A New Paradigm ofIndustrial Organization

The Diffusion of Technological and Managerial Innovationsin the Brazilian Industry

BY

LEDA GITAHY

Comprehensive Summaries of Uppsala Dissertationsfrom the Faculty of Social Sciences 93

ACTA UNIVERSITATIS UPSALIENSISUPPSALA 2000

Dissertation for the Degree of Doctor of Philosophy in Sociologypresented at Uppsala University 2000

Abstract

Gitahy, Leda, 2000. A New Paradigm of Industrial Organization. The Diffusion of Technological andManagerial Innovations in the Brazilian Industry. Acta Universitatis Upsaliensis. Comprehensive Summariesof Uppsala Dissertations from the Faculty of Social Sciences 93. 48 pp. Uppsala. ISBN 91-554-4778-3.

Based on the concepts of techno-economic paradigm, network and production chain, the main purpose of thisdissertation is to analyse the diffusion of technological and managerial innovations in the Brazilian industry during the1980s and the 1990s. It consists of a summary and six selected papers. Empirical studies were conducted at differentmoments of the re-structuring process and at different points of the production chain. The samples cover large leadingfirms as well as small second and third-tier suppliers in the automotive and footwear industries. They throw light on theprocess of diffusion and establishment of a new paradigm of industrial organization, mostly in conflict with theTaylorist/Fordist.

Ideas, methods and management techniques were largely adopted and imitated from the so-called “Japanese model”, butthe diffusion of the new paradigm in Brazil is also the result of adapting and modifying this model by trial and error. Atthe firm level, the adoption of these innovations entails a highly complex process of social change, reversing norms andmodels of behaviour hitherto dominant. They modify the daily practices at work, and the division of labour within andbetween companies, as well as between companies and other institutions, such as those within the educational system.These transformations are studied by distinguishing competition, management, and technological patterns.

The results show that, under the conditions of a an extremely large domestic market, the re-structuring of the Brazilianindustry occurs in a context characterized by crisis, economic instability, recession and unemployment as well as bypolitical re-democratization and growing influence of the labour movement. The diffusion of the new paradigm ofefficiency together with the increasing globalization of the economy and the ongoing abandonment of importsubstitution, transformed the organization of work and inter-firms relations, changing the volume, structure, andlocation of employment as well as the content and hierarchy of skills.

Keywords: technological paradigm, flexible production, network, employment, skills, education, Brazilianindustry.

Leda Maria Caira Gitahy, Department of Sociology, Uppsala University, Box 821, S-751 08 Uppsala,Sweden.

© Leda Gitahy 2000

ISSN 0282-7492ISBN 91-554-4778-3

Printed in Sweden by University Printers, Ekonomikum, Uppsala 2000

“... Nations which adopt the new techniques from abroad always do so for a double andapparently self-contradictory motive: to become like their more advanced rivals, but to

remain just as they are. They must at least meet the efficiency standards of theirpowerful competitors if they are to preserve their independence - hence the need to copywho ever has come up with the successful techniques of the day. But paradoxically, they

imitate others the better to defend their individuality.”

Charles Sabel

“Just how to achieve self realization, to preserve freedom, and adapt society to both,seems increasingly harder to know; it is felt as a central, overwhelming problem of our

days. … From finding security in a repetion of sameness, of only slight and slowvariations, we are having to live with a very different kind of security; one that must rest

on achieving the good life, with very little chance to predict the outcome of our actionsin a fast changing world. … To manage such a feat, heart and reason can no longer be

kept in separate places. … The daring heart must invade reason with its own livingwarmth, even if the simetry of reason must give way to admit love and the pulsation of

life. No longer can we be satisfied with a life where the heart has its reasons, whichreason cannot know. Our hearts must know the world of reason, and reason must be

guided by an informed heart.”

Bruno Bettelheim

LIST OF PUBLICATIONS

I. Gitahy, Leda (2000) Toward a New Paradigm of Industrial Organization? The concept oftechnological paradigm and its utility to study the diffusion of technological and managerialinnovations in the Brazilian industry.

Accepted for publication in Portuguese as Gitahy, Leda (2000) Na direção de um novoparadigma de organização industrial? O conceito de paradigma tecnológico e sua utilidadepara tratar o tema da difusão de inovações tecnológicas e organizacionais na indústriabrasileira, Coleção Mundo do Trabalho, Boitempo Editorial, São Paulo (in print).

II. Gitahy, Leda (1994) Technological Innovation, Subcontracting, and the Labour Market.

Published in Portuguese as Gitahy, Leda (1994) “Inovação Tecnológica, Subcontratação eMercado de Trabalho” in São Paulo em Perspectiva, Vol. 8 nr 1, pp 144-153, São Paulo.(ISSN 0102-8839).

III. Gitahy, Leda, Rabelo, Flávio, and Costa, Maria Conceição (1990) Technological Innovation,Industrial Relations, and Subcontracting, version in English prepared as a paper presented tothe I Symposium on “New Technological and Societal Trends” (Session IV) at XII WorldSociological Congress, Madrid, July.

Originally published in Portuguese as Gitahy, Leda, Rabelo, Flávio, and Costa, MariaConceição (1991) “Inovação Tecnológica, Relações Industriais e Subcontratação” in Textospara Discussão nr 10, DPCT/IG/UNICAMP, Campinas, pp 1-34.

Also published in Spanish as Gitahy, Leda, Rabelo, Flávio, and Costa, Maria Conceição.(1992) "Innovación tecnológica: relaciones industriales y subcontratacción" in BoletinCINTERFOR, nr 120, julio-setiembre, pp 71-98, Cinterfor/OIT, Montevideo (ISSN 0254-2439).

IV. Gitahy, Leda and Rabelo, Flávio (1991) Education and Technological Development: theCase of the Autoparts Industry.

Originally published in Portuguese as Gitahy, Leda and Rabelo, Flávio (1991) “Educação eDesenvolvimento Tecnológico: o caso da indústria de autopeças” in Textos para Discussãonr 11, DPCT/IG/UNICAMP, Campinas, pp 1-30.

Published in Spanish, as Gitahy, Leda and Rabelo, Flávio (1992) “Educación y DesarrolloTecnológico: el caso de la industria de autopartes”, in Gallart, M.C.(ed.) Educación yTrabajo - Desafios y Perspectivas de Investigación y Políticas en la década de los Noventa -Red Latinoamericana de Educación y Trabajo CIID-CENEP y CINTERFOR/OIT,Montevideo, pp 107-140.

Published in Portuguese as Gitahy, Leda e Rabelo, Flávio (1993) “Educação eDesenvolvimento Tecnológico: o caso da indústria de autopeças”, in Educação e Sociedade,Ano XIV, agosto, pp 225-251, CEDES/Papirus, Campinas (ISSN 0101-7330).

V. Gitahy, Leda, Ruas, Roberto, Rabelo, Flávio, and Antunes, Elaine (1997) Inter-firmRelations, Collective Efficiency, and Employment in two Brazilian Clusters.

Originally published in Portuguese as Gitahy, Leda, Ruas, Roberto, Rabelo, Flávio, andAntunes, Elaine (1997) ”Relações interfirmas, eficiência coletiva e emprego em dois clustersda indústria brasileira”, in Revista Latinoamericana de Estudios del Trabajo, nr 6, pp 39-78,ALAST, São Paulo (ISSN 1 405-1311).

An earlier version was published in English as Ruas, Roberto, Gitahy, Leda, Rabelo, Flávio,and Antunes, Elaine (1994). ”Inter-Firm Relations, Collective Efficiency, and Employmentin two Brazilian Clusters”, World Employment Programme Research, WEP 2-22/WP.242, pp1-55, ILO, Geneva, March (ISBN 92-2-109333-6).

VI. Abreu, Alice, Gitahy, Leda, Ramalho, José Ricardo, and Ruas, Roberto (1999) IndustrialRestructuring and Inter-firm Relations in Brazil: A Study of the Auto-Parts Industry in the1990s in Occasional Papers nr 21, Institute of Latin American Studies, University ofLondon, London. (ISSN 0953 6825) pp 1-40.

Also accepted for publication in Portuguese as Abreu, Alice, Gitahy, Leda, Ramalho, JoséRicardo, and Ruas, Roberto (2000) ”Produção flexível e relações inter-firmas: a indústria deautopeças em três regiões do Brasil”, in Abreu, Alice (editora) Produção flexível e novasinstitucionalidades na América Latina, Editora UFRJ, Rio de Janeiro (in print).

Reprints were made with permission from the publishers

Contents

Acknowledgements

Preface

1. Introduction

1.1 Objectives

1.2 Historical background

1.3 Basic concepts

1.4 Method

2. The studies

3. Conclusions and suggestions for further research

3.1 Main findings

3.2 Changes in the Brazilian industry, 1970-1999

3.3 Final discussion

References

Articles

I) Toward a New Paradigm of Industrial Organization?

II) Education and Technological Development: the Case of the Autoparts Industry

III) Technological Innovation, Industrial Relations, and Subcontracting

IV) Technological Innovation, Subcontracting, and the Labour Market

V) Inter-firm relations, Collective Efficiency and Employment in two Brazilian Clusters

VI) Industrial Restructuring and Inter-firm Relations in Brazil: A Study of the Auto-Parts Industry in the 1990s

Acknowledgements

As is the case for most PhD theses, there are many persons who, in different ways, have contributedto the fulfilment of the dissertation. Taking into consideration the period that has elapsed since Ibegan my graduate studies at the Department of Sociology, Uppsala University, and thepresentation of this dissertation, to name and thank all those that have been involved would amountto a very long list. To all of you who in one way or another have supported and trusted me, acollective and deeply felt: thank you! and, trust me, the memory is treasured.

Research reported herein has been partially financed by IIEP/UNESCO (France); IDRC (Canada);ILO/OIT (Geneve); FINEP, CNPq , SEBRAE and DPCT/IG/UNICAMP (Brazil). In four of the sixarticles reported here, the following persons were my co-authors: Alice Rangel de Paiva Abreu,Elaine Antunes, Maria Conceição da Costa, Flávio Rabelo, José Ricardo Ramalho, and RobertoLima Ruas, and I truely appreciate their collaboration.

I want to express my gratitude to the Department of Sociology at Uppsala University, which nevergave up on me in all these years and especially to my supervisor Pablo Suarez. I hope I havesomehow measured up to the high academic standards he set for his students. But his contributiongoes beyond academic support; he is a friend, who understood my special situation and encouragedme to bring my studies to a close.

I am also very thankful to my second reader, Hedda Ekerwald who has critically read my work andoffered valuable suggestions. Bo Lewin, Christine Roman and the administrative staff of thedepartment, Kristina Jacks, Eva Henricson, Margareta Thomas, Margareta Mårtensson and AndersHökback, who made my life easier and this thesis possible in various unforeseen ways. I thank themwarmly. Many colleagues created an encouraging and stimulating environment during this criticalSwedish summer. I want to thank Nora Machado for her friendship, Sandra Torres, Anne-MarieKalliokoski, Astrid Kubis, Arja Lehto and Maria Eriksson for their collegiality and friendly support.

Regarding the final stage I would like to thank the discussants at my final seminar, Göran Ahrneand Johan Nylander, for their helpful comments. Tom Burns gave me valuable advice, for which heis thanked. Anne Posthuma has transleted one of the articles. John Humphrey and Luis PauloBrescianni helped me with the technical terms. Peter Ekegren read the last version of theComphehensive Summary and helped me when I was ‘blindfolded’. My dear friend Kersti Gløersenhas revised the English language.

