were barelyable to make a living or went out of business,requiring their daughters to seek employment

elsewhere.6

Th e same thing was happening tomany small family businesses that had usedth e un paid labor of the owners’ daught ers.

In the first half of the 20th century, educa-tional levels were increasing significantly, withmany more women than men completing highschool. Since literacy was required for officework, women gradually became the preferredsex for clerical employment in expanding bus-inesses. Commercial business schools becamecommon in the 1850s to fill the needs for clerkstrained in office skills. They offered arithmetic,

bookkeeping, penmanship, stenography andby 1880, typewriting. By 1890, they enrolled80,000 students (for comparison, grades 1through 12 enrolled 298,000 at that time).

7

Until late in the 19th century, these studentshad been almost entirely men, but with therestructuring of businesses and office work andthe cutting off of the career ladder from clerk to manager, men instead sought training inbusiness management in the universities,whose now prolifera tin g busin ess schools didnot admit women.

The opport unit y to work in offices broughtwomen into the labor market in steadily in-——————

“Davies, op. cit., ch. 4,‘Janice Weiss, “Educating for Clerical Work: The Nine-

teenth Century Private Commercial School, Journal of His -tor~r , spring 1981, p. 407,

creasing numbers after 1890. In 1890, 17.4 per-cent of women aged 20 to 64 were in the laborforce; by 1920, 22.9 percent and by 1940, 29.4percent.

8

In 1984, the participation rate for women

aged 20 to 64 was 64.1 percent. Historicallynonwhite women participated in full-time work in greater numbers than white women, butwere limited to fewer occupations. Their ratein 1890 (for th e same age group) was 39.3 per-cent and is currently 65 percent. Work forceparticipation for men is about 75 percent.

The burgeoning of office work influencedwomen’s increased participation, but otherfactors were also powerful. Birth rates had

b e e n d e c l i n i n g t h r o u g h o u t A m e r i c a n h i s t o r y ;

whether this was a cause or an effect of wom-

e n’s g rowi ng pa r t i c i pa t i on i n t he work fo rc eis a matter for some debate. Birthrates declined

in the period 1890-1947, reaching historic lows

during the 1930s . The bi r thra te increased rap-

i d l y d u r i n g t h e 1 9 5 0 s , t h e b a b y b o o m y e a r s .

These periods were paral leled and reflected in

l a bor fo rc e pa r t i c i pa t i on ra t e s fo r wome n of

c h i l dbe a r i ng ye a r s , whi c h i nc re a se d s t e a d i l y

be tween 1890 and 1947, and decreased for 20-

t o a s - y e a r - o l d w o m e n i n t h e 1 9 5 0 s .9

During this century, the acceptance of mar-r i e d women in the labor force slowly increased.

In 1900, l ess than 2 percent of marr ied wom-

e n we re e mpl oye d , a nd e mpl oye r s o f t e n f i r e d

working women who marr ied and did not vol -

u n t a r i l y l e a v e . B u t f r o m 1 9 2 0 t o 1 9 4 0 t h e i r

par t i c ipa t ion ra te doubled, f rom 9.7 to 20 per-

cent.1 0

Women’s par t ic ipat ion rates in past decades

did not increase at the same pace for al l age

g r o u p s . W o m e n w e n t t o w o r k i n g r e a t n u m -

bers dur ing World War I I . Women whose chi l -

dren were past early chi ldhood tended to stay

in the labor force after the war, while the par-

‘James Smith and Michael fJ’ard, “tf’omen’s R’ages andWork in th e Twentieth Century” (The Rand Corp. ) October1984.“Ibid. p. 5.

‘ ‘Ibid. pp . 7-9.



300 q Automation of America’s Offices.

ticipation of younger women dropped consider-ably in the late 1940s.

11

Discrimination kept the majority of womenworking in offices in clerical positions untilrecent t imes. In 1919, Civil Service examin a-tions covered 260 occupa tions, but for n ear ly60 percent of those occupations, the examina-tions were not open to women.

12As recently

as the 1960s positions were advertised in news-papers as “male” and “female.”

Current and Future Labor Force

Par t ic ipat ion of Women

In 1984, 53 percent of all women aged 16or older were in t he labor force in th e Unit edStates, totaling nearly 44 percent of the civil-ian work force.

13Between 1972 an d 1982, wom-

en a ccount ed for 68 percent of th e 14 millionincrease in employmen t in wh ite-collar occu-pations. For those women born in 1951 to 1955(now 30 to 34 years old) the participation rateis now 66.7, a considerable increase over earliercohorts.

14As older women, who were ra ised,

educated, and socialized when the traditionalnonemployed housewife was the norm, declinein numbers, the overall participation rate canbe expected to rise. Moreover, the birth rateis likely to remain low, and t here h as been adramatic increase recently in continued laborforce participation of women during childbear-

ing years, including continued participationby mothers of young children.

The available work force in 2000 will con-sist predominantly (75 percent) of people al-ready in the work force in 1985. Today, 80 per-cent of the clerical work force is female, and30 percent of working women are clerical work-ers. That gender segregation in clerical jobshas, over the long range, been increasing in

“Women’s household burdens decreased during the early20th century because of fewer children and because of the in-troduction of labor-saving devices for the home. There is stilldebate, however, as to whether or not this provided housewiveswith extra free time; there were also fewer women per house-hold, the family servant disappeared, and new tasks appeared,

“Davies, op. cit., app. table 5.‘3Em pZoymen t and Earnings (Washington, DC: U.S. De-

partment of Labor, Bureau of Labor Statistics, January 1985),p. 156.

“Smith, op. cit., p. 8.

spite of changing social attitudes and publicpolicy objectives. Women continue to clusterin traditionally female occupations, constitut-ing 80 percent of all administrative supportworkers compared to only 32 percent of man-agers, administrators, and executives in 1983.

15

These higher level jobs account for only 7 per-cent of all jobs held by women, even thoughthey include many members of the traditionalfemale occupations of registered nurse, healthtechnician, elementary school teacher, librar-ian, and social worker. Where women are inmanagement positions, they are mostly in thelowest rungs of management. ”

A report on Microelectronics and WorkingWomen for the National Research Councilnotes that alth ough th ere has not been wide-spread labor displacement of women by meansof layoffs, there has been lack of growth inoccupations that have been their main sourceof employ ment .

17 In the United States, em-ployment growth in the clerical occupationsshows a lag behind increases in the volumeof business in insura nce, banking, and oth eroffices where women have been so highly con-centrated. A Canadian study confirms that

jobs such as secretaries, filing and other of-fice clerks, bank tellers, keypunch operators,telephone operators, mail handlers, and the su-pervisory personnel for these positions areamong the slower growing occupations.

18OTA’s

analysis (chapter 2) points to a long-range de-cline in jobs held predominantly by women.Already employment declines have occurredin the heavily automated insurance industryin keypunch operators, bookkeepers, file clerks,mail handlers, and typists.

16

———————

“Facts on Women Workers (Washington, DC: U.S. Depart-ment of Labor, Office of the Secretary, Women’s Bureau, 1984).

“Tim e of Change: 1983 Han dbook on Women Workers(Washington, DC: U.S. Department of Labor, Office of the Sec-retary, Women’s Bureau, 1983), Bulletin 298, pp. 52-53.

“Diane Werneke, “Microelectronics and Working Women:A Literature Summary, ” Cornrnittee on Women’s Employmentand Related Social Issues (Washington, DC: National Acad-emy of Sciences, 1984), prepared for the National ResearchCouncil.IHWerneke, op. cit.“Eileen Appelbaum, “The Impact of Technology on Skill

Requirements and Occupational Structure in the Insurance In-dustry, 1960-1990” (Philadelphia, PA: Temple University, Apr.1, 1984).



Ch. 12—Office Automation and Differentially Affected Groups: Working Women and Minorities q 301

Future employment opportunities for women,although dependent on growth of total demandin the economy, may be more dependent onthe opportunity for increasing their skills, work experience and upward job mobility, which

would allow them to take advantage of chang-ing job requirements. However, these oppor-tunities may not materialize. In the insuranceindustry, as overall female employment hasincreased in all job categories, the professional jobs into which they have moved have fre-quently been changed to lower pay levels toreflect lower skill levels.

20

New jobs are emerging in the computer andtechnical specialist occupations, especially forengineers, computer analysts, and paraprofes-sional computer technicians, positions in whichrelatively few women are employed. Accord-ing to the Bureau of Labor Statistics, com-puter specialist jobs increased from 275,000in 1972 to 585,000 in 1980. Women increasedtheir share of these jobs from 17 percent in1972 to 26 per cent in 1980. H owever, womenwere more likely to be programmers than sys-tems analysts (a higher level, higher paid po-sition).

21

Whether it cuts off career ladders, eliminatesunskilled clerical work, or requires more ordifferent training and skills, office automationwill change the nature and skill requirements

of traditional office occupations and jobs.22

Whether or not these changes will be reflectedin cha nges in job t itle, job classificat ion, a ndcompensation levels remains to be seen. His-torically, “women’s” jobs have paid less than“men’s” jobs. The figures comparing men’sand women’s average salaries are well known,as are the many discussions of the reasons for

——— —“’Barbara Baran, “Insurance Industry and Trade Strate-

gies, ” draft report prepared for the Office of Technology Assess-ment, September 1984, p. 6.“Carol Boyd Leon, “Occupational Winners and Losers,

1972 -80,” Monthly Labor Review, June 1982, p. 22.

“Arbeidsnotat fra forskningsprammet “Teknologiens be-tydning for kvinners arbeidsliv ” (Working Paper From the Re-search Program “Technology and Women’s Work”) Journal

for S ocial Research, vol. 23, 1982, pp. 519-534; Roslyn Feld-berg and Evelyn Glenn, “Technology and Work Degradation:Effects of Office Automation on Women Clerical Workers, ”Mach in a Ex Dea, Joan Rothschild (cd. ) (New York: PergamonPress, 1983), p. 72; and Baran, op. cit., p. 136.

the differences. The reasons usually offeredinclude differences in education and experi-ence, occupational and industry choices, jobmobility and number of hours worked. How-ever, men who go into “female” lines of work earn more than women in those fields. Femalefull-time, year-round clerical workers had a me-dian income of $10,997 in 1980 while male cler-ical workers had a median income of $18,247.A similar differential is found in all occupa-tions.

23

Pursuing a career in the computer industrydoes not au tomatically alter t raditional rela-tionships. There were compelling reasons toexpect to find relatively little male-female dis-parity in computer-related occupations, espe-cially programming. The occupations are new,women have been involved in the field from

the beginning, there has been a steady sellers’mar ket, and th e growth of th e industr y coin-cided with implementation of affirmative ac-tion and equal employment regulations. How-ever, women a re paid less tha n m en in everycomputer specialization, in every industry, andat every organizational levelo

24

The p ossibility of a genera l decline in com-pensa tion a ssociat ed with de-skilling of work and enhanced interchangeability of workers(generally in conjunction with anticipated jobpolarization) is also of concern to some re-

searchers. While these conditions have beennoted in specific organizations, particularlythose in office-oriented industries, the countertrend toward job enlargement in both office-oriented industries and general offices mayprovide some offset. Another uncertainty isthe effect of large-scale shifts in the structureof the economy, together with changes in la-bor supply, on the wage structure (holding jobcontent constant).

Some observers express concern about un-dercompensation for skills that may not be

“’’American Women: Three Decades of Change” (Hearingsbefore the U.S. Congress, Joint Economic Committee, Wash-ington, DC, Nov. 9, 1983), Testimony of Lewis Kincannon, Bu-reau of the Census, p. 26.

“Philip Kraft, “Computers and the Automation of Work, ”State University of New York at Binghamton and Center forSurvey Research, University of Massachusetts, 1984.




captured in formal job descriptions but arenevertheless essential. Automation may de-skillsome jobs, but it may also involve a changefrom manually intensive work to mentally in-tensive work that requires closer attention andincreased responsibility for accuracy. Increased

knowledge about the operations of the wholeorganization may be required to ensure ac-curacy of data input. These “invisible skills”become apparent only when they are not per-formed well.”

As office au tomat ion changes t asks an d jobs,blurring the distinctions between “men’s” and“women’s” work and between clerical andprofessional work, the opportunity is availableto objectively evaluate jobs, their skill require-ments, and compensation. Major changes inthe occupational mix and in job content are

likely to bring about pressure for new paystructures. In economic theory, individual payis a function of the contribution of the indi-vidual to the organization’s output; hence, paygenerally increases with productivity. In acompetitive market wages are also influenced

——. ..—— - .—“Joan Greenbaum, Cydney Pullman, and Sharon Szyman-

ski, The Labor Institute, “The Impact of Office Automationon the Municipal Workforce of New York City: A Case Study,contract report for the Office of Technology Assessment, April1985.

by supply and demand. For example, an abun-dance of teenage candidates for fast food-service work in the recent past may be onereason why th e pay is low. That sit uat ion ischan ging now with t he decrease in th e num -ber of young workers entering the labor force.

But in practice, other factors confound paystructures so that there may not be a directrelationship between the pay and the supplyof workers. If fast food restaurants in thefuture were faced with raising pay rates to at-tr act needed workers, t hey could furth er au -tomate their tasks and insist on more self-

service by customers. It is evident from theexperience in other consumer service indus-tries, for example banking, that we are becom-ing more and more a self-service society. Thiscould also be the case in offices as professionalsperform t heir own t yping an d graphics tasksand clients input information directly intocomputers, receive output directly into theirown computers, and print the informationthemselves.

The effect of information and communica-tion technologies on the nature of work, on

job classifications, and on compensation struc-tures is thus far broader than the issue of payequity and comparable worth for women, butit will have a direct an d immediate r elation-ship on those discussions.

SECTION 2: OFFICE WORK AND MINORITIES

Black workers account for 10.2 percent26

of the clerical work force, which is comparableto the black share of the labor force and thepopulation. Hispanic Americans account for5 per cent of th is occupat iona l category.” Forminority women, especially, the movementinto clerical jobs has in fact represented animportant channel of upward social mobility.

28

-’Em plo-vment an d Earnings (Washington, DC: U.S. De-partment of Labor, 13ureau of I.abor Statistics, January 1985),p. 177.“The Hispanic category includes black and white Hispan-

ics, so the true number of black clerical workers is difficultto ascertain.

-“See: Diane Nilsen Westcott, “Blacks in the 1970s: DidThey Scale the Job Ladder?’ Monthly Labor Rew”ew, June 1982;

(See table 12-1.) They began moving into of-fice work in significant numbers only in the1950s. Black w-omen increased their share of clerical jobs by 163 percent between 1950 and1960. Women of Hispanic origin increasedtheir share by 333 percent,

29now making up

about 4 percent of the clerical work force.

Center for the Study of Social Policy, “A Dream Deferred: Thel+~conomic Status of Black Americans, July 1983; and Thierry

Noyelle, “The New Technology and the New Economy: Impli-cations for Equal Opportunity, ” work in progress, ColumbiaUniversity, New York, February 1985.

‘<’U.S. Census of Population for 1950: Occupat ional Chara c-teristics, Special Report P-E No. 1 B, p. IB-31; and U.S. Censusof Population, 1960: Occupat ional Ch aracteristics (Washing-ton, DC: U.S. Department of Commerce, Bureau of the Census,p. 23).



Ch. 12—Office Automation and Differentially Affected Groups: Working Women and Minorities 303

Table 12-1 .–Minority Employment in Administrative Support Occupations, 1950=80 —. —

White Black Other - -

———Male

-Female M a l e ” Female M a l e

– Female

Year Total – (0 /0) (0 /0) (0/0) (“/0) -- (%) ( % )

1950 6,864,600 ‘- 2,476,710 4:187,820 109,740 75,060 5,580 9,690(36.1) (61 .0) (2.1) (1.1) (0.08) (0.14)

1960 9,617,874 2,821,463 6,048,678 184,823 197,263 22,50~ 41,998(29,3) (63.3) (1 .9) (2.1) (0.23) (0.44)

Hispanic

Male Female(%”) (

0 /0)

1970 13,748,260 3,258,901 9,346,947 330,492 691,097 144,309- 297,116(23.7) (68,0) (2.4) (5.0) (1.1) (2,2)

1980 16,851,398 3,235,744 11,325,716 435,365 1,200,516 234,132 595,461(19,2) (67.2) (2.6) (7.1) (1 ,4) (3.5)

SOURCE Data are derived from the U S Department of Commerce, Bureau of the Census, U S Census for 1950-7980 Washington DC

Between 1960 and 1976 the proportion of minority women workers employed as domes-

tics dropped from 35 to 9 percent, while thepercentage employed in clerical work increasedfrom 9 to 26 percent, and the percentage inprofessional a nd techn ical jobs r ose from 7 t o14 percent. Half of all minority women werein the work force in 1976, compared to 47 per-cent of whit e women. The m ovement of black and Hispanic women into office occupationshas thus occurred almost entirely within thelast 30 years and has aided many of them tomove into the middle class.

By 1980, over 29 percent of employed black women held clerical jobs, an d 14 percent heldprofessional jobs. The wages of all minoritywomen r elat ive to white women r ose from 70percent in 1960 to 94 percent in 1976.

30Bu t

between 1976 and 1980 their income slippedto 86 percent of that of white women. In 1976,black female clerical workers’ wages were 107percent of th at of whit e fema le clerical work-ers, but it slipped to 97 percent in 1980.

31On e

rea son for the h igher level in 1976 is thoughtto be that black women had been in these jobslonger and thus had higher pay levels becauseof seniority. After 1976, higher paid, educated

black women may have been moving out of clerical work and into supervisory, manage-

—— .‘‘ \ l inorit~ }!’omen Jlrorkers: A Statistical otrer~riew,

,Jlanuaf on l)a~ I+;quit>: R a i s i n g Jlrage.s fo r 11’omen ‘? 1$’ork,

.JoJT .lnn (;run(’ (cd.], (’omtnittee o n l)a~r [jquit~’, No \ r t~m h e r

19X1. pp. :)1-:14.\\’(’$[c(Jt t . op. cit., p. 37.

ment, and professional jobs as these optionsopened up for them.

Black and Hispanic males also increasedtheir share of clerical jobs considerably be-tween 1950 and 1960. Black males held a largersha re of clerical positions in t he 1950 censusthan did black females. The balance changedhowever by the time of the 1960 census, whenblack women slightly outnumbered black menin clerical jobs; they have increased this gapsteadily since 1960.

During the 1970s, minority workers madesignificant gains in moving into white-collaroccupations and in advancing within these oc-

cupations. Their share of professional jobs suchas credit and collection managers and officemanagers increased tremendously as did theirsha re of clerical jobs such a s bill an d a ccountcollectors, secretaries, and statistical clerks.The jobs that showed the largest growth forminorities between 1972 and 1981 are shownin table 12-2. Many of these positions are, how-ever, still at the lower end of the scale andthus most likely to be affected by job displace-ment from office automation; the black work-ers also tend to have least seniority since these

jobs became open to them only in recent years.

Becau se of a growing economy an d t he ac-tive interest in social change in the UnitedStat es, employment opport un ities for minor-ities have seen noteworth y improvements inthe last two decades. However, black workersstill have significantly higher unemployment




Table 12.2.—Minority Employment in SelectedOccupations as a Percent of Total Employment,

1972 Compared to 1981

Minority employment

Occupation 1 9 7 2 1 9 8 1

Computer specialists . . . . . . . 5.5 9.4Bank officials and managers ... 2.6 5.5Credit and collection managers . 1.4 4.4Office managers, . . . . . . . . . 1.0 4,0Bank tellers . . . . . . . 4,9 7,6Billing clerks . . ... ... 6.7 10.5Bookkeepers . . . . . 3,6 6.3Collectors, bi l l and account. . 5.0 10.8File clerks ... . . . . . . . . . . . 18.0 22.9Secretaries . . . . . . . 5.2 7.2Statistical clerks . . . . . . . . . . . . 8.4 15.1Typists . . . . . . . ... . . ... 12,0 17.8

SOURCE U S Department of Labor, Bureau of Labor Statlstlcs, Current Popu/a-fton Survey A Databook VOI 1 Washington, DC 1982 pp 651667

rates than whites and also higher rates of in-voluntary part-time work. Both of these trends

could be intensified by the use of office auto-mation. The changing nature of skills requiredfor beginning and mid-level jobs and the chang-ing na tu re of job tr ainin g (see cha pter 3) willalso have an effect on the future employmentlevels of minorities in offices, unless their ac-cess to training is increased. Minority work-ers will have to find ways to obtain the moreformalized and more off-the-job training re-quired to fill positions in the office.

Another problem for the minority workersis the strong trend in the last decade for officesto move from th e cent ral city to the subur bs,and for business and industries to grow in theSouth and Southwest and shrink in the North-east. Because 55 percent of black Americans

live in central cities, as compared to 24 per-cent of whites, and only about 22 percent of blacks live in the suburbs, the movement of offices from central cities to suburbs decreasestheir opportunity for office employment. Gov-ernment employment in central cities, whichhas been a significant source of employmentfor minority workers, is likely to stabilize andmay well decline. The shift of office work tothe Southwest tends to further decrease theaccess of black women to office jobs, althoughit increases opportunities for Hispanics.

The greater instability of worklife for mi-norities and th eir concentra tion in t he lowerlevel clerical jobs indicates that their effortsto better their status may be more difficultin the future than it has been in the past dec-ade. The availability to th em of tr aining an deducation and the continued growth of the U.S.economy is of the highest importance if mi-norities are to maintain and increase theprogress they have made.



