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Accounting Representation and the Road to Commercial Salvation

Mahmoud Ezzamel Cardiff University

Simon Lilley Leicester University

Hugh Willmott Cambridge University We acknowledge the research support provided by the Institute of Chartered Accountants in England and Wales (ICAEW). An earlier draft of this paper was presented at the EIASM Workshop on Writing, Rationality and Organization, Brussels, 21-22 March 1994. The authors are particularly grateful for the helpful suggestions made by Bob Cooper, Anthony Hopwood, Rolland Munro and two anonymous reviewers. The usual disclaimers apply.

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ACCOUNTING REPRESENTATION AND THE ROAD TO COMMERCIAL SALVATION

Abstract The paper examines the contribution of inscriptions, in particular new accounting measures, to a process of transforming the ethos and operations of `Britech, a high tech division of a major British manufacturer. Focusing upon the increased and changing use of inscriptions at this site, we interpret them as moves to signify and facilitate an increasingly commercial orientation towards activities. We describe how new writings, particularly new management accounting measures, were deployed to create spaces of representation in which traditional views and practices were problematized in a strategic effort to constitute a new organizational reality for Britech employees. The new systems of inscription, we argue, were a key resource in the translation of established practices. This translation was facilitated by writings that expressed and promoted conditions of accelerating change that were prompted by pressures to avoid closure or divestment of the Britech assembly site. Analysis of the inscriptions is thus of significance for understanding how a human agency deemed capable of enacting the new commercial agenda at Britech is constituted and reproduced.

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ACCOUNTING REPRESENTATION AND THE ROAD TO COMMERCIAL

SALVATION

Despite the importance of writing1 for the communication of information and the promotion of a

common frame of reference, its presence and effect in organizations has attracted little direct

attention from researchers.2 Although accounting inscriptions such as budgets, performance

measures, periodic reports, memos, etc. are widely deployed inter alia in the enactment of what is

accounted for in organizations, and have been extensively researched as sets of techniques and

practices that impact on organizational functioning, the particular attributes they have, and their

power effects as forms of writing per se, remain to be researched adequately (but see Latour, 1990;

Robson, 1992). Moreover, our knowledge is limited concerning the extent to which accounting

inscriptions permeate a particular organizational layer more than others, and the particular

discontinuities (e.g., changes in ownership structure or market conditions) that condition, enable or

impede changes in the form of existing inscriptions or the emergence of new written measures.

Our principal concern in this paper is to explore the roles played by new forms of written

representations, in particular accounting inscriptions, in contemporary work organizations. We

examine the inscription and reception of new performance measures at Britech (a pseudonym of a

division of a British high-tech manufacturer that produces/assembles small numbers of very high

value products that are sold in global markets) that heralded and promoted what we characterise as

a more commercial agenda. During the three years of our study (1993-96), Britech was in the

process of becoming designated as a distinct and separate space of representation (Miller, 1992;

Miller and O'Leary, 1993; Carmona et al., 2002) responsible for its own performance in the

market, having previously been an integral part of a sprawling conglomerate. In the early 1990s,

following a significant reduction in public contract business, the site had been regarded as

uncompetitive with a very uncertain future, and a variety of initiatives were under-way to save it

1 We take a broad definition of `writing here, encompassing a range of representational forms including the alphanumeric and the graphical, whether paper or screen-based. 2 The power of writing (Derrida, 1976; 1978; Ong, 1982; McArthur, 1986; Goody, 1986; 1987) is evident both in the importance that is attached to putting it in writing, and in the reluctance of those seeking to keep their options open to commit themselves to the relative permanence and presumed unambiguity of the written word. Writing is a systematic conversion of the power relations between controller and controlled into written words (Foucault, 1974); indeed, inscribed texts are fundamental facts of power (Nietzsche, 1930). Writing is subject to processes of interpretation, and it is therefore necessary to pay attention to how inscriptions are received and deployed.

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from closure. In addition to internal changes, negotiations were in train to transform the site into part

of a joint production venture with a foreign partner3. This anticipated selling of the organization

served to intensify the need for internal transformation.

Focusing upon the emergence of diverse written performance measures in Britech, we seek to

examine the potential of writing for establishing inscriptions that are generally presented by managers

as an impersonal, neutral set of mechanisms and metrics for removing unnecessary ambiguity and

wastage of resource. We explore the impact of: (i) changes in the form of inscription and

representation at senior and middle management levels; and (ii) the introduction of new inscriptions

on the shopfloor. We locate the emergence of the new inscriptions within the context of efforts to

secure capital needed to re-equip and re-organize Britech. We read the new performance

inscriptions as devices for supporting and justifying the attraction of levels of investment necessary to

refurbish the plant and thereby maximize the chances of its profitable survival.

We do not, however, view these inscriptions as purely ritualistic formulae developed to impress or

appease senior managers of the parent company. At Britech, the extensive use of writing was

accompanied by a reorganization of the shopfloor into teams with operational responsibility for

adhering to the targets marked out in the new inscriptions. This move identified workers as

individuals capable of interpreting complex processes, making choices and exercising discretion to

ensure that targets were met. Hence, the inscriptions were present and influential on the shopfloor in

articulating and constructing a new from of power/knowledge. This move went well beyond a

Taylorist intention to appropriate employees knowledge and place it exclusively in the province of

management. For the new manufacturing practices at Britech sought to discipline employee

knowledge within a series of inscriptions designed by managers but shared with and enacted by

workers. Their purpose was to secure managerial control over production processes but in a way

that was intended to involve employees in the exercise of managerial discipline, enshrined in the

inscriptions, by inviting them to participate in planning and organizing their work as well as

monitoring their own achievement, rather than to distance or alienate employees from its operation.

3 Initial attempts to form a joint venture with one foreign partner fell through at a relatively early stage of the study. Britech eventually became part of a European consortium of three partners that sought to develop a new generation of products. Towards the end of our study, Britechs higgest and most established competitor ceased trading and thereby at a stroke secured the companys future.

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The inscriptions contributed to the development of a survival ethos that emphasized the necessity of

shifting rapidly from a factory regime based on cost plus defence contracting to a regime that

aspired to (re)organize the manufacture of products at commercially viable levels of cost, quality and

delivery. These manufacturing practices were greeted by many employees with a degree of

scepticism about the new regime and the prospects of its smooth and full implementation.

Accordingly, we do not regard employees as inscription dopes. We recognise how they are

capable of developing alternative readings of the new inscriptions - as nonsense, the latest fad or

old wine in new bottles (Bougen, 1989), or indeed as part of a managerial offensive intended to

secure commitment to the demands of an intensifying agenda of commercialism (Munro and

Hatherly, 1993). By attending to the promotion of new forms of communication and accountability

through writing, we note how the operation of these measures could be curtailed and their effects

could be contested.

Our empirical material is drawn from several sources: (i) over 50 semi-structured interviews, each

lasting between one and one and a half hours, with senior managers, middle managers, shop

stewards, supervisors and fitters in Britech; (ii) numerous internal documents; (iii) repeated visits to

examine the organization and use of inscription in the factory; and (iv) press cuttings. Therefore, we

draw upon both actual inscriptions (ii & iii) and accounts of these inscriptions by internal (i) and

external (iv) informants.

The remainder of the paper is organized as follows. In the next section, we describe the conditions

claimed to necessitate sweeping changes in culture, processes, structure, and accounting at Britech.

We then analyze the shift from production-push to build-to-order and the emergence of the new

commercial agenda. Focusing upon a particular inscription - that of a motorway, we explore how

this was deployed to emphasize the interdependence of processes, technical literacy and commercial

urgency. Then we discuss the introduction of new accounting measures and practices before

examining the key role played by human agency in these processes and commenting on the

possibilities of resistance on the shopfloor. Finally, in a concluding section, we elaborate our

understanding of the varying visibility of the power of accounting inscriptions.

