Global management concepts and local adaptations: working groups in the French and German car manufacturing industry

Abstract

In this paper, the diffusion process and organizational consequences of management concepts that spread globally through an industry are analyzed. Taking the example of the working group concept, the organization of the final assembly of a sample of French and German car manufacturers is studied. It can be shown that, in both counries, working groups similar to the ones used in Japanese car companies are widely diffused in the car industry. It also becomes clear from the analysis that plants have been experimenting with working groups and have adjusted them to their proper needs; a process which we call 'local adaptation'. Our results indicate that the local adaptation of working groups is brought about to a large extent by the institutional differences between countries. Because of diffusion and adaptation processes, isomorphic as well as idiosyncratic tendencies in organizational structures can be observed at the same time.

Descriptors: working groups, management concepts, cross-national comparison, diffusion, adaptation, automotive industry

Introduction

For many years, considerable debate has surrounded the issue of whether or not organizations in different countries become increasingly similar to each other over time (Meyer and Rowan 1977; Whitley 1997; Kondra and Hinings 1998). Factors such as technological convergence, the growing importance of multinational enterprises, or the diffusion of international corporate standards like ISO 9000 or ERP systems have been said to contribute to isomorphic tendencies (Mueller 1994; Meyer and Scott 1992). Recently, some researchers have claimed that globally spreading management concepts, such as the shareholder-value concept or the concepts of downsizing and decentralization have also increased similarities between organizations (Porter 1996). However, this view of increasing isomorphism has been challenged by other researchers, who have emphasized the resilience of national cultures, despite isomorphic pressures on organizations. In their opinion, institutional differences at the national level cause persistent hete rogeneity among organizations across countries, even if they operate in the same industry and are subject to the same external influences (Maurice et al. 1980; Whitley 1997; Whitley and Kristensen 1996). From this point of view, in different national contexts, globally diffusing management concepts should have significantly different consequences at the organizational level.

Which, if any, of these two perspectives on the organizational impact of globally spreading management concepts is supported in an empirical test? And are the views really contradictory? Framing the issue of globally spreading management concepts in terms of either leading to convergence or divergence may seem like a rhetorical trick, but, for this paper, it is a good starting point. We will show here that the two perspectives regarding the structural consequences of global management concepts are equally true, and that, to get the full picture of this particular organizational change process, they have to be integrated. The basic idea put forward here is the following: management concepts can be understood as distinct sets of general organizational rules, developed outside the company, for the transformation of input into output. When a management concept diffuses though an industry, the rules diffused are those which -- on the surface -- will increase similarities among organizations over time. However, whe n individual firms decide to apply a new management concept, the concept itself must be 'locally adapted'. This results in considerable interfirm variations of the practices which are linked to a particular management concept once it is implemented. The local adaptation of a management concept at the level of the firm is influenced significantly by the particular national institutional setting in which the organizations are embedded. Consequently, realizations of a management concept at the level of the firm can be expected to differ significantly between countries.

In this study, the diffusion and structural consequences of management concepts are analyzed empirically by investigating working group concepts realized at the final assembly stage in French and German car manufacturing plants. Working group concepts are among the major management concepts that have occurred in the automobile industry in the last 30 years. The idea to organize employees at car manufacturing companies in groups, on a large-scale basis, first came up in the 80s when the Swedish car manufacturer Volvo started to organize its production workers in more or less self-regulated teams. The concept of working groups was re-introduced in the 90s, when the work practices of successful Japanese car manufacturers were under scrutiny (Kochan et al. 1997).

Considerable research has already been conducted on the dynamics of management concepts (Abrahamson 1996; Kieser 1997; Mazza and Alvarez 2000), including research on working-group concepts in the automotive industry (see e.g. Jurgens et al. 1989; Womack et al. 1990; Kenney and Florida 1993; MacDuffie 1996; Womack and Jones 1996; Murakami 1997; Kochan and Landsbury 1997; Frieling 1997; Freiboth 1998; Wilkens 1998). This study differs from previous ones on management concepts, for several reasons: first, while researchers have explored in great detail the mechanisms through which management concepts diffuse, research has not yet investigated in any depth the exact nature of the structural consequences of those management concepts, and how they can be explained; second, while in the other studies on the car industry, mentioned above, a research strategy favouring multiple countries and a small number of local car producers is used, this study includes only two countries -- France and Germany. It is an exhaustive investigation, nevertheless, in the sense that information was collected on every major local car manufacturer, namely, Mercedes Benz, Opel, Ford, VW, Audi, BMW, Porsche as well as Renault, Peugeot and Citroen. This allows us to draw reliable conclusions regarding the determinants of final-assembly work organization in the automotive industry in these two countries. Third, since management concepts can spread quite rapidly, as will be shown later on, this study calls into question some of the results of earlier comparative studies which included French and German car manufacturing organizations.