Appendix A

The Technology of Office Automation

Business is now faced with the problem of con-

trolling 400 billion documents, a number that is

increasing at the rate of 72 billion per year.1

Fortu-nately, technology is providing the means of elec-

tronically storing billions of characters on a single

device and moving data at the rate of millions of

characters per second. This appendix describes the

technologies that are in use in offices, those that

may be applied in offices during the remainder of

this century, and how they may affect office oper-

a t ions .Information is ephemeral. It must be available

when and where it is needed; too late, it maybe use-

less. The goal in applying information technology

is to deliver information to the end user on time and

at the lowest possible cost. Information technol-

ogy eliminates distance as a significant factor indetermining the degree of operational control that

managers can exert over operations. It reduces the

time required to analyze large volumes of data andmakes the resulting information available to those

who need it for decisionmaking.

Overview of Appendix

This appendix descr ibes the technologies for

information processing and telecommunication in

the office. First, a taxonomy of the functions of the

office is presented, followed by a description of relationships between the functions and the tech-

nologies that are now available or could be avail-able in the future. Following that is a more detailed

description of the technologies and the options for

employing them.

A Systemic View of the

The following functions comprise

jor office activities:

q da t a ga t he r i ng ,

Office

the set of ma-

q data organiza t ion and s torage ,

q data access and retrieval ,

q data processing, and

q

communica t ion of resul t s .

C, 1“: W’hlte, ( ’ “ LS’1’A and A’I’&’l’, ‘‘ 7’elec’omn]unic8tio ns,” April1 VHF), p. 44.

Data Gathering

Information flows into an office from the inter-

nal accounting systems of the organization, cus-

tomers and prospec t ive cus tomers , government

agencies, suppliers, trade groups, and other sources.

Intraorganizational data flows constitute a signif-

icant portion of the total, Data, once received, must

be put into a form suitable for processing, Some

has to be transcribed from one medium to another.

For example, an order that is received by telephone

has to be recorded on an order form. On the other

hand, automatic readers in supermarkets capture

all the data needed for inventory control as a by-

product of the checkout procedure.

Traditionally, the process of transcribing data

from one medium to another has constituted a sig-

nificant portion of the work. I.arge numbers of peo-

ple worked at typewriters transcribing manuscript

and at keypunch machines transcribing informa-

t ion f rom documents to punched cards . Modern

technology is reducing the need for transcription.

Professionals now create text that clericals edit and

format rather than transcribe. Scanners are in-

cluded in materials-handling systems to capture

data in a form processable by machine.

Data Organization and Storage

Data is useful only if it is organized in a way that

makes it identifiable and accessible. Offices have

used multipart forms and files housed in cabinetsfor organizing and storing data. Modern technol-

ogies for data storage and organization range from

large-scale computers that are capable of handling

hundreds of millions of records, as in the case of

the Social Security Administration, to small data

bases containin g a few dozen records that are storedon personal computers. Copying machines reduce

the need for multipart forms because additional cop-

ies can be made on demand. Telecommunication lets

responsibility for organizing and storing data be

assigned to those responsible for gathering it . Or

all of an organization’s data can be gathered in one

central location. In either case, all who require ac-

cess can have it immediately regardless of theirphysical location,

A shared database reduces the problems of keep-

ing multiple copies of data synchronized. But not

all data in an office is meant to be shared. Much

307




consists of working documents useful only to spe-cific individuals.

Data Access and Retrieval

The third function provided by an office is dataaccess and retrieval. Implicit in this function is mak-ing all who may need data aware of its existenceand denying access to it by others. In a paper basedoffice, one of the means of assuring awareness of data is to provide potential users with “informa-tion” copies of documents. Others who need datamust then seek out one of the existing copies andits accessibility to those not authorized to have itis implicitly limited. On the other hand, errors indata are often discovered after documents havebeen distributed, and corrective information hasto be sent to all who have copies so that all are oper-ating from a common base of information. This goalis difficult to attain.

Paper-based files may be less than satisfactorybecause of the time that it takes to move physicaldocuments from point to point. Advanced tech-nologies do not constrain the accessibility of datato those in a specific geographic area and thus re-duce some of the limits on office operations.

It is most efficient to access only those data of interest. In the past, the user had to obtain oneor more documents and sort through them for spe-cific data of interest. With the aid of modern tech-nology, the user can identify and retrieve specificdata elements that are needed.

Data Processing

The tools for data analysis range from hand-drawn graphs depicting relationships between andamong data elements through programs run onthe most powerful computers. Nonnumeric datais assembled in tabular formats for study andanalysis.

The speed at which humans can process datais limited regardless of whether they are perform-ing num erical calculations, preparing charts andtables, or creating text. It is unreasonable to ex-pect an individual to even attempt some computa-tions. But modern information technology providespowerful tools, ranging from systems that will re-trieve and order data to user specifications, to

those that routinely prepare reports representingthousands of individual data items. The trend isto reduce the need for professional data process-ing personnel by providing users with easy to usetools having great analytical power.

In addition to automating traditional data re-duction and reporting tasks, modern technologyputs new capabilities in the hands of users. Wordprocessors make it easy to alter text and combineor refine documents. Computer-based models canbe used to explore the consequences of decision

alternatives. These range in complexity from com-paratively simple spread sheets to econometric andprocess simulation models that involve the inter-action of hundreds of variables. Decision-supportsystems can provide insight into the consistencyor interaction of judgments made by the deci-sionmaker.

Experience over the last 30 years shows thatusers consta ntly find new an d previously un-foreseen ways to employ this technology effec-tively. As the number of users has increased, thetechnology has evolved to require d ecrea singdegrees of technical sophistication from the user.Innovative applications will thus continue to

emerge.

Communication of the Results

Another function of an office is the delivery of information. Traditionally, it has been deliveredeither orally or in hard copy. Preparation of hardcopy requires considerable effort, and transport-ing it requires t ime. Orally tran smitted informa -tion is ephemeral and difficult to capture; transcrip-tion is requir ed if an endu rin g record is to becreated.

Modern technology lets the user specify the for-mat in which information is delivered. It can bepresented for viewing on a display screen but canbe easily replicated. Telecommunication has largelyneutralized distance as a factor. Many users canwork from a common database eliminating theproblem of inconsistent data.

Users and Providers

The trend in applications of advanced technol-ogy in the office is toward direct involvement of the user with minimal technical training. The tech-nologies to support these systems comprise tworelatively distinct classes. The first consists of cen-tralized data processing equipment that is used

to prepare printed reports as well as provide fordirect user interaction through terminal devices.The second includes a variety of stand alone de-vices, microcomputers and word processors thatare under the direct control of the end users.



App. A—The Technology of Office Automation q 309

The user seeks a functional capability rather thana specific technology. From this perspective, theterminal tied to a central computing facility canbe th e functiona l equivalent of a personal com-puter. However, from the systems point of viewof managing the information resources of an orga-nization, the alternative technologies can have

quite different implications. For example, in an of-fice served by a centralized facility, both the report-ing needs of the organization and the needs of usersfor selective access can be supported from a com-mon, shared database. On the other hand, coordi-nating the activities of users of personal computerswho each define and structure data resources differ-ently, may present a considerable problem for man-agement.

Complicating this problem is the fact that thetechnology is not neatly divided into centralizedprocessors and individual workstations. There arehybrids of these technologies. Microcomputers canbe linked to central facilities to retrieve data that

can then be processed at the user’s location, Al-ternatively, networks of microcomputers permitthe sharing and interchange of information. Thus,one of the effects of the emerging technologies isthat the functional characteristics of an office sys-tem can be defined almost independently of thetechnologies used to implement those functions.Furthermore, while the end product of a systemmay be achieved through alternative means, theinternal structure of a system can have significantimplications for the operations of an organization,its employees, and its management,

Technology consists of tools and the knowledgeof how to use them. Computers and telecommuni-

cation networks are virtually valueless to thosewho do not have a clear understanding of how theyfit into the office environment and the benefits thatcan be derived from them. Systems put in placewithout such understanding have often failed tomeet the needs of users. These failures representa waste of significant resources and, in many cases,result in the creation of barriers to future intro-ductions of technology.

Equipment Providers

The providers of technologies for the office comefrom three distinct heritages. First, there are the

suppliers of the kinds of equipment tha t have beenin offices for decades—typewriters, calculators,copying machines, etc. They have traditionally as-sumed a comparatively rigid division of tasksamong office workers. Secretaries type; profes-sionals use paper and pencil. They are accustomed

to selling to office managers who buy equipmentas though it were standardized, like paper clipsand forms.

Computer manufacturers comprise the secondclass of equipment suppliers. They are most com-fortable dealing with professional technicians andhave had little contact with other office workers.

While programmers and analysts were interposedbetween the computers and the end users, sellersof computer systems did not find it necessary tostructure their products to be understandable bynontechnical people. Technicians were assumed toknow the str engths a nd limitations of the equip-ment and to take the steps necessary to ensureits operability and the integrity of the work it sup-ported. Data processors, for example, know theimportance of creating backup copies of data; of-fice managers often do not.

The third group of providers of technology tothe office are telecommunication specialists, Theirtraditional role was to place telephones where

needed and keep them in repair. Organizations withsignificant communication requirements workedwith the providers of telephone service to estab-lish private networks when such steps were eco-nomically justified. Data communication facilitieswere generally separate from voice services. Addi-tional circuits were obtained for facsimile and videotransmission as required.

The divestiture by AT&T of its operating com-panies and the emergence of a variety of competi-tors has complicated the job of the telecommuni-cations manager. There has also been a markedincrease in data traffic and in requirements thatvoice, data, and other traffic share telecommuni-

cation facilities. This has required that telecom-munication mangers become heavily involved inthe design, development, and operation of infor-mation processing systems. They must now work closely with technologies that are often unfamiliar,

In the past, the office manager, telecommunica-tion manager, and data processing manager havebeen able to operate more or less independently.Each had a constituency of users able to maintaina marked level of distinction between the threeclasses of support services. Now there is a needfor greater interaction, a need that will increasewith time.

Equipment and service providers from each of

the three sectors have moved into areas served bythe others. Computer manufacturers offer wordprocessing systems; some word processors nowhave the same capabilities as small to midrangecomputer systems. All offer telecommunicationsequipment, and telecommunication providers are

52-644 0 - 85 - I 1




beginning to offer processing services. From thepoint of view of the user, this competition is prob-ably beneficial, but each kind of provider may havedifficulty in understanding the nuances of new mar-kets. For exampIe, the firm that has been success-ful in providing word processing equipment maynot grasp all of the operational ramifications of

expanding its line to include capabilities normallyassociated with data processing.

The Merger of Telecommunicationand Information Processing

In 1956, AT&T, in a consent decree, agreed thatit would not build data processing machines forsale on the open market. In the mid-1970s, itoffered for sale a terminal that had some process-ing capabilities; and the question of whether thatviolated the 1956 consent decree led to an inquiryby the Federal Communications Commission,called Computer Enquiry II. One of the purposes

of this proceeding was to establish a line of demar-cation between telecommunication and data proc-essing equipment and services. The final reportsidestepped the issue; it failed to differentiate be-tween telecommunication and data processing, butdefined a set of basic telephone services that couldbe offered by AT&T and enhanced services thatcould be offered t hr ough an ar m’s length subsidi-ary. This put to rest the assertion that telecom-munication and data processing services and equip-ment could be differentiated. The interaction of the two technologies has changed the fundamen-tal character of both.

One result is the ability to deliver information

processing services directly to the end user througha variety of system configurations, Terminals canbe connected to a central processing facilitythrough either the conventional switched telephonenetwork (dial-up service) or through a dedicatednetwork “owned”

2by the user organization. In this

configuration, all processing takes place at the cen-tral site. A variation of this substitutes computersfor the terminals so that some of the processingis done at the user location and some at the cen-tral location.

‘An “owned” network, more often than not, will make use of circuitsthat are leased from a common carrier and dedicated for the use of the

lessee. In some cases, organizations wilf build and operate their owntelecommunication facilities that may include such diverse componentsas ground stations for use with satellite transponders, microwave tow-ers, and fiber-optic cable. The balance between leased and owned facil-ities is struck by each organization to be consistent with the cost sched-ules for the alternatives and other, noneconomic consideration (e.g., theorganization makes the judgment that it does not want the problemof operating a satellite Earth station).

Alternatively, a communication network may in-clude only small computers under the direct con-trol of end users, using the network facilities toaccess data wherever it is located. Processing func-tions are controlled by the end users with, possi-bly, some coordination activities being the respon-sibility of a cent ra l dat a processing function.

Telecommunication facilities can be designed sothat they perform processing functions as well asprovide a conduit for moving information. For ex-ample, the network can convert codes used by onetype of equipment to a format usable by anotherso that the two can exchange data. Network switches can route data between locations on thebasis of address information that constitutes partof the message, They can also combine informa-tion from a number of incoming messages intoanother that is sent to a specified destination,

Advanced telecommunication equipment avail-able for offices can select the lowest cost alternat-ive for routing each call, with some calls routed

over one of the public long distance services andothers over the organization’s private network.Some equipment can combine voice with data traf-fic on a common internal network. Computers thatcomprise an office local area network function asthe switches for the network while at the same timeproviding its data processing capabilities.

Broad Trends in Telecommunication

and Informat ion Process ing

Technologies

The foundation of new office technologies is the

integrated circuit. The equivalent of hundreds of thousands of transistors can be built on a siliconwafer with an ar ea of a fraction of an in ch. Al-though many argue that the limits of silicon-basedchip technology are being approached, the compo-nent density of chips can continue to increase atleast in the short run. Alternative technologies arelikely to become a factor in the market in the 1990s.Gallium arsenide, for example, offers potentialadvantages in speed relative to silicon oxide tech-nology, and may provide a foundation for new ma-terials t ha t a re more optimal th an silicon formicroelectronic circuits. Chips that have circuitcomponents distributed in three dimensions rather

than two are likely to be on the market in the rela-tively near term, with improved performance toprice ratios relative to those now available.

Increasing the number of components that canbe built into a single integrated circuit, by reduc-ing the physical size of a circuit increases its speed



— —App. A— The Technology of Office Automation 311. — —

Photo credif Be// Labs

One of the continuing trends over the last severaldecades has been the reduction in the size of the

microprocessor. This shows a very large-scaleintegrated memory management chip.

and hence the computational power of devices. Asproduction volumes grow, the prices of chips fall.Generally, this is translated into increased perform-ance to cost ratios for equipment. Fewer chips arerequired for end-user devices, again lowering th ecost to build them an d redu cing th e cost of main-tenance.

Thus, the cost of office equipment will continueto decrease, but they will not go to zero; the bot-toming of prices is likely in the next few years.Beyond that, the benefits of technological improve-ments are likely to be in the form of improved per-formance at relatively stable prices.’

Optics4may provide an alternative to electronics

as the basis for the operations of computing andcommunication devices. Already, fiber optic con-ductors are being deployed widely in telecommu-nication networks. They offer advantages over cop-

‘This statement has to be taken with a grain of salt. In the early1970s a calculator with four functions, memory, and square root soldfor something over $100. In the last year, a major manufacturer of elec-

tronic equipment gave away such a calculator as part of a promotionalcampaign. This adds some credibility to the argument that equipmentcould become a ‘‘throw-away provided at no cost to the user who buY, ssome package of services.

‘Computers and communication devices can be built of componentsthat manipulate light waves just as microelectronic devices and con-ventional communication network components manipulate electricalcurrents.

per wire, microwave and coaxial cable technologiesin t h e form of reduced physical s ize , elimination

of interference between messages carried over con-ductors in a common cable, and increased security

(because fiber optic circuits a r e more difficult t otap). The use of optical devices in switching and

storage devices is still a subject of basic research

and is not likely to be a significant factor in t h emarket in the near term. Such devices, if perfected,

could offer advantages o v e r microelectronics in

that they could be less susceptible t o electrical a n dmagnetic fields generated by office machinery, Inaddition, since they would not emit electromag-netic radiation that can be detected and decoded,they would provide more data security.

Because the prices of computer components areexpected to continue to decrease, it is possible thatfunctions now performed by software maybe builtinto the hardware. For example, one of the mostpopular spread-sheet programs is now built intoa portable lap-top computer and operates as if it

had been loaded as a diskette. On larger systems,complex programs such as language processors,database systems and communication processorsmay be included in machine hardware.

A logical extension of this concept is the devel-opment of limited function machines dedicated toa specific task or a narrowly defined set of relatedtasks. Familiar examples of dedicated devices in-clude stand-alone word processors and hand-heldcalculators.

But running counter to the trend of building in-creased capabilities into the hardware is the re-cent emer gence of reduced instr uction set com-puters (RISC).’ These computers have 50 or so

instructions in their repertoire rather than the wellover 100 found in conventional machines. By proc-essing a few types of instructions very quickly,RISCs can in theory outperform those with morecomplex instruction sets. A greater burden isplaced on software designers to optimize their de-signs in light of the attributes of the machines.RISCs have gained some degree of commercialacceptance, because tests have shown that in someapplications they can outperform conventionalcomputers. However, all of the reasons for this im-proved performance are not fully understood.Changes in conventional computers that would usesome of the coding techniques and architectural

feat ur es foun d in RISCs ma y yield significan t im-provements in their performance.

““R ISCs-Reduced Instruction-Set Computers–5fake I,eap, ” SJrs-tems and Software, December 1984, pp. 81 ff .




The users of office automation are less interestedin the nuances of the technologies used to imple-ment systems than they are in the functional char-acteristics of those systems. Just as most automo-biles are bought to provide transportation, not asa hobby for the amateur mechanic, most users of

office systems want specific tasks performed andcare little about the inner workings of the com-puter. Designs of newer office systems are gener-ally moving in the direction of insulating the userfrom the specifics of the underlying technologies.

Many of the application programs now com-monly used in offices are accompanied by thick

jargon-laden manuals purporting to inform theuser how to obtain the promised benefits from apackage. Some of the newer systems, on the otherhand, are self explanatory and are accompaniedby minimal amounts of paper documents. In thelong run, information processing systems will, likethe automobile, evolve to the point where the user

can operate them with only minimal understand-ing of their underlying technical structure.As the capabilities of applications and hence

their complexity increase, total development costsfor office systems have tended to rise. However,emphasis is moving from systems tailored to meetneeds of specific organizations to those havingsufficient generality to meet diverse needs. Be-cause these generalized capabilities can be sold involume and development costs can be spread overlarge user communities, their price should fall.

These tendencies toward lower priced microelect-ronic circuitry and systems designed to minimizerequirement for technical expertise, together with

the merger of telecommunication and informationprocessing imply:q

q

a broad and increasing choice among techno-logical options for accomplishing information-handling objectives;a strong movement toward distributed dataaccess and data handling, usually superim-posed on rather than superseding centralizedautomatic data processing;more and more capture of data at the pointof origin, with decreasing need for repeat key-boarding and centralized data entry; andunlimited capability for communication, be-tween devices, between organizations, and be-

tween locations.Managers will have the freedom to define or-

ganizational policies and objectives with morealternatives for implementing them. This createsa greater need for analysis to make good selections.Both for the designer and user of office systems

there may have to be a significant rethinking of the way an office operates if the potential benefitsof the technologies are to be realized.

Trends i n Spec i fi c Techn ologie s

From a functional perspective, information proc-essing and telecommunication technologies can begrouped into five broad categories: 1) processors,2) input technologies, 3) storage, 4) communica-tion, and 5) software. Trends in each of these areaswill be discussed in the sections that follow.

Processors

The Microcomputer. –The microcomputer thatis becoming ubiquitous in many offices is the small-est of computers, followed by, in increasing orderof size, minicomputers, mainframes and supercom-puters. These constitute a continuum of capabil-

ities, with considerable overlaps at the boundariesbetween classes. A large microcomputer may haveroughly the same capacity as a small minicomputer.

Conceptually, given enough time, any computercan perform all of the computational tasks thatcan be envisioned. They all operate on the sameprinciples. Realistically, however, large computersare necessary to perform tasks that require themanipulation of large databases and extensivecomputations. A large computer can also simul-taneously support many small tasks each of whichcould be handled alone by a smaller computer.Thus, one alternative for offices is to provide allprocessing support from one or more large com-

puters with many terminals.Generally, microcomputers are designed to be

used by a single individual and to perform one taskat a time. In 1985, a microcomputer for use in theoffice can be purchased without a printer for $1,500to $3,500. A printer, depending on the quality of the outpu t desired, can be bought for an additional$300 t o $2,0000

Microcomputers capable of supporting multipletasks and several u sers simultaneously are com-ing on t he ma rket. Pr ograms t hat allow two ormore programs to be active simultaneously areavailable. Networking microcomputers has becomepossible using programs and hardware components

purchased off the shelf. A variety of generalizedspread-sheet, word processing, accounting and util-ity packages are available from both computermanufacturers and third-party suppliers. Thus, of-fice workers will have under their direct controlcomputer power that until very recently was found




only in corporate data centers. At present theyneed to develop the expertise to modify existingprocedures and design new ones to take full advan-tage of the available capabilities. But this couldlead to a significant redistribution of function andpower between data processing groups and end

users.Stand-Alone Word Processors. -Stand-alone word

processors are microcomputers whose hardwareand software configuration has been optimized forword processing. As other software, such as datamanagement and spreadsheet programs, are madeavailable for them, the dedicated word processorbecomes indistinguishable from a general purposemicrocomputer. But as yet, with a few exceptions,the manufacturers of word processors have not sig-nificantly broadened the application packages forthese machines.

Electronic Typewriters. –Electronic typewritershave limited word processing capabilities built into

th e circuitry of th e machin e. The rep ert oire of th emachine is fixed and t he pu rchaser does not ha vethe option of either expanding or modifying thecapabilities.

Integrated Office Workstations.–Integrated of-fice workstations are now being developed thatcombine a per sonal compu ter , telephone, an d mo-dem in one desk-top device, providing a voice, text,and data terminal that can communicate with othercomputers. First generation versions are now com-ing on the market, Whether this market will de-velop probably depends on how integrated work-stat ions compar e in price with enha nced versionsof convent iona l personal compu ter s. The end tha t

is sought t hrough integrat ed workst ations is usu-ally to allow files and documents in preparationto be shared and passed between coworkers, or be-tween pr ofessiona ls an d su pport personnel. How-ever, some designers speak of the need for a “mul-tifunctional electronic office automation systemcompact enough to fit into a relatively small officearea” and including in one unit an electronic type-writer, personal computer, word processor, laserprin ter , copier, electr onic mailer, filer, teleph one,modem, and facsimile machine.

