Expediting organizational transformation in the small firm sector : lessons from the metalworking industry

Abstract

This dissertation examines the adoption of new work organization practices in the small firm, manufacturing sector through an in-depth examination of the metalworking industry in western Massachusetts. An original survey of 46 firms was conducted as were detailed firm-level case studies. Four key questions were addressed through the research: 1) what does the new work organization look like in the small firm sector? 2) how widely have new forms of work organization diffused? 3) what explains variation in workplace innovation outcomes? 4) what are the most effective mechanisms of diffusion? Survey and case study results show that new work organization practices have diffused widely in the small firm sector but that adoption levels vary dramatically among similarly situated firms. Detailed review of data indicates that whether and when firms embark on a path of organizational reform must be analyzed in the context of each firm's market environment and overall strategy. The extent and rate of adoption is determined by two key variables: the nature of market pressure a firm experiences (shaped predominantly by the industry sector the firm supplies to and customers relations); and the strategic orientation of firm leadership. The presence of cooperative customer-supplier relations and/or innovative, investment-oriented firm leaders appears to facilitate adoption of new work practices. The current policy approach to small firm modernization encourages piece-meal change that fails to address far more fundamental issues of firm strategy.

(cont.) The research suggests that public programs should build from the powerful mechanisms of change indigenous to the small firm economy. A concerted focus on management education, and development and promotion of customer supplier 'partnerships' across key industry sectors is a more promising way to encourage long-term adjustment strategies in the small firm sector.