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THE PREVIOUS CONTEXT OF BRITECH

Britech has been one of the pioneers in its industry in terms of technology, product design and

reliability. Its commercial activities began in the 1920's as a stand alone business and the company

continued to grow over the next five decades. In the early 1980's, Britech was acquired by a large

company, which itself was formed in the 1970's through the amalgamation of a disparate group of

businesses. The parent company was noted for the quality of its engineering skills while exhibiting

some financial weaknesses. At the time of Britechs acquisition, these weaknesses were not seen by

management to pose a problem as the parents major client (Defence) indemnified losses by paying

prices based on an agreed formula of cost plus. However, following defence cuts in the 1980s,

defence contracting became more competitive. This placed additional risk on the parent company

that sought to shift its focus towards the civil market.

In order to strengthen its financial position following the removal of loss indemnity, the parent

acquired a motor manufacturer (3 Billion turnover) and a property business (280 Million).

However, these acquisitions became a drain on cash as their assets were tied to the business, a

problem that was compounded as the property business suffered from a market collapse during the

late 1980s. To improve cash flow, the parent launched a rights issue of over 400 Million, but the

financial situation continued to deteriorate. By the end of 1992 group losses were nearly 200

Million, the share price had dropped from 6 to 1 over twelve months, annual interest payments

approached 200 Million, and cash flow shortages became acute.4

In 1992 a new management team was appointed in the parent company with responsibility to

improve the financial position and to divest non-core businesses. Britechs customised product

range, which by this time was enjoying strong demand that exceeded its production capacity, was

defined as core business. Yet, Britech was also a major loss maker, mainly because of fierce

competition from a (heavily subsidised) European manufacturer but also because its activities were

deemed to be extremely costly. To minimize liabilities arising from commitments to past customers

4 As the recession struck, many companies leasing some of the parents major products returned them. The parent could only obtain poor lease rates for their product, rates which could hardly cover its own lease payments. The parent was initially effectivly indemnified against losses as its sales were at cost-plus but because of a significant change in the market from defence to civil deals, this indemnity disappeared when its sales became based on fixed prices.

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(e.g. ongoing maintenance, buy back), the parent partially disengaged itself from Britech by

converting it into a stand alone subsidiary: [the Group] couldn't stand the losses and basically....the

level of resource that was out there....was horrific as well (Accounting Manager). The creation of a

separate company was intended to isolate these problems and to provide maintenance support to

past customers:

[We] have a lot of products that are still being used by customers and they need supporting and maintaining. So who else better to do that than [Britech]? So that's another rationale to keep [Britech] going, to service the fleet [already out there]. (Senior Manager)

Some long-serving senior managers perceived the separation of Britech from the parent company as

a damage limitation move for the group. It was also claimed that recent recruits to Britech were

determined, with the support of the parent, to explore avenues that would enable Britech to fly

rather than fail. The new recruits, appointed in early 1993, included: one Senior Manager drawn

from the accountancy profession as well as a Managing Director, a Senior Production Manager and

a Senior Human Resources Manager who were all recruited from the motor car industry. A number

of middle managers were then recruited from a wide range of industries.

The other main prong to Britechs plan was the intent to attract, through a joint venture, a cash-rich

partner who was under-resourced in technological and manufacturing expertise. This partner, it was

hoped, would finance the transformation of Britech into a viable enterprise in exchange for the

acquisition of expertise that, in the medium term, would enable it to develop its own manufacturing

capacity. Such a joint venture (jv) was seen to be the only alternative to the unmitigated and terminal

application of hard love (Legge, 1989) by the parent organisation: The rationale for the jv is

certainly that [the division's poor results]. I think in simple terms [the group] had two options, close

or sell, simple as that....[The site] has made losses under [group control], I suppose it's a cash

drain....If you look at the `92 accounts there was provision in that which was one option for the site.

If we don't have option A we have option B. It's as simple as that really. But option B [i.e. closure]

isn't the option. Option A is the joint venture ongoing, that's what we're working to (Senior

Manager).

The prospects of entering into a joint venture were, however, uncertain and, in any event, were

understood to complement rather than substitute for a programme of strategic reorganization of

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Britech. Central to this drive to restructuring Britech was the problematization by the new managers

of the legacy of organizational, engineering, and accounting practices in Britech. Table 1 below

contrasts this problematization against the recipes promoted by the new managers to deal with these

problems.

INSERT TABLE (1) ABOUT HERE

The new managers diagnosed Britech as having an outdated functional structure that militated against

concern for processes, an oral culture that vested engineering knowledge in few experts who in turn

controlled work organization; fragmented operations and failure to recognise their holistic nature;

dominance of engineering mentality over pressing commercial considerations; and building for stocks

rather than producing to order. Previous engineers were criticized for being obsessed with purely

technical matters and driving the business primarily by these considerations without paying attention

to commercial imperatives - for example, by ignoring the cost of the components they designed. One

Senior Design Engineer, who has since retired recalled We just did what we thought was best from

an engineering point of viewWe were very much interested in the best structures without the

economics at all. Since contracts were based upon cost plus, there was no incentive to contain

costs or streamline established working practices so long as these delivered what was best from an

engineering point of view.

Previous management accounting practices at Britech were presented as built up from a function-

based organization and focused upon product cost, utilisation and efficiencies using manhours as the

only cost driver. The accountants were castigated for needing a dose of reality (Production

Manager) because they represented Britech as a fragmented set of functions instead of emphasizing

the holistic nature of the business. Middle managers also represented previous accounting reports as

having little value by claiming that they were accessible only to senior/middle managers or that the

reports simply sat on the accountants shelves. Although these reports seemed to have monitored

everything to death, they did not reach shopfloor operators except through oral communication via

cell leaders:

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[The old report] was of very poor quality. It gave you very little information. The information it did give you was very difficult to decipher and work with. It was very difficult to say to operators what we achieved this week and what we hope to achieve next week. (Middle Manager, our emphases)

In the remainder of the paper, we will focus on what we identify as key issues rather than follow

mechanically the order of issues listed in Table (1) above. We will argue that the new management

team set about to address the problems they had identified (see above) by: (i) evolving the new

vision that would guide Britechs future decisions; (ii) developing a new organization of work to

replace an out of favour functional structure; (iii) disembodying the skill/knowledge base, so that it

was liberated from the province of the individual barons of craft expertise and inscribed for all to

access5; (iv) redefining and inscribing task boundaries and businesses; and (v) evolving and using

new written performance measures commensurate with the newly established commercial agenda.

We address the first four issues in the next section, leaving the fifth issue to a later section.

FROM PRODUCTION PUSH TO MARKET PULL: THE EMERGENCE OF

COMMERCIALISM AT BRITECH

The Post-Disengagement Challenge: Divisional Vision and Accounting Inscription

The survival of Britech was in the balance following its separation from the parent, the loss of the

security of cost-plus defence contracting and the shift to producing for the more competitive civil

market. As one Britech manager observed of this shift:

We no longer have this one customer [Defence] that we work with on long time scales. They don't

mind if it takes you three years to do a [product]. You are now in the civil market where all they are interested in is the contract date [and] the price. And the price is determined by the market not what it costs.

The removal of the predictability associated with defence contracting was compounded by the

simultaneous removal of the protective shield provided by the parent:

Because we now stand alone we've not got the [group] piggy bank so we've got to be slicker, quicker.