The Department of Science and Technology Policy, Institute of Geosciences, at CampinasUniversity in Brazil was my ‘habitat’ during all these years. In the last few months some colleaguesof mine were obliged to take care of my courses and duties and I want to thank them, speciallySandra Brisolla, Ruy de Quadros Carvalho, André Furtado, Newton Pereira and Sérgio Salles Filho.To Adriana Garutti Teixeira, Juarez Costa, Neide dos Santos Furlan, Waldirene Pinotti and all otherpersonnel who helped and supported me unhesitantly in my work I give my full thanks.

There are three teachers, Amílcar Herrera (in memoriam), Ulf Himmmelstrand, Juarez BrandãoLopes and two colleagues Elizabeth Souza-Lobo (in memoriam) and Helena Hirata who havedeeply influenced my intellectual trajectory, and I want to express my particular gratitude to them.

Anne-Marie Morhed and Lennarth Wallström opened their home and their hearts to me during allthese years and are therefore part of my thesis. I am greatful for their friendship. Special thanks toMagdalena Czaplicka, Gladys Goulborne, Aida and Lasse Lagergren, Elcira and Robert Liljequistand Alejandro Zamora, for their support, specially during the last and stressful period of completingthe dissertation.

Finally, there are those who suffered and supported me out of all proportion. Thanks Berna, Gui andspecially Chico, who travelled to Uppsala to take care of me; thanks to all my family, from mygranny (the oldster) to my syster’s daughter Carolina (the youngster) and specially my motherEunice Caira Gitahy, from the bottom of my heart!

Preface

This thesis, which gathers together six papers written in Brazil during the 1980s and the 1990s, ismarked by the reflections, dreams, and experiences of a long trip shared with my generation. Wewere born in the baby boom after the Second World War, and in our childhood, marked by theromanticism of the Hollywood films of the 1950s, we believed that “at the time of evil I think wehad not been born yet” [“no tempo da maldade acho que a gente ainda não tinha nascido”] (“João eMaria”, by Chico Buarque de Holanda). We woke up at the end of the 1960s in a world divided bythe violence of the Cold War and the scenes of the Vietnam War, which used to invade our TVscreens every night. As it is said in the same song, “now it was inevitable that the make-believeended like that, beyond that yard it was an endless night”, [“agora era fatal que o faz-de-contaterminasse assim, pra lá desse quintal era uma noite que não tem mais fim”] (“João e Maria”, byChico Buarque de Holanda).

I entered the University in 1968 and, one year later, with Bernardino, my love and companion sincethen, I had to leave Brazil “running like crazy” [“num rabo de foguete”] (“O Bêbado e aEquilibrista”, by Aldir Blanc). We could only return in 1980, with our two sons: Guilherme, whowas born in April, 1973, in Santiago de Chile, and Francisco, who was born in May, 1977, inUppsala, Sweden, countries which have welcomed us in our successive exiles.

Ironically, it was as ‘survivors’1 of the totalitarian regimes which devastated Latin-Americancountries during our youth that we reached Europe, from where our great-grandparents havedeparted, as victims of the great migratory movements provoked by the social transformationswhich formed the Second Industrial Revolution. The seven years spent in Sweden during the 1970shave taught me that it is possible to build institutions which join democracy, development, andsocial welfare, depending on the characteristics, creativity, and modes of action of the socialmovements.

I have never been able to separate my intellectual work, strongly marked by rationalistic traditionand faith in Science, inherited from the Enlightenment, from my daily life, my emotions, anddreams. In this sense, my work means a kind of long return, marked by my experiences in Chile andSweden. To live in different countries get me the ability to see Brazil in a new light on my return,and, in the beginning, the paradox of feeling a foreigner in my country. Little by little, through myresearch and teaching activities, in which I have sought shelter, devoting myself to understand therecent history of my country and continent, I have found that the magical realism of Latin-Americanliterature is much more realistic than magical. Countries of the future with no memory from thepast, we go on repeating the cycles of our “Hundred Years of Solitude”, so well portrayed byGabriel Garcia Márquez.

My effort, together with that of colleagues who have collaborated in the researches giving origin topart of the articles which constitute this thesis, was to try, as much as possible with no prejudices, toopen the ‘black box’ of concrete processes of industrial re-structuring. It would be impossiblewithout the collaboration of all those present in the various investigations on which this thesis isbased: managers, engineers, workers, and businessmen, actors and victims of the re-structuringprocesses at the time, who chose to share their experiences, knowledge, beliefs, and expectationswith us.

1 For Primo Levi, who survived the Holocaust (cited by Hobsbawn, 1995:11), ”we survivors... are those who, byprevarication, skill or luck, have never touched the bottom. Those who have done it, and who have seen the faces of theGorgons, did not return, or returned with no words”.

9

1. Introduction

1.1 ObjectivesThe objective of this thesis is to analyse the process of diffusion of technological and managerialinnovations in the Brazilian industry in the 1980s and the 1990s, based on:

(a) A theoretical-methodological discussion on the concept of techno-economic paradigm (Perez,1985) and its utility to study the diffusion of technological and managerial innovations in theBrazilian industry 2;

(b) The use of the concepts of network and production chain to analyse concrete processes ofrestructuring;

(c) A set of four empirical studies based on different researches carried out at different momentsand in different types of companies in the 1980s and the 1990s.

It is a matter of understanding how the introduction of a set of inter-related innovations, inspired ina new paradigm of efficiency, modifies:

(a) on one hand, the daily work activities (routines, procedures, modes of producing, indicators,criteria, status symbols, habits, and values);

(b) and, on the other hand, the division of labour within firms and among them i.e. inter-firmrelations), as well as between firms and different institutions, including those of the educationsystem.

The main idea is to show how the diffusion of a new paradigm of efficiency, associated with theprocess of globalization of the economy and the abandonment of the model of development basedon import substitution, transformed the work organization and the inter-firms relations in theBrazilian industry, changing the volume, structure, and location of employment as well as thecontent and hierarchy of skills. Under the conditions of an extremely large domestic market (in spiteof its great contraction, especially at the crisis peaks of 1981-1983 and 1990-1992), the re-structuring of the Brazilian industry occurs in a context characterized by crisis, economicinstability, recession and unemployment as well as by political re-democratization and growinginfluence of the labour movement. It is within this scenario that the slow abandonment of the modelof development based on import-substitution, the increasing integration to global economy and thediffusion of the new paradigm of industrial organization have taken place. In the beginning of the1990s, the liberalization of the economy intensifies this process. It is through studies realized incompanies at different moments that I try to retrieve the links between the change in daily practicesand the constitution of a new production scheme.

This thesis consists of two parts: this summary, which discusses some central issues and theconcepts used in the different studies which constitute the thesis, and six selected papers based onresearches carried out in the 1980s and the 1990s. Among them, four are based on researchesconducted at different moments of the re-structuring process and in different points of theproduction chain (articles III, IV, V and VI), and two are efforts of synthesis and theoreticalcomprehension of how the re-structuring processes in Brazilian industry have happened (articles Iand II). Some studies have been carried out in large leading companies in the production chain andothers intentionally seek to reach firms at the end of the chain, and even home-working (in the caseof the shoe industry). The empirical studies allow us to understand, on one hand, changes in time(i.e., the different rhythms of innovations’ diffusion), and on the other hand, differences in varioustypes of companies (from large firms to small second- and third-tier suppliers).

2 See also Dosi (1984) for the related notion of “technological paradigm” and Kuhn (1963) for the more general conceptof “paradigm”.

10

The aim has been not only to understand the evolution of the re-structuring process, but also howthe actors’ perceptions have changed. At a different level the papers also show how I and mycollaborators were changing our views about the processes being investigated and witness at thesame time our theoretical and methodological evolution. My research was at first focused on therise of women’s trade-union membership among the metal-workers in São Bernardo do Campo(Gitahy et al., 1982a and 1982b; Lobo et al., 1984). In these papers, we started from the socialmovements of female workers. Through the analysis of their claims and social practices (usingdocuments and interviews in depth) we began to see, using the available bases of quantitative data,what was happening both on the labour market and within trade unions. Labour Process, SexualDivision of Labour, Labour Market, Trade Unions, and Social Movements were the keywords inthese papers. Our premise was that women’s perceptions of their work, family life, and trade-unionexperiences were signs of important social changes both in the composition of labour market and inthe very forms of women’s participation within trade unions, a hypothesis which was confirmed.

My subsequent research, also centred on the labour process, was aimed at investigating the socialeffects of the introduction of new technologies in companies in various industrial sectors (Peliano etal., 1987; Gitahy and Rabelo, 1988). Working in several projects carried out in the 1980s I realized,little by little, that the introduction of technological innovation was associated with the diffusion ofa set of organizational innovations based on a paradigm of efficiency qualitatively distinct from theTaylorist-Fordist. I also realized that the process of diffusion of the new paradigm had thecharacteristics of a social movement. When searching for the effect of the introduction of machines,I found a social movement of engineers, businessmen, managers, etc (see articles I and III). Fromthe middle of the 1990s onwards, I started to study transformations in several production chains,emphasizing the comparison among different regions in Brazil (see articles V and VI) and thelocation and relocation of employment (Gitahy and Cunha, 1999; Abreu et al., 2000). At the sametime we began to link the results of these studies with those of the studies conducted on the actionof trade unions during the last few years, which generated various papers (Gitahy and Bresciani,1998; Araújo and Gitahy, 1998 and 1999).

Research on these processes led me eventually to a reconsideration of the understanding of linksbetween changes in daily practices and the construction of a new productive and institutionalscheme. The main issue was to understand how actions at the level of the firm, oriented by differentperceptions of the paradigms in force, result in changes not only in the structure of employment andlabour market, but also in the very structure and location of the industrial system. In my opinion,this may contribute to a better understanding of the linkages between daily work practices, on onehand, and processes of industrial re-structuring and re-ordering of production chains, on the other.

1.2 Historical BackgroundIn the last two decades, Latin-American countries have witnessed profound changes in theirtraditional productive relations, which have been greatly affected by globalization and theassociated international re-structuring process. This process is characterized by the diffusion oftechnological and organizational innovations through different production chains and by themarkets re-ordering. At the core of these transformations is an intense process of labourreorganization and an increase in productivity, affecting the volume, structure, and location ofemployment, the level and hierarchy of skills, and patterns of work-force management. It isimportant to understand the dynamics and the nature of these changes in order to understand thetransformations they entail. The relations between work and education and the dynamics ofproductive re-structuring in the region are particularly relevant in this context (Gitahy, 1994b:9).

In Latin America, these transformations have occurred at the same time as the replacement of theimport substitution model. This project, which characterized different political and economic

11

experiences3, has had as a common axis the establishment of a salary-based society founded on thedomestic market, which allowed a sustainable income rise and the overcoming of poverty.

Paradoxically, it was precisely in the countries where more inclusive social structures had beenbrought about that, in the early 1970s, a succession of military coups were staged. Starting withPinochet in Chile and followed by Argentina and Uruguay, the military regimes repressed violentlyparties, trade-unions, and other organized social groups while disorganizing the domestic economicbasis. Strongly supported by the Reagan and Thatcher governments, Pinochet’s dictatorship in Chileopens a new perspective of development, oriented to a larger external exposition of economies,made possible by the financial internationalization trend which began to acquire importance in thatperiod (Castro and Dedecca, 1998:10).

‘Adjustment’ policies associated with the liberalization of markets and to the fomenting of exportswere implemented in a context marked by economic crisis and recession. To the already traditionalproblems of the region (such as structural unemployment, income concentration, deficiency ofeducation systems) can be added the effects of crisis and recession, either by the consequences ofinflation spirals, which concentrate income, or by the desindustrialization and dismantlement ofpublic systems provoked by ‘shocks’ in adjustment and deregulation policies. Simultaneously, wewitnessed a process of political redemocratization and reorganization of civil society, and efforts ofeconomic co-operation and regional integration (Gitahy, 1994b:10).