6Many users are

likely to create their own integrated workstationsthrough add-ens, modifications, and software pack-ages. Ultimately integration will come about in a

different way; it will result from the fact thatalmost all information will routinely be availablein digitized form.

‘John Vacca, “Key to Automated Systems Lies in Miniaturization, ”The Office, February 1985, p. 66.

Minicomputers. -Minicomputers trace their line-age to the requirements of scientists for low costcomputers for laboratories. They were the earliestmeans of providing end-user computing. However,they were delivered with little if any software, andit was t he r esponsibility of the u sers t o do what -

ever was r equired t o get useful work out of th em.Minicomputers have, however, evolved to achieve

many of the characteristics of mainframes. Theysupport large amounts of data storage and permitmultiple users simultaneous access. Often, mini-computer installations are run by a data processingman ager supported by a sm all group of program -mers, The principle advantage of minicomputersis that they offer the midsize organization consid-erable power at a cost significantly below that of a mainframe. Generalized applications for account-ing, inventory control, and other applications areavailable to avoid the cost of developing customsoftware. The equipment is self diagnosing so that

much of the required maintenance can be handledby replacing failed components from an inventoryof spares.

Most minicomputers offer office-oriented soft-ware su ch a s word processing and can support net-works of terminals in addition to supporting con-ventional data processing services. Some are indirect compet ition with th e sha red-logic’ system ssold by the office machine manufacturers. Somefirms that entered the market as office machineproviders have expanded their product lines to in-clude shared-logic systems with a significant rangeof data processing capabilities. Some of these sys-tem s fit a t t he top of th e ran ge of microcomput ers

while others can be classed with minicomputers,However, all computers that offer users the oppor-tunity to share resources, whether they are labeledshared-logic word processors or general purposeminicomputers, create new problems for managerswho must allocate the shared resources amongcompeting deman ds and a t th e same time protectth e integrity of th e organ ization’s dat a.

8

Mainframe or Large-Scale Computers.–Main-frame or large-scale computers are normally asso-ciated with data centers and/or data processingdepartments. They are capable of supporting alarge number of users simultaneously, providingthem access to large databases and libraries of com-

7A shared-logic word processor uses a central computer to supporta number of word-processing terminaIs. Many are, in reality, minicom-puters that are limited only by the software that is available to sup-port them.

“The problems of resource allocation and system integrity exist inthe microcomputer/stand-alone word processor environment as well.But, they change in substance and magnitude in shared resourcesystems.




puter programs. Although these computers are ca-pable of supporting routine office operations suchas word processing and small database systems,they are not much used for such limited appli-cations.

Where processing capabilities are distributedamong many devices in an information processingnetwork, large-scale computers may function pri-marily as repositories for data and programs thatare to be shared throughout the organization. Dataand programs can then be communicated from themainframe to a small computer for processing.Drawing from databases stored on mainframe com-puters ensures that all users will have a commonbase of information, but new problems of coordi-nating data input and updating activities are cre-ated. Generally, office work does not challenge thecomputational capabilities of mainframe comput-ers, but as applications that include voice and pat-tern recognition become available, greater process-ing capabilities may be required.

Supercomputers. -Supercomputers are very highperformance machines with capabilities approach-ing 100 million instructions per second. These sys-tems are being delivered to universities, govern-ment agencies, and a few private companies whohave pa rticularly intense computational require-ments. Machines in this class as yet so far exceedthe requirements of the office that they are notfound in conventional data processing centers.

The laws of physics limit the computationalspeeds of conventional computers. Therefore, thesupercomputers are structured to perform manyoperations in parallel rather than sequentially.Problems must be described in terms that makeit possible to take advantage of parallel process-ing. Descriptions of office operations with this inmind have not been accomplished. Potential officeapplications for supercomputers that come imme-diately to mind include the processing of voice in-put by pattern recognition.

The range of processor capabilities now avail-able more than covers the range of office needs.Moreover, technological developments are likelyto proceed at a pace sufficiently rapid to stay aheadof the ability of office applications to challengethem. More importantly, users of office automa-tion will be able to acquire processing capabilities

appropriate to their needs and as those needs in-crease, expand those capabilities incrementally.Even the smallest users are likely to be able toenjoy the benefits of the technologies.

Data Capture Devices

The Keyboard.-The keyboard is likely to remainthe dominant data input device at least throughthe r emainder of this century, augmented by themouse, wand, touchscreen and other devices forspecialized tasks.

9But this assumption, while it

is perhaps the most obvious one, can certainly bequestioned. In fact, the most important questionabout office automation, from the standpoint of effects on future employment, may well be the out-look for input technology, especially optical char-acter recognition.

OCR.–State-of-the-art optical character recog-nition (OCR) devices can now read typed, printed,and some hand-printed material in a limited num-ber of fonts. ’” Some OCR equipment can automat-ically feed about 75 pages into the reading device;recognize characters in 23 different fonts, whetherin 10 or 12 pitch or proportionately spaced; readthe material into the computer’s memory at the

rate of one page every 15 seconds; and format thetext. The claimed error rate is one per 300,000 char-acters. Such systems are now being offered forprices under $12,000.

OCR can already input a typed document intoword processing 40 to 50 times faster than a typ-ist can rekey board it.

11It can capture data from

order forms, application blanks, ticket stubs, etc.Publishers are beginning to instruct authors to usespecific fonts on their typewriters or computerprinters to avoid the need for retyping. Banks arenow introducing Automatic Teller Machines thatwill accept, read, and cash a check.

Within a decade OCR may be able to read all

standard fonts, and have some capability to rec-ognize, isolate, and read or copy specific bits of information. It will be much more difficult to de-

9The mouse is a palm-sized device, used with some computers, thatwhen moved over a table surface positions a cross-hair curser on theVDT, using mechanical, mechanical analog, opto-mechanical, optical,and hybrid sensors. Touch-sensitive screens allow direct positioning of a cursor on a screen through touch; one approach surrounds the screenwith infrared light-emitting diodes and sensors, the other places a resis-

tive or capacitative layer on the screen that acts as a pressure-sensitiveswitch. While these kinds of input are swifter than keyboarding instruc-tions, they have limited uses in most offices.‘“With OCR, a page is scanned with light. White, or background,

portions reflect the light and inked portions absorb it. The resultingimage is recognized, digitalized, and fed into a circuit. There are two

approaches to character recognition-matrix matching (the characteris gridded and compared to templates) and shape analysis (features of

the character are abstracted and used for identification). The latter ismost useful where characters are less predictable, as with handwriting.“E. Polizzano, The Office, February 1985, p. 75.



——


velop OCR devices that can read handwritten ma-terial except in very limited, constrained form.

During this early stage of office automation,some offices are u sing OCR to deal with t he pr ob-lem of incompatibility of equipment. AdvancedOCR systems can take the hard copy printout fromone computer or word processor and forward it into

incompatible systems without rekey boarding. *2 Inanother current application, time-sensitive formsfor reporting hours worked are marked by theworker with a felt tip pen, collected or “batched”and fed into a scanner, which checks them forlength and completeness, flags errors, accepts onlydat a t hus checked, and st ores it for furth er proc-essing. OCR system s ar e now being us ed for pr oc-essing subscriptions, proxy cards, surveys, orders,sales call reports, piecework payroll data, utilitymeter-reading, tax bills, and tax payments.

OCR print elements are readily available nowfor office printers. If OCR reading capability be-comes a stan dar d component or a dd-on t o stand-ard office computers, printed and typed documentscoming from outside the organization can be en-tered without rekey boarding. The possibility of transferring information from one medium toanother (e. g., from a printed page to a computer-ized data bank) without a second keyboarding, orcapturing data at the point of origin (directly froma t icket a gent in th e field, from a customer’s or-der, or from business correspondence) rather thansending it t o the receiver’s centr al ADP un it couldgreatly redu ce th e volume of secondary da ta en-try that is now done. If OCR can be improved sothat it can read handwriting, the potential for labor-saving is even greater.

Optical character recognition technology has notbeen widely introduced into offices in the past be-cause of relatively poor performance and highcosts. Software ha s been a part icular bottleneck.But performance is now rapidly improving.

In principle, combining OCR with facsimile tech-nology (FAX, or electronic transmission of imagesfrom hard copy to hard copy) is attractive sinceOCR involves substantial data compression. Thiswould a llow FAX tr an smission t o consist of int er-mixed ASCII code and digitized image bits. Forthis purpose, OCR will have to handle graphics,which it cannot do yet,

With th e present ra te of OCR development , byth e end of th is decade today’s volum e of man ua ldata entry could be reduced by a significantamount, with a much greater reduction by the endof the century. The amount of data that is collected

‘Polizzano, Ibid., p 75 ,

and used is of course steadily increasing, and likelyto increase still more if the cost of data-handlingdecreases. Nevertheless, since more and more of the data will be digitized from the beginning, orcan be captur ed with only one keyboarding a t onepoint early in its processing, the amount of manualdat a en tr y to be done is likely to decline stea dily.

OCR is a technology for translating hard copyinto machine r eadable form. But as time goes bymore an d more dat a will be digitized from th e be-ginning, and be translated into hard copy onlywhen a paper version is needed.

Machines can read a variety of formats to cap-tur e informa tion. Optical wands can r ead bar codesand alphanumeric characters printed in suitableformats. The scann er used in superm ark et check-out lines and wand readers used in retail storesto gather inventory data are examples, Mark sensedocumen t rea ders ha ve been used in a wide vari-ety of applications for years. In some applications,the IRS Form 1040 EZ, for example, computerscan read manually printed characters. Cash reg-isters a nd a variety of machines can be connectedto computers so that data capture becomes a by-product of operations such as recording the de-tails of a sale.

Speech Recognition I npu t Techn ology .–SpeechRecognition Input Technology (SR) could in the-ory mean th at data need not be keyboarded evenonce. This tech nology is however lik ely to developmu ch more slowly than OCR. 13 Sta te-of-th e-art,comm ercially available SR t echnology can recog-nize from several h undr ed to 5,000 different words,spoken by a single individual for whom the devicehas been programmed. However, for most SR sys-tems t he words m ust be spoken clearly an d witha pau se between them, and t here is still an una c-ceptably high error rate. Vocabularies are still toolimited to be very useful.

Speech recognition ha s been u sed in some envi-ronments with limited success. For example, bag-gage clerks at airports speak flight numbers forrouting baggage through automated baggage han-dling equipment .

‘ ‘Speech creates variations in air pressure that are transduced intoelectrical signals that are then broken down into their component fre-quencies. In the processing system, words have to be time-aligned tocompensate for tbe variations in their length when they are spoken.

When a machine is “trained” for one speaker, he or she creates wordtemplates to which the SR system matches words. In another approach

the system extracts consonant and vowel features and recognizes in-variant relationships among them. This is aimed at allowing the s}’s-

tem to accept voice input from any speaker, but at present it is diffi-cult to reduce the error rate below 10 percent. Continuous speechrecognition is also complicated by the fact that the acoustic propertiesof a word are modified by adjacent words and by its place in a sentence.




IBM and Kurzweil have demonstrated voice--activated typewriters that may represent steps onthe road to viable machines for use in the office.It is conceivable that a commercially viable voice--activated typewriter will be marketed by the mid-dle of the 1990s.

A few SR developers are now claiming to offer

continuous speech recognition-that is, recogni-tion of speech at a normal pace and rhythm, with-out artificial pauses; and the ability to accept voicesignals from people for whom the equipment is notspecially progra mmed. A vendor recently ann ounceda possible breakthrough in SR technology-a dig-ital filter chip integrated circuit that, when usedin sets, is said to allow something approaching thesound processing capability of the human ear. Itis to be combined eventually with artificial intelli-gence techniques to allow software to deal withsuch peculiarities of the English language as homo-phones (words that sound alike, such as “to,” “two,”and “too’)

14

If SR is improved so that it can recognize upto 10,000 or 15,000 words of continuous speech,from multiple speakers, it can be used to put datainto a computer for memory or processing, thusautomating many office functions—taking dicta-tion for correspondence, dictating rough drafts of documents, accepting commands to the computer,recording observations as a worker reports on otheractivities, keeping minutes of meetings, and per-haps most importantly accepting customer’s orders,complaints, or inquiries over a telephone. If it caneventually be combined with speech synthesis out-put technology, the computer might provide manybasic customer services without human interven-

tion or with very little human backup—for exam-ple, taking airplane or theatre reservations overthe telephone.

Even by more conservative expectations, SRcould make some of today’s data-entry work un-necessary by the end of this decade. It is conceiva-ble that OCR and SR together could displace asignificant amount of data keyboarding during the1990s.

A related technology, voice identification, mayhave some special uses in offices; for example, pro-viding security for facilities or computers by iden-tification of authorized users.

In general, technology will diminish the distinc-

tion between information that is machine proces-sible and that which is not. The number of cases

“Kurweil Applied Intelligence, Inc.—a description of the new chip,KSC 2408, appeared in Technology Wa tch, vol. 5, Nos. 1&2, November-December 1984; and Fortune, Jan. 7, 1985.

will increase where users will be willing to acceptinformation displayed on a screen in lieu of havingit printed on paper. Many people will find thatusing a computer keyboard or alternative data-entry device gives them more flexibility and ispreferable to the traditional pad and pencil.

StorageConventional Storage Media. -From the time of

the first computers, there was a very strong di-chotomy between machine processable data anddata that could be easily read and used by people.Pun ched cards, magnetic ta pe and disks andpunched paper tape not readable by people were,and continue to be, the data-storage media. Thecomputers that could read them were not readilyaccessible to users. This has changed to an extentas terminals and personal computers have becomereadily available.

Paper is a “people medium. ” Together with mic-rofilm it is the primary means of creating a per-

manent record and a primary way of transferringinformation between people, and also the primarymeans used by computers to convey their outputto users. Paper and microfilm are not media thathave been usable by computers for storing datafor further processing.

The media used for storing data should supportthe delivery of data to the user’s location. There-fore, a key element that distinguishes alternativedata-storage media is the degree of portability itoffers. A large capacity magnetic disk is perma-nently att ached to a computer. If the data is tobe transferred to another site, it must be tran-scribed to another medium. Magnetic tape and

portable disks can be shipped without transcrip-tion, but are not efficient if only a limited amountof data is to be moved. Pun ched cards, on t he otherhand, are very efficient for moving limited amountsof data, especially if it can be put in the standard80 character format.

Traditional data processing installations havealways stored large amounts of data primarily onmagnetic disk and tape. These media support data-bases that contain millions of pages of data. Disksare available in two broad classes. The first, capa-ble of holding hundreds of millions of characterson a single unit, are the so called “hard” disks thatare permanently attached to a computer. The large

capacity disk with a system that permits the shar-ing of resources can put immense amounts of datawithin reach of the users on demand. A single largecapacity disk drive can store well over half a tril-lion characters. Even the magnetic disks used with



App. A—The Technology of Office Automation q 317 .

microcomput ers a nd the smallest minicomput ershave on-line storage capacity that can approach100 million characters.

The great volume of information that can bestored on one large-capacity disk creates someproblems. A large number of people within an orga-nization ma y need to access th e data at one time.

Getting access to a specific bit of data maybe slow.If the data is stored on or in a limited nu mber of physical locat ions, t he problem of conten ding foraccess will always arise. There may be technologi-cal ways to provide multiple access paths to thesame surface (whether that be a disk, tape, or otherobject), but as will be discussed later, optical disksdesigned for small computers may make it practi-cal to provide multiple copies of databases.

This however creates other problems. With m anycopies of the database there is no way for an orga-nization, or u ser, to make sur e tha t a ll copies areidentical, or are properly updated and corrected.This can also ra ise legal, ethical, and ps ychologi-cal problems—e.g., questions about the ownershipof information and willingness to share it. Choicesabout data-storage mechanisms will be a matterof costs and management priorities.

Floppy disks are generalIy used with microcom-puters and have capacities that range in the hun-dreds of thousands of characters. These offer theadvantages of low cost and high portability; theycan even be sent through the mails. Three sizesof floppy disks a re used with office systems —3.5inches, 5,25 inches and 8 inches in diameter. Thelast are most often used with stand-alone wordprocessors, the first and second by microcom-puters. The 3.5 inch disk is just entering the mar-ket but may become the medium of choice. It ispackaged in a hard case that protects it from inad-vertent damage, and its capacity of about a half million characters far exceeds 360,000 charactercapacity of the most popular 5.25 inch floppy disks.

The portability of floppy disks can be in partillusory. Virtually every word processor using eightinch disks uses a disk-storage format that is in-compatible with all others. The same is true for5.25 inch disks th at are used on microcomput erssupported by the CP/M 80

15operating system. If

dat a an d progra ms are to be tra nsferred on disksbetween machines that use incompatible formats,a conversion process is required. There are busi-nesses th at specialize in offering convers ion ser v-

‘“An operating system is a program for a computer that performsmany of the overhead functions required to manage the machine,Among the services it provides are those needed to move data and pro-grams between external storage and the main memory of the computerfor processing.

ices in many major metropolitan areas. On theother hand, floppy disk compatibility does existamong office microcomputers that follow the DOSformat used, for example, by the IBM/PC, and thisformat is becoming an industry standard for of-fice microcomputers.

The storage medium u sed determines to an ex-

tent the degree of control managers have over thedata resources. Perm anent ly mounted (fixed) disks,can be reached only through a computer to whichaccess can be tightly controlled. Magnetic tapesare stored in a controllable central facility. The task of controlling access to data stored on floppy disksis much more difficult.

In spite of talk of the paperless office, paper couldbe widely used as a medium for storing data insome future automated offices. For decades, thepunched card has been valuable as a turn-arounddocument, for example, inventory cards and checksprinted on punched card that could be machineprocessed. Today, the punched card has disap-peared from many applications. But technologyis now available that can read data that is printedin a variety of formats. Packages can be imprintedwith a machine readable bar code and credit cardswith numbers in a scannable type font. In addi-tion, standard fonts used by typewriters can beread by optical character readers.

Therefore the printed page can be used as anexternal storage device for data that will be proc-essed by computers, because the cost of convert-ing the printed image to the electrical signals proc-essed by a machine is becoming relatively small.Operationally, however, devices that read printedpages ar e not likely to replace the ma gnetic disksand tapes that are used to store data since the char-acter reading devices are much too slow for any-thing but capturing data inputs for office systems.Processing will continue to be performed using anelectrical representa tion of the dat a, but much of the data may be captured initially by scanning.

From time-to-time th ere is heightened inter estin the use of microform (microfilm or microfiche)technology in the office. It is often used for stor-ing informa tion wher e large volumes mu st be ar -chived for an extended period. Financial institu-tions routinely microfilm all checks. Computerman ufactur ers distribute infrequently used docu-men ta tion on microfiche. There a re some systemsthat facilitate the retrieval of information frommicroform files by coupling a computer to the read-ing device. Microform systems have been proposedtha t would h ave informa tion recorded a s conven-tional images in one portion and as a machineprocessable hologram in a nother.

52-644 0 - 85 - 12




Optical disk technology may provide a viablemeans for on-line retrieval and processing of thetypes of records that would now be stored in amicroform retrieval device coupled to a computer.If so, microform may be permanently relegatedto the task of preserving large volumes of infre-quently accessed records.

Optical Disk Storage.–Optical disk storage canpotentially provide 25 times the per-disk capacityof magnetic disks, at one-thirtieth of the cost. Theequivalent of 250,000 typed pages can be storedon one disk.

16A read-only disk already available

in the United States carries the equivalent of 100,000 typewritten pages on a 4.7 inch diameterdisk. A number of optical disks, making up a verylarge database, can be stacked and sorted and ac-cessed like platters in a jukebox.

Optical disk storage is still in the developmentphase, but the development is moving rapidly andreaching the mar ket faster t han expected even ayear ago. It is likely to have a major effect within

this decade. Diode lasers are used for “writing”data on optical disks in digital form. The disks maybe “read-only,” which means that users cannotchange them; or they may be “write-once,” mean-ing that users can record but not wipe clean; orthey may be erasable. Read-only disks are usefulmostly for archiving.

At least 30 American companies are working ondevelopment of optical disks, but it was generallybelieved until recently that the Japanese held thelead in development of erasables. In March 1985,3M Corporation announced that it would immedi-at ely begin pr oducing (in small qua ntit ies) 51.25 incherasable laser disks that will store the equivalent

of 250,000 pages, the capacity of 25 magnetic harddisks of th e sam e size. ” They are designed formicrocomputers, and will allow data to be movedand changed or erased just as on magnetic disks.This will let personal computers perform manytasks that until now could only be done on aminicomputer or mainframe.

Because optical disks have such a large capac-ity it becomes reasonable to use them for storingimages as well as alphabetic and numerical data.This capability will make it possible to organize,process, and present data more effectively thanis possible when image and textual dat a mu st bestored separately.

‘“In early 1985 a draft of this report said, correctly, that the bestcommercially available optical disk (read only) stored 1 billion bytes orthe equivalent of 40,000 pages. By June that statement was incorrect,This is an example of how rapidly events are moving in this field.

“Brian Dumali, “Here Comes the Erasable Laser Disc, ” F o r t u n e ,Mar. 4, 1985, p. 100.

Image Processing.–Image processing capabilitywill be readily available as part of, or an add-onto, small business computers in the near future;it is already available from some vendors. It willallow drawings, photographs, maps, and otherforms of graphic information to be scanned, stored,incorporated into databases, copied, or rearranged.

It will allow parts of these images to be removed,added to, switched to a new location, or otherwisemodified. Image processing has many uses in ageneral office, such as in presentations and facil-ities planning, and it will be very important in somespecialized offices such as those in the real estateindustry, marketing, and advertising. It should benoted that for the unscrupulous, image process-ing can be a tool for counterfeiting, misrepresen-tation, and fraud.