We've got to be much leaner and meaner. (Senior Manager)

Early in 1994, a major New Business Initiative (NBI, a pseudonym) was launched by the Managing

Director of Britech through a video presentation, and in July 1994, it was printed in a booklet. In the

5 To disseminate and disembody skill and knowledge is to reduce the dependence of the organization upon the expertise of a few agents and thereby reduce their capacity to influence and control.

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NBI it was stated that: (i) We cannot expect [the parent] to support us indefinitely as a drain on the

companys resources; and (ii) We will need to convince our partners in the Joint Venture6 that we

are the best site to assemble the new product when it is developed - and to do this we need to be

world class in both efficiency and profitability. It was claimed that, given the recession and the

intense market competition, improvements in the financial performance of Britech could not be

achieved through increased prices; hence7:

If we cannot meet our profit targets from prices we are left with two alternative paths to follow: to cut our costs and bring in more revenues from other activities. (NBI Booklet)

The NBI document identified three business objectives for Britech: (i) to break even in 1997 and be

profitable thereafter; (ii) to be cash flow positive 1995 2000; and (iii) to reduce the working

capital needed to finance sales. Against these objectives, eleven key themes8 with their targets were

identified, each being included in the NBI with its own allotted champion manager. The themes were:

enabling people to maximize their contribution to achieve profitability; quality enhancement and

elimination of non-value adding work; reduction in unit cost of production; releasing potential and

contribution from facilities, assets and infrastructure; adding market value to products and services;

controlling cash; building to order; maximizing opportunities for revenue enhancement; effective

management of product and service change; product evolution; and spares.

For each theme, accounting measures were used to construct a scenario as to how, and by how

much, it would contribute to the business objectives of Britech. The theme on reduction in unit cost

of production, for example, had a target of reducing the Bill of Material cost by 19% on the previous

year in order to improve profitability by 36 million, and it spelt out clearly the key tasks from which

the specific contributions to this target were to be achieved. The spares business was to increase its

sales by 30%, reduce its cost by 25%, reduce its inventory by 15%, and increase its profitability

from 1 Million to 8 Millions. Project evaluation was to be performed in half the previous time at

one third of previous cost and cash flow was to be increased by 600 Million. Similarly, the build-

6 At that time, the prospect of establishing a joint venture with a cash rich but technologically less advanced partner seemed likely. 7Other internal documents also hammered the message home; in another glossy document the General Manager of the factory stated: "We must recognise however, that our costs are far too high in relation to the output we are achieving". 8 These were more like perfromance indicators, but in consistency with Britechs inscriptions we use the term theme throughout the paper.

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to-order theme had a target of reducing inventory used in final assembly from 155 Million to 65

Million by ensuring that 100% of orders are delivered first time, on time, every time. The previous

production method of production push was seen to have resulted in an over-reliance upon a rigid

and risky production plan which had ultimately faced the problem of finding customers. In contrast,

build-to- order was presented as a flexible, pull process that produced only as and when our

customers required it to. Evangelical9 Operations Accountants played a key role by working with

production and logistics staff to create credible scenarios of future costs. Such practices were

deemed essential when production had to be reverse-engineered from seemingly given pricing

constraints. As a result, these accountants were granted a much greater scope of influence over

production at the site compared to the accountants of the past (see below).

Restructuring Britech

INSERT FIGURE 1 ABOUT HERE

The new managerial regime at Britech sought to instantiate a (more) commercial rationality by

making production and pricing policies more responsive to the dictates of the market There are still

more [products] available than customers, which inevitably means that we are not obtaining the

prices we require for the [product] (NBI Booklet). It was anticipated that simply re-arranging

functional units - for example, by reducing their size or even by delimiting their scope - would be

insufficient. The old work arrangements, structures and measurements were construed by the new

managers as militating against attempts to improve Britechs capacity to compete on price and

performance. A document entitled Announced Organisation issued in 1991 stated We must

ensure a market led culture utilising a process based management structure aligned to the market

drivers and business objectives. It was claimed that production processes were masked within

functions (as a black box) as, at that time, the focus on functions was paramount. The functional

structure was considered to harbour undesirable features such as walls between groups, gaps in

activities, bottlenecks, a relay racing mentality in production, poor teamwork, power plays,

poor communication, frustration, long-lead time and financial waste (see Figure 1). One

Manufacturing Engineering Manager described how under the functional structure sporadic, very

high profile activities were pursued at a considerable expense to other activities. The new managers

9 In their own words.

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presented the methods of organizing production they inherited as something that inhibited innovation

and change because, as one Production Manager argued, they stimulated very little intellectual

challenge of where the front is and where the boundaries could be pushed forward. Another

Manager observed that as multi-functional teams began to be established on the shopfloor, while

preserving the functional structure it was getting harder to do our every day job as well as being

on all these multi-function teams. The shopfloor considered the functional structure to have been

chaotic and conducive to wasting resources:

Money was going down the drain unnecessarily. It was going down like water, right. And the main things were organised chaos, incompetence at a very high level, right and everything else that went with it. (Shopfloor Convenor)

One shopfloor Fitter likened the functional structure to the old military style, just order it kind of

style. He went on to suggest that under that structure the rationalising of activities was based on

the wrong arguments which focused on the function rather than the process. Another Fitter

referred to the paper chase required under the functional structure to order even very minor items

needed for production, such as bolts, which required the shopfloor to get a memo out from the top,

you know from the ivory tower, which had to be followed to the letter. This red-tape was

rationalised on the basis of seeking to keep inventory levels down, even though the volatility of

product demand required much greater flexibility in stocking such low-cost items, whose availability

was critical because if they were out of stock it took thirty-eight week waiting list to secure these

bolts, with the inevitable delay in product completion and delivery to customer.

INSERT FIGURES 2 AND 3 ABOUT HERE

The various changes introduced to reduce cost and waste were accompanied by a shift from the

discredited functional organization to a matrix structure presented via text, diagrams and pictures.

The new representation construed Britech as comprising six product-oriented processes: marketing,

selling, building, customising, customer support, and management and control. The processes were

to be managed by product teams and steering groups with functions being subsumed within

processes rather than the reverse, as was previously the case (See Figure 2). Clearly articulated

reporting relationships were drawn to emphasise interdependence and clarity of the parts of the

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matrix. The reporting relationships detailed several dimensions; in particular, relevant strategies,

objectives, funding, product requirements, budgets and resources, product building standards and

conflict resolution.

Having already diagnosed a lack of commercialism as the main ailment of past practices at Britech,

new prognoses were promoted: We must ensure a market-led culture, utilising a process based

management structure aligned to the market drivers and business objectives. (Internal Document,

1991). The new structure was presented as one that would ensure delivering customers

requirements and continual process improvement through measurement, enhance ability to react,

improve costs, and avoid political wranglings as the new structure was presented as seamless

and achievement oriented (see Figure 3). Multi-functional process management teams were

deemed to be the primary mechanism for managing a portfolio of activity (Internal Document,

1991). Management commended a metaphor of the motorway, emphasizing urgency,

interdependence, ease of reading signs, and speed of identifying the location of bottlenecks. This

was presented as a major break away from the relay racing mentality with its bottleneck problems.

The Disembodiment of Engineering Knowledge

Britech had three product lines in addition to providing substantial maintenance for in-service

products. Competition for the first product was fierce but the market was expanding, hence

managements ambition to maintain its 25% market share; in contrast, the market for the second

product was fairly stable and the aim was to increase market share from 7% to 20% (Internal

Document, 1991). The basic condition for continuation of activities at the site was identified as

making its operations cost-effective (NBI Booklet).