The economic crisis in the beginning of the 1980s affects the countries of this region in differentways. In Brazil and Mexico, the process of foreign debt explains recession, whereas in Chile and inArgentina the crisis is produced by the effects of external exposition on the local market and by adisproportional rise in the availability of goods and services. Nevertheless, whereas in Brazil thecrisis is concomitant with the slow process of political opening, redemocratization, and resurgenceof social movements, in Chile and Argentina we have the binomial dictatorship/recession, i.e., theworst of all possible worlds.

In Brazil, the 1970s was characterized as a period of great industrial expansion and, although thesymptoms of crisis and economical recession could be felt already in 1974, their negativeemployment effects were only visible after 1981. In this period, a great expansion in industry andindustrial employment is verified, especially in terms of the increase in the amount of workersclassified as semi-qualified. Another important element was the massive incorporation of women indirect production activities, especially in the metal-working industry (Gitahy et al., 1982a).

This process occurs under a competition pattern basically directed to an internal market inexpansion and protected by the import-control politics. The capital-goods sector developed, on theone hand, to meet public-sector demand (large governmental projects in a variety of areas) and, onthe other, to meet demand in the durable consumer-goods sector which was also growing.Concerning the labour management pattern, we found, in mass-production industries, a model4

characterized by an extreme parcelization of activities, extensive use of non-qualified work-force,high and induced turnover5, extremely conflictive work relations, where discipline is obtainedthrough authoritarian methods, associated, in the case of the auto industry, to salaries higher than inother sectors6. The crisis in the beginning of the 1980s and the process of political liberalizationquestion the foundation of this model (Gitahy, 1988).

From the point of view of the competition pattern, the contraction of the internal market, associated

3 From democratic experiences to military governments, some of which have dissociated economic development fromsocial development.4 Which Fleury (1978) also called “routinization” and Carvalho (1987) “predatory ways for using the workforce”.5 For a discussion on turnover as a management policy, see Stutzman (1981).6 Humphrey (1982) adds to these elements the importance of work laws and jobs and wage structures used by largefirms and relates the authoritarian character in work relations in the firms to the political context in which they areinserted.

12

with the issue of the external debt, takes the firms to a new level of competition, in a moment of re-ordering of the markets on the international level. If the problem in the 1970s was producing“quantity”, in the 1980s the keyword turns out to be “quality”. The increase in exports, on the onehand, and, on the other hand, the increased competition on the internal market made it vital forfirms to increase their levels of productivity and efficiency. Concerning the technological pattern,we can notice the introduction of product and process innovations (use of systemsCAD/CAM/CAE, NCMTs7, robots, introduction of Just-in-time, Kanban, cellular production, grouptechnology, TQM systems with the use of SPC8), related to the process of diffusion ofmicroelectronics accelerating during the crisis. The change in the labour management pattern,though, is the slowest one. It encompasses the implementation of more participative managementmethods, revision of jobs, and wage structures, work-force stabilization politics, ‘democratization’of the use of restaurants, and greater concern with human-resource management. This changebegins in the 1980s and is enhanced in the beginning of the 1990s, especially in the auto industry.The great competitive pressures on course in the world auto industry9 (car assemblers and autopartsmakers), brought by the entrance of Japan, caused deep and radical changes in this sector’sorganization and forced the re-structuring of the frequently turbulent relations between the vehiclecar manufacturers and their component suppliers. The pressure on auto assemblers to increase plantproductivity and quality of the vehicles had a vital effect upon the autoparts industry (see articles IIand IV).

Since the 1990s new and important changes can be noted in inter-firm relations, in product andlabour markets, in worker’s mobility, and in skill requirements. At the same time, in a country likeBrazil, some forms of flexible production are being established in a context of labour marketderegulation and the atomization of collective action. These processes have emphazised the need fora simultaneous analysis of what is going on both within, between, and outside firms10. Hence, thesocial construction of production networks and the new forms of institutional articulation are aparticularly relevant theme for social scientists (see articles V and VI).

7 CAD = Computer Aided Design; CAM = Computer Aided Manufacturing; CAE = Computer Aided Engineering);CNCMT = Computer Numerical Controlled Machine Tools.8 JIT - Just-in-time, a management system created in the Japanese car industry to adjust input demands and production,reducing stocks, and costs of production. It can be used within the firm (internal Just-in-time) or between client firmsand suppliers (external Just-in-time). Kanban is a control system using cards to manage Just-in-time production.Production and inputs are organized through cards containing information on each part being produced (name, code,number of pieces, and where in the prodution line it is used). TQM - Total Quality Management, a management systemaiming at total quality in production. SPC - Statistical Process Control is a control system using statistics that transferresponsibility for quality to the shop-floor workers, eliminating the traditional quality control based on inspectors.9 For the auto-world industry it was a decade of intense global competition and rivalry, and a new re-structuring phasewas on course in Europe. The reality found by the most important auto manufacturers consisted of the reduction of thedemand’s growth index and the increase in excess capacity, while the expansion of Japanese leading firms were goingon in the USA and began to have a considerable impact on Europe (there was expectations of an increase in theparticipation of Japanese firms on the European market from 11% to 18-20%). The agreements and mergers, theincreasingly faster technological change which induce the growth in R&D expending and heavy capital investments(related to severer environmental laws), and the innovations implemented by Japan in the production methods bring tothe auto manufacturer’s mind a great variety of challenges. Between the end of 1989 and the beginning of 1990, Ford(USA) bought Jaguar (UK), GM (USA) bought 50% and the control of Saab (Sweden), Volvo (Sweden) joined Renault(France), Daimler-Benz (Germany) set up negotiations with Mitsubishi (Japan), while Ford and Fiat were negotiating adeal in the tractors and heavy-trucks sector (Financial Times, May 16th, 1990, cited in Article IV).10 For Ahrne (1994:vii) “what is going inside, outside and between organizations is central in all analysis of society.Organizations are the mechanisms that shape macro-processes at the same time as they are the preconditions for everyday life. Action and structure are brought together in organizations.”

13

1.3 Basic conceptsThe theoretical and methodological effort of this thesis is directed toward the question of how tostudy an ongoing transformation process, which involves radical changes from the economic andsocial point of view (change in the model of development) associated with a change in the paradigmof efficiency. It is based on empirical studies conducted in industrial enterprises, which wereundergoing re-structuring11 processes at different moments in the 1980s and the 1990s.

I started my study on the diffusion of technological innovations in Brazilian industry in thebeginning of the 1980s. The initial studies are centred on the analysis of the introduction of newtechnologies based on microelectronics in companies of different sizes and sectors (Gitahy, 1983;Peliano et al., 1987; Gitahy, 1988; Gitahy and Rabelo, 1988 and Article III).

During the researches carried out in this period I realized, little by little, that: a) the introduction oftechnological innovations was associated with the diffusion of a set of organizational innovationswhich used to modify radically not only labour organization and modes of working, but also thevery form of conceiving productive efficiency; b) I was witnessing more than a diffusion ofmachines; it was a process of diffusion of ideas and social practices associated with such ideas, andc) this process of diffusion had the characteristics of a social movement of engineers, managers,businessmen, workers, etc.

During the interviews conducted at companies, I have faced a highly complex process of socialchange at the micro level, which turned the established norms and behaviour12 models familiar toorganization members inside out, setting new systems of authority and control. This processtransforms norms, values, and routines and creates new sources of insecurity, anxiety, andresentment (see Article I and II).

The diffusion of this set of innovations implies transformations in daily routines of labour13, inmodes of producing, thinking, and feeling. Just to give an example, today, in many metal-mechaniccompanies, pride of being smeared with grease (which used to show hard work) was substituted forthat of wearing, at the shop-floor, an impeccable white apron (synonymous with organization and“quality”), after a successful 5 S programme14. This is something which is happening either in atraumatic way (as, e.g., at moments of downsizing or re-engineering) or in a gradual way withdifferent degrees of visibility, either to the different actors involved in this process or to researcherswho pass by with their questionnaires and interview guides (Gitahy, 1999).

Today, when this process is extremely advanced, the anguish of managers, engineers, technicians,and workers (direct actors in the process of change) is impressive, as it is said that everything theyhave learned before is no longer of use. In order to survive in the ‘magical world of globalization’,it is necessary to be modern, competitive, and to redesign daily practices based on a sort ofperception of the underlying principles of a new paradigm of efficiency, which each and everyoneinterprets as they can, risking concretely to find themselves excluded both from the company andfrom the formal labour market, because they are too old, neither modern or updated, or whatever thediscourse in fashion dictates.

At the common-sense level, the idea spreads that companies and individuals should become“competitive”, “productive”, “modern”, “entrepreneurial”, “polyglots”, “multi-disciplinary”,

11 The empirical studies that make up this thesis are just a part of the researches carried out and published in the period,which have strongly influenced the theoretical approach I have developed throughout time.12 For a discussion on technology, social action, and rule systems, see Burns and Flam (1987).13 Even if this process is extremely heterogeneous, when compared to the contradictions among the “guiding principles”and the “practices” effectively implemented, what changes is the everyday life at work: routines, procedures, modes ofproducing, indicators, criteria, status symbols, habits, and values (Gitahy and Cunha, 1999).14 A programme which aimed at constant improvement of 5 S: Seiri (clearing up - throwing away unnecessary items);Seiketsu (things disinfected, hygienic etc.); Seiso (sweeping or cleaning - getting rid of dirt); Seiton (tidying - puttingthings in proper order); Shitsuki (discipline or self-discipline).

14

“polyvalent”, “post-modern”, and “employable” in order to survive. To reach these objectives(which nobody knows exactly what they are and which individuals will interpret in their own ways)can be acquired through a set of recipes, methodologies, techniques, packages, etc., spread by anample literature, courses, and the most diverse means of mass communication (Gitahy, 1999, seealso Gitahy and Fischer, 1996).

According to the media, it is necessary to study and to recycle throughout life in order to, perhaps,get some kind of occupation; or, in the words of a worker at a large company of cellulose,interviewed in 1998: ”In order to stay in the job now we have to be scientists, real experts”, whereasanother one, discouraged, states: ”I am a sparepart, which cannot be milled anymore” (Santos,1999:IV).

Little by little, I realized that: a) the agents of change themselves, managers, workers, andespecially engineers (strongly motivated by their firm belief in technological progress and interestin innovations), have not been able to see the results of their actions; b) we, the researchers, withour long questionnaires and our questions, have somehow been actors and agents of the sameprocess, and none of us has seen the results of our actions; c) in reality, we have been working witha mix of perceptions, expectations, and values (theirs and ours), which biased our studies15.

Based on the contrast between the insights from my experience in the fieldwork16 and the nature ofthe debate in scientific congresses (which, at that time, seemed to me locked into the dichotomycontinuity/rupture or straitjacketed by the ”positive” or ”negative” effects of new technologies) thatI was going to move away even more from the approaches influenced by structuralism (Braverman,1974 and the French School of Regulation) and come closer to authors who, either in laboursociology or in innovation economics, seemed to me to be more influenced by empirical findings.

Taking for example economics and sociology, studies such as the one by Piore and Sabel (1984),which had a great impact, question the idea of the inevitability of technical progress viaspecialization (included in Adam Smith’s pin factory), and point toward the importance of theinteraction among views, ideas, actors, and processes of institutionalization to explain theconstitution and the hegemony of the system of mass production from the beginning of the centuryonwards. Also Neo-Schumpeterian economists (Dosi, Freeman, Perez), when studying innovation,borrow from epistemology the concept of paradigm17 (Kuhn,1963), which also assumes actors andviews to explain the dynamics of generation, selection, and choice of innovations (see Article I).