Special-Purpose Terminals.–With falling hard-ware prices, it is reasonable to expect the develop-ment of special purpose terminals. Some are al-ready used, for example, to gather inventory data

through either a hand held keyboard or an opticalwand. Pocket-sized terminals with a key pad andsmall display screen, that can be easily connectedto a telephone, may become available soon.

Portable computers that maintain memorieswhen the power is turned off can be used to gatherdata to be transferred at a later time to anothercomputer, either directly or over the telephonelines, In t his way, a tr aveler can, while on a n a ir-plane, creat e a documen t t o be tra nsferred to themain office system for further processing and ar-chiving.

Personal Storage Devices. -Machine-readable and

updatable data storage devices exist that can bepersonally carried or attached to an article in tran-sit. Included among these are the familiar creditcard magnetic stripe technology

18and the “smart”

card tha t conta ins a microprocessor a nd m emory.19

—“The fare card used on the Washington, DC, subway system pro-

vides one example of what can be done with magnetic stripe technol-

Ogy. When the card is purchased, the purchase ~ralue is recorded on thestripe, Then, whenever the user enters the system, the station of originis recorded. At the destination, the fare is ccimputed based on therecorded data and the value of the card decremented appropriately. Sim-ilar cards could be used to capture and store data for office applicationswhere very low data volumes are involved and the connection of com-puters by telephone is unwarranted.‘“A Canadian company has designed a hospital information system

around the smart card. When the patient enters the hospital, a card

is created. Then the card moves with the patient and as each serviceand product is dispensed, the memory of the card is updated using adevice built into a microcomputer. When the patient is discharged, thedata that has been captured during the hospital stay is retrieved anda bill is prepared. It is conceivable that the “smart” card, originallydesigned for executing financial transactions, could find significant ap-plication as a data capture and storage medium in a number of office

applications that range from systems for prov]ding security to thosethat require capturing transaction data.



App. A — The Technology of Office Automation q 319

Communication

In the present context, communication includesall technologies that are used to transmit databetween people, people and computers, and com-puters .

Telecommunication Networks.–The backbone of office telecommunication is the switched telephonenet work . It was designed t o ha ndle voice comm u-nication passing between individuals, and stillfunctions primarily in this mode. However, datacomprises a growing portion of the traffic.

For many organizations, the switched telephonenetwork consists of two relatively distinct parts.First is the conventional and ubiquitous int eror-ganizationa l component, t he dial telephone serv-ice. No operat or inter vention is requ ired even forman y intern ational calls. Credit card calls can beinitiated using the 10 key TouchTone’

h’, an d some

pay stations are now being equipped with devices

for r eading billing inform at ion from th e magn eticstripe on the back of a credit card.The repertoire of services available from the

switched t elephone n etwork will expand over th eremainder of the century unless legal or regula-tory constraints are imposed. Simple services suchas call waiting, call forwarding and three party con-ferencing are already offered in many areas. Somecode conversion services offerings by local operat-ing telephone companies were recently approvedth at would tr anslat e the signals from one type of comput er or term inal to a forma t un dersta ndableby another. Such services will be valuable to officesthat until now had to provide code translation

through their own systems. Not all businesses areprepared to deal with the code conversion prob-lem an d th e detailed technical questions of inter-change.

The future is likely to see such services as voicemessage storage offered through the switched tele-phone n etwork. Virtu ally all telephone tra ffic, in-cludin g voice, will be tr an smitt ed digitally. Orga-nizations will no longer have to maintain separatenetworks for voice and data communication. It willalso be technologically possible to deliver process-ing services through the network, including therouting of messages based on their informationcontent. For example, the interchange of financial

transactions (now accomplished by financial insti-tutions) could be a service of the switched telephonenetwork, and this could include data processingsuch as t he accumu lation a nd r eduction of tra ns-action data and following the enroute status of shipments.

The opportunity for offering an increasinglylarge variety of telecommunication services throughthe switched t elephone network derives from t hefact that much of the switching capacity now inplace is provided through computers. Eventually,all switching will be done by comput ers. Already,

mu ch of th e tr affic between m ajor switching cen-ters is transmitted digitally; and customers areable to subscribe to on-site digital transmissionservices. They are then able to mix digitized voiceand data traffic. Much attention is now being givenworldwide to th e concept of an int egrat ed servicedigital network (ISDN) that would make digitaltr an smission of all da ta , voice, video, and facsim-ile traffic universally possible over a common net-work.

For some years, 1ong distance telecommunica-tion ser vices h ave been offered by compet ing pr o-viders. However, since the divestiture by AT&T

of its operating companies in 1984, the choices havebecome significantly more complex. Organizationsnow have th e option of using either t he switchedteleph one service or opera ting t heir own telecom-munication networks, Most often, a private net-work is assembled using circuits an d support fa-cilities leased from t elecommun icat ion p roviders,some combination of the local telephone company,and one or more providers of long distance serv-ices. However, some organizations choose to buildand operate telecommunication networks that in-clude privately owned facilities as well as capacityleased from common carriers. Alternatives includeleasing of tra nsponders on satellites, the bu ilding

of microwave systems and the construction of con-ventional telephone circuits. One problem is thatlarge users of telecommunication services oftenfind it in their interest to by-pass public utilities,depriving them of significant revenues.

A variety of providers offer business telecom-munication services. Third-party operators eitherbuild facilities or lease them from an other car rierand use them to offer services to those who can-not justify developing private networks. Packetswitching is used to obtain the high ra tes of utili-zation that are needed to justify third-party net-works. Messages are broken into data packets thatare individually routed to their destination and

reassembled to constitute the original message,Network opera tors can bill users on t he basis of tra ffic volume ra ther tha n t ime and dista nce, be-cause the packet switching technique levels theload across the available network facilities ratherthan allowing it to concentrate on the paths be-




tween points with the highest volumes of trafficflow.

Many localities a re wir ed for cable television, andmany of the newer systems are capable of two-waycommunication. Because television requires abroad chan nel, cable systems can han dle large data

volumes. In some area s, such as N ew York, cableoperators find it profitable to make some of theircapacity available for transmitting voice and data.

In congested areas, not all telecommunicationoptions are available. For example, in New York City it has become very difficult to build privatemicrowave facilities because buildings often ob-struct the proposed path for the signals and fa-cilities alrea dy in place cau se electr omagnet ic in-terference that cannot be neutralized. Routingcommunication to a central antenna “farm” lo-cated in an area relatively free of th ese obstru c-tions (the teleport concept) provides one alterna-tive for neutralizing this problem. In some cities

the cable tunnels beneath the streets are so con-gested that th ere is no room to run a dditional ca-bles. Fiber optic circuits provide potential relief from t his problem because t hey provide substa n-tial increases incapacity in significantly less spacethan conventional cables.

Mobile Communications.— For local communica-tions, offices also ha ve th e option of using m obiletelephone services. The most common are the“beeper” services ava ilable in ma ny a rea s. A per-son is alerted t o a call by an audible tone gener-ated in response to a signal sent by the serviceoperator and received by a carried device. Somedevices can visually display a message, eliminat-

ing the need to telephone the office for information.Telephones in cars have been available for years,

but the technology severely limited the numberthat could be used within a geographic area. A newtechnology, cellular radio, has eliminated this limi-tation on the number of mobile telephones. In addi-tion, the quality of the service with the cellularsystem is significantly better. Companies requir-ing constant telephonic communication with peo-ple in the field can now ha ve such service at rela-tively affordable rates. In the future, cellular radiomay also provide an alternative for delivering fixedpoint telecommunication services to ru ral a nd r e-mote sites more economically than is possible withconventional telephone lines. Potentially, this tech-nology could also permit t he t ra nsm ission of dat ato and from mobile terminals, but not all of the

problems posed by this application have yet beenresolved.

20

PBX and Local Networks.—Managers of officesare now faced with complex telecommunicationchoices. A few years ago, arranging for telecom-mu nication services requir ed only a call to th e lo-

cal telephone compan y and everything was tak encare of, Today users can tailor services to theirneeds and shop for providers who can offer therequired services most economically. However, theuser organization h as t o devote more resources toanalyzing the costs and benefits of alternative tele-communication services. To an extent, the settle-ment of the antitrust suit negotiated betweenAT&T and the Department of Justice has led tothis increase in complexity. However, even with-out the divestiture, advances in technology wereincreasing the options available to users.

Adding to th e telecomm un icat ion options ava il-able to managers are other technologies available

for in-office communication. At the lowest levelare electronic replacements for the 1920s plugswitchboard to permit intraoffice communicationas well as connection with the external n etwork.Modern private branch exchanges (PBXs) can pro-vide a var iety of services, including t he a bility t oforward calls from one office to another and to auto-matically transfer calls to another number oncea predefined number of rings have gone unan-swered. PBXs can be progra mm ed to record voicemessages an d to select from the altern ative serv-ices available the most economical routing for eachcall as it is placed. Some provide for the sharingof internal telecommunication circuits for both

data and voice, giving the user organization thebenefit of a shared internal network.

Another a lterna tive for use within an organiza-tion is a va riety of local a rea net work (LAN) tech-nologies. These provide high-speed data communi-cation for a variety of office machines, includingdata-storage devices,

21printers, word processors,

gateways to external telecommunication networksand professional workstations. Several technol-

“)Cellular radio operates using a number of low-power transceivers;computers are used to assign traffic to the one of many antennas thatis best able to communicate with the mobile unit. As the mobile unitmoves from cell to cell, traffic is handed from one antenna to another.This handoff procedure could introduce discontinuities in the signal thatoffer no problems for voice communication but could present problemsfor data transmissions.

“Most often disks that can be used to store data of interest to anumber of individu~s and/or organizational elements and shared by anumber of workstations,



—

App. A —The Technology of Office Automation q 321

ogies for implementing LANs are in use;22

and thisdiversity of incompat ible technologies using a va-riety of LAN architectures may present problems.But most LANs include the ability to carry on com-munications over the switched telephone network,so that the switched network becomes a common

facility over which dissimilar LANs are able tocommunicate.

To an extent, modern PBX and LAN technol-ogies are competitive. Both provide the ability toswitch da ta at relatively high speed between of-fice machines. On the other hand, LANs will beuseful for voice transmission only to the extentthat the telephone instruments that are connectedto them can send an d receive signals in a digitalformat .

An interesting variant in telecommunication liessomewhere between the public switched network an d in tr a-office comm un icat ions facilities; th is isthe smart building with which some realtors are

experimenting. These buildings are wired for tele-communications and data processing services sotha t m ultiple tenant s can use t echnologies avail-able in the past only to large organizations. Asmart building may provide outlets that permitall tenants to connect terminals to a common wordor data processing facility. Other outlets may beused for t elephone conn ections t o a comm on PBXthat routes calls within the building or complexwithout using t he pu blic switched telephone n et-work, or routes external calls using the most eco-nomical service. High-cost facilities like laserprinters and reprographic facilities can be shared.

Once digital informa tion h as t o be tran smitted

more tha n a quar ter m ile over conventional tele-phone circuits, an instrument called a modula-tor/demodulator (modem) is required, to convertdigital signals used by the computers to or froman analog signal that can be handled by theswitched telephone network.

23Commonly available

modems are capable of transmitting or receiving30 or 120 characters per second over the standardswitched telephone network. Modems capable of han dling 240 cha racters per second are becomingwidely available. Speeds of 480 and 960 charac-ters per second can be achieved by some premiuminstruments.

—Alternatl\c transmission techniques include broa[ihand and base-

band signaling The technologies for managing traffic include tokenring passing and collision detection and retransrnis>ion in th[> c~ent of a collision between messages.

-Actually, a digital signal can onl}’ be tran~mitted a few hundred

feet without a modem. }[oweyer, limited distance nlt}denls, low c{~st

rnodcls with limited capabrlitl[+, can be usc~d for di~tances under a quar.ter mile.

Higher speeds require the use of circuits thatare dedicated to a specific customer. These maybe leased from a comm on car rier or built a s a pri-vate ventu re. Commonly, these lines are r ated a t19.6 and 56 Kb,

24The highest capacity lines are

called T1 carr iers and a re ra ted at 1.544 Mb.25

Sat-

ellite transponders have capacities on the orderof 6 Mb.

Interactive communication that involves peopleusually will not challenge the capacity of a cir-cuit capable of handling 30 characters per second.Higher speed circuits ar e needed only when largeamount s of dat a a re to be tra nsferred directly be-tween comput ers.

However, there are technologies for multiplex-ing many signals over a common line. Thus, manyslow-speed conversations can be combined to takeadvantage of the economies attainable when high-speed circuits are used. A company with officesin two major cities may find it useful to provide

one high-speed circuit between the two points.Some of the private lines can use the capabilitiesof a PBX to connect with any number in the re-mote city through the local switched telephone net-work, t hus bypassing th e long distan ce dial-up n et-work and its toll charges. This reduces the revenuesto the long-distance carriers, and, indirectly, reve-nues to the local-operating companies.

Communication Terminals.-The most ubiquitouscommunication terminal in the office is the tele-phone, basically an instrument for accomplishingvoice communication between two people. How-ever, comput ers ha ve been pr ogra mm ed to acceptthe tones created by a TouchTone’” telephone and

respond to th em u sing computer generated voice.When a customer enters the long string of num-bers required to use long-distance services pro-vided by other than AT&T, the data (access codean d nu mber dialed) is received an d processed bya computer. Telephone bill paying also uses thecommon telephone as a data terminal.

The telephone is suddenly a rapidly evolving in-strument. Display screens are being added thatlet the user view a number from an electronic direc-tory before instructing the telephone to dial it auto-matically, Telephone handsets are being added todata terminals so that the user can communicatevoice and data interchangeably over a commoncircuit. Wh en coupled with th e P BX, th e office tele-phone becomes a versatile, multifunction commu-

“Kb is kilohits per wcond or 1,()()0 hits per s e c o n d A charac[cr

transmitted at [hese speeds n{)rnlallj requirt~~ the transmission of eightbits.

u Mb is millions of bits per second



322 q Autornation of America Offices

Photos Courtesy of Bell Labs

In 1877, the first commercial telephone was leased toa Boston banker. The round, camera-like opening onthis box instrument served as transmitter and receiver.

This example of a 1907 Magneto wall set was in use

from the late 1890s through the 1930s.

By the 1980s, the telephone and display monitor wereintegrated. This terminal can access files from other

computers and perform a full range of telephonemanagement and message functions.

nication ins tr um ent for th e office. AT&T divesti-ture has forced businesses to decide whether tobuy or lease the telephones in their offices. Theincreased variety of options has forced decision-makers to carefully match service requirementswith a lterna tive capabilities.

People now communicate with computers, andcomputers communicate with computers. It willbecome m ore an d more common for comput ers inone organization routinely to interchange informa-tion with comput ers of another with little huma nintervention. For example, a comput er can deter-mine th at an inventory level has fallen t oo low andsend a replenishment order to the supplier’s ma -chine. Alternatively, payments can be queued ina comput er th at is instructed to conta ct t he com-puter in a financial institution and order the fundstransferred at the optimal time for the debtor orga-nization.

The most common way for an individual to com-municate with a computer is by means of a termi-nal that uses a typewriter keyboard for entry andeither an electronic display or a printer for output.The terminal, in its simplest form, captures inputfrom t he keyboard, t ran smits it over t he t elecom-munication line, receives data from the computer,



App. A—The Technology of Office Automation 323

and displays it either on paper or a screen. Thiskind of terminal has no processing capabilities.With these “dumb” terminals, the user dependson a central system for all computational support.

Increasingly, however, the terminals used tocommunicate with computers will have significantprocessing capabilities in their own right. Some

will have print ers at tached to them directly, butin t he office, print ing will increa singly be done byprinters shared among the terminals that comprisea network,

Teleconferencing.– Information processing andtelecommunication technologies can be used tosubstitute, at least in part, for face-to-face meet-ings of individuals. Two broad classes of telecon-ferencing are computer conferencing and videocon-ferencing, both insensitive to distance. A computerconference is also insensitive to time, in that peopleparticipate independently on their own schedules.

A comput er conference is conducted by pr ovid-ing all of the conferees access through their termi-nals t o a distant comput er on which a re recordedtheir contributions to the conference and fromwhich they are able to retrieve the comments of the other participants. The conference may takeplace over an extended period, and each individ-ual contributes at times that are personally con-venient. Conferees sometimes are allowed to maketheir contributions a nonymously or u sing a pseu-donym, in order to encourage them to be morefrank than they would be in a face-to-face meet-ing. Comput er conferencing permits t he u sers t oponder their thoughts rather than react to the dy-na mics of th e group. This can be either an advan-tage or a disadvantage; the body language andother forms of nonverbal communication that oc-cur in a face-to-face meeting are absent.

Videoconferencing perm its conferees at widelyseparated locations to both see and hear oneanother via a television link. Several levels of vid-eoconferencing are now available. One providesonly for the transmission of stop frame pictureswhere the image seen by the viewers changes onlyevery several seconds rather than continuously.At the high end of the spectrum is full-motion colorvideo transmission that provides a level of qualityat least as good as commercial broadcast television.As one moves to higher quality of service, how-ever, costs ‘increase ma rkedly.

Some corporations and at least one common car-rier have installed videoconferencing facilities. Atbest, success as mea sured by mar ket growth hasbeen marginal. Although this technology has beenheralded for some time as a way of reducing travel

costs, it ha s not been well accepted. Some peoplemay like travel because it is a break in the day-to-day routine.

Display and Printing

The primary means of presenting information

to users is by mean s of a display screen. The sta nd-ard display screen n ow in use is th e cat hode raytube, a specialized version of the television picturetube. There has been considerable controversy re-garding whether prolonged exposure to the radia-tion from cathode ray tubes has long-term impli-cations for t he h ealth of the user. (See cha pter 5.)The question may well become mute as new dis-play technologies become available that are moreatt ractive, tak e up less room, and do not dependon high-energy beams

26to generate the display.

Liquid crystal displays are used on most of thelap computers now and plasma displays appearto be just over the horizon. A by-product of this

display technology will be the flat screen that canhang on the wall, taking up no more room thana photograph or painting.

Display technology has improved so that it ispossible to create finely defined images on a ter-mina l screen . Color displays can cost th ree tim esth e pr ice of a monochr ome monitor; some special-ized office user s find t he ben efits wort h t he a ddi-tional cost.

Electronic Document Preparation.- The printingof docum ent s ma y increa singly take pla ce only atthe last step in the document creation process. Doc-uments will be created and transmitted from point-to-point electronically because of the delays in-

curred in sending paper.The tr end is toward r apid convergence of print-

ing, copying, and typesetting technology. Theymay also incorporate color sensing and image proc-essing in designing and modifying output.

Multibin, multicolor, jetspray and laser printersare already becoming common in offices and arelikely to increase in capability and decrease in costsfor several years . Reprograph y (copying) techn ol-ogy is also becoming more sophisticated; printquality is improving and speed is increasing. Someof the capabilities already in the mar ket or likelyto be available soon are the ability to store and

‘The display on a cathode-ray tube is created h} a +trt~:im of high-

speecl electrons that strike a phosphor on t hc~ face of the screen andcause it to lumine~ce. At least some of the electrons continue past tht’face of the tuh[~ for some distance before losing their energy It is the’electrons that continue past the screen face that gi~”e rise to concern~about radiation hazard from cat hode-ra}-tuhe d i ~pla}’s.




25 Years of Xerography in the Office

Xerox 1020 (1983)

.

‘‘preii r(l<ln] In ltlc ot tlcc’

92 c(JpIc+ pcr mlnu[c

m u II I t \ I n~t it)n

[ Xerox 9200 (1974)

Xerox 1090 (1985) Xerox 9700 (1977)

Credit Xerox Corp



App. A —The Technology of Office Automation q 325

use form overlays, to assemble a composite ima gewith part s tak en from ma ny sources, and to aut o-ma tically size an ima ge to fit t he spa ce ava ilable.

As these technologies improve, it is likely thatmany organizations will do their printing of formsand document s as t hey are n eeded. The cost sav-

ings tha t a re possible by reducing the wareh ous-ing of documents is large, and t his is au gmentedby savings from reduced waste (no stocks of un-used documents and obsolete forms to be disposedof), an d redu ction of labor time spen t in order ing,unpacking, storing, etc. An additional benefit of on-demand printing is the ability to provide onlythose sections of a documen t or r eport th at a spe-cific user needs.

Documents that are electronically stored andtransmitted will be complete with diagrams andillustra tions pr operly insert ed in th e text. A ma-

jor compan y has a lready demonstr ated a printingdevice that will combine pictures that have been

stored in a digital format with text on a single page.Optical stora ge, becau se of its large capacity, willbe a key element in making this possible. Rela-tively small offices will be a ble to creat e docum ent sthat will give the impression of having been typeset.

Software

Software, broadly defined, includes all of the pro-cedures, documents and computer programs foroffice computer technologies. This discussion fo-cuses primarily on comput er pr ograms, Much a t-tent ion h as been directed toward softwar e pack-ages for m icrocomputers, but as has been pointed

out, the combination of terminals and telecommu-nication capabilities has made it possible for of-fice workers to interact directly with centrally oper-ated computers. Therefore, the software that runson larger machines is of as much interest to theoffice worker as that which runs on the smallercomputers.

Software technology consists of two compo-nents. The more obvious is the ability to imple-ment and operate computer programs that performthe operations necessary to produce the resultsneeded by the end users, Second, and less obvi-ous, is the knowledge needed to design the com-puter programs and related procedures. This re-quires th e involvement of the user in th e designof inform at ion pr ocessing an d telecomm un icat ionsystems, or full benefits of the technologies willnot be realized.