The key staff working directly on the product, beyond the design stage, divided mainly into highly

skilled electricians and fitters. The skills invested in electricians divided into two main types: basic,

almost household, type of electrical skills, and more product-specific high-level skills that directly

impacted on the safety of the product. According to one senior Design Engineer, the latter skills

involve testing the functioning, continuity and safety of various complex high-spec electronic devices

and electric wires, fitting them in the correct places, and ensuring that the aggregate electric load on

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the wiring when all the components were installed does not compromise product safety or violate the

threshold required to avoid the risk of fire. In the case of fitters, their skills were also of a very high

calibre. Although the various parts being assembled in Britech were manufactured elsewhere either

within the Group or by other suppliers, fitters had to test them carefully for functionality and safety

before they were put together. Moreover, the fitters skills involved getting the structure of the

product together, putting together pieces of equipment and hydraulics, pieces of wire of the correct

length, so that the product is correctly fitted together as a working system (senior Design Engineer).

As another Manufacturing Engineer summed up the importance of fitting skills:

Fitting is a bit of a worry. Youve got to make sure everything is connceted properly. Youve got to watch the hydraulic fluids and make sure everything is joined up on that. The other thing youve got to watch is when assembling the [product] youve got to make sure that one system does not interfer with another by abberation or rubbing, and youve got to make sure that if a fire occurred it would not spread from one system to another.

Any errors in fitting or electrical work, no matter how simple, would compromise the functioning of

the various components and electronic devices to catastrophic consequences, by malfunctioning or

giving conflicting, and at times, reverse directions to what is intended (Assembly Manager).

In the old days, very little inscription of work organization took place on the shopfloor. Technical

knowledge was entrusted to the working memories of factory employees and to their capacity to

organize work processes. Much of that technical knowledge was acquired through apprenticeships

that were frequently handed down father to son (Operations Manager), or senior operator to

apprentice (Design Engineer). One Fitter stated that in the old days he had to aquire and retain a

knowledge of exactly what to do and the order in which the different pieces had to be fitted:

There was nothing there to tell me what to do. I just had to know what to do. You never saw a design engineer, unless you had a real specific problem where you had to drag him out kicking and screaming to come and look at the [product]. And you were expected to carry the decision making process over every single facet of the [product].

Thus, technical skill was vested in individual operators rather than disembodied as a set of

procedures that can be taught to newcomers in a systematic way. Since only those shopfloor

workers who understood the manufacturing and assembly activities knew in any detail how the job

was progressing, it was possible to concoct plausible stories that managers were unable, and

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perhaps unwilling, to challenge. Managements dependence upon shopfloor workers arose from the

embodiment of expert knowledge in craft technology and its skilled operators. Management, it was

claimed, neither had good knowledge of individual tasks nor a mental map of how the tasks were

woven together:

[In the old days] You knew what you could get away with. You knew when you were personally interrogated, you knew what your particular experience was of it. You made sure that you could show him [the superior] anything that he wanted to know. But thats the thing. You were the technical expert and everybody accepted it and they knew it. That would never happen now. The manager would never ever get in that position. (Engineer)

Even when some fitting instructions were written down in manuals, these seem to have been mainly

for external legitimacy In the past the starting point was pretty much the way we used to do service

bulletins and maybe to a certain extent to do the bulletins for our exterior consumption

(Manufacturing Engineering Manager). As Ackroyd and Lawrenson (1996, p.182) have observed

of craft technology: Worker(s) autonomy extended to the task of dividing work between

themselves, coordinating production activities between different skills, and between workers with

different levels of skills.10

To emphasize the oral, in contrast to the written culture of the old days, one Manager said that

once a fortnight the production manager, who was an old war horse from the track, would come

down and talk them [the shopfloor] through the history stage by stage and the lads would say where

they were up to. Referring to many of the charts installed on the shopfloor recently, he recalled the

practice in the old days:

No, we did not have any of these charts. All we had was this machine. It was one of my things that I did as a technical expert to understand the way that [the product] went together. Nobody told me. I just had to know it. There was nothing there to tell me what to do.

INSERT FIGURE 4 ABOUT HERE

10 This understanding, and the risks posed to its perpetuation by writing, is not foreign to those who participate in such systems. Consider, as a dramatic illustration, the following excerpts from the nineteenth century member's pledge to the Tin Plate Workers Society (from an exhibit at the Pump House Peoples History Museum in Manchester, 1994):

I will never instruct any person in the art of tin plate making... I will never make known any signs, tokens, passwords, or write any information respecting this Society, on stones, sand, wood, tin, lead or anything visible or invisible to the eye... If I reveal any of this solemn obligation, may all the Society disgrace me so long as I live, and may what is now before me plunge my soul into the everlasting pit of misery.

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The past trusting of memory was perceived by the new managers to have preserved the status

quo, allowing those with expertise to control the organization of work in sub-optimal ways. The new

managers sought to render the process of production more transparent and manageable through the

use of new inscriptions - in the form of shopfloor layouts, signing, and the use of highly detailed

planning sheets and progress charts that signalled quickly and clearly problems and bottlenecks.

Technical knowledge now had to be coded and inscribed in detail: To protect ourselves we have to

have it [technical knowledge] down in writing, every thing down in infinite detail and he [the

operator] has to work to the instructions like a trained monkey (Manufacturing Engineering

Manager). One Manufacturing Director characterised the new philosophy as:

We took the approach to attract a number of individuals from a wide range of industries to essentially seed in the middle level management at that time a change in thinking and the ability to challenge the black art of [product] construction and the heritage that had allowed a number of processes to evolve almost unchecked for such a considerable amount of time, such that they actually became the businesss biggest constraint.

New knowledge - whether engineering, commercial, financial or managerial was identified as a

key driver of Britechs future activities. In what was dubbed The Process of Process

Improvement, reform was seen to depend upon, and be facilitated by, rendering visible and explicit

- through writing and modelling - as much as possible of what previously had been tacit and

beyond the purview of formal procedures (see Figure 4).

The codification and depersonalisation of knowledge was intended to translate previously hidden

and implicit knowledge into a written form that is visible for all to see and share:

I dont like any one person knowing everything thats going on. I would rather everybody had access

to the visibility so that they know exactly what is going on. People still say understanding whats going on is the biggest problem. And there is no reason now for anybody not to know what is going on; the cell leaders and everybody else carries out the weekly briefs, the cascade briefs and everything else that we brief. (Senior Production Manager)

It was claimed that changes in production technology had resulted in much greater interactions and

information-sharing than previously: There are thousands of such potential interactions to take into

account in building [the product] and the complexity has evolved beyond the point when any single

individual can understand it (Senior Production Director). In a document titled Process Modelling,

Review and Improvement, a chart was prepared, and widely circulated, with the aim of

17

emphasizing both knowledge de-personalization and its importance for the effective management of

interdependent activities. Modelling and business knowledge was called upon to inscribe and define

current processes. Once defined in writing, current processes were to be analyzed using business

knowledge; process metrics were to be developed; required processes were to be defined; and

changes in plans and processes were to be effected. In short, knowledge of the production process

was to be disembodied. Charts were prepared for each process:

Two of my values are visibility and shadow boards. I like to make things visible, cos if people can see that its visible, this is what this is about. The business awareness cell, the quality improvement cell and this, if you like, control centre are themes which I established to meet a requirement for that and the same theme has been picked up on now on employee communications. You can walk now up to the whole of this site and see different areas responding to different requirements as far as visibility is concerned. (Senior Production Manager)

One way of de-personalizing and visualizing knowledge at Britech was the extensive deployment of

bar charts. These were commended as particularly useful in storing valuable information for future

use/analysis in order to improve performance on a continuous basis:

Bar charting is actually the key to making sure that youve got repetitivity, taking the analysis off it

and taking the information off it, analysing it and determining how to do it better next time. So a lot of effort goes into that, taking that information off the bar charts, the networks, and down loading that information and ensuring that we do it better next time and not make the same mistakes. Its a very visual, visible tool. It is a very powerful tool to see where you are in the programme, where the labour is deployed, what is the labour that is required, etc. (Production Manager)

One particularly acute problem was monitoring the use and movement across the factory of a large

number of very expensive tools. Shadow boards were presented as an effective way to handle this

problem, according to one Senior Production Manager:

Tools were a problem and we are trying to shadow board all of these resources, it all goes on the

shadow in one way or another, markings on the floor or whatever. So thats what I mean by shadow boarding and visibility and visibility charts as far as what Id term plastic brains, are very very powerful. And that supplements whats going on with the networks, the bar charting.