As defined by Perez (1985:443), the concept of techno-economic paradigm makes reference to “aset of common sense guidelines for technological and investment decisions” which guides theactor’s choices. As such, the concept was deemed to be adequate to analyse the social and economic

15 Morin (1982) points out that one of the basic problems of modern science is the difficulty in thinking of itself due tothe elimination, on principle, of the subject which observes, experiences, and conceives the observation, eliminating thereal actor (scientist, man, intellectual, inserted in culture, society, and history).16 During the 1980s, among different research projects, I think I visited more than 100 companies (from differentindustrial sectors), some of them many times. In the 1990s, I believe this number was doubled.17 The concept of ‘technological paradigm’ appears in the literature on diffusion and the dynamic of innovation bymeans of an analogy borrowed from modern epistemology, based on Kuhn (1963). Dosi (1984:13-16) definestechnology as “a set of pieces of knowledge, both directly ‘practical’ (related to concrete problems and devices) and‘theoretical’ (but practically applicable albeit not necessarily already applied), know-how, methods, procedures,experiences of successes and failures, and also, of course, physical devices and equipment. Existing physical devicesembody the achievements in the development of a technology in a defined problem-solving activity. At the same time, a‘disembodied’ part of the technology consists of particular expertise, experience of past attempts, and past technologicalsolutions together with the knowledge and the achievements of the state-of-the-art. Technology, according to this view,includes the ‘perception’ of a limited set of possible technological alternatives and of notional future developments.This definition of technology is very impressionistic, but it seems useful for the exploration of the patterns of technicalchange. One can see that the conceptual distance between this definition and the attributes of science - as suggested bymodern epistemology - is not so great.” Based on this definition, the author proceeds analogously, defining‘technological paradigm’: “we shall push the parallel further and suggest that, in analogy with scientific paradigms,there are ‘technological paradigms’ (see Article I).

15

dynamics of the diffusion of technological and managerial innovations in the Brazilian industry.The paradigm is a “a general guiding model”, a kind of “ideal type of productive organization”18,which is used as “the most efficient and rational” during a certain period of time (Perez, 1985: 443)with a strong power of inclusion/exclusion (Dosi, 1984:16). It is worth mentioning that, used in thismanner, the concept leaves an ample margin to exploit the nature of the performance of sociologicalvariables in the diffusion process. There is something similar in Piore and Sabel’s (1984) view,when they analyse the confrontation of two production systems based on different visions oftechnological efficiency. In the same way as Perez, their approach presupposes social visions andactors who hold these visions. Chart 1, based on Perez (1985) and Piore and Sable (1984), showsthe differences betwen the ‘old’ (Taylorist-Fordist or “mass production”) and the ‘new’ (Post-Fordist or “flexible specialization”) paradigm of efficiency (see Articles I and II).

The new forms of industrial organization has received various titles in the international literature:“Neo-Fordism” or “Post-Fordism” (for the French Regulation School, e.g., Aglietta, 1976, Palloix,1976, Boyer, 1987), “new techno-economic paradigm” (for the Neo-Schumpeterians, e.g., Perez,1985), “PIW strategy” (for Björkman and Lundkvist, 1987), “flexible specialization” (for Piore andSabel, 1984), "systemofacture" (for Hoffman and Kaplinsky, 1988), “lean production” (forWomack et al. 1990, from the world automotive study conducted at MIT). Despite the variety ofterms used, all make reference to the same phenomenon. Owing to this and in order to avoid tocontribute to the plethora of terms in the litterature, I will just call it the “new” paradigm (seeArticles I and II).

The idea that attracted me in Perez’ (1985) definition of paradigm as common-sense principles-guiding decisions, in the analysis of processes of change, is that generally the mobilizing ideologiesand the so-called common-sense principles19 usually take on a normative format20 and are based onthe codification of some kind of mobilizing social experience. Distinguishing the model (paradigm)from reality, in its turn, allowed me to separate the ”recipes”21 from the practices effectivelyimplemented. The model is always an interpretative construction of reality and should bedistinguished from reality itself 22. This allowed me to move away from the views which tookmodels for reality, either to claim that new forms of labour organization and use of technologyshould be followed in order to survive (Womack et al., 1990) or to reduce them to some sort ofimmanent logic (almost a natural law) of capitalism, which has risen both among the ideologists ofthe neo laisser faire and in variants of structuralist neo-Marxism.

18 Perez (1985:443) suggests “that the behaviour of the relative cost structure of all inputs to production follows more orless predictable trends for relatively long periods. This predictability becomes the basis for the construction of an 'idealtype' of productive organization, which defines the contours of the most 'efficient' and 'least cost' combinations for agiven period. It thus serves as a general 'rule of thumb' guide for investment and technological decisions. That generalguiding model is the ‘techno-economic paradigm'. As it generalises, it introduce a strong bias in both technical andorganizational innovation. Eventually, the range of choice in technique is itself contained within a relatively narrowspectrum, as the capital equipment increasingly embodies the new principles. Furthermore, for each type of product,expected productivity levels, optimal scales and relative prices become gradually established, together with the forms ofcompetition in each market”.19 What my grandmother calls “the law of life”.20 From catechism to administration manuals and almost all the bibliography aimed at executives via cash on deliveryand that invades bookshops and airport newspaper stands.21 Which, in general, used to come in different packages sold by consultancy companies, and especially throughprogrammes of Total Quality Management.22 One of the problems pointed out by Morin (1982) as a cause of scientist’s incapacity to thinking science is the beliefthat scientific knowledge is a reflex of reality.

16

CHART 1: DIFFERENCES BETWEEN PARADIGMS OF INDUSTRIAL ORGANIZATION

Taylorist-Fordist Paradigm orMass Production

Post-Fordist Paradigm orFlexible Specialization

Size offirm/plant

• Large (the corporation) • Small and large

Organization ofthe firm

• Analytical model, focuses onparts or elements of processes, itled to detailed definition of tasks,posts, departments, sections,responsabilities and to complexhierarchies

• Adapting demand to production• Periodic planning• Specialized plants and

equipments

• Systemic model, focuses on links andsystems of interrelations for holistictechno-economic co-ordination, mergingactivities into one single interactivesystem: managerial and productive, whiteand blue collar, design and marketing,economic and technical

• Adapting production to demand• Dynamic "on line" monitoring• Flexible production systems

Technology • Specialized dedicated machinery • General purpose machineryLabour • Great number of workers

• Narrowly trained• Separation of conception and

execution• Fragmented and routinized tasks• Narrow job classification

• Reduction of the number of workers• Broadly trained• Integration of conception and

execution• Multi-skilled and varied tasks• Broad job classification

Characteristicsof the Worker

• semi-skilled or specialized • Skilled, multifunctional and co-operative

Management • Hierarchical and formal • Flat hierarchy, informalManagerialbehaviour

• Strategy to control market • Fast adaptation to change, innovation

Characteristicsof the Manager

• Intuition-based skills, that wouldlead to the right decisions in theface of scant information.

• Information-based skill, a more integratedtechno-economics skills and increasedcreative, intuitive skills.

Production • High volume, limited range ofstandardised products

• Large and small batch, single unitsvaried/customised products

Characteristicsof theproducts:

• Energy and materials intensity • Information intensity

Characteristicsof theproduction

• Automation• Economies of scale, based on

homogeneity• "Minimum change" strategy• Producer-defined products

• Systemation• Economies of scope or specialization

based on flexibility• Rapid technical change strategy• User-defined systems

System ofcontrol

• Hierarchical bureaucracies • Decentralized networks

Source: Gitahy (1994:148-149) charts 2 and 3, Gitahy (2000) charts 3 and 4; see also Faria (1999, 84-85).

Another theoretical-methodological problem I had to face was the fact that, when observing aprocess of change, we always find the coexistence of elements of transformation and conservation,

17

and, in analysis, it is possible to privilege one or the other23. Depending on the stage of this process,it is possible to find more elements from the old than from the new24. In this sense, the survey,statistically representative, is not the most adequate instrument in studying changes in the period inwhich they are still embryonic and have not been expanded to the whole industrial fabric yet25 (seeArticle I).

To study a process of diffusion of innovations and its relation to social changes implies taking intoconsideration longer periods of time in order to understand their potential and their dynamics ofdiffusion. To study innovation, it is necessary to seek it where it is or where we think it has somepossibility to occur, and to try, by means of successive approximations, typologies, scales, andreports, to reconstitute and understand its process of diffusion. This means, on the one hand, toidentify the characteristics of the ‘old’ and the ‘new’ via the construction of ideal types or models,to identify the islands and their characteristics, and, on the other hand, to understand the timing andthe dynamics of its process of diffusion (see Article I).

A way of overcoming this problem was to use the historical-comparative method. I have startedwith the hypothesis that the phenomena I was observing should be similar to those which occurredduring the diffusion of Taylorism in the beginning of this century in the USA. Thus, using an amplebibliography about the social history of technology, I have compared the present debate and contextwith those contemporary of the process of diffusion of Taylorism (see Article I). Trying to answerthe question of how the process of diffusion of the previous paradigm happened, helped me to thinkof possible forms of studying an ongoing process and to light up the path in order to understand thepresent moment.

In order to understand the dynamics of the diffusion of a new paradigm, one must distinguishbetween different ideas regarding the practice and timing of this process. Distinct differences intime and space exist between the emergence of ideas, the initial experiments to put them intopractice, their systematization, and their diffusion in different societies. The ‘success’ of these firstexperiments induce a process of imitation and adaptation, leading to distinct outcomes in differentcontexts and situations. This process involves new actors, generating support and opposition,whereby new contributions and ideas are either transformed or “renamed”.

By means of this mechanism, it was possible to point out five basic issues: the context of diffusion,the contents of the changes, the mechanisms (paths) of diffusion, time, and finally the incentivesand obstacles found in this process. Following this approach, it was possible to discuss:

1) The concept of paradigm: (a) as a managerial ideology (in the sense proposed by Bendix (1956)and Merkler (1980), i.e., as visions of the role of the worker, of the manager, and oftechnology); (b) as the organization of the labour process; (c) as the enterprises’ structure; (d) aswork relations in terms of the enterprise (posts and salaries, policies of human-resourcesmanagement); (e) as industrial relations (the relationship with the trade unions); (f) as anindustrial organization (relationship among the enterprises); and (g) as a system, relationsamong parts.

23 An interesting interpretation of European history in the period known as the Second Industrial Revolution from thepoint of view of conservation and not of change is the work of Mayer (1981). This author’s thesis is that the two WorldWars in the 20th century are the Thirty Years’ War of this century, and only after them the "ancien régime" disappears,and it is this permanence which is at the roots of wars. This work shows the existence of small "islands" of modernityimmersed in a sea of "tradition”. A survey carried out in the USA or Europe during the Second Industrial Revolutionprobably would not catch the importance of Taylorism and mass-production system for the constitution of modernsocieties. However, Hobsbawm’s works in the same period show a reading from the point of view of change andinnovation.24 The theses which privilege continuity (Neo-Fordism, continuum of degradation, there is not enough empiricalevidence, at the end everything is the same, in Japan yes in Brazil no, etc.). Even being important for the debate, theseaproaches put too many demands and filters on the limit of a consolidated process in order to accept its existence.25 A survey of the automobile industry in the beginning of the 1970s could not predict the emergence of the "Japanesechallenge", even if at that time Japanese experiments were already quite advanced.

18

2) The diffusion of the ideas and practices of paradigms, as a process of imitation and recreation,having diverse results depending on varying socio-economic contexts and the characteristics ofthe “actors” or “agents” in the process.

3) The adoption and institutionalization of paradigms26.