Much of the software being developed today isdesigned to minimize th e technical knowledge re-quired of the users. At the same time, systems are

coming that will be able to accommodate compara-tively unst ructur ed deman ds. The need for m ostusers to develop programming skills or use theservices of a trained programmer is diminishing.

Early applications of advanced technologies werefor highly structured procedures such as payroll,

general-ledger accounting and the processing of financial transactions. They were operated byhighly trained specialists a nd did n ot h ave to bedesigned to be used directly by large numbers of technologically unsophisticated people. As the ca-pabilities of applications software to accommodatecomparatively unstructured demands for informa-tion have increased, much of the focus has shiftedto the organization of data and the means of mak-ing it accessible to lar ge and d iverse user comm u-nities. To date, designers of automated systemshave viewed applications in t he light of the tr adi-tional comput ers th at execute progra ms one stepat a time, sequen tially. Not a ll of th e machin es of

the future will execute processes sequentially.Newer architectures now being developed to meetthe needs of the scientific community for unheardof volumes of computations emphasize parallelprocessing to achieve these capabilities. Supercom-puters are not used in today’s offices, but for someindustries they may be the business machines of tomorrow. At some point there will have to be areexamination of the techniques used to design of-fice-oriented systems to make it possible to real-ize some of the benefits of parallel processing.

During the early 1970s, much attention was given. to the concept of an integrated management in-formation system (MIS) that would meet all of theneeds for information of an organization. Someorganizations undertook the development of suchsystems; none were particularly successful. Butinformation systems to meet t he m ore limited objectives of specific organizational elements havebeen quite successful, These range from complexsystems designed to serve large n umbers of usersto personal-information systems for individuals.

One of the challenges for software and systemengineering is to establish effective mechanismsfor interchanging information between automatedsystems while preserving th e integrity and secu-rity of all of th e involved dat a, pr ocessing, an d com-munication resources.

Some tools to aid systems engineers already ex-ist. Structured approaches to system design thatemphasize the analysis of functional relationshipshave been in use for some time. Rapid prototyp-ing is a newer concept t hat is meeting with a mea s-ure of success. In this technique, demonstrationsthat show the intended user samples of system




output and the procedures used for entering dataare developed. The rapid prototype does not in-clude implementation of the inter nal processes thatwill comprise the system. It presents only the fa-cade tha t can be evaluated by the user in light of the requirements the proposed system is intendedto meet, just as a wind-tunnel model is used asa tool for defining t he external shape of an aircraft.

Two classes of software are used with moderncomputers. The first, support software, creates anoperating environment that provides functions of value to all users, including resource schedulingand input/output services. The second, end-usersoftware, includes application programs for spe-cific users, ra nging from spr ead-sheet processorsrun on a microcomputer to complex, tailored ana-lytical programs that require the services of a verylarge mainframe.

Support Software. -Support software, in this con-text, includes language processors, ut ility pro-grams, database systems and other software re-sources that are shared by all users of a computersystem.

27 The software creates an environmentwithin wh ich a computer user operates. To an ex-tent , a common operating system is created forcomputers that are, in reality, quite different fromone another .

On large systems that are shared by multipleusers, operating systems manage the resources onthe computer, scheduling them for use by specificapplications .28 An application is permitted to be-come active on a comput er system once it ha smoved to the front of th e line and all of th e datait requires can be made available to it. The operat-in g system on a computer shared among multipleusers also keeps the various users from interfer-ing with on e another. On smaller systems that onlysupport a single user at a time, t he operating sys-tem lets the user move easily from one applicationt o another and relieves him/her of some of the rou-tine tasks that would otherwise be required. Forexample, a user can esta blish a series of commandsto perform often repeated multistep tasks, andthey will be executed automatically under th e con-trol of th e operating system.

‘70ne could argue that the generalized packages such as word proc-essor and spreadsheet programs so widely used on microcomputersshould be included in the category of support software. However, forthe purposes of this analysis, because they are oriented to use by indi-viduals on personal computers, not to be shared by a number of usersof a shared computer system, these types of programs will be discussedas end-user software.‘&Some installations may determine that all short jobs will run be-

fore long ones. Others may determine that some work, regardless of the demands it places on computer resources, will receive a higher pri-ority than all others.

All operating systems, regardless of the size of the computer, provide input and output servicesfor all applications. The operating system t akesthe data that is used by an application and t rans-lates it into a form suitable for driving the physi-cal input and output devices.

Generally, the computer manufacturer designsand implements the operating system.

29In th e

past, each manufacturer used a proprietary sys-tem, and this made it difficult for users to movefrom one brand of equipment to another. Todaythe trend is to standardize operating systems. Forthe microcomputers most commonly found in of-fices, MS-DOS is a defacto standard, although com-petitors exist a nd some ar e in relatively widespreaduse (e.g., CP/M). The UNIX operating system de-veloped by Bell Labs is becoming a competingstandard, available on a spectrum of hardwareranging from microcomputers to large-scale main-frames. However, although UNIX is the focus of

substantial attention it is not as yet an establishedstandard, and in fact may never become one. Com-peting systems ar e likely to continue to be a sig-nificant factor in the industry at least into th e1990s.

Standardization of operating systems would of-fer the user several potential benefits. The firstis portability of application programs. An appli-cation written to an operating system standard,in theory, can be run on an y computer for whichthat operating system is available with little orno modification. In this sense, the operating sys-tem can mask differences among machines fromusers, and competing computers take on the at-tributes of commodities not differentiable from oneanother in the eyes of the users. Second, third-partysuppliers of generalized software will ten d to pre-pare products for use with a standard or widelyaccepted operating system in order to have thelargest possible base of potential customers. Thus,using a system for which a standard operating sys-tem is available ensures the user of a la rge a ndvaried supply of software packages from which tochoose. This availability of gener alized pa ckages,in turn, tends to reduce the need for expensive de-velopment of software tailored to needs of a spe-cific organization.

Programming languages, or, more precisely, proc-essors

30for programming languages, are another

“In the early days of microcomputers, some third-parties createdoperating systems that were offered in competition with those createdby the manufacturer. This practice is not widespread, but competingoperating systems are still available for some of the most popularmicrocomputers.

“]Language processors accept computer programs written by users

and translate them into a form that is understandable as a set of in-structions to a computer.



App. A— The Technology of Office Automation q 327

set of support software. COBOL and FORTRANhave been the two languages used most heavilyfor management information systems. BASIC isth e langu age most widely available on microcom-puters, but the common BASIC interpreter thatis supplied with most microcomputers is not suitedfor very large application systems.

From time to time, new languages appear andreceive some degree of acceptance before disap-pearing. ALGOL was one of these. It made someheadway in Europe in the 1960s but was not ac-cepted in the United States. The current crop of computer languages includes ADA, C, and PASCAL,among others. Whether they will be able to demon-strate real staying power remains to be determined.

In order t o use program ming langua ges of thistype, the u ser m ust develop a degree of technicalskill. First, the syntax or rules of the language mustbe mastered. Second, skill must be developed indescribing a task at the fine level of detail that

must be specified in a computer program. Mostcasual users of computers are more concerned withtheir t asks in th e office th an with developing th eskills required to write computer programs. Rather,when the need to develop a program materializes,office workers turn to professional computer tech-nicians.

The tendency today is to minimize the need forany user to develop computer programs, The gen-eral assu mption is tha t m ost of the needs of enduser s, office work ers in p ar ticular, can be m et byprogram packages available on the open mar ket.At the time it announced a major new product,one of the major producers of microcomputers

made no language processor available; in fact, com-puters developed by suppliers of office machinesare often delivered without a language processor.

The computer languages used for applicationsystems continue to evolve, and languages avail-able in the future, whether or not they have famil-iar names like COBOL, will be different from thoseavailable today. Software engineers have recog-nized some of the limitations of existing languagestru ctures a nd a re developing new ones to over-come the deficiency. One approach is the develop-ment of object-oriented languages that focus onthe manipulation of processes and the entities man-ipulated by those processes rather than the defini-

tion of procedures.”As this evolution continues, it is possible thatcomparatively few people will be engaged in the

“See a series of articles in the May 1985, issue of Bj’te Afagazjne,

p, 151, discussing Small Talk, an object-oriented language developedby the Xerox Corp.

task of application programming as it is under-stood today. Rather, the language capabilities mayevolve to the point where it is no longer reason-able to make a distinction between th e languagethat is used to describe a process to a computerand the application program that is delivering in-formation to the end user.

Supp ort softwa re a lso includes a var iety of pro-grams tha t a re r eally applications, but fill needsfor such a large portion of the user community thatthey are properly included under the heading of support software. Within this group are housekeep-ing programs that are used to create copies of files,prepare diskettes for use, and check copies to seetha t t hey are a ccura te. Some ut ilities also permitmodificat ion of existing da ta ; for examp le, a u til-ity could be u sed t o cha nge all occurr ences of th eword “green” to “blue.” Others permit the userto select from a da taba se some records t hat meetspecified criteria.

Database management systems also fit in thecategory of generalized support software. Thesesoftware systems a re u sed to organize, store, andaccess data so tha t it can be shared a mong manyapplications. This concept makes it possible tomanage data as a corporate resource and decouplespecific applications from the databases that theyuse. The difficulty of modifying both applicationprograms and the data bases is thu s markedly re-duced. Changes in the data bases do not necessarilyrequire corresponding changes in the applicationsthat use them nor do changes in applications nec-essarily demand changes in the databases.

Some database management systems are designed

to be used in conjunction with a generalized pro-gram ming langu age such as COBOL, Hence, th eyare of value only to those with programming skills.Others provide the end user with a generalizedquery language that can be used to specify the cri-teria to be met by data retrieved in response toan inquiry. These query languages in general donot ha ve the versatility that is foun d in general-purpose programming languages, but they let auser h ave access to data without t he intervent ionof a program mer. Many of the da ta-man agementsystems sold for microcomputers follow the modelof the query languages used with generalized data-base management systems initially developed for

mainframes.End-User Software. -End-user software consistsof the application pr ograms tha t deliver informa -tion to users. With mainframe and minicomputers,end-user software consisted of a relatively well de-fined class of programs designed to meet the needsof a u ser commun ity. Such applications st ill exist




and th e development of new application systemswill continue, but the class of end-user softwareis no longer so precisely defined. Now a varietyof generalized application packages such as Lotus

1-2-3° meet the needs of broad classes of users.The development of software to meet the needs

of specific users is expensive. The user organiza-tion not only incurs the cost of developing the soft-ware, but must also maintain it. Maintenance in-cludes correcting errors as they are discovered andmaking modifications to operational programs asrequirements change. A mature data processingorganization is likely to devote as much as 80 per-cent of its programming resources to the mainte-nance of operational applications, leaving only 20percent for th e development of new a pplicat ions.Many organizations are discovering that their re-quirements for data processing services are notas unique as they once thought, and are turningto packaged application programs. This trend ismost clearly evident at the low end of the hard-ware spectrum where thousands of programs arebeing marketed.

There are two broad classes of generalized end-user application programs. One consists of model-ing or decision aids oriented to fairly narrow cate-gories of problems; the other includes applicationsof general interest.

Application systems designed to run on com-puters of all sizes have been developed for sets of problems to which a common methodology can beapplied, such as packages for econometricians,

32

engineering specialties, statisticians, accounting,inventory control, and system-management pack-

ages. These applications are not designed for non-specialists; users are expected to understand theunderlying disciplinary concepts on which they arebased. The command structures are oriented tothe jargon of the professional. For the person nottrained in the discipline, they are not “userfriendly. ”

The second class of generalized user applicationsconsists of programs designed to meet needs com-mon t o most offices, such a s da ta processing,spreadsheet, and graphics packages. “Thoughtprocessors’ facilitate the creation of outlines and,thus, help the user organize ideas. “Desk orga-nizers” let the user make notes or maintain a calen-

dar and an automated telephone index. Programsthat let users create personal databases, make in-

“Econometric programs, for example, include procedures for esti-mating the parameters of an econometric model, access to data usefulin building economic models, and the means for exercising models oncethey have been built.

quiries against the data, and prepare summaryreports a re a lso available.

These programs are designed to be used by peo-ple with limited understanding of the technologies.Many are menu driven; the user only has to selectan operat ion from a list on t he screen. Most can-not be operated without sometime referring to vo-luminous, usually poorly written manuals or docu-mentation; but the number that require only simpledocumentation is growing. For some of the morepopular programs, dozens of texts explaining theiroperation to the user have been written and arewidely available in bookstores.

33

Some packages, because of their popularity, havebecome de facto sta nda rds of a sort . For example,word processors and spreadsheet programs willsometimes note th at t hey are a ble to accept dat afrom one or m ore oth er widely used sprea dsheetprograms.

Series of spreadsheets and word processing pro-grams are available, designed so that their com-mand structure is consistent, thus minimizing thelearning time required to use each program. Also,the programs in a series are designed to facilitatethe passage of data between them, e.g., a table froma spreadsheet is easily included in a document be-ing prepared using the word processor.

Integrated, multifunction programs are also be-ing marketed. While some of these have been rea-sonably well accepted in the market, each one of these programs has both its strong points andweaknesses. For example, the spreadsh eet capa-bilities may be powerful but the word-processingfunctions weak. Often, integrated packages r equirecomplex comma nd stru ctures t ha t a re difficult tolearn. There is some question whet her it is moreadvisable to acquire a number of single-functionprograms tha t can pass data between and am ongthem selves or to obtain a single, integrated m ul-tifunction package.

Instr uctions a nd owners’ man uals, which t he in-dustry persists in calling by the intimidating name‘‘docum ent at ion, ” have been a major hurdle forbeginning computer users; they are often incom-prehensible to the novice. But competition for thesmall computer software market will sooner or laterforce software vendors to concentrate on ease of use, and to emphasize usability, training, customer

service, and software maintenance in order to buildand keep a sha re of the mar ket.

“’Another explanation for the popularity of the texts for some pro-grams is that they are being used in lieu of manuals by those with pi-rated copies of the software.



—

App, A — The Technology of Office Automation q 329

The management information system conceptthat has been developing over the last two dec-ades is already evolving into the broader concep-tual framework of information resources manage-ment, a field that seeks to understa nd th e overallrequirements of an organization for informationand to provide the m eans for meeting them . De-cision-support applications will comprise an im-portant element within information resourcesmanagement. These applications will range fromcomparatively simple models such as pro formafinancial statements in the spread-sheet format tocomprehensive models of both the internal opera-tions of an organization an d its int eractions withthe environment . Models for m ark eting an d pro-duction management are already in use and willbecome increasin gly commonplace even for sm allfirms.

Much attention is now being given to expert sys-tems. Some expert systems are being used, butthey are generally rudimentary; and the ability of expert systems to deal with some of the more com-plex problems faced by knowledge workers maybe slow to materialize.

Expert systems attempt to capture the problem-solving knowledge and methodologies used by peo-ple who have demonstrated abilities significantlyabove those of the large majority of the profes-sionals working in a specific area. Specialized tech-nicians, called knowledge engineers, interview ex-perts a nd at tempt to define in a forma t pr ocessableby computers, a series of rules of thumb that willemulate th e experts. Users are th en asked to pro-vide the pa ram eters of a problem, and the expert

system returns an analysis that is intended to ap-proximate th e results tha t would be arrived at bythe experts whose knowledge was used t o struc-ture the decision rules. In theory, if there is a suffi-cient gap between t he a bilities of top experts an dthe journ eymen who would use the systems, expertsystems should significantly improve the perform-ance of the journeymen.

To date, expert systems have found some appli-cation in law, medicine, and insurance underwrit-

ing. Development work in other areas, includingthe ma nagement of emergency preparedness an dfinancial services, is underway. The results of theseefforts have so far been limited, but they offer con-siderable promise. An un dersta nding of the pr oc-ess of building expert systems is developing andthe computational power required to support themis available to many organizations.

S u m m a r y

System designers a nd u sers ar e only minimallyconstrained by the information processing and tele-communication technologies that are available. Awide variety of telecommunication services is alsoavailable. Capacity can be added in relatively smallincremental steps so that users are not faced withunused capacity for extended periods.

Mana gement can impose a strongly centr alizedstru cture or su bstan tial decentr alizat ion of deci-sionmaking can be allowed. Regardless of the strat-egy, technicians have considerable latitude in im-plementing system designs t hat are optimal fromthe technical point of view while supporting what-ever management philosophy is in place. For ex-ample, a centralized processing system can servea decentra lized decisionma king str ucture as wellas one that is highly centralized.

The processing and telecommunication technol-ogies that are now available to the office put sig-nificant amounts of processing power in the handsof office workers and managers. The equipmentused to deliver processing services ranges over a

broad spectru m of capabilities, creat ing for officema na gers a wide ra nge of options for configurin gsystems and designing the flow of work within anoffice. As the applications of the technologies be-come more widespread and the experience withthem increases, they will have significant effectson virtually all aspects of office operations and theways in which office workers interact with otherelement s of their own organizations a nd t he out-side environment .



Appendix B

OTA Case Studies

In support of OTA’s study of office automation,several case studies were performed to supplementthe ma ny foun d in the mana gement litera tur e. Inchoosing contractors to perform these studies, con-sidera tion was given to the resea rcher s’ scholar lyqualifications, their access to the proposed studyorganization, and the relevance of the study to theneeds of the OTA staff. Those needs involved in-form at ion on th e impa cts of office aut omat ion onorganizat iona l stru ctur e, job content , skill levels,tra ining and employment levels. In a ddition, it wa sdesirable that the studies illustrate a variety of office sett ings. Special efforts were m ade to con-sult workers at all levels of each organization, be-cau se th eir perspectives were neglected in man yof the case studies examined.

The case studies summarized here were set infive types of offices– a small Federal Governmentagency, the Office of the U.S. Trade Representa-tive (USTR); “XYZ Company, ” the corporate head-quarters of a manufacturer of a consumer product;th e production, plann ing and contr ol departm entof ‘Aircraft Ins tr um ent s Plant , ” a ma nu factu rer ;an international division of a large commercialban k (“Commercial Bank ”); an d th ree a gencies of the New York City municipal government—theHuman Resources Administration (HRA), the De-part ment of Fina nce (DF), and th e Departmen t of Genera l Ser vices (DGS).

O ffi ce Au t o m a t i on i n a M a n u fa c t u r i n gS e t t ing ’

Introduction and Background

This case study examines the effects of com-puter-based technology on one of the most com-mon “offices” in American industry—those thatha ndle orderin g, invent ory, scheduling, coordin a-tion, and control in the manufacturing facilitiesof private industry. According to one estimate, thepeople workin g in factory offices mak e up 10 per-cent of the clerical work force in the United States.Clerks take orders for a variety of products, break

the products down into th eir component par ts, th enorder parts from a vendor or have them built onsite. As components wend their wa y thr ough t he

‘This section is based on research performed for OTA bv I.eslieSchneider, Robert Howard, and Frank Emspack, Har\’ard Un~versity,

factory, expeditors and production control clerkstrack their progress and position them for finalassem bly. Finally, still other office work ers m ak esure the components meet the appropriate qual-ity standards and ship them to customers.

For the last 15 years, companies have used avariety of data-entry and computer-printout tech-niques to create an “after t he fact” tra cking sys-tem. Today, the lowered prices of computer termi-nals and the greater sophistication of softwarema kes possible “rea l time’ scheduling a nd in ven-tory systems. Usually known by the generic termof “MRP” (for “Materials Requirements Planning”or “Manufacturing Resources Planning”), suchsystems integrat e th e various fun ctions of the in-dustrial office and automatically track componentson the shop floor as products are produced; coordi-nating the entire production process.

The focus of th is st udy wa s pr oduction of gyro-scopes, that contain over a thousand components,involving 14 different levels of assembly. This wasthe first product to go “on-line.” With accurateinformation on the product structure and how longit takes to either manufacture or purchase eachcomponent, one can work back from the “due date”of the customer order to determine what compo-nents to order, how many, and when. The MRPsystem can also schedule production by matchingcustomer orders to plant capacity and provide feed-back on the work-in-progress. This information sys-

tem can be extended to the purchasing, market-ing, and finance departments.The study of the MRP II system implementa-

tion at the Aircraft Instruments Plant illustratessome of the dangers that ignoring the organiza-tional dimension of technological change can produce.It reflects how the demands of a new technologicalsystem can conflict with t raditional ma nagementpractices and style. It also demonstrates howworker involvement in an d commitm ent to the n ewtechnology is crucial to success and how new tech-nical systems, far from making traditional work skills obsolete, can ma ke certa in skills and exper-tise more important than ever before.

The study site is at a medium-sized factory,known here as th e “Aircraft Instr ument s Plant . ”At t he time of the st udy, the MRP II system wasbeing implemented. This was both a disadvantageand an advantage for the case study; the imple-mentation process was observed as it took place.

330



App. B—OTA Case Studies q 331

But the full impacts are not yet known, although

par t ic ipants in the s tudy did specula te on what

those impacts will be,

This plant i s par t of the Aerospace Business

Group of a major American corporation. Of a work

force of approximately 1,300, some 500 are man-

agerial and professional personnel. The rest areproduction and clerical workers represented by alocal union belonging to a large AFL-CIO interna-

tional. The plant manufactures a wide variety of high-technology products such as aircraft instru-

ments, engine sensors, displays and monitoring

systems, incorporating some 55,000 different parts.

Much of the work is under contract to the Depart-

ment of Defense, and military specifications re-

quire high quality, strict cost control, and exten-

s ive documenta t ion and recordkeeping.