These inscriptions, and the newly espoused concepts of monitoring, visibility and knowledge-

sharing, were increasingly promoted as part and parcel of the vision of the new management and its

emphasis upon internalizing work targets and financial discipline into employees:

18

We actually share with people now as much as is possible what the business is, how its constructed and what its made up of and where the costs are... It should be more self-generating. The guys that are in the teams, they know what the milestone is and theyre very good, almost to a man, very very keen to get it. (Senior Manager)

Moves to codify and inscribe previous tacit, invisible knowledge were not primarily part of a

Taylorist initiative intended to deskill the workforce. Rather, their stated intent was to subject Britech

employees to an alternative disciplinary regime in which they were invited to participate, through

involvement in planning and organizing their work, by making as well as reading the new inscriptions.

It was through these inscriptions - milestones, progress charts, etc. that senior management at

Britech endeavoured to lay out the corporate road to commercial salvation.

Inscribing Space and Businesses: Building the Motorway, Making the Motorists

The disembodying and inscribing of knowledge at Britech was accompanied by attempts to redefine

factory space and knowledge location by imposing new boundaries to make the flow of activities

both more coherent and visible. A major aim was to encourage the sharing/transfer of skills across

different production specialisms. The redefining of boundaries was considered an essential condition

to effect the de-personalization of knowledge:

I want to get people more aware of what goes wrong in service, so that we can improve in some way

our testing or whatever, or our assembly. So weve got to strike if you like new boundaries that say Ok how are we going to get that feedback?...So that may impact on the boundaries that people traditionally operate within their disciplines. (Senior Manager)

New boundaries that cut across disciplines were defined to promote feedback and to encourage

cross-functional exchange and collaboration. Other initiatives, including the setting up of "multi-

functional" teams, were deployed to strengthen and speed up the move in that direction. To facilitate

the new focus upon processes and their added value, the new Finance Director and a Senior

Finance Manager set about a (re)inscribing of divisions within the site to integrate functions. This

new representation was conditioned by wider demands for change and aspirations for stronger

financial accountability and was pursued through segmental disclosure and benchmarking:

In terms of pull, I think people are becoming aware that they need to be able to be benchmarked.11 I

mean they don't really know if they're performing well or not. [Then the new FD] arrived here and asked the question Well what's going on? and he's not quite got the visibility he wanted. So we're moving towards segmental accounting in terms of profit centres, allocating working capital to each of the various sectors in the business so we can really benchmark their performance. (Finance Manager)

11 Note here the re-presentation of the interests of others to legitimate actions. Being seen to act on ones own behalf is to risk being seen as self-interested and provides no such legitimatory grounds (Wildavsky, 1991).

19

Three major segments12 were identified: product assembly, the spares business, and product

simulators used for training customers. Within product assembly a coalition built around one of the

Senior Production Managers and one of the Operations Accountants set about a further segregation.

Three businesses were to be set up within the assembly segment: the manufacture of a major

component, a standard product assembly and a product customisation. By doing this, a

Manufacturing Manager claimed, Britech would have its own design, engineering, procurement and

contract organization within each of the businesses to obviate the need to go to outside suppliers.

Concurrently, new representations of work organization were made by an influential Production

Director, based upon the metaphor of the motorway.13 Another Director justified the use of the

metaphor on the grounds that managers powers of articulation are quite limited and that he finds it

easier to convey [to his subordinates] in some detail what good would look like because most

people actually struggle with trying to figure through in their minds where they are going. The

motorway metaphor was presented as a reflection of the extensive process mapping that went on in

Britech and as an organizing principle for the new inscriptions of work organization and performance

measures. Each business was to become a motorway with a network being constructed to manage

interdependence between activities. The time implications of bottlenecks in this new culture of

urgency were made clear:

The motorway type metaphor is the recognition that identifies that there are problems in the process

and tends to lead peoples minds to think that it only has an effect at that particular part in a process map. The truth of it is when one is driving down the M6 and you get within forty miles of Birmingham you only need to get the traffic to slow down by five miles an hour because the M5 is speeding on at a disproportionate rate to the flow of the M6 and all of a sudden it has an impact on the process all the way through. Essentially its capturing the understanding that its not as simple as having process inefficiency in pockets, because it affects the whole, no matter how far upstream or downstream you are of it. (Production Director)

Managements desire was for the production mentality associated with the motorway metaphor to

cut through the supposed black art of product construction at the site:

He [the Production Director] came from the car industry and he really does come from the point of view: what is the problem? We have stable build volume, 20 plus or minus 4. We know exactly what we are going to build, we have got this commonality, we have got a stable production programme, stable in terms

12 Following the spirit of continual re-division, a fourth segment is now in place. 13 Despite repeated inquiries during the interviews, no one seems to recall where the metaphor of the motorway came from. The Production Director took pride in referring to his MBA qualification which he had acquired relatively recently and which he claimed was an essential additional qualification to engineers that he demanded his junior colleagues to obtain.

20

of ten months before deciding which kinds of products to build. Why arent we knocking them out like peas out of a pod? (Senior Production Manager)

The Production Director saw the motorway metaphor as the means of improving response time. He

foresaw the possibility of introducing this large element of predictability in the production planning

process without sacrificing the scope to customize the product. He claimed he knew what parts,

master build schedule, and assembly volume should be, and hence he characterized the control

process as stable and predictable. One of the aims of the motorway metaphor was to emphasize to

the shopfloor the multiplicity and interdependence of activities within the site in an image that was

familiar and especially resonant to senior managers recruited from the car industry. Its focus upon

the holistic nature of the business became paramount in sharp contrast to the previous tradition now

presented as having parcelled the business into pockets of seemingly separate, and chaotically

(dis)organized activities paralleled in the meanderings and intersections of secondary roads:

Certainly if youd set out to process the whole [old] organization trying to get it on a piece of paper, itd be worse than spaghetti junction. It would be horrendous, because it would be a classic case of you do that and it goes into a loop and then comes out and you do that and nobody knows whats going on. (Finance Director)

Under the new process mapping style, processes were inextricably linked to the motorway, in the

sense that each process would be achieved through driving on the appropriate motorway: Once we

identified the key processes we establish what the process motorways are (Production Manager).

It was claimed that the motorway network, presented in the form of a diagram, would lay out the

ground required for an effective transformation towards desired objectives as the Production

Director claimed:

The mechanism that were gonna adopt, is in establishing the vision for each one of the three

businesses here is a diagram that helps to establish the way in which each of these relates to each other and the way we cede authority for them to do their task, what we've looked at is establishing what the motorways are, or the key processes within each one. And the way we're gonna go through it is in giving them a motorway for each one of these major subjects that takes us from where we are currently to where we want to be, is to establish all the motorway service stations or junctions and what the goals and the tangible objectives are for each stage of that transition or evolution from A to B.