Hence, in order to analyse the diffusion of the new paradigm in Brazilian industry, it was necessaryfirst of all to distinguish between the so-called “guiding principles” and those practices actuallyimplemented. Secondly, one must take into account that re-structuring and implementation is a longand complex process, even in the same firm. Finally, one must identify which dimensions areaffected by changes27.

In order to understand the actors or agents of the processes of change I was obliged to study: a) thedynamics of market niches where companies were inserted28; b) their relations with clients andsuppliers; c) the characteristics of their products and production processes; and d) the characteristicsof technologies and ”packages” of innovations in detail.

Charts 2 and 3 summarize the dimensions used to characterize changes within (Chart 2) andbetween (Chart 3) companies in the case of the automobile production chain.

CHART 2: CHANGES WITHIN COMPANIES

1. Technical basis(technologicalinnovations)

• Higher use of process automation• Flexible equipment• Computerized systems supporting management

2. Productionorganization andmanagement

• Changes in plants lay-out (mini-factories, cells)• Quality and productivity programmes aiming at continuous improvement,

waste reduction and costs cutting (inventory, defects, materials flow time,equipment setup time and lead-time)

3. New methods ofwork organizationand management

• Changes in the professional tasks of direct workers• Multi-skilling process• Greater responsibility for leading processes• Introduction of teamwork concept

4. New ideas onproductionmanagement

• Hierarchical structure downsizing• Technical and behavioural training• New management attitudes• Participatory programmes• Variable payment- and profit-sharing systems• New focus, specialized plants

Source: Gitahy and Bresciani (1998:35).

26 Littler (1978), in his analysis of Taylorism, points at the importance of considering the process of institutionalizationof different systems of ideas (and ideologies) taking into account the relation between ideas and structure. He showsthat different ideologies and models cannot be treated as equivalent and in the same dimension, because if all ideologieshave structural implications, some of them have more implications than others, and the difference is the process ofinstitutionalization of the different systems of ideas: “... the knowledge and understanding derived fromTaylorism wasinstitutionalized within industry in terms of practices of industrial and production engineers. It resulted in the creationof industrial engineering departments and became deeply rooted in the training of general engineers and managers.”(Littler, 1978:187), (see Article I).27 Such as management ideology, organization of the labour process, firm structure (hierarchical levels, organizationalstructure, and systems of authority and control), human-resource management policies (career and salary structure,training and use of participatory methods), industrial relations (union relations), and industrial organization (inter-firmrelations, client-supplier relations).28 Watanabe (1983) rejects the common practice of analyzing the structure of the market and the level of competitionbased only on data from industrial census. To analyse the relationship between competition and technology, a microanalysis based on field research is necessary. Not all enterprises included in the same industrial branch compete amongthemselves and it depends on specific characteristics of the products, location, etc. (see Article III).

19

The dimensions used to characterize changes within firms are: a) technical basis, i.e., technologicalinnovations in a strict sense (e.g., new machinery); b) production organization and management,i.e., systems of production control and planning (e.g., new layouts); c) methods of workorganization and management, (e.g., changes in work-task assignments); and d) application of newconcepts of production management such as downsizing, variable payment, and profit-sharingsystems. Chart 3, in its turn, presents the dimensions used to analyse changes in inter-firm relations:a) introduction of new strategies for market positioning (e.g., client redefinition); b) development ofinter-firm networks with suppliers as well as with “external” and “internal” subcontractors; c)organizational changes such as establishment of “industrial condominiums”29 where variousenterprises share a common plant to produce a variety of components (e.g., assemblers and auto-parts) for a particular product; and d) effects of the introduction of new materials or componentssuch as the use of electronic devices in cars.

CHART 3: CHANGES IN INTER-FIRM RELATIONS

1. New forms of marketpositioning

• Introduction of the Just-in-time system in order to adapt firms’ structuresto the market fluctuations

• Processes focusing, product and client redefinition (specialization)• Flexibility of the company’s operational conditions• redefinition of products (use of new materials and components)

2. Development of inter-firm networks

• With suppliers – establishment-selected partners and a certain level ofstability that guarantees the supplied-material quality and the deliverydates. This partnership often includes the technical assistance from thelarge firm to its productive suppliers

• With ”external” subcontractors – who start to carry out some productiontasks or to make components and parts that will be included in the finalproducts of the large firm, or to execute services outside its premises

• With ”internal” subcontractors – who start to carry out some supportingactivities for the production system (as maintenance, tooling, processand product engineering etc)

3. Organizationalchanges

• Establishment of industrial condominiums• ”Modular consortium” implementation

4. Effects of newproducts

• Obsolescence of parts and models• Use of new materials and components

Source: Gitahy and Bresciani (1998:39).

Based on these main ideas and observations, I proceed to use the concept of flexible specialization(Piore and Sable, 1984) or flexible production, to describe the practices oriented by the new techno-economic paradigm (Perez, 1985) and to analyse the transformations whithin and betweencompanies (inter-firm relations) in different production chains (see Articles III, V and IV). Thepioneering work which developed the concept of flexible specialization (Piore and Sabel, 1984)refers to two cases of industrial organization, which have proved to be effective in adapting firms tounstable and more segmented markets through greater flexibility and lower cost production. Thesetwo cases are:

(a) the vertically integrated production chains commanded by large firms present in the Japanesecar industry; and

(b) the association of more independent geographically concentrated groups or clusters of small-and medium-sized firms in certain regions of northern Italy.

The so-called Japanese production system (referred to as “toyotism” in some studies) has beenwidely discussed in organizational and managerial literature. Crucial to its success has been theability to combine flexibility with standardization.

29 As the VW new plant at Resende/RJ (1996) and the Ford plant at Taboão/SP.

20

In the case of the geographically concentrated industrial complexes or clusters, flexiblespecialization is based on an organization of the production process dominated by small- andmedium-specialized firms dividing among themselves the various production stages of certain itemsor families of items (Schmitz, 1992). The principal features of this model include:

(a) geographical concentration of firms belonging to the same industrial sector;(b) member firms of various sizes, where medium and small enterprises hold a prominent role;(c) productive specialization among firms along the vertical production chain, involving suppliers

of all types of goods and services;(d) great flexibility in quantity and wide differentiation of products;(e) horizontal division of production among different firms through subcontracting and

complementary activities;(f) the most effective of such industrial complexes base their competitive advantages on non-price

factors;(g) low barriers to entry; and(h) access to information and service networks.

Such a structure is called a cluster of firms, which enjoy collective efficiency through the ability ofthe cluster to create competitive advantages shared by all member firms, which the individualproducer alone could not obtain (Sengenberger and Pyke, 1990). The major benefits provided by acluster include:

(a) proximity of clients to their suppliers;(b) the ability to create very dynamic market niches through the development of various suppliers

of goods and services;(c) the presence of financial- and technical-aid institutions; and(d) the availability of a skilled workforce. In regard to inter-firm relations, we must distinguish

between vertical relations (complementarity in the production chain) and horizontal ones (whichmay range from fierce competition to some co-operative efforts).

Not every cluster, though, shows a tendency to specialization and innovation. To a large degree, thiswill depend on the nature of the manufactured goods and market dynamics. In less developedcountries, more than in the developed ones, competitiveness implies the ability to quickly adapt tounforeseen circumstances30 (see article V).

The concept of production chain was useful to map networks of linked production activities and toanalyse the transformations of the inter-firm relations in different industries (see Articles V andVI). Gereffi (1994 and 1995) uses the broader concept of global commodity chain. In this analysisthe main units are industries and firms and the study is conducted through a mapping of theeconomic networks in three dimensions:

(a) product – which encompasses the production cycle and complete consumption: supply of rawmaterial, project, components and final-goods manufacturing, export, distribution, and sales;

(b) location: i.e., the geography of chain; and(c) the organization: companies’ characteristics (e.g.: if firms are specialized or vertically

integrated, large or small, transnational or national) hierarchization and power relations amongthe components of chain and structures of governance.

Gereffi (op.cit.) argues that the study of chains allows the study of global capitalism, and points out

30 Besides flexibility and collective efficiency, some other structural elements may establish the specific characteristicsof a cluster. Among them we may include the low cost of labour and the existence of a reserve work force. Under theseconditions, it is common to find competitive strategies based on low prices, guaranteed by low wages and precariousemployment conditions (see ArticleV).

21

that, in this approach, different patterns of national development indicate results and not startingpoints for research (Gitahy, 1996).

The use of the concept of networks indicates a kind of analysis where the emphasis is on therelations’ dynamics. It is a matter of mapping and describing dynamic relations which occur in acertain context or environment, which, in turn, is also dynamic. Following this line, several authorsstart to map the most diverse networks31 from the globalized commodity chains (Gereffi, 1997),which identifies the elements that move the different types of commodity chains (buyer-driven vsproducer-driven), to the sophisticated techno-economic networks of Callon (1992), whose conceptsare built on economic and sociologic theories, but using much of the methodology of anthropology.However, we observe that different authors use the concept of networks differently to reachdifferent objectives32 (Gitahy, 1996).

Based on the analysis of daily lives whitin companies, it was possible to check that the process ofindustrial re-structuring on the international level, associated with the globalization of the economy(which is translated into simultaneous mergers, acquisitions, and market re-ordering), is inducingsimultaneous movements of destruction/reconstruction of traditional productive relations. Thisprocess is translated into significant changes in inter-firm relations in different production chains, inproduct and labour markets, in workers’ mobility, and in qualification demands.

Next, in order to understand the changes in employment conditions and in qualification demand, itis necessary to analyse simultaneously what happens inside and outside companies. Studies on newdemands for qualification and technological capacity point toward the emergence of newarrangements and agreements between companies, trade unions, education institutions, and centreswhich produce scientific/technological knowledge. Thus, the theme of social construction ofproductive networks and their new forms of institutional articulation becomes important. Thisperspective allows us to gather and articulate several contributions from the research accumulatedin the past few years in our countries, ranging from analyses on the diffusion of technological andorganizational innovations in state-of-the-art sectors of the economies to studies on the dynamics ofthe informal sector and precarious employment (see articles II, V and IV).

Focusing on the issue in this way allows us to avoid economic or technological determinism(present in many studies on the ”effects” of new technologies or globalization, and, por ende, theidea of the inevitability of changes in one sense or the other) and think about ongoingtransformations in terms of multiple choices made by concrete actors in view of given social andeconomic conditions. This means, when studying the process of diffusion of innovations associatedwith a new paradigm of efficiency, we should consider how and why certain ideas and modes ofproducing, and not others, are those which assert themselves in a certain period (a question, by theway, easier to answer a posteriori than a priori), and how they are institutionalized (see Article I).

31 For a view on the use of the concept of network, see how Callon (1992) uses the idea of ”techno-economic networks”,Segenberger and Pyke (1992) the idea of ”collective efficiency”, Sabel (1993a and 1993b) the idea of ”trust”, andGranovetter (1990) the one of ”embeddedness”. An interesting view is that of Langlois and Robertson (1995). Theseconcepts are inserted in many debates, which cross each other in the literature of the 1990s; among them there arediscussions on the convergence between sociology and economics in the study of technological change (about the needto think of the social to understand the economic, and vice versa), the paradigm of flexibility, and the nature of thenecessary ”competencies” to face environments characterized by instability and accelerated rhythms of social,economic, and technological change (Zarifian, 1995).32 The central issue, for Granovetter (1990), e.g., is to understand the social construction of economic institutions, whichleads to what he calls the problem of embeddedness. This author has based his view on two fundamental sociologicpropositions: (1) the action is always socially situated and cannot be understood by means of a reference to individualmotivation, and (2) the social institutions do not appear automatically from some inevitable form, they are ”sociallybuilt” (Berger and Luckman, 1966), and both propositions are inconsistent with the basic beliefs of neo-classiceconomics (Gitahy, 1996).