Methodology

The stu dy was based on 75 hours of int erviewswith approximately 30 employees, conducted inDecember 1984 and January 1985, Those inter-viewed included a broad cross-section of managers,system s designer s, super visors, clerks, sh op floorworkers, and union officials. However, the studyfocuses on t he exper iences of th e clerical workersin th e plant ‘‘Pr oduction Su pport’ depar tm ent ,in particular, production planning and control su-pervisors, clerks, and expeditors. This study lookednot only at the technology, but also at the produc-tion planning and control, the general manufac-turing process, the concept and philosophy of MRP, and labor-management relations,

Organizational Structure

The plant has five basic product lines: gyro-scopes, heat sensors, electromechanical sensingand display devices, electronic sensing and displaydevices, and flow meters. It also has four “con-tr ibutin g ar eas ’’-machine sh op, coil sh op, printedcircuit boards, and silk screen. These areas supplythe five production a reas with par ts a nd compo-nents that are not purchased from outside ven-dors. There are seven functional areas—finance,marketing, purchasing, engineering, manufactur-ing, information systems, and employee relations.The first product to go on line with the MRP II

system wa s a gyroscope. The Production SupportOffice that handles the gyroscope performs twofunctions–production planning and productioncontrol—and consists of a production support man-ager, two super visors, an d five clerks a nd expedi-ters. These clerks and expeditors are “graded sal-

ary” personnel and receive a yearly salary ra th erthan an hourly wage, but are members of the union.There is also a Production Support Office for thecontributing area s with its own ma na gers, super-visors, schedulers, expeditors, and clerks. Finally,ther e ar e people in t he sh op itself who interface

with these production support personnel—pri-mar ily, the sh op supervisor, dispatchers, an d ~ro

analysts.Many of the senior salar ied workers at th e Air-

craft Instruments Plant were hired in the yearsimmediately following the Second World War andbecause of union seniority rules, are now concen-tr at ed in th e highest job classificat ions, includingthe graded salary positions of the Production Sup-port Office. Because of the long tenure of manyworkers, th ere ha s been little incentive to investin explicit docum ent at ion of work p rocedur es an dpractices. As this generation retires, the plant riskslosing important job skills that have not been

passed onto younger workers. Systematizing andformalizing work practices in order to counter thisloss was a major objective for the automated in-ventory control system,

The Old System

For the last 15 years, the Plant used a computer-ized Inventory Management System ( IMS) run out

of a centralized corporate computer center in an-

other city. Keypunched paper orders were batchprocessed monthly to break the orders down intocomponent parts. This monthly “profile report”updated all material on hand, on order, an d on the

shop floor, and identified shortages. The Produc-tion Planning clerks then put out “order actionreports” to Purchasing for outside vendors andto contributing areas for in-house “make” parts.In gener al, this pr ocess took a month. 1n addition,documents were generated setting aside parts forthe manufacture of particular products and list-ing shortages of par ts r equired to fill cur ren t cus-

tomer orders, Supervisors and expeditors in Pr o-duction Control followed these orders on the

shortage lists into, thr ough, and out of the plant ,Other Product Support personnel schedule and co-ordinate the work of the contributing areas.

The a bove is a description of th e formal produc-

tion plan ning a nd cont rol process. Along with t heformal rules, a system of informal negotiations was

necessary to accomplish production goals. Theprocess was rife with irregularities and conflict-ing priorities, some resulting from technical limi-tations of the IMS system. The once-a-month re-




port quickly became out of date. Accumulatedinaccuracies were difficult to eliminate. As a re-

sult, Pr oduction Support personnel often did notknow whether the dat a on the profile report wereaccurate and spent much time tracking down in-

accuracies. The plant had a number of parallel rec-

ordkeeping sys tems tha t could not communica tewith each other and that were often in conflict.

The organization of work also caused irregulari-

ties because of the multiplicity of smaller compet-

ing suborganizations each with its own managerial

hierarchies, priorities, and goals. In order for these

various units to work together, considerable in-formal negotiation was required, Effectively per-

forming one’s job might mean doing favors for

other departments in hopes of return favors or put-

ting pressure on someone, but not so much pres-

sure as to make an enemy. This kind of informalnegotiation served to smooth the production proc-

ess and iron out conflicts, but the inefficiencies

were obvious and their elimination was one of thegoals of the new system.

Implementing the System

W h i l e t h e m a n a g e r s recognize that organiza-

tional issues and workers’ attitudes are the key

to the ultimate success of the new system, the ten-

dency has been to concentrate on the narrow tech-

nical details of getting the system installed; or-

ganizational issues have been left for later, and

often either ignored or mishandled.

When the plan for an MRP II system was ap-

proved in 1983, a Core Team was created to select

a vendor and oversee implementation. The CoreTeam had representatives from all major functional

areas but the two organizations most directly con-

cerned with employee attitudes—Employee Rela-

tions and the local union–played only a marginal

role. In order to justify the major investment, the

Core Team had to produce a cost/benefit study.Estimating the costs of the new system was rela-

t ive ly s t ra ight forward-one- t ime purchas ing cos t s

plus yearly maintenance and servicing fees and la-

bor costs.’ The benefits were considerably more

difficult to estimate. These would include savings

on labor costs, control over data processing opera-

t ions , reduc ing inventory, and speeding up the

movement of inventory.The implementation began with an intensive re-

view of the gyroscope production process. Changes

‘The team estimated the MRP 1 I would cost $2 million for the ini-tial investment (80 percent was for hardware) and $1.7 million in ex-penses over 3 years. Maintenance and service would amount to $600,000;the remainder would be training and labor costs.

were p l a n n e d in the production process, systema-

tizing shop procedures to correspond to the logic

of MRP. The systems designers began writing the

applications software when the hardware arrived

in April 1984.

The MRP 11 system is an elaborate simulation

of the gyroscope production work process. Man-agers say that increased access to information is

its greatest benefit. However, the computer is not

as yet programmed to correspond to the complex-

ities of the actual work. For example, the system

refuses to release orders if there are missing com-

ponents . Product ion could begin wi thout those

components if the MRP system were programmed

to handle such exceptions. Much night and week-

end time that could be used for certain processes

is lost because the system is closed down. Since

there is no easy way to record a product movingbackward in the assembly process for “reworking,”

which happens f requent ly wi th such a complex

product, the MRP often does not know where theproduct i s .

The problems in the gyroscope division during

the first weeks of implementation had to do with

rigidities created by the shift from an informal pro-

duction planning and control system to a highly

formal system. With the MRP system, each time

one level of assembly for a product is completed,

the new subassembly goes back to the locked stock-

room, where its new status is fed into the com-

puter. There is no general floor stock; every single

component i s accounted for , “mortgaged” to aspec i f ic order number and under s t r i c t cont rol .

However , amids t the pressures of prepar ing the

gyroscope division for implementation of MRP,cataloging general purpose floor stock received

a low priority. When the newly functioning MRP

II system began releasing i ts fi rst components

many of these parts (yet to be entered into the

computer or even properly organized in the stock-room) were left out. In addition, supervisors were

still responsible during implementation for meet-

ing their normal monthly production quotas, an

imposs ible s i tua t ion for them.

Employment Impacts

In order to justify this major investment, the

Core Team produced a cost/benefit study. The teamprojected that one-tenth of the plant’s total work

force (130) people could be laid off over a 5-year

period. With attrition, the overall reduction could

approach nearly 20 percent of the current work

force. These potential savings have not occurred

as yet but are expected when the system is operat-

ing more smoothly.



App. B—OTA Case Studies 333

Job Content, Skills

The problems experienced during the implemen-ta t ion i l lustrate that instead of el iminat ing thene e d fo r t r a d i t i ona l p roduc t knowl e dge , MRP

makes that knowledge more necessary, to ensure

that the MRP simulation is as accurate as possi-

ble. Supervisors have to have sufficient familiar-ity with the product to know when to ask that the

MRP system be manually altered. Product knowl-

edge is especially important for the supervisors

of Production Planning and Control, the people

with the authority to manually release orders. This

shift of authority from the shop floor to the Pro-

duction Support Office has led some production

employees to see MRP as a threat to their own

control, exacerbated by their perception that the

people in Production Support do not know how

to perform their job effectively.

Knowledge of the system is also necessary for

effective use of the MRP. Production Support per-

sonnel need to know how and when to perform end-runs a round the sys tem. For example , par t s for

a specific order are released in lots of ten. If only

eight parts of a component are available, the sys-

tem will not release the order until two more ar-rive. The current lot size must be manually changed

to 8 and the next lot size to 10 in order to begin

product ion.

The system has substantially increased the time

that Production Support personnel spend actually

working at computer terminals, by as much as 300

percent; they enter their own data, gather infor-mation and perform transactions (e. g., releasing

parts onto the shop floor). The need for accuracy

in data entry becomes very important. This, andthe need to identify and handle exceptions demand

constant alertness and can be extremely stress-ful. In addition, there are not enough terminals

to handle the work to be done and lighting and

other envi ronmenta l condi t ions a re poor .

The management is operating under two basic

assumpt ions—that MRP II wi l l requi re s igni f i -

cantly fewer people to oversee production planning

and control and that because of the centrality of

MRP to the plant organization, those people who

work on the system must be management person-

nel. Many of the new supervisors occupying newly

created positions are young with almost no experi-

ence in production planning and control. They have

often confronted problems that they do not have

the expertise to handle. Unofficially, some experi-

enced employees are still performing the tasks.

One example of shifting work roles is that of the

production control clerk in the contributing areas.

This positionin g materials;

seeing that it

and put back

formerly involved planning; order-sending it out to the shop floor; a n dwas properly machined, inspected,into stock. The more accurate and

up-to-date information provided by MRP makesit unnecessary for the production control clerk to

spend a great deal of time on the shop floor. Manyof their traditional tasks have disappeared—some

into the computer system, others taken over by

the new supervisors in the Production Support Of-

fice and by shop coordinators. What is left are cler-

i c a l t a sks t ha t a re r e pe t i t i ous a nd , some sa y ,

point less.

When graded salary personnel work with the new

system, it is usually at their supervisors’ discre-

tion and only to perform the lowest level clerical

tasks. The managers claim that this is temporary

and that eventually some additional tasks will be

delegated to graded salary personnel. The union,however, sees this division of labor between su-

pervisory and union personnel as a contradictionof the work organization model presented by the

management. This change in the balance of respon-

sibilities puts the union workers most at risk if

the predicted labor savings are achieved.

T ra i n i ng

From the beginning, the MRP training process

encountered serious problems. The Core Team’s

recommendation that a manager be hired and given

full-time responsibility for training on the MRP

project was rejected by top management as too

c os t l y , P re oc c upa t i on wi t h ge t t i ng t he sys t e mworking resulted in the neglect of training. On the

sur fa c e , t he qua n t i t y o f t r a i n i ng p rov i de d t omanagers and workers seemed considerable. Some

managers , supervisors , and hour ly personnel a t -

tended a week-long MRP training course at the

nearby factory of the system vendor. The training

for most of the affected work force was a 10-week,

40-hour, in-plant course developed by the Core

Team and the Informat ion Systems Depar tment ,

which proved far from adequate. Some key work-

ers did not receive training until well after MRP

was implemented. The vendor training course was

criticized, especially the videotapes, as boring anda waste of time. Workers were not taught how to

use the paperwork that comes out of the system,

and did not understand the logic of the system.

Managers believed that workers did not under-

stand what production control itself was. Work-

e r s f rom t he P roduc t i on Suppor t De pa r t me nt

tended to see things differently. They felt they

unders tood how the work process rea l ly func-




tioned, but were being asked to learn a highlyformal ized sys tem radical ly di f ferent f romwhat was ac tua l ly happen ing .

The superficial training has come back tohaunt the Core Team. The system designershave had to play a support role that takes val-

uable resources and time away from implemen-tation of the MRP system in new product lines.

Conclusions

The final organizat ion of work with in th e MRPII system is not yet determined. It is still too earlyto know wheth er a work organization based on asmall group of relatively young, new supervisorscan effectively oversee production planning andcontrol at the plant. The promise of increased deci-sionma king for gra ded salary workers h as so farrem ain ed un fulfilled, becau se of ma na gerial deci-sions about how technology is used. There maybe a conflict to management as to whether to en-

trust responsibility for working the system to bar-gaining unit workers or to reserve it within man-

a ge me nt .

This case study illustrates the fact that techno-

logical change is a social process, in which organiza-

tional choices that shape not only the effects on

people and organizations but the effectiveness of

the technology itself. Managerial choices were amajor obstacle to the successful implementat ion

of MRP II; and as MRP 1I was put into operation,management did not address a variety of sharp

contradictions between the new system and tradi-

tional work practices, job categories, and plant in-

cent ive systems.

The management staff feel that these problems

wil l be resolved in t ime. The problems are not

unique, but represent some of the most common

problems that organizations experience when im-

plementing new office technologies. Their resolu-

tion depends far less on narrow technical factors

than on the social processes by which technologi-

cal change is managed and negotiated.

O ffi ce Au t o m a t i o n i n t h e C o r p o r a t e

H e a d q u a r t e r s o f a C o n s u m e r

P r o d u c t Ma n u fa c t u r e r


This is a case study of the successful implemen-ta tion of an office au toma tion system. It su ggeststhat choices in managing technological change can

‘This section is based on research performed for OTA by Tora 13ik-

son, Don Man kin, and Cathleen Stasz of The Rand Corp.

lead t o positive outcomes for both employees andfor the organizations, if that is a priority in theplanning and implementation process.

The research site is the national corporate head-quarters for Company XYZ, a major manufacturerof a consumer product. In addition to the head-

quarters office, the company includes four manu-facturing plan ts located thr oughout the country.There are approximately 30 0 employees in the cor-porate headquarters and approximately 1,000 em-ployees overall. The company is a wholly ownedsubsidiary of a larger corporation. The study fo-cused on four departments within the corporateheadquarters-marketing research, planning, thecontroller’s office, and product development.

Only one of the four manufacturing plants isunionized, the pay is high compared to similarcompanies, and there is a high degree of career mo-bility in this company. The company literaturestresses the importance of treating employees well

and giving them the freedom, opportunity, and re-wards to perform effectively. A second theme isthe importance of open communications. Produc-tivity is viewed in terms of a total system, em-bracing employees, equipment, information andmat erials. There is a str ong empha sis on inn ova-tion, risk taking an d experimenta tion, and st ate-of-the-art knowledge and technology. There is also,peculiarly, a strong emphasis on punctuality, withall employees, including the president, clocking inevery morning. Bonuses are linked to both salesvolume a nd r etur n on a ssets, providing an obvi-ous incentive for improved performance for thecompany as well as for the individual salaried em-

ployees.It is clear from int erviews and personnel data ,

company brochures and policies, that the corporatehea dqua rt ers work force is highly educat ed, well-paid, and largely professional. Except for its for-malistic policies on punctuality, the company close-ly resembles the “organic” (i.e., nonmechanistic)model of organizations that management theoristshave touted for years.

Methodology

Semistructur ed interviews were supplementedby researchers’ informal observations and archival

information. Interview data were collected from—2executive managers, 1 manager from personnel,3 man agers from t echnical departm ents, 2 key peo-ple involved in the implementation process, 4 de-partment heads f 8 individuals outside the focalwork groups who

-‘were links in t he pr ocess an d 20

employees from focal departments, Where possi-




ble, respondents were selected for participation onthe basis of formal position in the organizationchart. Oth ers were identified dur ing the data -col-lection process.

The interview format used with all respondentsrequired 1 to 2 hours to complete. Field notes takenduring research visits were used to construct case

reports for each department and for organizationalpersonnel; these t hen became the basis for su bse-quent examination, Preliminary research findingswere reported to the participants in feedback semi-nars in order to confirm descriptive information,vaIidate conclusions, and generate discussion of issues this organization faces as the technologicalinnovation continues.

Implementation

In 1980, Company XYZ acquired a new chief ex-ecutive officer who sa w a critical role for inform a-tion systems which permit a business to collect,

store, structure, share, and manipulate informa-tion about previous experiences in order to learnfrom them and improve business performance.

The segment of the consum er product industr yin which XYZ operates is highly competitive, withmany strong players. In 1980, XYZ, holding fourthplace among its competitors, was facing majorprofit-and-loss difficulties; it needed to increasemarket share and cut costs. This impetus led toan investment in computer technology. The goalwas to replace old batch-oriented information sys-tems and manual technology with flexible cutting-edge electronic tools and concurrently, accordingto man agement, to give users a renewed sense of

power, insight, and enthusiasm about their tasks.A high-level organizational manager (now a Vice

President) was na med to lead the plan ning effortand put together an implementation team. Hechose employees who had substantial business ex-perience an d a strong sense of stra tegy, and who,like himself, were not systems professionals butwere comforta ble with inform at ion techn ology. Inaddition, he recruited for the team an employeefrom another firm with recent systems implemen-ta tion experience. The five-person tea m pr oduceda business systems plan by first studying the work of the firm’s ma ny depart ments to determine wha tinformation needs they had; this task required sub-

stan tial input from departm ent employees. Thenthe team investigated the kinds of technology thatmight fill these needs, relying heavily on technicaladvice from an outside consulting firm.

Looking back, the former head of the team em-phasizes the importance both of employee partici-

pation an d technical expertise in the plann ing. Adirect knowledge of business tasks was critical.On the other hand, comparing technologies andassessing their ability to handle the needs requiredcomputer system professionals.

The year-long planning effort yielded an ap-proved plan and those who developed it were

char ged with its implementat ion. Executive man -agement was highly committed and provided solidbudgetary suppor t that was appor t ioned asfollows:

q 10 percent—hardware ,q 10 percent—software,q 30 percent—software development, modifi-

cation,q 40 percent—implementation, and

10 percent–t ra ining.The process operated on a project-by-project ba-sis, with t he plan par titioned into relatively inde-pendent part s. Each project r equired its own spe-cific plan and justification. The plan established

a very general blueprint and performance criteriafor system development but was indeterminatewith respect to order of projects and details of theirenactment. Projects originate either from usergroups or from the technical consultant percep-tion of a need. The consulting firm operates a cen-tralized computing facility, the use of which pro-vides this mid-size firm with more computingresources than it could support on its own.

The major architectures include a remote main-frame owned by the consultant firm, another largecomput er system on which time is rent ed, and asmall number of personal computers. The acquisi-tion of personal computers at this point is un-

systematic and there is no formal responsibilityfor their support. They are purchased by employeerequest. Although t he compan y does not want todiscoura ge personal comput er u se, there are con-cern s about dat a security. Only a few people havemore than read-only access to corporate databases.Ana lysts can download da ta from th e larger sys-tems and u pload data that they have entered on-site. There are a variety of systems available foruse through time-sharing that provide several pro-gramming languages (including a variety of appli-cations software and a fairly high-level matrix-structured language suitable for flexible data ma-nipulation, ana lysis, and reporting).

In addition to these major applications, wordprocessing is handled by a small centralized de-partment doing internal and external correspon-dence for various departments. Electronic mail isused primarily for external communications to sub-sidiary companies. For a variety of reasons, it has



336 Automation of America Offices .

not been fully implemented within XYZ—draw-backs were found in two systems pilot-tested, mostemployees do not ha ve their own ter minals, an dit is seen as hindering personal commu nications,which is a n essent ial elemen t of XYZ’s corporat eculture. The company does, however, use VoiceMail Exchange (VMX) to better manage telephone

communications. Primary VMX communicationoccurs between sales r epresenta tives in th e fieldand th e Sales Planning department in the homeoffice.

The Users

On average, employees had been using com-puters for at least 3 years at the time of the inter-views. Across t he four depa rt men ts, five employ-ees had their own workstations; the remaindershared workstations with two or more others, andoften found getting computer time to be a prob-lem. In most depar tment s workstat ion a llocationreflected ta sk deman ds. In one depar tmen t, how-ever, statu s was a lso a factor. Actua l time spentworking on t he comput er was extremely variableacross the four groups. Since few people use thecomput er all day, it seems reasonable that work-stations be shared, but the tradeoff of cost v. ac-cess has not been wholly resolved,

The users in most depart ment s have a ran ge of options for guiding and modifying the systemsthey employ. There is considerable choice abouthow to use th e adva nced tools, left largely to userinitiative. Some employees envision a split between“haves” and “have nets, ” based on differential ap-titude for information technology.

Users across the four depart ments were gener-ally enthusiastic about the capabilities of the com-puter systems, a lthough some ha d specific complaintssuch as poor graphics capability and difficultymoving between databases. Other complaints con-cerned the databases themselves—the data weresometimes inaccura te or u navailable. The disad-vantages cited by users have more to do with lack of systems integration than with individual sys-tems. The integration problem had been expectedas more applications were implemented and ac-cessed by users.

Job Content, Skills

No trends were observed toward mechanizationof work or toward de-skilling of jobs. Most usersreported increased variety, challenge, creativity,and responsibility. Time savings were u niversa llyreported for individuals and for groups. For ex-

ample, some vital procedures requiring nearly aday when done ma nua lly now require only 1 hourand are less likely to contain errors. Most employ-ees use the time gained to take on new tasks an dresponsibilities. On occasion, groups have also wid-ened or redefined their missions as a result of com-put er us e. In term s of bottom-line mea sur es, XYZ

has su cceeded in increasing its ma rket sh are a ndcutting total costs per unit output, even thoughlabor costs are higher.

Reported changes in work were generally con-sistent across all groups. There was increased con-tr ol over work. Work dema nds in creased for somean d decreased for other s, depending on t he work group. Rather than create repetitive data-entry

jobs, the company chose to distribute databaseupdating tasks among the employees using thedata bases. This has caused some dissatisfaction,There were two important between-group differ-ences. One was a chan ge in m ana gement style inone department-a manager apparently was spend-

ing most of his time on-line and less time in typicalman agement activities. Opinion was mixed as towhether this change was good or bad. Anotherdifference was th e degree to which u sers h ad in-vented new ways of doing their work. Many re-ported tha t t hey ada pted or modified the technol-ogy to suit their needs, although most of what theyreported was more appropriately categorized asa new task.

Most changes in communications resulted fromtool sharing and interactions with others in thedepartment, rather than increased communicationwith people outside their department. Few employ-ees used computer-based communications, and no

one reported that this took the place of other formsof communication. Because of the strong empha-sis on face-to-face interaction, many believe thatelectronic communications systems are unneces-sary and possibly detrimental to intraorganiza-tional behavior.