The link between setting up the motorways and management vision was made by several managers:

The motorways help us clarify the visions, the process visions, that weve got in our strategy

(Senior Manager). One Senior Operations Manager stated that the motorway metaphor would help

21

eliminate production delay, by claiming that it would generate an optimum build cycle with a critical

path which, when not achieved led to delays in the production programme. At the same time,

management asserted that this new holistic view of activities, involving a thinking, an understanding,

a literacy (Production Manager), was not to be achieved at the expense of individualized

responsibility. Participants at the site were cast by production managers as drivers on and off the

motorways. It was their responsibility to read the signs and, in the longer term to suggest ways of

developing better motorways. Through empowering and devolving ownership for these new

representations and the processes seen to underlie them, a new culture was envisioned and expected

to emerge that, it was claimed, would accrue substantial benefits for Britech. The building of the

motorways was also intended to improve competitiveness (at all levels), not least because, it was

claimed, key processes would be owned by employees. To dramatise this vision further, one

Production Manager explained that the motorways were being built in the back garden14 of

employees - that is, as close as possible to their users so that they would have to take responsibility

for their motorways successful operation:

If it [the motorway] was in your own back garden and you had to manage it, the analogy is if it was a

family business then you know, you are a nickel and dime merchant. You know the things you have to monitor and the things you don't and I'm working very much with a brief that I want these guys to be running them [the businesses] as if they were the Mafia. Therefore theyre concentrating on what makes money and they're very quick to get rid of that that's not opportune. (Production Manager)

Moves to improve upon the current situation involved developing new products and work

processes documented through the carefully managed creation and employment of inscriptions.

Key processes were identified, and these were focused upon customer, product and supply, with

each of these three processes having attached to it associated activities. Each product team became

linked explicitly to process teams appropriate for the product with the requisite marketing, selling,

building (production), customising and customer support skills drawn from various functions; the

emphasis being on process-based management. This way, it was claimed, attaining improvements in

business processes was ensured (Manager).

This shift in emphasis was linked to a focus on understanding process mapping enshrined in the

motorway metaphor (see earlier): Each department now has to identify its customers. Were very

14 We tend to fall in the trap of using a whole bunch of analogies... to help express, describe in terms of what were conceptually trying to get across... We tend to use a considerable amount of metaphors, analogies and general mental descriptions (Senior

22

much into process mapping the work that we do. ISO9000 says that you should be able to look at

each process and look at its inputs, its outputs and the causes that affect it (Human Resource

Manager). Key in this approach was the empahsis being placed upon velocity ratio, or what one

Manager defined as the time it takes to do the work thats inside the process divided by the total

time thats elapsed. This new empahsis, it was claimed, required a radical shift in attitude among

staff in a manner that moved away from the old style of waiting for things to emerge before any

action is taken towards a more entrepreneurial style that promoted taking initiative, innovation and

experimentation with new modes of organizing to provide instructive, remedial guidance to those

with a settler mentality. By following the new pathways and adopting the understandings laid out in

the site representations by the pioneers, it was anticipated that novel ways of working would be

engaged in by the settlers with a security provided by these new representations that spoke of the

transformation of the site and the appropriateness of the new behaviour it required. One Design

Engineer summed up what he described as the emerging mood among many employees, contrasting

a settler mentality with a pioneering approach:

There was a settler mentality which was looking for the ground already to be laid to get you forward. The pioneering approach was to bring people who actually had experience, knowledge and perhaps flair to recognise that things and processes could be organized in a different way, with a confidence that they would deliver results and essentially be able to lay the ground such that the settlers would be able to move forward positively and with the confidence that hitherto may have been lacking.

The analogy drawn between the Mafia (see earlier quote) and the commercially aware pioneering

approach to doing the business is significant. Through such an analogy the message could be driven

home that the new way of doing business at Britech would be underpinned by the urgency and

ruthlessness of being quick to get rid of that thats not opportune. Rather than shy away from these

attributes, they were being promoted as both legitimate and necessary to secure the survival and

future success of Britech in the face of what were construed to be extremely hostile markets. Once

motorways are installed in the back gardens of employees, managers claimed, the visibility of what

is opportune would be enhanced through inscriptive devices. Bar, or Gantt, charts were used to

record allocated valuable resources (i.e. employees and components) to sub-tasks with a pre-

specified completion time. These plastic brains were conceived to provide a highly successful

Production Manager).

23

system of representation, providing both visibility and responsibility as two key factors in the

realisation of accountable empowerment.

The declared intention was for this system to be operated by management acting at a distance.

Employees were invited to utilise their agency, literacy and common sense to read and respond

flexibly to the new planning regime. One Union Convenor stated:

We know that industrial muscle is away in the past, we are very forward looking and we are very keen on the European approach as regards social partnership. One of my constant statements to the management here is, the only change that you will ever get successful and long term is that which is shopfloor driven, at the end of the day it will be the change that the lads demand, and that is starting to happen, we have greater accountability for the manuals.

An initiative called the involvement scheme was launched, which entailed, one Cell Leader

indicated, asking operators to highlight their ideas for reducing lead times, saving money, basic

issues like that. Fitters would participate with their supervisors in deciding on how the product

should be constructed, what the product is made of, and also be involved in identifying the most

appropriate ways to plan, organize and monitor their work. As the Operations Accountant, using a

graph showing resources plotted against activity, said:

You had the resource coming down the side so what you had was fitter 1, fitter 2, fitter 3, then you had

time here [across the horizontal axis] and what you've then got is the actual activity [as a horizontal block]. So when the fitters came to look they said Well we don't do that job here, that job happens here. So what you did was you brought the planning to the man and the man and the supervisor came to use the planning to suit the way they built it.

This involvement of the shopfloor was part of a plan to develop the cell leader and his team through

active discussion; one Senior Operations Manager pointed out how managers took steps to devlop

the cell leader and the team by bringing those people into quality discussions, into development

plans, training plans and costing. Management was construed as not being the management of the

past, the management that intervened in the work. As newly commercialised agents, the fitters were

expected to do much of the old managerial work, even though there is evidence that some fitters

were unable to recognise, or were reluctant to acknowledge, this change of role to include the self-

monitoring of performance through the continuous completion of written records of job progress

(see below). The written played a key role in the sustenance and monitoring of this self

24

management, as paperwork was constituted to be the process of controlling flows along the

motorway:

Were trying to take it to the stage now where the process is actually the paperwork itself. There isnt

going to be a process, the actual documentation that you follow for doing it would define the process, so that the process becomes the working pattern. And so the records are self generating. (Employee Relations Manager)

In an effort to ensure the compliance of new, seemingly empowered employees, plottings of

progress against plan for the new accounting measures were carried out weekly. This discipline was

thought to have promoted the new commercial agenda of the business, speed of action, ruthless

focus on money, clear direction, individual responsibility and interdependence. If the present was

found to be not where it was intended to be, the plan would then be broken down to the next level

of detail. The introduction of streamlined administrative and production processes presented

opportunities in 1995-6 for major headcount reductions of employees. Manufacturing managers,

shop stewards and shopfloor employees suggested that the number of employees was reduced from

about 5,500 to approximately 1,700. While some of those who lost their jobs were from among

managerial levels, most redundancies came from the shopfloor. Some have argued that the people

who went under those cost-cutting excercises were in most cases the right people to go (Cell

Leader). Most of those who lost their jobs, we were told, were those who were lazy or wedded

to the old practices. One Fitter described them as what they call dead wood, you know, a lot of

people who had been here thirty, forty years and they were still working the same way.. When

commenting on new training programs introduced by the new management, the Employee Relations

Manager stated:

Those that didnt accept it [new training], stuck in their own school of putting times on jobs and expecting it to be done and then washing their hands as they went, they very brutally went as well. There was no compassion with it. If they didnt fit the business, they went.