22

1.4. Method

(a) Data

Research reported herein has used data collected in different forms:

• Data was collected on visits to the companies under study, with a long schedule including: a)interviews with entrepreneurs33, directors, managers, technicians, and workers; b) directobservation; and c) data and documents provided by companies;

• Data collected on visits to the business associations of the studied sectors, where we haveobtained data on the sector’s performance and studies conducted or ordered by suchassociations;

• Census data from different sources;

• Review of all kinds of research reports, magazines, theses, books, specialized technicalmagazines, etc. about the studied sectors or markets.

We worked with interview guides for visits and extremely comprehensive and detailedquestionnaires, which had questions ranging from general characteristics of a company and itshistory to products and their markets’ characteristics as well as to the whole labour process (fromproduct and process development to manufacturing and sales), to human-resources characteristicsand policies (selection and recruiting, characteristics of labour force, structures of job and wage,programmes of professional education, etc), to relations with clients and suppliers and withdifferent institutions. In each one of the sectors studied, we have asked about the type of innovationintroduced in past years. An important aspect was to discuss relations between clients, suppliers,and competitors.

(b) Interview guides

Our schedules were flexible and adaptable to different kinds of companies and have beensophisticated and formalized during learning time. It is worth emphasizing that the interaction withthe interviewee and the immersion in the daily routine of companies were extremely important tothe development of our research instruments34. Little by little, we learned from our interviewees thelanguage of companies, and gradually understood both the technical and economic parts and theirsystems of rules, written or not.

On a first visit, specially in large companies, we used to go for a general survey to gatherinformation on the company’s structure, visit the plant, and elaborate a schedule of interviews andobservations with the people in charge of the sectors we would study in detail. During interviews,we have been shown examples of how to solve problems whereafter we went to the plant again. Insome companies, we have attended courses on quality, costs, etc., invited by their organizers and wehave followed audits in which client companies certified suppliers. Sometimes this process hastaken several weeks, depending on the size of the company.

Whenever possible, in each interview, there were at least two of us (one more experiencedinterviewer and a trainee). We have used a tape recorder only at moments in which it did not seemto interfere with the situation. All interviews were transcribed the next day together with ourimpressions on what we had seen and on the conditions of the interview. In this sense, the methodemployed was almost ethnographic.

An important aspect is that questions and data were always related to a longer period of time (from5 to 10 years).

33 In small companies, their owners.34 The analysis of the evolution of our questionnaires could produce an article on the theme. In the beginning, I did notknow how to distinguish one machine from the other. I call this learning process ”learning to see”.

23

(c) Characteristics of material gathered

The material obtained from the companies can be classified in different types:

• Transcriptions of interviews with entrepreneurs, workers, managers, engineers, technicians, etc.in charge of different activities;

• Tables with series of data (e.g., evolution of sales, production, numbers of employees, turnover,salaries, and sometimes structures of job and wage);

• Lists of clients and suppliers;

• Lists and descriptions of machines purchased;

• Documents: organization charts, product catalogues, technical rules, procedures descriptions,manuals, instructions of organizational packages, programmes of different types of courses,examples of calculated cost structures, etc.

(d) Characteristics of samples

The companies included in the studies were selected using a nonrandon purposive sample designaccording to the objectives of each article, as in the chart below (see Chart 4). The samples used inthe articles were selected among the companies under study in the research projects35 mentioned inthe summary of the studies.

CHART 4. CHARACTERISTICS OF THE SAMPLES

Objective Datacollection

Numberof firms

Sector Localization Size Sample’sdesign

III Relations betweensmall and large metal-working firms in thediffusion of NCMTand new HR policies

1987-1988 11 Metal-mechanicalandElectronics

SP Large andsmall

FirmsusingNCMT

IV Relations betweentechnological andorganizationalinnovations andchanges in schoolingand skill demands forproduction workers

1990-1991 18 Autoparts SP Large andmiddle

Leadingfirms bytype ofproduct

V The nature of inter-firm relations withintwo differentBrazilian clusters

1993 37 Shoes/autoparts

RGS/SP Large,middle,and small

Sector,region,type offirm

VI Changing in inter-firmrelations and theimpact the newstrategies on locallabour markets andlocal institutions inthree regions

1996-1997 53 Autoparts SP/RJ/RGS Large,middle,and small

Region,size, anddifferentposition inproductionchain

It is worth pointing out that, in general, it was through large companies that we reached their clientsand suppliers. Thus, using the informal networks between companies we had access to othercompanies (names, telephone numbers, addresses, etc.). For instance, in the case of article III, inorder to find out which companies used NCMT (one of the sample parts was about companies

35 Number of firms interviewed in each project (other sectors and localizations to): III (40); IV (20); V (37).; VI (87).

24

which used automation equipment), we started the research in a company which manufactured thesemachines and which provided us with a list of the companies, which had purchased the machinesand their characteristics.

(e) Analysis

When we finished fieldwork, we had a huge amount of material of various types, which needed tobe tabulated and which were organized in folders and files by company. There were greatdifferences between the quality and the quantity of information obtained in each company.

The next step was to summarize the information in descriptive tables per group of relevant variablesfor analysis in order to visualize the set of material obtained. This was an extremely time-consuming task, from which we had to extract a maximum of significant information for theobjective of the study. In the analysis of innovations, we have opted for listing occurrences and theirdescriptions in order to construct our codes and classification categories, which generated the tablespresented in the articles.

Here, it is worth emphasizing that it was necessary to arrange many discussions and team meetingsbetween the several stages of codification and analysis of the material in order to distinguish thepractices of interviewees’ discourses (what was said and what was done), and, using the criterion ofintersubjectivity, to try to untie the knot of a mix of perceptions, expectations, and values (both ofour interviewees and of the interviewing team), which could bias data interpretation36.. Even if thisis an insoluble methodological problem, the fact of having tackled the problem and opted for aresearch strategy which was more exploratory than confirmatory of hypotheses deducted fromconsolidated theories (often domineering in debates), it has helped us to perceive some types oftransformations when they were still in their embryonic stage and appeared in ”deviated” cases.

2. The Studies

I. Toward a New Paradigm of Industrial Organization? 37 This paper analyses the concept oftechnological paradigm, and the so-called “new technological paradigm” in its differentversions (“flexible specialization”, “lean production”, “Neo-” or “Post-Fordism”, Japanese,Swedish, and Italian models, etc.) and discusses its utility in dealing with the theme ofdiffusion of technological and managerial innovations in Brazilian industry.

One of the problems of the literature on the theme, especially in Brazil, is that it seems to beclosed in a kind of vicious circle organized around two main lines of thought:

• Continuity or rupture?

• Whatever the nature of the changes (continuity or rupture), are they in a process ofdiffusion in Brazil?

First, theoretical arguments regarding the contents and nature of the ideas associated with theparadigms under debate are often mixed and confused with arguments of an empirical nature,with respect to the characteristics of organizational and technological innovations that arebeing implemented within the enterprises. The second line of thought is primarily associatedwith a more general discussion on the situation of the developing countries within the newinternational order, and secondly, with the debate on the process of diffusion and social effects

36 When we work in teams, it is extremely useful and clarifying to confront our perceptions and expectations with thesame material obtained, and it is very interesting to observe that the content of what each one considers more or lesspositive or negative varies considerably.37 Paper originally presented as Gitahy, Leda (1992) “Na direção de um novo paradigma de organização industrial?Algumas reflexões sobre o conceito de paradigma tecnológico e sua utilidade para tratar o tema da difusão de inovaçõesna indústria brasileira” at XVI Annual Meeting of ANPOCS, Caxambu, octuber 1992.

25

of new technologies in these countries. Here the discussion seems to be even more confusedand the diverse possible combinations of arguments of the first line of thought with those of thesecond, in the most diverse mixes, many times lead to a kind of ‘dialogue among the deaf’.

How can this vicious circle be avoided? One possibility is through the comparative historicalmethod, i.e., to compare the current debate on the contemporary situation with the process ofdiffusion of the former paradigm. It is an attempt to try to answer the question “how did theprocess of diffusion of the former paradigm come about?” and “how to study a process inprogress?" so as to enlighten the path to understand the current moment. The period chosen forcomparison with the current moment was that of the diffusion of Taylorism in the beginning ofthe century, in the USA and in Brazil, with a brief look at Sweden. The essential idea is to treatthe diffusion process of the new paradigm as a social movement: of engineers, entrepreneurs,managers etc., as an inflexion point in the so-called “rationalization movement”. From there, anew question appears: how, in which socio-economic context, and through which means andsocial groups are these ideas and practices disseminated.

II. Technological Innovation, Subcontracting, and the Labour Market. 38 The objective of thisarticle is to discuss the re-structuring process underway in Brazilian industry, giving specialattention to a discussion of inter-firm relations and its impact on employment relations and thelabour market. In a context where economic instability in the country and domestic marketcontraction were associated with the intensification of international competition, this inducedcompanies to re-structure through the introduction of a set of product and process innovationsand client-supplier relations inspired by the Japanese model.

This diffusion process has taken the form of imitation and recreation, trial and error. More thanthe introduction of technological innovations, the application of these tools on the firm levelsignifies a highly complex process of social change, reversing established norms and models ofbehaviour which were familiar to members of organizations. Total Quality Managementprogrammes often appear as a vehicle, or detonator, of this change process. This wave of re-structuring, in which the crisis has served as an intense pressure, has implied a tendency inwhich a company initiates a process of reflection and revision of goals and objectives, oftenthrough an external consultant, oriented by some type of view of the guiding principles of thenew paradigm.

The ”outsourcing” trend intensified with the pressure to reduce costs and increase efficiency,starting with a process of deverticalization and an externalization of activities. It is possible toidentify different ”trajectories” in the outsourcing process. On one hand, one type ofoutsourcing is associated with a joint effort between a large and a small firm in order to qualifysuppliers and increase their product quality and, on the other hand, other forms are associatedwith ”restrictive” strategies, involving the externalization of activities in order to cut coststhrough more precarious employment conditions, even risking the quality of services provided.The search for increased competitiveness leads to the creation of subcontracting networks andnew forms of inter-firm relationships with quite heterogeneous characteristics. This situationpoints toward significant modifications in the labour-market structure and new challenges forthe institutions and social actors involved in this process.

38 Paper originally presented as Gitahy, Leda (1993) “Inovação Tecnológica, Subcontratação e Mercado de Trabalho”at XVII Annual Meeting of ANPOCS, Caxambu, october 1993

26

III. Technological Innovation,Industrial Relations and Subcontracting.39 This paper discussesthe relationship between small and large metal-working companies in the process of diffusionof new automation technologies, mainly Numerical Control Machine Tools (NCMT) and in thechanging of industrial-relations policies in the Brazilian industry. The study, based on researchundertaken from May 1987 to June 1988, is restricted to some metal-working companies in thestate of São Paulo.

The practice of subcontracting tends to enhance the diffusion of new technologies. The qualityof the products of the large company is influenced by the quality of the services delivered bythe small subcontracting partners. Thus the large company may find it advantageous to transferto its subcontractors new production techniques. The demands of the contracting company forhigher quality standards from its subcontractors will put pressure on the latter to enhance thequalification of its human resources.

IV. Education and Technological Development: the Case of the Autoparts Industry.40: Thispaper discusses the relationship between technological and organizational innovations andchanges in schooling and skill demands for production workers based on research undertakenfrom October 1990 to June 1991. In a sample of 18 firms, from various sectors of the Brazilianautoparts industry, we investigate how the implemented innovations affect schooling and skilllevels among shopfloor workers.

The main innovations treated here are the Total Quality Management (TQM) programmes andJust-In-Time (JIT) production systems. These innovations cause changes in the desired profileof shopfloor workers since they imply a transfer to them of new responsibilities, typicallyassociated with white-collar personnel, requiring thus a greater level of self-control.