Formal job changes were reported in three of the four groups, but only at the clerk level. Twoclerks believed their recent promotions and payincreases were due to increased responsibilities andspecial assignments resulting from their computeruse. The clerks’ job descriptions in one depa rt men twere being upda ted at the t ime of the interview,explicitly because of the new computer-related

higher level skills and responsibilities. The clerk position in an other depart ment h as now been up-graded from an hourly to an exempt one.

While the majority of users found satisfactionand a sense of accomplishment, others were bored,less motivated, an d work ing below their a bilities.



App. B—OTA Case Studies . 337

Among th e rea sons cited were increased expecta -tions about what the technology could do and,therefore, frustration when expectations were notmet. Another user felt “locked to the terminal”when trying t o meet en d-of-period or other dea dlines.

TrainingDespite th e fact tha t tr aining was a mixed-bag

of form al an d ad h oc procedures, most u sers wer ewell satisfied with it . For most employees, learn -ing about the computer system is part of doingthe job. Learning beyond t he minimu m r equiredfor this purpose is voluntary.

Training varies by department. In R&D, thetask s ar e so specialized tha t genera l purpose in-troductory an d inter mediate courses ar e of littlehelp, so training proceeds on an individual basiswith th e help of peers. Peer learning a lso cha rac-terized the Planning Department, where only oneperson uses the system. Formal classes are offeredby the system vendor. The consultant firm andthe Business Systems Department both providetra ining and technical support for users on m ajormainframe applications. The amount of time re-quired for users to learn their systems varied widelyby department. In R&D it took 2 to 3 months; inPlan ning, some applications could be used in ju sta few days; sales forecast ing took about 6 month sto master.

Users mentioned a variety of formal help mech-anisms, including documentation, local technicalstaff, a telephone hot-line, a users’ group, and on-line help. Some means of assistance, however, werenot entirely reliable. Employees had problems find-ing some of the manuals they needed, and someapplications were not well documented.

Informal support was crucial to most users. Thelearner must find someone who is willing and ableto teach an d then find a time when th ey are bothfree. Self-taught “experts” among the employeesperformed voluntary support service. While theyseemed to enjoy the teaching role, they believe thatlearning support could be more effectively providedif some resources within the department were for-mally allocated for that purpose. A resource cen-ter was one suggestion.

Conclusions

In Company XYZ, a conscious attempt wasmade n ot only to remove the constr aints on inn o-vation, but to encour age it. They view comput ersas t ools needed by competent an d motivated peo-ple to per form th eir jobs effectively. The t echnol-

ogy is mission focused, user driven, and can beguided, modified, and m an ipulated by user s. It isdesigned for chan ge as u sers a cquire great er ex-pertise. The organization had a conscious strat-egy for implementation that had been carefullyplanned, staffed, and budgeted, They attempted

to balance centralized and decentralized decision-mak ing. The implementa tion project was char ac-terized by a great deal of user involvement thatpromoted a feeling of “ownership” among employ-ees. The system continu es to chan ge and individ-uals keep finding new ways of working with it.Ther e is no “post implemen ta tion” period. Ratherthan minimizing the change, the organization haslearned to manage it.

C om pu te r -M e dia te d Wor k in

C om m e r c ia l B a n k i n g4


The influences that affect the implementationof automated office systems can be environmentalor institutional. In this study of the automationof one group in the international department of a major Commercial Bank, the original reasons fordeciding to implement the system were environ-men ta l-th e desire to improve world-wide commu -nications in the International Department (ID) andto become more competitive by offering more orbetter services. The factors that contributed to thesuccess of the implementa tion were institu tional,the most important being the visible and unwaver-ing support of top ma na gement. Key actors were

involved from the beginning and provided theirbacking. Users were involved in the feasibilitystudy and in the actual implementation.

These factors, while critical, are not sufficientfor success. If unwise technical decisions are madeor based on inaccurate technical information, theimplementation is likely to be compromised. Whileit is felt at Commercial Bank that the original im-plementation was a success, there have been someproblems. For example, they were not able to “closemore deals, which was one of th e goals; the n um -ber of functions available on the system was re-duced after t he pilot project wa s complet ed to re-duce costs; commun icat ions, especially overseas,

have been a problem because of low-speed linesand lack of sufficient equipment; and at certaintimes, the system is heavily loaded which affectsperformance and user satisfaction.

‘This section is based on research performed for ()’I’.\ h} ,JonTurner, New York Llniversity,




Commercial Bank has over $40 billion in totalassets and employs some 8,000 people, worldwide.Since 1977, equity has grown by more than $1 bil-lion, largely through high earnings performanceachieved by taking advantage of capital marketopportunities.

There has been an intense effort to control nonin-terest expense. Over the past 6 years, operatingexpense has increased at a n average annua l rateof 11 percent, compared to 16 percent for a com-posite of the nin e largest U.S. commercial bank s.Several tactics have put downward pressure onexpenses, among them, the application of technol-ogy in labor intensive areas and intern al expensebudgeting.

The International Department (ID) is one of thr ee groups tha t ma ke up the ban king function.As part of the ID, the Asia/Pacific Group, whichwas the focus of this study, provides commercialbanking services and has well over 60 percent of

its staff located in field offices in Asia and the FarEa s t .Most of the 800 information systems personnel

in th e bank were part of the Technology Depart -ment (TD), which developed and maintained mostof th e bank ’s compu ter a pplicat ion syst ems an dran the da ta center s. TD was th e builder of large,transaction processing systems and was viewedby many as being slow and not responsive.

Almost all of the Asia/Pacific Group’s commu-nication, am ong the field offices an d between t heNew York and field offices, took place over an in-ternational TELEX System, because of the needfor a hard copy record of the communication on

both ends a nd becau se time differences restr ictedthe time available for telephone conversations dur-ing the normal business day. Long (15-20 page)loan proposals had to be sent between Tokyo, HongKong, New York, and London several times dur-ing their preparation. Preparation of TELEX mes-sages was time consuming for the principal andthe secretary, inefficient, and error prone. It dis-couraged sending messages.

The possibility of using computer and commu-nication technologies to overcome the communi-cations pr oblem in ID was of inter est t o the h eadof th e Asia/Pacific Group, wh o realized t ha t poorcommunications was compromising his people’s

performance and his ability to control them.

Implementation

Initially it was thought that communicatingword processors in ea ch location could ha ndle th e

job, but t his a ppr oach was t oo limited. The Office

Information System (01S) was then planned. Itwas intended to be integrated, providing a varietyof functions, for example, electronic mail, coupledwith text editing to deliver information directlyto people in the field.

The concern over controlling expenses meant

that the pilot had to be tied to clear-cut goals. Itwas to be a means for increasing revenue and acatalyst for behavioral change, to improve com-munications, and to be financially justifiable interms of cost savings. Specific goals in customerservice were same day response to 30 percent of customer Money Transfer Inquiries from field loca-tions and elimination of all routine customer in-quiries from the field to the New York divisionCustomer Service Officer. Other goals includedbuilding a database to assist in identifying cus-tomer n eeds, developing an d m onitoring mar ketplans, and permitting broader product require-ment s’ assess ment s across un its. Finally, th e 01S

pilot test was t o reduce th e amount of time mar-keting personnel spent on administrative mattersby 15 percent, eliminate 25 percent of the problemsolving workload of the New York based CustomerService Officer (permit ting m ore time t o be spentin customer cont act) and redu ce secreta rial workload.

Planning for 01S began in the spring of 1982.Equipment was installed in New York du ring thesummer and in the field during the winter of 1983.Evaluation continued into the beginning of 1984.

An employee was hired to implement the 01Swho had experience in implementing a similar sys-tem for a nother financial institu tion. The bank alsoreta ined a consulta nt . A two-stage pilot test gave

ample opportunist y to debug and configure the sys-tem . A member of th e Asia/Pa cific Group was t hefull-time user r epresenta tive on th e implement a-tion team.

Equipment.- The 01S included word processing,electronic mail, document processing, desk man-agement with calendar, a nd calculation abilities,and forms development in one integrated package.The system is connected to a time sha ring systemand to the bank’s mainframe computers. A 72 linestatistical multiplexer (STAT MUX) tied to amicrowave link is used to connect the equipmentbetween New York City offices. Terminal trans-mission speeds are 9,600 baud at the headquar-

ters office, 2,400 baud at another NYC location,and 1,200 baud on the overseas and dial-up links.The system can access the time sharing system,transactions for each customer, commercial loans,historical records, financial asset inventories, andall other banking databases.




Methodology

This study focused on the individual worker, al-though some conclusions were drawn about work group, depart menta l, and organizational processes,Semistructured interviews, memoranda, and obser-vation were the primary method of data gather-

ing. Respondents were selected from all levels of the depa rtm ent studied, ran ging from clerical todepartment head, based on the participation in theimplementation and on their position in the orga-nization. For purposes of verification, at least twosubjects were selected from each work group andfrom each organizational role. They included work-ers who had been in the field at the time of imple-mentation.

An open en ded int erview selection pr ocess wasused, adding personnel to the list as their roleswere identified. The senior personnel were inter-viewed last to perm it th e ident ificat ion of crit icalpolicy issues.

The Users

One of the goals of the system designers wasthat everyone would prepare, send, and receivetheir own messages. Officers would read their mailfirst t hing in the morning and pr epare th eir ownreplies. They may check the system 3 to 4 timesadditionally during the day. The system is usedhea vily by personn el when t ra veling to field loca-tions. However, the lack of enough terminals inoverseas offices limits access to the system. Thespeed of the lines and th e need for certa in opera-tions offices in New York to be open in order to

use on-line files also restricts the usefulness in thefield offices.

Secretaries make extensive use of word process-ing and electronic mail. Large documents are pre-par ed off-line, proofed, corr ected, and t hen t ra ns-mitted over 0IS. The low-speed lines restrict useof the system interactively.

In New York, most employees in Asia/Pacifichave their own terminals which, along with thehigher speed lines, encourages use. Employees domuch of their own document preparation. Officersan d support staff make extensive use of the con-nections to other systems, directly accessing theMoney Transfer, Cash Connector, and Historical

Resear ch system s. An a ctive officer in N ew York might be continuously logged in to the system,receiving 10-15 messages per day and transmit-ting 7-10. Meetings may ta ke place around a ter-minal while scrolling through a document or list.Some officers use 0IS to access the time sharing

system where they execute analytic procedures androute the output back to the terminal or printer.A spread-sheet function is used for preparing plansand can be downloaded t o a personal comput er a ndback into OIS.

J o b C o n t e n t a n d P r o d u c t i v i t y

The cont ent of secreta ries’ jobs h as clear ly im-proved. Previously, up to 40 TELEXs per daywould be sent, which meant spending 2 to 3 hoursin a TELEX room an d man y more hours in pr ep-aration. Now principals send most of their ownmessa ges. Becau se n ot all offices have 01S, someTELEXS are still sent, but this is much easier withth e 01S. The secreta ries’ typing load ha s been re-duced and now consists mainly of larger manu-scripts. This has freed them for other activitiesthat includes some customer contact and some re-search. The word processing software helps them

to create more “professional” looking work. Somesecretaries feel that the total amount of paper hasdecreased; however, many principals do not agreewith this.

The secretaries feel that they have acquired newskills an d th at they ar e more productive. New ca-reer paths have opened up for some secretaries whoshowed un usua l interest in or skill with th e sys-tem. Some were promoted to system “expert,” pro-viding consulta tion a nd t eaching to other s in t hegroup. Some were tra nsferred to th e Informa tionMana gement Systems group where they are pur-suing a systems career. Management appears notto have anticipated the change in work mix for

the secretaries. Each secretary has been left onhis/her own to work this out.

Some managers feel that the system helps themestablish priorities in their work or th at they ar emore aware of what is going on in overseas offices.Because information is easier to transmit, moreis sent. Principals feel more productive becausethe n umber of telephone calls an d memos has de-creased, messages sent on t he system t end to bebrief, ther e is less time wasted in t elephone ta g,and more reports are distributed over the system.The Monthly Profitability System used in plan-ning, formerly took several days to distribute, Nowit is distributed instantly by electronic mail. Al-

though more useful information is being commu-nicated, th e num ber of trivial messages has a lsoincreased, Communications tend to be among peersrather than flowing up and down the hierarchy.For certain people, the system has served as anexcuse n ot to get out int o the field. There is some




concern that management will see everythingthrough the machine and will not benefit from ex-posure to the field offices and customers.

In times of great pressure or emergency, work-ers at Commercial Bank tend to revert to their oldmethods of doing work. They pick up the phone

to relay messages or they may not read their elec-tronic mail for several days.

The effectiveness of the organization as a wholeseems to ha ve increased because of the increasedaccess to the var ious da taba ses such as historicalrecords and customer transactions.

Training

The original concept for training was one-on-onetraining. Often an on-site person in each office wasdesigna ted a s th e “expert” in th at office, receivedspecial tra ining, an d became a “friendly’ sourceof information. While there was some “cultural”resistance to using the system in the field at themore senior levels, this was a short-term ph enome-non a nd disappea red when th e “boss’ began usingit .

Special care was ta ken t o have documen tat ionprepar ed and to provide training sessions on th eequipment. The tr aining was st aggered to accom-modate new users over time. A good portion of the staff were tr ained by th eir colleagues, rat hertha n in the forma l tra ining sessions. The simplic-ity of the system a nd its self-help featu res ma deit easy for many of the staff to learn on their own.

Organization

Although th ere ha ve been n o major chan ges instru cture or social support, the system ha s facili-tated social interaction among levels. Since the sec-retaries were the first trained on the system, theylater aided in teaching senior officers. This servedto break down social barriers between levels, par-ticularly in the field offices.

The system also permits more time/place flexi-bility in performing work as managers can do theirwork from home or hotel rooms and do not haveto spend as much time on the telephone. Formerly,all information was sent to New York for entryinto the systems. Some of the data entry is nowdone in the field, which better distributes the work-

load and makes the system more current. Also,field personnel communicate directly with opera-tions to resolve some pr oblems rat her tha n goingthrough the Customer Service Officer in New York.

C onc lus ions

Employees at Commercial Bank feel that ther ehas been an increase in individual productivity andmore communication with customers. Althoughthis improvement is difficult to quantify, a 1 dayturn-around on approvals for certain proposals hasmade the bank more responsive to customers. Mar-keting personnel have not reduced the time theyspend on administrative matters and CustomerService Officers still handle most of the contactwith the field. In the New York offices, the num-ber of secreta ries ha s decreased from 11 to 7. La-bor savings figures were not available for the fieldoffices.

01S will not be fully cost justified on the basisof electronic mail alone. One of the most impor-tan t benefits of th e system is a ccess to th e vari-ous application systems su ch as money tran sfer,comm ercial loan, a nd collections. The full poten -tial has not yet been realized. The use of leasedlines and satellite communications could increasebandwidth a nd ma ke the system much more usa-ble in t he field. Local processors in ma jor r egionswould reduce traffic on the relatively slow trans-oceanic links. The real payoffs will occur when thesystem is used as a single interface to all writtenmaterial and this has not yet occurred, possiblybecause of the costs involved, This is an exampleof the conflict between controlling operating ex-penses a nd ta king advan ta ge of office au tomationto improve operations.

De ve lopm e nt , I m ple m e n ta t ion , a nd

I m p a c t o f Offi c e Au t o m a t i o n a t t h eOffi ce of t h e Uni t ed S t a t e s T r ad e

R e p r e s e n t a t i v e

In t roduc t i on a nd Ba c kground

Office automation at the Office of the UnitedStates Trade Representative (USTR) has estab-lished extensive system capabilities in a relativelysmall agency with wide ranging policy responsi-bilities. The ratio of terminals to employees isalmost one-to-two, an achievement that is not com-mon at this early stage of development.

This case study reviews the brief 25-year his-

tory of the office, its role in international trade

“This section based on research performed for ()’I’A by J$rilliam Neu-feld, consultant, Washington, DC.



App, B—OTA Case Studies q 341

policy, early efforts to automate a number of func-tions to aid in carrying out its responsibilities, andhow these early efforts served as the beginningof the present automation system.

USTR is a sma ll agency with a perman ent st aff of 122 in 1984 an d a t otal sta ff including cont ra c-

tors and part-time personnel of 183. Assisting theUSTR with his responsibilities for trade negotia-tions are three Deputy U.S. Trade Representativeswho also hold the rank of ambassador, two inWashington and one in Geneva, Switzerland. Thereare a lso assistan t r epresenta tives in tr ade policy,industrial and energy policy, international invest-ment policy, agriculture and commodities, GeneralAgreement on Trade and Tariffs (GATT) affairs,and for several specific areas of the world.

Thr ee events cont ribut ed significan tly to devel-opment of office aut omat ion—commitmen t by t heUnited States to a new round of multilateral nego-tiations and the need for a method to handle large

volumes of tra de data an d mat erial, the failure of the Department of Commerce to assume a leadingrole in th e creation of a centr alized tra de data base,and the introduction of microcomputers into theworkplace. Computer technology suggested toUSTR th at a da ta base could be developed specifi-cally for international trade, from data that ex-isted in files of many different agencies with re-sponsibility or interest in international trade. Aconsolidated base of accurate information wasgreatly needed.

Initial effort s by USTR to centr alize tr ade da taused contracted computer and programming time.A plan was outlined utilizing the hardware and

programming capability of the Central IntelligenceAgency (CIA), including the development of com-mun ications capability between th e USTR Wash-ington and Geneva offices by high-speed data link.The program was eventually transferred to the De-partment of Commerce computer facility and toa computer system at the National Institutes of Health.

In 1977, USTR forma lly proposed developmentof a centralized computer system for the trade com-munity to eliminate duplication of effort. It wouldrequire each agency to contribute data to an infor-mation pool. A major goal was to give trade profes-sionals direct access via computer terminals to the

data. The system became known as the Trade Pol-icy Information System (TPIS). The NIH, Divi-sion of Computer Research and Technology waschosen a s t he ma in comput er su pport facility be-cause many agencies already used the system andit was cost effective. By 1979, the data system

was working an d in 1984, it was r enamed, TradePolicy Staff Committee (TPSC) TradeNet. Officeautomation followed development of the largesystem.

Methodology

Personal interviews were conducted with 37 peo-ple, including 10 senior staff, 15 professional staff,and 13 secretarial staff members. (Secretarial staff at the agency current ly number 46, including 3 con-fidential secretaries.) Four of the ten senior staff interviewed had terminals on their desks; the oth-ers did n ot have direct access to comput er t ermi-nals. All but three of the professionals interviewedhad computer terminals at their desks.

Terminals ha d been a vailable to most of th oseinter viewed for 1.5 to 2 years . Few USTR staff used the system directly before that. Office auto-mat ion is a recent development, a nd work patt erns,habits, expectations, and performance are still

chan ging. In spit e of th is it wa s difficult for s omerespondents to recall how they worked previously,an d conversely, difficult for sen ior sta ff to n oticesignifican t change becau se th ey have n ot part ici-pated as fully.

I m p l e m e n t a t i o n

The computerized trade database has becomea m ajor component of th e tools used at USTR andwas the forerunner of the office automation sys-tem that eventually developed. The interagencytra de data base an d some additiona l electronic ca-pabilities evolved over th e cour se of 15 year s. In-

tr oduction of a more fully int egrat ed an d compre-hensive office automation system took place in only5 years.

There was as much plann ing and considerationon th e part of the Comput er Group and senior ma n-agement as time and budget allowed. The first fea-tures to be developed were systems for sendingmessages between offices electronically and forkeeping track of incoming mail to assure timelyresponse. This system, alth ough not u nique, wasahead of many other such programs in government .Since most of the agencies participating in theshared data network had some terminals allowingdirect access to the computer facility, an electronic

mail system was introduced in 1980 using the ex-isting elements of the TradeNet system. It allowsusers to send and receive messages and completeddocument s, and enables members of the Tra de Pol-icy Staff Committees to transmit unclassifieddocuments. The system serves nine agencies, in-




eluding the Office of Management and Budget;Departments of Agriculture, Commerce, Interior,Justice, Labor, State, and Treasury; and the In-ternational Trade Commission. A telemail systemis available for communication 24 hours per daybetween Washington, Geneva, USTR Ambassa-

dors, and staff members on travel. It is also possi-ble to use th is system to tran sfer documen ts intothe word pr ocessing systems in Washington a ndGeneva.

USTR had only begun to purchase terminals forthose outside the computer operations group in1980 and electronic mail was not available to allstaff. To use the electronic mail or database sys-tems, it was necessary to use one of the few termi-nals available through the computer operationsgroup. To encourage users to sign on to the sys-tem frequently despite the inconvenience, a calen-dar was published electronically of daily meetingsand events held at USTR. The International Trade

Commission added a calendar showing trade deci-sions being considered by the Commission eachweek. A system designed to keep track of the in-creasingly large amount of correspondence directedto the agency was developed at the same time.

By 1980, the agency had acquired a computerto do data man ipulations a nd commu nicat e withthe NIH system, and a minicomputer with capa-bility of supp orting 128 us ers. A needs stu dy rec-ommended that the ultimate configuration be acombination of stand-alone units and shared logicterminals that would use the same software, belinked through telecommunications, could accesselectronic mail and files, and could share common

resources such as printers. Terminals were placedin only a few offices at first , but as p rofessiona lsgained experience using the system, others a skedfor terminals. By the end of 1983, more than 50term inals ha d been inst alled. All secreta rial sta ff will eventually receive stand-alone machines. Therewere 36 more microcomputers on order at the timeof this study.

Tra ining

Organized training activities for users of thetr ade dat a system expanded in 1981. A USTR Com-puter Users Manual was issued. Formal grouptraining and orientation sessions were held. Indi-vidual training sessions and ongoing technicalassistance was provided on demand to new users.A staff of six “information counselors” was hiredwithin the Computer Group. Additionally, six part-time student workers were added to assist withthe increasing workload of the Computer Group,

including maintenance and updating of the sys-tems, updating training manua ls, and preparingthe daily newsclip service.