Despite this concurring with managements assessment that excessive over-manning in the past

necessitated the trimming down of the labour force to more efficient levels, there was widespread

belief among the shopfloor that at least some of the redundancies were not warranted, as one Fitter

observed the lads are fearful, they perceive some of the reductions as unnecessary. One Convenor

suggested that most of the redundancies were particularly focused on the manual side. He

suggested that management find it easier to get rid of the guy on the shopfloor but at the end of the

25

day he is adding value and he is a productive worker [compared to staff] who are indirect, they are

not adding value. Another Convenor claimed that those who lost their jobs were not all bad guys:

Under the redundancy we saw a lot of good guys as well as bad guys, so people now have the perception that, well no matter what I do it is not necessarily going to save me.

Following the previous massive wave of redundancies, another round was announced with the

intention of reducing the remaining labour force by a half and making good any shortfall with just-in-

time agency workers who could be hired in response to changing patterns of demand for their

specialist skills. This second wave of redundancies further fuelled employees uncertainty. As one

Operator stated The thing is that we know how many people are going to go at the end of the year.

Now everybody feels at risk because they dont know who those people are so we arent living

normal lives. So, while pursuing the motorway vision entailed the involvement and cooperation of

the workforce, waves of redundancies posed a threat to the security of even the most loyal and

productive employees, thereby casting serious doubt upon the commitment of the company to its

workforce.

NEW PERFORMANCE MEASURES, NEW PERFORMERS

The new accounting measures had two key objectives; first to integrate engineering and commercial

knowledge, and secondly to inscribe new measures commensurate with the new commercial agenda

that empower and educate people to actually make it happen (Operations Accountant).

Integrating Engineering and Commercial Concerns through Accounting Inscriptions

In the new era, senior managers argued, engineers had to be coaxed or coerced into line, and their

skills had to be depersonalized and visualized through inscription by translating their knowledge into

a format that everyone could use as a visual aid (Operations Accountant). Engineers were required

to become more financially aware in order for them to understand what the pound notes are of the

components and what theyre building (Operations Accountant). This change was to be achieved

by means of an integration, through written accounting measures, of financial information with

representations of the materiality of the site and components assembly in a way that would

reconstitute engineers as cost conscious agents:

26

When you start assigning pound note signs to items that have been fitted... people soon start to

realise the importance of what theyre doing. (Production Manager)

Moreover, new evangelical accounting was introduced to replace the old, discredited engineering-

dominated, accounting mentality. For example, to transform engineers and assembly staff into cost

conscious agents, every part had to have a cost attached to it:

You want every time there's a part number shown on any system screen the value will flash up on

it....[We did this at another site and] when the supervisor was gonna scrap something, Shit, is that how much it is? and they had to think twice about what to do with this. That's the culture we'll have on [this site] in another six months time. People will know what things cost, they'll have respect for those items. (Accountant)

The marketing and selling process was translated into a set of calculations showing selling prices,

target margins, detailed costs per product and per process. More relevant to the engineers, the

making of standard products and customization processes were converted into detailed calculations

showing the business plan, targets, added value and achievements for each programme, cycle time,

inventory, costs, supplier prices, and engineering support. These new inscriptions were aggregates of

new detailed measures introduced on the shopfloor (see below) and were reported regularly to

engineers. The inscriptions signalled clearly the new, commercially-driven, measures of the

components used with the intention that engineering and financial concerns would be integrated.

New Accounting Measures and the Shopfloor

A set of key business drivers was articulated in a document called Introduction, 1992, focusing on

three such drivers: customer response time (lead time for final assembly + procurement +

engineering), cost, and quality. These drivers were then converted into a five 9s focus (99 9 99) of

customer related targets: 9 months product response time; 9 week customer response time; $9

Million unit cost and 99% quality. Further, the NBI Booklet contained detailed targets for the eleven

key themes mentioned earlier. Based on these measures, it was decided that accounting would be

extended to: (i) incorporate new measures that would emphasize concern for quality and added

value; and (ii) develop more detailed measures, out of these broader measures, to be targeted at

shopfloor operators.

27

Processes dedicated to market pull were promoted as the new entities upon which employees

energies and new management accounting practices were to be focused. This focus was inscribed

notably in the NBI and the Manufacturing Strategy documents. Accounting and business

terminology were mobilized to spell out the financial benefits that would accrue from build-to-

order: reduced working capital employed; reduced risk of incorrect model mix; reduced total cost;

improved responsiveness; superior quality; improved revenue (Manufacturing Strategy Document).

The accounts given by our informants were underpinned by an extensive use of new inscriptions.

The quest for new measures at Britech signalled a significant shift in the focus of control from

exclusive obsession with manhours and labour cost15 to inventory cost and stock ratio. The very

expensive products in stock on the shopfloor were now seen as the big numbers whose drivers

were to be monitored:

the value of the product that were dealing with is so great. What I am interested in is the things that

drive the big numbers and the big numbers in this context is look out of the window. They're all around us [products in stock]. They're on what I describe as the dust test, then that is no way to run a chip shop. (Manufacturing Director)

Economic Value Added (EVA); Market Value Added (MVA); net present value (NPV); quality

enhancement and revenue enhancement were identified by senior managers as new measures

needed to inform decision making and to instil financial discipline right down to the shopfloor. The

new emphasis was presented as being holistic by looking at Britech as a total business unit. It was

claimed that the new performance measures were focused on the ability to add value through time

or the ability to move [stocks] and create wealth quickly as distinct from situations where the

clock is ticking but they're [stocks] going nowhere. To inaugurate and drive through this holistic

vision, a four dimensional approach to performance management based on the European Foundation

of Quality Management (EFQM) was inscribed. Underpinned by new accounting calculations, it

was presented as a rating methodology that looks at the total business and analyzes all the

processes (Senior Director). An Internal Document produced in 1992 identified four axes of the

EFQM model: NPV, growth, sustainability of growth and business breadth; these were presumed to

capture the overall health of the business. The diagram presenting the EFQM to employees

identified and quantified the attributes of the model in terms of two sets: enablers (50%) and results

28

(50%). The enablers were inspired leadership (10%), incorporation of quality values and concepts

in policy and strategy (8%); releasing employees full potential through people management (9%);

providing necessary resources, including financial, material and technologies (9%); and reviewing

and revising processes (14%). The results subset (notice the asymmetry) was enhanced satisfaction

of employees (9%); customer satisfaction (20%); better impact on society (6%); and improved

business results (15%).

INSERT FIGURES 5-8 ABOUT HERE The EFQM model was supported by a plethora of accounting and production reports, pi-charts and

histograms. These revealed to managers, and more significantly, to the shopfloor, detailed statistics

on production volume, quality rejects; production time schedules; costs, etc. (for some example see

Figures 5-8). In turn, the factory shopfloor was partitioned into centres of calculation full of large,

colourful charts of work scheduling, performance, and cost consciousness. In each production cell

written work schedules were displayed in which work was logged down to individual operators.

The charts showed weekly details on customer specifications, conditions of supply, production

progress, weekly spend and achievement analysis in man hours for days, nights and subcontracting

(see Figure 8d), lead time analysis per assembly set (completed and uncompleted; see Figure 8c),

weekly labour analysis (day and night; see Figure 8b), site spend (man hours) both actual and

forecast per assembly set (see figures 5 and 8a), job delay summaries, shift attendance and absence

in man hours, factory utilization during day and night shifts, overtime per operator, production

effectivity, etc. The inscriptions also displayed details of product audit reports, bar-charts for defects

in terms of quantities and causes (see Figure 6), throughput monitoring (actual versus required and

outstanding deviations), responsibility for corrective action and levels of important cost items, such

as engineering costs in terms of actual, budget and outlook for the monitoring and planning of work

(see Figure 7).