V. Inter-firm Relations, Collective Efficiency and Employment in two Brazilian Clusters.41 Thisstudy, based on research undertaken from March to September 1993, analyses and comparesthe nature of inter-firm relations within two different Brazilian clusters, i.e., the shoe industryin the state of Rio Grande do Sul (RS) and the metal-working industry clustered around the cityof Campinas in the state of São Paulo (SP) and their impact on industrial competitiveness andemployment. It attempts to identify the major obstacles to the establishment of the flexiblespecialization (FS) model in both clusters and to assess whether this model shows a trendtoward a core-periphery segmentation of the labour force and whether it contributes to greaterworkers’ skilling.

The study shows that the diffusion of innovations associated with the FS model in the twoclusters surveyed has followed different patterns and affects employment and inter-firmrelations in different ways. These differences result, to a larger extent, from the diversecompetitive strategies dominating each cluster: price reduction in the shoe cluster and qualityimprovement in the Campinas cluster. However, geographical proximity has favoured a closeinteraction between firms and teaching/research institutions in both regions. The researchsupports the hypothesis that a core-periphery phenomenon between firms under subcontracting

39 This paper is based on the results of the research entitled: “Education and Technological Development: the case ofinfornatization of industry in Brazil”, co-ordinated by Leda Gitahy in NPCT/IG/UNICAMP, financed by IDRC/Canadaand IIEP/UNESCO (1986-1989). Flávio Rabelo and Maria Conceição da Costa worked in the project as researchassistants.40 This paper is based on the results of the research entitled “Estratégias Competitivas, Capacitação Tecnológica eGestão de Recursos Humanos”, DPCT/IG/UNICAMP (1990-1991) co-ordinated by Leda Gitahy. Flávio Rabelo was aresearch assistant in the project.41 This paper is based on the results of the research entitled ”Inter-Firm Relations, Collective Efficiency andEmployment in two Brazilian Clusters”, realized by PPGA/UFRGS and DPCT/IG/UNICAMP in 1993, funded byILO/OIT. The research was co-ordinated by Roberto Lima Ruas (UFRGS) and Leda Gitahy (UNICAMP). FlávioRabelo worked as a researcher and Elaine Antunes as a research assistant in the project

27

arrangements is present in the shoe-manufacturing industry in RS. In the Campinas cluster, onthe other hand, a workforce with similar characteristics in terms of skill and experience isfound in both the larger and small firms. The difference is that in the latter they receive lowerwages, have fewer training opportunities, and enjoy much less social benefits.

VI. Industrial Restructuring and Inter-firm Relations in Brazil: A Study of the Auto-PartsIndustry in the 1990s. 42 This paper looks at the process of re-structuring in the Brazilianautoparts industry, using data collected in fifty-three autoparts firms, located in three differentregions of Brazil: Campinas (São Paulo), Rio de Janeiro, and Porto Alegre (Rio Grande doSul). Data were collected between August 1996 and May 1997. In Campinas, the researchstudied a medium-sized firm producing brakes and ten of its suppliers (medium- and small-scale). In Rio Grande do Sul, the research gathered data on nine auto-parts firms and sevensuppliers for three of those firms. In Rio de Janeiro, the research outline was different from thetwo other regions, since all twenty-six autoparts firms in operation were interviewed. Of these,however, only nine were direct suppliers to the automobile assemblers; three others suppliedparts to other autoparts firms and the rest worked with the after-sales market.

Using the concept of a production chain as a reference point, the research aimed at studying notonly on the level of diffusion of technological and organizational innovations inside the firms,but also how these changes affect the reallocation of activities along the production chain. Inthis sense, it was thought that the introduction of strategies of focused production andexternalization of activities to the top of the chain would affect the organization structures ofthe chain as a whole. The main focus of the research was, therefore, inter-firm relations, but italso looked at the impact of these new strategies on local labour markets and local institutions.

3. Conclusions and suggestions for further research

3.1 Main findingsThis thesis encompasses a period of twenty years, in which we can see the process of diffusion of aset of product and process innovations, and of relations among clients and suppliers, inspired by theso-called ”Japanese model”. Such innovations are oriented by a new paradigm of efficiency,qualitatively distinct from the Taylorist-Fordist model. From the point of view of the use of labour,it is important to point out that such innovations imply the transformation of a model characterizedby the extensive use of semi-skilled labour into another based on the intensive use of skilled, multi-functional and co-operative workers (see Articles II and IV).

The essential idea was to treat the process of diffusion of the new paradigm as a social movement ofengineers, businessmen, managers, etc., as a point of inflexion in the so-called ”rationalizationmovement”. By means of this mechanism, it is possible to think of five basic issues: the context ofdiffusion, the content of changes, the mechanisms of diffusion (paths), time, and finallyencouragement and obstacles found in the process (see Articles I and II).

The main findings can be summarized as follows:

1) The diffusion of technological and organizational innovations in Brazilian industry began in themiddle of the 1970s, at the same time as the beginning of the economic recession, the process ofpolitical liberalization (“reabertura politica”), the emergence of the so-called new trade-

42 This paper is based on the results of the research entitled ‘Reestruturação produtiva, trabalho e educação: os efeitossociais da terceirização industrial em três regiões do país’ (Productive Restructuring, Work and Education. The SocialImpacts of Industrial Outsourcing in Three Regions of Brazil), 1995-97, funded by FINEP and CNPq, co-ordinated byAlice Rangel de Paiva Abreu and José Ricardo Ramalho (PPGS/IFCS/UFRJ) in Rio de Janeiro, Leda Gitahy(DPCT/IG/UNICAMP) in São Paulo, and Roberto Ruas (PPGA - UFRGS) in Rio Grande do Sul.

28

unionism, and the crisis of the model of industrial relations in force during the ”miracle” period(1969-1974). It is in this context that, in most modern firms and sectors, the first experimentsrelated to the new paradigm of industrial organization began. During the 1980’s, contraction andcompetition fierceness in the domestic market associated with an increase in exports in a contextof intensification of international competition have induced companies to re-structure throughthe introduction of a set of product and process innovations and client-supplier relations inspiredby the “Japanese model”. From the beginning of the 1990s, the liberalization of the economyintensifies this process and Just-in-time, Kanban, and flexible production are now part ofordinary Brazilian industry’s vocabulary from managers to production workers (see Articles II,III, IV and VI).

2) In the last decades we could see a series of successive changes within and between companies,related to the size and depth of innovations adopted and to the perceptions of the actors involvedin these processes (entrepreneurs, managers, engineers, workers) about the nature andconsequences of these innovations. By the end of the 1970s up to mid-1980s, innovation formany companies signified buying equipment and/or introducing organizational or motivational“programs”, which were often implanted in sectors of companies under the initiative of this orthat department, with heterogeneous outcomes43. Starting at the end of the 1980s, an increasingnumber of companies entered a profound re-structuring process, originating from a managementdecision to introduce a set of inter-related innovations44. These efforts toward more integratedre-structuring were manifested through the introduction of some type of Total QualityManagement (TQM) program (see Articles II, IV and VI).

In the Brazilian case, the Total Quality Programs often appear as a vehicle or even as adetonator of this process of change. A similar phenomenon was observed in British industry byHill (1991), which passed from the partial use of Japanese management methods (especiallyQuality Control Circles which were widely diffused in the middle of the 1980s and increasinglyabandoned by companies) to more integrated strategies based upon Total Quality Programs.The problems encountered in these initial experiments reflect the clash between traditionalprinciples and firm structure and the new principles, which created an anomalous situation ofduality and conflict. The new programs pointed toward a deeper and more integratedtransformation (see Articles II and IV; Gitahy, Leite and Rabelo, 1993; and Rachid and Gitahy,1995).

The set of changes that are introduced within companies, either in a partial form or throughbroader or “systemic” strategies, imply substantial changes in their traditional forms oforganization. From the point of view of labour management it is interesting to highlight someelements such as the reduction of the turnover levels, initiatives to obtain a greater involvementof the workers, and elevation of the formal schooling requisites for direct production jobs. Thesechanges occur in a quite distinct direction from that of the model used previously. Qualitysystems such as the Statistical Process Control (SPC) illustrate this thesis well. The transfer ofresponsibility for quality to shop-floor workers, eliminating the traditional quality control basedon inspectors, generally involves large retraining programs. The low schooling of most of the

43 Leite (1992) highlights the importance which organizational innovations have taken on in the modernization strategyof companies. After the initial phase in which the modernization efforts have been concentrated on the acquisition ofnew equipment, companies began to perceive the need for reorganizing production as a fundamental issue, whetherbecause the new production concepts, based upon the principles of flexibility, quality, and speed of the labour processdemanded quicker and less rigid forms of labour organization than what was predominant at the time, or because thenew forms of labour organization were seen as central even for guaranteeing a more efficient utilization of the newequipment (see Article II).44 Fleury (1988) and Ruas (1994) distinguish three types of company strategies in reaction to the crisis: restrictive,partial, and systemic. In the first case, companies respond with traditional cost-cutting methods; in the second, theypartially introduce some technological and organizational innovations; and in the third, they involve a broader changeprocess through the increasing utilization of new production concepts (see Article II).

29

production labour was an obstacle to the new organizational systems. Besides retrainingprograms, enterprises also advance towards more rigorous recruitment plans, where schoolingbecomes a fundamental variable. It is interesting to observe that it was only when the SPCstarted to be introduced that many enterprises noted that a significant percentage of theirpersonnel was practically illiterate and was not familiar with basic mathematical operations.Apart from the technical training itself, the firms had also to act in the motivational sphere45 (seeArticle IV).

This movement towards re-structuring46 consists of a variety of measures, among which thefollowing are most important in their consequences (see Articles IV, V and VI):

a) reduction of hierarchical levels, which is reflected not only in the dismissal of managers andeven top executives, but also in the increase in the search for recycling courses of the mostdiverse nature;

b) change in the structure of jobs and wages, creating new career plans47 associated withtraining programmes, even for shopfloor workers;

c) increase in the importance attributed to management of human resources and training;d) adoption of programmes for the qualification of suppliers; ande) outsourcing48.

3) The “outsourcing” movement intensified with the economic crisis (81-82 and 91-93) and thepressure to reduce costs and increase efficiency, starting during the 1980s with a process of de-verticalization and an externalization of activities (see Article II). In the 1990s, this movementintensified in a more structured and systematic way (see Articles II and V), and from 1994 in avery different context – not of crisis, but rather of industrial growth. In this second phase, theexternalization of activities is clearly associated with policies of focusing, development, andreduction of suppliers and with quality enhancement. This externalization began in serviceareas, but also affected productive activities. It was possible to identify different “trajectories”in the outsourcing process. On the one hand, one type of outsourcing is associated with a jointeffort between a large and a small firm in order to qualify suppliers and increase their productquality and, on the other hand, other forms are associated with “restrictive” strategies, involvingthe externalization of activities in order to cut costs through more precarious employmentconditions, even risking the quality of services provided (see Articles II, V, and VI).