A vendor provided training for secretarial staff members after acquisition of 18 microcomputersin late 1983. Training by outside sources of both

professional and secretarial staff was cited oftenas one of the least attractive experiences withUSTR automation thus far. All found it to be un-sat isfactory becau se of th e u se of ‘‘compu ter lan -guage” to describe operations and lack of expla-nation of technical details. The agency has foundit more satisfactory to use in-house staff for train-ing because it is more useful to the employees andbecause it is more cost effective.

As th e agency and t he system grew, comput eroperations personnel were engaged almost full timein system construction, maintenance, and respond-ing to requests for assistance, leaving little timefor orga nized t ra ining. A “cont rol desk” has been

recently established to assure that someone isavailable to answer questions or help solve prob-lems, releasing the Computer Group staff for othertasks including advanced training sessions.

J ob Cont e n t , Sk i ll s

About one-half of the sen ior st aff, including th eagency’s t op official, uses th e ter mina l in t heir of-fice infrequently. The reasons most, often cited arethat they do little creation and revision of docu-ments or data retrieval and analysis. Because theagency is so small, use of the calendar functionis not cru cial. They do not u se electr onic ma il in-tern ally or between a gencies because either t heyor their counterparts in other agencies do not haveterminals available. They do not use the word proc-essing capabilities, preferring to rely on their subor-dinates to produce required documents or data onrequest. They use th e telephone or short m emosand letters to conduct business. Negotiating tradeissues, or discussing policy options, duties primar-ily reser ved for senior s ta ff, requ ires face-to-facecontact with counterparts in other countries orgovernm ent agencies. “Diploma tic niceties” wouldpreclude the use of teleconferencing technology forconducting trade talks or other negotiations. Asa result of not having a need to use a terminal,half of the senior staff interviewed expressed somereluctance about learning to operate the equipment.

The opposite was true of most professional staff.They use their terminals frequently. In the absenceof time or opportunity to participate in formaltra ining sessions, all said they learn ed the m ostabout how the system worked by “playing with



it. ” Each interviewee suggested tha t it had takensome time to become comfortable with the ideaof typing rat her t han writing, or with t he techni-cal aspects of the equipment.

Most professionals described increased self suffi-ciency in document production as the greatest timesaving, as well as adding greater satisfaction tothe job. Without the need to rely on secretarialsupport to do drafts, rewrites, or make copies, theprocess becam e not only fast er bu t less st ressful,Secreta ries comment ed th at they believed t herewas less an xiety on t he pa rt of professiona ls, whoused to wait for typing, and less stress on secre-taries as a result.

Professionals noticed that deadlines on occasionhad moved up as the ability to meet them had im-proved. Senior staff said that they had becomemore conscious of time saved, and a s a r esult, de-layed making assignments knowing their staff members were able to meet shorter deadlines.Professionals described significan t changes in in-

dividua l writing style; word processing capa bilityenables them t o spend more time thinking abouttheir subject. Senior staff, again without excep-tion, suggested they were more likely to send adocument back to correct small errors or to addclarification because they knew it would take muchless time with the automated equipment.

Several professiona l and secreta rial sta ff mem-bers were more satisfied with their jobs becauseaut omat ion let t hem do th eir work better. Somesecretaries performed more typing in the sameamount of time; others spent less time typing thesam e am ount of work. Some were dissa tisfied be-cause the job was uninteresting, especially those

whose workload h ad been dr ast ically reduced. Ina few insta nces, secretar ies had been able to ta keon new responsibilities such as research and writ-ing. If that becomes general, the secretarial staff may seek increased pay to reflect these responsi-bilities. But becau se USTR is a sma ll agency, op-portunities for advancement may be limited.

Productivity

USTR has a growing workload and the need tokeep u p with changing conditions. The “product”of the agency is, at the broadest level, advice tothe President regarding trade policy options and

choices, an d ser ving as “honest broker” betweenthe ma ny groups with an interest in t rade policy.When measuring the effect of office automationat USTR therefore, one must evaluate fairly in-tangible products—coordination of discussion, in-terp reta tion of facts, an alysis, an d th ought. More

App, B—OTA Case Studies q 343

and bett er data bases have contr ibuted greatly toeffectiveness in carrying out this mission.

Increas ed productivity at t he pr ofessiona l levelwas achieved by the use of the electronic mail sys-tem. The ability to send and receive documentsby electronic mail has improved the process of com-ment and clearance. The time for review and clear-ance of trade policy positions and papers had beencut in half in some cases.

Professionals felt that they could get their work done much faster , which a llowed them to clear u pbacklogs, Without exception, respondents describeda decrease in real time of 50 percent in completionof projects.

Organiza t ion

As yet it is impossible to relate hiera rchical or-ganizational changes within USTR to the intro-duction of office automation, No major organi-zational changes have taken place since 1979.

However, a nu mber of esta blished office relation-ships have been affected, especially between profes-sional and secretarial staff members, As manyprofessionals become adept at performing theirown word pr ocessing, some secreta rial st aff havebegun devoting more of their time to other work while others have become dissatisfied with their

jobs and the lack of challenge.The increased knowledge and contact with others

in the trade community may change the career ex-pectations of the junior staff. When senior staff become more familiar with the potential of the sys-tem, they may assume more direct responsibilityfor day-to-day conduct of operations.

C o n c l u s i o n s

The agency has a better understanding of issuesunder negotiation because of their automated sys-tem tha t provides more pert inent informa tion ona wide var iety of issues. Sta ff productivity has in-creased, the number of meetings required for doc-ument clearance has been reduced, and th e timesavings allow them t o keep up as issu es develop.The professional staff are faster to act and react,ha ve been able to adap t to expanded r esponsibili-ties and have better data to support their analyticwork. The secretarial staff produce work of higher

quality and the office runs more smoothly.The system is a ppreciated by all of th e employ-ees in this agency, although to varying degrees.The sen ior level employees do not h ave mu ch oc-casion to use it, the professional employees areinnovative and interested in their use of it, and




the support staff’s experiences range from bore-dom to hope for advancement.

The results of this study, while not unexpectedor dramatic, provide indications of the types of personal and organizational changes that haveoccurred with office automation and also provide

points of departure for speculation on futurechanges that might occur as personnel becomemore familiar with the system capabilities.

The I m p a c t o f Offi c e Au t om a t ion on th e

Mun ic ipa l Work For ce of New York Ci ty’

In t roduc t i on a nd Ba c kground

The primary theme evolving from a study of theoffice aut omat ion pr ocess in t hr ee agen cies of th eNew York City Government is tha t ma na gementstrategies and agency goals play a fundamentalrole in determining the effectiveness of public sec-

tor as well as private sector office automation. Im-proved productivity in terms of increased outputwas achieved in these agencies. However, twodifferent methods of automating services haddifferent effects on output, worker satisfaction, andquality of service. The assembly line style oftenused for processes which can be mass-producedand processed repetitively, resembles t he indu s-trial assembly line in its effects. Customized serv-ices that enable creation of databases for new ana-lytical purposes were generally more successful inincreasing outpu t, worker sa tisfaction, an d qua l-ity of service.

This study looked at four occupational catego-

ries—clericals, paraprofessionals, professionals,and managers. The principal findings were—an in-crease in work output; a perceived increase in thequality of outpu t; and under certa in circumsta nces,evidence of the creation of new work. Reduced em-ployment has been an objective of the New York City Government since fiscal problems of the mid-1970s and the cost-justification of acquiring auto-mated equipment has included a reduced work force.

The three agencies studied in New York Citywere the Human Resources Administration (HRA),the Department of General Services (DGS), andthe Department of Finance (DF).

The HRA is the largest municipal agency in thiscity, with 24,000 employees an d a budget of $4.1billion. It serves over 1.5 m illion p oor an d elderly

‘This sec~ion is based on research performed for ()’f’A b}’ Joan(lreenbaum of (’ity IJniversity of New York, an{i (’ydney Pullman andSharon %ymanski, The I,abor Institute, New }’ork (’it}’.

through public assistance, food stamps, Medicaid,day care, shelters, protective services, and jobplacement and training. Before 1979, all typingwas done manu ally. The massive paperwork a ndspiraling costs caused HRA to develop a plan toautomate. Today, 23 office systems serve 39 of

the 52 program and administrative support areas,providing word processing, data processing, andcommunications in a single system.

The DGS provides support services to other cityagencies, such as distributing and maintaining mu-nicipal supplies and services, producing all citypublications, constructing and maintaining thepark and street lighting systems, providing all con-struction services, maintaining city vehicles, andmanaging the public radio station. DGS had 2,500full-time employees an d a budget of $350 millionfor fiscal year 1984. In order to improve its servicedelivery, productivity, cost conta inmen t, an d rev-enue enhancement, DGS setup a Technology Task

Force made up of technical managers from vari-ous un its. All employees were encour aged to ta kepar t in t he selection a nd imp lement at ion of officesystem s. Word pr ocessing was first int roduced in1980. Two systems with 23 terminals in two build-ings performed straight word processing tasks.The first users were volunteers. In a short time,the dem and from workers resultecl in m ore ra pidintroduction of the systems. The system has beenupgr aded twice since 1980, evolving from a wordprocessing system to a hybrid system, which in-cludes data processing applications. The systemis also linked to the city’s central mainframe com-puters to further integrate word and data process-

ing applications.The DF a dministers a nd collects all taxes, real

estate assessments, and other city revenue. Itmanages and invests city finances and adminis-ters the payroll. Office automation systems havecont ribut ed to the depar tm ent ’s effort s to reachits revenue goals. Before 1980, 90 percent of thework at the DF was batched, typed. and handwrit-ten. Over 1,500 installment agreements for tax pay-ments were tr acked on 3x5 cards. The quality of letters mailed to taxpayers and the productivityof the workers was low. There were few produc-tion reports or controls and a general lack of man-agement control. Since 1980, a centralized word

processing pool and a microcomputer center fortra cking of tax r ecords and producing reports ha sbeen created. In 1984, the DF had 34 micros, 20word processors, and 40 to 50 terminals connectedto the mainframe. The agency is requesting 80more microcomputers.



App, B—OTA Case Studies 345 —

Me t hodol ogy ing that there is a trend towards more administra-

te approach for this case study was to locatetion a nd super vision, which m irrors trends in the

a n umber of distinct mini-case sites within t he mu -private sector.

nicipal government in which to conduct datagathering workshops. A matrix was developed of

the following variables—type of office automation,date of system introduction, and agency servicetype. Interviews were conducted with appropri-ate commissioners, city directors, departm ent man -agers and supervisors, and union officials to gatherbackground information and to gain acceptancefor the study.

Data gathering workshops were conducted foreach group of employees (clerical, paraprofessional,professional, and managerial), except in the caseof mana gers using personal comput ers, where itwas more appr opriate to carr y out individual in-terviews, Par ticipant s were selected on t he ba sisof the length of time in t he depar tmen t, with pri-

ority given to employees who had been in theagency before the introduction of the new system.Participants in the workshops filled out activitysheet/questionnaires on background and educa-tion, job content, work organization, history of work site, health and safety, and their recommen-dations. Discussions then facilitated an interchangeof information about each subject area and greatlyenhanced the information gathered.

E mpl oyme nt E f fe c t s

The increase in output has r esulted in some re-duction in st aff and ther e are plan s for futur e re-ductions. City officials mu st cost-justify their re-quests for additional automation and clerical work is usually targeted for cost savings, because it iseasy to demonstrate that data-entry and word-processing functions can be performed with fewerworkers. The Financial Plan: Fiscal Years 1984-1988 for th e th ree agencies studied projected r e-duction of 13 administrative positions in HRA, 36sta ff positions in DF, a nd 15 clerical positions inDGS. These reductions would be achieved bymeans of attrition.

As a percentage of full-time city workers, officeand clerical workers declined from 19.7 percent in1982 to 18.6 percent in 1983, although t here h ad

been increases between 1980 and 1982. The per-centage of professionals has declined while para-professionals increased, The most consistent increaseis in the category of ‘‘Officials and Administra-t o r s , which increased from 4.8 percent in 1979to 8.9 percent in 1983. The total number of cityemployees did not increase nearly so much, indicat-

Work Organiza t ion , Job Sa t i s fac t ion

a nd t he Work i ng E nvi ronme nt

The overa ll response toward s office t echnologyby workers participating in this study was favora-ble. Clerical workers tended to define their satis-faction in terms of release from tedious manualwork. Word processing operators found automa-tion “more fun” than previous work and perceivedthat work quality was improved. Professionals’favorable ra ting is related to the amount of infor-mation that technology makes available, the speedand cont rol it pr ovides and t he potential for n ewuses of information.

Worker participation in the introduction and useof office automation was most limited in work unitsin which th e ta sks were pr eviously ra tionalized.The au tomation intensified th e ra tionalization of th ese ta sks. Agencies tha t h ad m ore flexibility inthe services they offered, experienced greaterworker involvement in th e planning an d implemen-tation process.

Dissat isfaction was expr essed by clericals, spe-cifically with increased amount of work, routineand boring tasks, lack of promotional opportuni-ties and physical problems such as eye strain,headaches, backaches, and stress, In a centralizedwork organization in the DF, the process involvedmoving the typists and support staff in 30 work units to a windowless basement r oom with inade-quate ventilation, lighting, and noise control. Type-writers were removed from work units so that allcorrespondence would flow through the centralpool. Correspondence was standardized to includeboiler-plate paragraphs. Management sees the ben-efit as a more integrated work process that canrespond to set quotas, increased quality of work that elicits more confidence from the public, andincreased t ax collections. The women in th is unitfelt that they were doing more work for which theywere not being compensated, that the work wasboring and that learning new skills was thwarted.An unintended side effect was that to overcomelack of an adequate supervisory system, the womenha d to work togeth er t o coordina te a nd organ izetheir work; this provided them with a feeling of ‘‘running the show’ albeit without adequate train-ing and supervisory assistance.

The DGS reorganization resulted in small clus-ters of women working as a team with consider-




able control over all facets of their job. The micro-computers were introduced as a resource and toolfor those who chose to use them. Training was pro-vided to all employees by an agency-wide trainingcenter, with no segregation by level of employees.The managers of this agency see the lines between

clericals and managerial workers blending suchthat a clerical worker is not “only a clerk” andtha t m ana gers increasingly take on more clericalduties.

A correspondence was found in this study be-tween th e nu mber of hours clericals spent on theequipment and complaints of eye strain, backache,stress, and fatigue. Paraprofessionals overwhelm-ingly linked increased str ess with a n increase inworkload and to an increase in su pervision in theform of more required reports. The poor qualityof the working environment contributed to healthand morale problems. In most instances, clericaland para professiona l workers were not consulted

about how the introduction of office automationwould affect the design of the work process andwork ar eas.

Unlike clericals, professionals tend to use microsfor inquiry that is immediately job specific. Allof th e professionals liked th e equipment, but theamount of work they do has increased. Case-workers in HRA expressed frustr ation with ha v-ing to spend additional time checking on the infor-mat ion th at is generated by the aut omat ed formssystem. Before automation, they were responsi-ble for determining what basic information wasneeded an d wha t forms would be sent out to ob-tain it, Now, a new clerical position and a para-professional position are responsible for these pro-cedures. The caseworkers feel tha t these workersdo not under stan d what informa tion is importa ntto the process and tend to make more mistakes,increasing the workload of the caseworkers.

Tax auditors in the DF, question the effective-ness of the automated system since their proce-dures ha ve become fragment ed an d, according t othe auditors, more clerical in nature. They acknowl-edge that the computer generates more informa-tion quicker and provides more control over thesta tu s of each case, but feel ther e is less need fortheir professional training and judgment.

Analysts in the DGS quickly discovered thespeed and wider range of reliable information thatwas available to them. They cited two results—apower shift in th eir favor (they h ad m ore da ta onthe various work units they visited) and an enlarge-men t of their jobs to include pr oviding more tech-nical support. Analysts felt peer pressure and self pressure to become more computer literate. Spend-

ing so much time on th e system caused one an a-lyst to say, “I need to pause occasionally to remem-ber tha t I’m a h uma n being. ”

J ob Cont e n t a n d Oc c upa t i ona l Mi x

Whether skills increase or decrease with the in-troduction of office automation did not seem sopertinent in this study as did a redefinition in themeaning of skill. The traditional view of clericalwork sees it as a series of routine, highly repeti-tive tasks that must be incorporated into machinesto impr ove efficiency an d p roductivity. However,there are “invisible skills” that cannot readily bediscerned by an observer but are crucial to thesmooth functioning of the organization. For ex-ample, coding and entering information from themail into a CRT terminal requires knowing a vastnum ber of current codes and n umerous outdat edcodes which mus t be upd at ed. The process is also

dependent on the worker’s sequent ial decisionm ak-ing and actions. Since the informa tion entered byclerical workers instantaneously becomes part of the database from which other information, con-clusions and actions will be generated, the respon-sibility of the position has increased. The clericalsorganized into pools and clusters found an in-creased need for communication with many differ-ent work units an d for judgments as t o the mea n-ing of the job orders. These “invisible skills” tendto be used for job descriptions, evaluations, andsalary decisions only for professionals.

Tax auditors felt tha t t heir jobs were being rede-fined by “clerical” tasks. With the new system,

their tasks involve checking various forms gener-at ed by the compu ter , reviewing oth er a udit or’swork for errors and lack of clarity, and screeningbatches of tax returns.

The changed nature of the work has not changedeither the job descriptions or salary level for audi-tors, but such a possibility is reflected in the historyof the change in the job content of caseworkers,classified as professionals. During a restructuringin 1971, the information gathering portion of thecasework ers’ jobs was rem oved an d ass igned tolower paid positions. Many caseworkers were reas-signed as lower paid “Income Maintenance Spe-cialists’ and ‘Eligibility Specialists. As a result,the 10,000 caseworkers in th e city ha ve been r e-duced to 4,000. No caseworkers have been hiredsince 1972 and t here h ave been virtua lly no pro-motions.

Job mobility for clerical workers was dramati-cally changed in the 1970s when steps in the cleri-cal career ladder were eliminated by collapsing



App. B—OTA Case Studies 347

some job titles and eliminating others. Becausethe city is in the process of adapting to office auto-mation, job titles, and job lines are in flux and con-tinue to be “worked through” by the city and theunion.

Productivity y

Some managers in the New York City offices feeltha t to increase efficiency in the production of theirservices, as many clerical procedures as possiblemust be standardized and automated. Other man-agers see no reason to focus on developing wordprocessing skills, much less job ladders, becauseth ey believe fewer word processing clericals willbe required when more managers learn to use

microcomputers.All workers perceived an increase in work due

to a combinat ion of factors including work in ten -sificat ion, crea tion of new work, r eorganizat ion of

work and need for more error correction. For cleri-cals a nd most par apr ofessionals, th e increase inoutput came when automated systems were usedto incorporate large amount s of previous m anu alwork into preceded forms and standardized let-ters. This meant the elimination of handwritingand typing hundreds of forms and letters per week and a reduction in the time spent hunting for filesthroughout the work unit, which spans severalfloors. But although clerical workers were en-thusiastic about being released from the manualprocesses, many of them now spend almost theirent ire day in front of VDT screen s, In centr alizedwork units, the integration of the process gives

the ma nager more contr ol through th e establish-ment of work quotas.In a decentralized reorganization, the change in

workload resulted from a unique set of circum-stances—managers were performing their ownwriting and editing to such an extent that the sec-retaries were bored from lack of work, They re-quested extra work from other groups inside andoutside the agency.

Tra ining

Clerical workers who primarily performed data-entry functions were given only a few days train-

ing in entering codes into the system. They feltfrustrated about their lack of knowledge of the sys-tem and had a low level of motivation. They re-ceived no word processing training and there wereno plans t o offer t hem furt her tra ining. Anothergroup of clericals whoc) were former secretaries hadbeen sent to training class when they were placed

in the word processing pool. Informally they ex-changed information to solve problems collectivelyand learn new word processing procedures, butthey felt better training would have reduced thetime spent in problem solving. Secretaries in a thirdgroup, who had organized their own word process-

ing cluster and part icipated in t he decision a boutsystem purchases, were satisfied with the train-ing they had received.

Training in DGS encompassed a broad spectrumof courses for all em ployees; intr oductory class eswere available for both clerical and managerial per-sonnel. A grea t dea l of on-the-job informa l tr ain -ing took place. The training center for this agencywas funded in part by outside grant s and a lso oper-ated a retraining program for public assistancewomen , who were tra ined in word processing an dgiven temporar y tra inee jobs within t he a gency.The program is apparently very successful and theaccess of clerical workers to a wide range of courses

seemed to enhance their motivation and self-esteem.While professionals complained most about lack of time to learn new applications, they were gener-ally pleased with t heir tr aining. Complaints cen-tered around their reliance on a minicomputer net-work and a mainframe database which kept themdependent on the technical staff to solve problems.“Downt ime” due t o an expan ded commu nicationssystem exacerbated this problem.

Managers, like professionals, said t hat they weretoo overworked to take advantage of formal train-ing programs but felt some peer pressure to doso. In order to overcome this problem, courseswould have to be acknowledged as having priority

over some work.

C onc lus ions

This case study paid par ticular a tten tion to theinter action of office au toma tion an d chan ges in job

content, work organization, and the physical envi-ronment. An overall increase in the output perworker was found; however, this was not neces-sar ily followed by an increase in th e qua lity of serv-ices produced.

Job content was changing; the redefinition of skill caused an increase in the number of definabletasks performed and a shift in the type of tasks.Office automation enhanced the need for concep-tua l knowledge and abstr act think ing at a ll occupa-tional levels. Cha nges in job conten t a re a ffecting

job ladders and promotional opportunities. Thereare few promotional paths that could be used toencourage clerical workers to use their invisibleskills to gain entry to high-level jobs.

Automation of America's Offices, 1985-2000

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