Managers claimed that there was a significant shift from the exclusive focus upon man hours which

predominated in the old days. One Manufacturing Manager noted the shift in empahsis on man

hours thus: Quite frankly, in the past people have been predominated with looking at man hours and

15 As noted earlier labour cost was addressed through waves of redundency and the hiring of flexible contract

29

the cost of pay rolls and all the rest of it. I couldnt give a monkeysIm interested in how much of

it [activities] is adding value because the value of the product were dealing with is so great. The

Production Director echoed the above view:

The way they used to account for projects was to attach a great deal of effort to man hours monitoring and performance, even though they were looking at only ten percent of the total costs.

The fact that the detailed measures now used in Britech still contained man hours was not seen as

presenting any contradiction from the desire to shift emphasis away from man hours for two reasons.

First, in contrast to previous practice where man hours predominated, under the new regime man

hour measures were but one of a battery of detailed measures now being considered. Second,

traditional measures such as man hours were now being linked more clearly to the new measures.

One Manager stated that:

EVA, MVA and DCF are all linked back to some of the traditional things [measures] because essentially our cost is largely driven cost with time. So it puts the focus and the rigour into the ability to add value through time. If you like the wealth creating fits into what we call a whole span of traditional manufacturing measures.

One Operations Manager commenting on the measures used in his area observed that:

Most of what you see here is either on cycle time or man hours. So it has a pound note equivalent. And so therefore, by a simple piece of maths, we could soon decide on what the pound effect was. With the new measures, everything will be struck on bringing it down to the bottom line of what it costs.

The key logic here is that the new holistic measures, such as EVA and MVA, could only be

enhanced if staff in Britech secure savings in line with the traditional measures employed previously,

as well as the new measures. Hence, waste in man hours, higher defect rates, or higher engineering

costs are reflected in unnecessarily higher costs to the business which will ultimately translate into

lower EVA, MVA and NPV. Third, managers claimed that the traditional measures were used in a

different manner. Concern for throughput time efficiency meant that man hours remained of some

importance, but not in their raw form or in terms of the cost of labour as in the old days. Instead,

as one Manufacturing Manager stated, man hours were regarded as a basic component in

labour.

30

emphasizing the cost relationship to time. Emphasis shifted therefore from tracking every minute

spent by an operator to focusing more on the effective use of time and a new link was now forged

between man hours and inventory levels:

The issue of direct labour is not so much tracking the man hour for every minute that he [the operator] is on the job. The key to it is the effective use of labour and with linking it to inventory, that clearly affects lead time. Now the driver to disclose performance against plan would be inventory accruals not man hours. (Assembly Manager)

Further, an Operations Manager claimed:

I might be the guy on the shopfloor, I understand all the big boards that you see measuring performance down on the shopfloor on the big bar charts that we use driving throughput time efficiency which they [shopfloor] can all relate to, but it will give them a link into how they can value the measurement of policy and strategy cos the feedback which allows us to make our policies and strategies clear overall are vital to complete success.

Hence, it is the application of resources through time, rather than simply tracking man hours, that

now mattered. Undepinning this argument was the recognition that obsession with short term

manufacturing measures, such as man hours, would militate against the attainment of a longer term

vision in which issues of growth and sustainability were considered paramount, and for which a

broader assemblage of costs associated with doing the business was required:

We all recognise that its easy to adopt short termism in levering present value. The whole context of course is that what Im trying to achieve is business growth. Now I will not achieve business growth without the other dimension which is sustainability. Again thats why were looking at the relationship between all the costs associated with doing business today and then taking a discounted cash flow on what the forward book is, and then looking at the cost of being in business to exploit that forward order book. (Operations Director)

To emphasize the holistic nature of the business, the product assembly positions sheet (not shown

here for reasons of confidentiality) designated by time, date, month and year, made visible, in a

pictorial format supported by accounting numbers, to supervisors and operators the added value (or

incurred cost) to the product for every additional week in assembly. Also, as the inscriptions in this

sheet moved from one assembly stage to another, or as the motorway metaphor would imply, added

value was signposted as the product moved through different stages along the motorway. In this new

shopfloor practice of accounting inscription, the relevant statistics were displayed against the

business plan and were produced for each product. Further, charts showing rejects were displayed

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on the shopfloor, and factory managers and supervisors were expected to act on them. Pictures of

various parts of the product with their corresponding cost figures were also displayed throughout the

factory, with the aim of enhancing the cost consciousness of operators when handling these parts.

Regular written reports per process were produced containing weekly and monthly statistics for

things such as operations, assembly, and quality, combining financial and quantitative non-financial

figures and arranged in tabular formats and charts. For each activity, the tables and charts showed

target/budget, actual and current forecast (outlook) with variances calculated in relevant tables.

These written measures were seen to do the business whilst talk of change was just hot air, here

today and gone tomorrow - You couldnt talk change and you couldnt buy change (Employee

Relations Manager). Activities were recorded in writing and rendered more accountable in relation,

for example, to any subsequent product recalls. As Said (1991, p. 134) has pointed out, To write

therefore comes to mean morethan to speak, for the appearance of writing alone gives assurances

of regularity and meaning that the tumble and dispersion of speech denies. Writing provides an

indelible record that is more difficult to deny or obfuscate in comparison to the spoken word. The

(semi)permanence and visibility of written measures was seen to provide the certainty about

performance appraisal that would enable change. As we have noted earlier, it was intended that

inscription, through the responsibilization and accountability it engendered, would produce

(commercial) agents who compared current circumstances with planned scenarios as they

endeavoured to meet the demands of the new agenda. The continued deployment of appropriate

inscriptions was aimed at obviating the need for personal appeals and confrontations by enabling the

inscriptions to empower those subordinate in the hierarchy. Plans served to relate people and

resources in the name of the good of the business, and were increasingly seen as the only way to

prescribe and describe sensibly such relations, making alternative versions of events fewer and

further between:

The generic process reviews, understanding your processes, how you go about that, fishbone

techniques and all the rest of it, are all things that should become part of their common language and way of working....It is creating a style of language that everyone knows what that means.... actually share that common language. It can actually make decisions without reference because they know what will be a right decision. (Senior Manager)

The generic process and fishbone techniques were meant to signify the new, commercially

driven, decision making style; one that takes as its starting point the prices dictated by market forces

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and the specifications of product quality demanded by the customers, and internalises commercial

awareness into the subject. This decision making method was intended to become the common

language shared by all Britech employees as enshrined in new writings that were to be widely

disseminated.

To emphasize the new commercially inspired competitive focus further, league tables were posted

on the shopfloor for such things as attendance and productivity. These tables showed for each area

current, lowest and highest performance of the week, and current and previous league positions, all

contrasted against the business plan. In this process, accountants at the site were presenting

themselves, and were increasingly becoming recognized by others, as agents of change who, by

preparing league tables and running mini-business things with all employees, sought to educate the

non-commercial in the reading of the newly inscribed commercial agenda. One Operations

Accountant suggested:

Were able to get the message of finance across to people. I encourage my people to get out there, understand what the processes are, get involved in those processes and then they can start changing them. I got awarded... at the end of 92, changemaker of the year award, manager of the year award. It was only a couple of books, and stuff like that, but it didn't really matter, I was speechless at the time.

THE SCOPE FOR SHOPFLOOR RESISTANCE We have already noted how mass redundancies coupled with the threat of further job cuts served to

remove intransigent employees, including managers, and weaken opposition to change. For those

who remained, there was an expectation that their full support would be given to the new agenda.

Despite this, the new inscriptions were not endorsed fully by the shopfloor: many employees

expressed strong resentment and frustration with them, casting doubt as to their relevance to

Britechs activities and aspirations. However, as we argue below, there was also a sense of fatalism

on the shopfloor about these new measures.

In the case of the motorway metaphor, initial steps to operationalize it by p