The research conducted in Campinas region, in the autoparts, machine tools, and computerindustries in the 1980s, pointed toward a complex industrial network where production by largefirms is relatively integrated with a significant number of small- and medium-sized suppliers.Despite the fact that most of the large firms were highly verticalized, this showed a cleartendency toward de-centralization. In this respect, the research revealed three importantfeatures:

a) subcontracted companies based their competitive advantage on the use of advancedmachining technologies - all were using NC machine tools;

45 As stated by one of the industrial managers interviewed in 1990: “If the worker has no idea about the product he’smanufacturing or even why the tolerance limits must be so narrow for his good performance, he thinks that all thisworry about quality is simply another managerial whim to make his life more difficult” (see Article IV).46 This wave of re-structuring, where crisis operates as intense pressures, has involved that companies start, oftenresorting to an external consultant, a process of reflection, a review of goals and objectives, and a reorganizationoriented by some sort of perception of the guiding principles of the new paradigm.47 It is worth pointing out the introduction of multi-function careers for shopfloor workers.48 Programmes transferring activities that were formerly carried out by the employees of a specific company to outsideagencies, meaning companies or institutions that operate either within (internalization) or outside (externalization) thepremises of the company, are known as outsourced activities. This term is currently used by those involved in theoutsourcing processes for activities and describes a broad range of combinations and possibilities.

30

b) during the 1981-83 recession, the employment behaviour of these firms was much morestable than that of the large subcontracting companies, and

c) the small companies used a qualified labour force (machine-tool operators and mechanics)which was comparable in most cases with their large client firms (see Article III).

The research carried out in in the begining of the 1990s compared the diffusion process offlexible specialization in the cluster of footwear producers in Rio Grande do Sul and in thesubcontracting networks in the metal-working industry in the Campinas region. The studyconfirmed that the diffusion of innovations associated with these model in the two clustersinvolved different trajectories and consequences for employment conditions and for inter-firmrelations. An important explanatory factor for these differences is the competitive strategy onthe markets in which these firms operated. The two case studies indicate that the process ofdiffusion of innovations based upon the concept of flexible specialization is indeed taking place,albeit at different speeds and with different outcomes. These differences could be explained dueto the specific characteristics of the two sectors as well as the dominant competitive strategy –i.e., low prices in the case of the footwear industry and new quality standards (certificationunder the ISO 9000 norms49) in the case of the metal-working industry.

In terms of employment levels, the footwear industry showed rising levels, yet within a contextin which the characteristics of subcontracting pointed toward a clear separation between “core”and “peripheral” workers, in a phenomenon characterized as “rudimentary flexibility”. In thecase of the metal-working industry in the Campinas region, employment levels are dropping,but the differences between large and small firms are not significant in terms of labourqualification or the nature of the production processes, but are significant in terms of wages andsocial benefits. It is worth mentioning at this point, that a detailed analysis of employment andwage conditions in the most advanced cluster points toward a situation where quite reducedlevels of stable, polyvalent, and co-operative labour in the large firms coexist with labour in thesmall firms which is equivalent in terms of skill requirements, yet with lower wages, feweropportunities for training, and less social benefits. Employment in the small firms in the samplewas found to be skilled, less prone to oscillations during periods of crisis, formalized, and hadhigher average salaries than those of other industries and could not be classified as precariouslabour. However, this characterizes a qualitatively different situation than that which waspredominant prior to the crisis and the beginning of the re-structuring process in the firms (seeArticle V).

4) In the research carried out between 1996 and 1997 in fifty-three autoparts companies localizedin three different regions of the country, we tried to better understand these processes. The threeregions have a very different industrial history and this is reflected in the profile of the autopartsindustry in each one of them. The autoparts industry in Rio de Janeiro is characteristic, in manyways, of an old and decadent sector. It was an important player in the constitutive period of theBrazilian automotive industry in the 1950s and 1960s. Now, however, it is facing veryimportant changes, with the installation of several assembly plants in the region or in borderingregions of the state such as the Volkswagen and Peugeot plant at Resende and the MercedesBenz plant in the south of Minas Gerais. The metal-working industry of Rio Grande do Sul wasby origin closely related to agricultural production and the firms had different phases ofadaptation to the different industrialization periods. The switch to autoparts started in the 1950sand 1960s. Their importance is greater now because of the Mercosur agreement (SouthAmerica’s Common Market, including Argentina, Brazil, Paraguay, and Uruguay). The regionof Campinas, São Paulo, on the other hand, has a very dynamic industrial sector, which grew

49 ISO 9000 is a set of norms edited by ISO (International Organization for Standardization) for evaluation andcertification of companies. The norms ISO 9001-9003 are used as a base for contracts and ISO 9004 describes the mainbases for a quality system. The norms are attesting to levels of quality in many aspects, such as managementproduction.

31

steadily even during the 1980s – the ‘lost decade’ for most of Brazilian industry. Metal-workingindustries have a long tradition in the region, dating back to the 1930s, when the main nationalmachine-tool firms were created. Other national and multi-national groups installed plants in theCampinas region in different phases of the import substitution process, among them leadingautoparts firms. A large transportation, services, and educational infrastructure supports thisdense economic fabric. Campinas also has a privileged location, close to the main industrialcentres of the country. Using the concept of production chain as a reference point, the researchaimed to study not only the diffusion of technological and organizational innovations inside thefirms, but also how these subsequent changes affected the reallocation of activities along theautomobile chain. The main focus of the research was, therefore, inter-firm relations, but it alsolooked at the impact of these new strategies on local labour markets and in local institutions.The central hypothesis was that the externalization and/or internalization of processes werebeing implemented by the large client firms resulting in a major recomposition of industrialworkers in those firms and that a new industrial fabric is being created by this re-structuringprocess (see Article VI).

We found that one of the main consequences of the re-structuring process for companies in theautoparts sector is the shift in the relationships between client firms and suppliers (verticalrelationships). It was possible to identify some trends in the reorganization of these relationshipsbetween the firms in the three regions:

a) intensification in the trend toward outsourcing/internalizing activities (auxiliary andproductive) on all levels of the production chain, which implies a redefinition of the divisionof work among companies;

b) tremendous pressure from client firms to formalize quality systems offered by theirsuppliers, reflected in regular audits and assessments and, more recently, in the demand forISO 9000 certification50;

c) growing demands for flexibility, meaning the capacity to cope promptly with frequentalterations in the scheduling of customer orders (see Article VI).

In the first place one must stress that the movement towards externalization and/orinternalization of activities and the resulting redefinition of the division of labour among firmsin the autoparts industry is extremely complex, heterogeneous, and dynamic. What we areseeing was the result of a re-structuring process that started among the large autoparts firms inthe 1980s. This has been accentuated in the 1990s, with flexibilization, cost reduction, andfocusing being closely related to quality improvement. As previous research has shown,however, this is a trial and error process (see Articles I, II and Gitahy, 1994) and theintroduction of these measures will depend on specific conditions. Their diffusion along theproduction chain is very dissimilar. This research provided some information on how, and towhat degree, these processes are disseminated along the production chain in the three regions.

50 A widespread trend identified in the reorganization of the relationships between client firms and suppliers is thetremendous pressure from client firms to formalize product quality from suppliers. This marks a clear-cut trendreflecting rising demands to introduce documentation and procedures related to production quality, parallel to risingpressures to trim costs. These demands are reflected in regular assessments and audits by the client firm companies and,to an increasing extent, pressures to obtain ISO 9000 certification. This type of assessment guides the selection of thoseto be maintained or eliminated by client firm in order to reduce the overall number of suppliers. This process could bedetected in the companies studied in the three regions, but with varying characteristics and intensity. In general, thisinitially involved a performance assessment of the supplier by the client firm, including regular assessments of therejection rates for the product, prices and/or delivery periods, followed by visits by the client firm to the supplier inorder to authorize supplies with ‘guaranteed quality’, resulting in the elimination of on-receipt controls at the client firmcompany. This ‘guaranteed quality’ is generally followed by audits of the supplier quality system carried out by theclient firms, covering additional information and more frequent visits to rank the suppliers. At a later stage, the clientfirm company may require ISO 9000 certification, which in principle eliminates the need for them to audit theirsuppliers, as the certificatory agency carries out regular audits.

32

The outsourcing of such activities as restaurant facilities and cleaning is very widespread. In allthree regions and at all firm sizes, including the very small ones, these services are beingexternalized. The research also shows productive activities being externalized, but this is morediversified among the different firms and seems to depend on a variety of factors, some ofwhich are outside the direct control of the individual firm. Regional differences seem to beparticularly important in this matter. In fact, productive outsourcing affects two different typesof activities:

a) activities related to labour-intensive products or processes, which can be located outside thefirm without affecting the production flow;

b) activities related to more complex products or processes, in those densely industrializedregions, capable of absorbing those activities with efficiency and reliability.

Some variables seem to be particularly important in defining which production activities areoutsourced and to whom. The type of product and/or process involved in outsourcing is a keyvariable for defining what is outsourced, and cost-cutting considerations are vital in thisdecision. On one hand, labour-intensive processes for which the location outside the companydoes not affect the production flow (such as assembly tasks and machining simple parts) arevery frequently outsourced. For more complex products and/or processes, on the other hand, itdepends on the availability of an industrial network that is sufficiently reliable and efficient inthe region where the company is located.

The definition of to whom these outsourced production activities are assigned depends onvariables relating to the nature of the relationships between the client firm and the supplier, andtheir intensity:

a) the track record of the relationship between the client firm and the supplier, meaning pastexperience which determines levels of mutual trust;

b) the importance of the client firm to the supplier and vice versa;c) the combination of size (scale and investment capacity) and competence (technical capacity)

of both client firms and suppliers.

The pressures for lower costs paired with enhanced quality and flexibility have intensified there-structuring of companies on all levels of the chain studied in the three regions, resulting ininnovations in the organisztion of production and work as well as in management policies. Thedrive to reorganize production and work in the companies is characterized by the introduction ofvarious types of innovation within the firms:

a) higher investment in production-process automation, mainly through the acquisition of newand more flexible equipment;

b) alterations in the layout of the plants, with the introduction of mini-plants and productioncells, and alterations in job specifications, stressing multi-function skills;

c) adoption of new production control and planning techniques as well as quality control inorder to obtain ISO 9000 certification (JIT/Kanban, SPCl).

In turn, these innovations pave the way for a new definition of the division and content of thework by expanding the duties and responsibilities of workers in the production sector throughthe transfer of activities related to the formalization of quality and maintenance tasks.

5) The links between pressures to cut costs, formalization of quality, enhanced productivity, andgreater flexibility for deliveries have triggered appreciable transformations in the division ofwork, both within the companies (through the reorganization of the work process, parallel toinvestments in equipment and organizational innovations), as well as between companies (thetrend towards internalization/externalization of activities). This process has significantconsequences, not only for job structures, but also for workforce profiles, ushering in alterationsto the structure and hierarchical levels of skills. If, on the one hand, higher productivity is

33

associated with the introduction of technological and organizational innovations, on the otherhand, these innovations have resulted in more intensive work and higher educational demandswithin a context where the labour market is extremely unfavourable to the workers.

Higher educational levels are increasingly used as selection criteria in the companies whenhiring workers and also the use of new different psycho-technical testings to test the so-callednew qualities as for example initiative and creativity, capacity to work co-operatively in agroup, ability for the mutual formation in the workplace itself, competence to evaluate theproduct of his work, and to make decisions that will improve the quality and control of theplanning techniques and work organization (see Article VI).

The organization of production and work has taken on a new logic which incorporates self-regulation mechanisms that ensure the feasibility of reducing the number of hierarchical levels(reducing the number of bosses) and increasing the independence of workers in terms ofconducting production processes. As a result, companies become more dependent on theiremployees. Their success depends on the motivation and commitment of participants to thecompetitive targets of the company and the quality programmes as well as the new routinesintroduced. Within this context, the need arises not only for training programmes, but also forthe adoption of different types of participatory systems, designed to motivate and/or involve theemployees as a group. This includes the dissemination of information on the company’sperformance, rewards for good ideas brought in through suggestion plans, the introduction ofmulti-function careers and profit-sharing schemes (Gitahy and Bresciani, 1998). The quest forgreater commitment from the workforce has paved the way for major changes in humanresource management in the three regions, within a context marked by the limited presence oftrade unions in the companies.

Nevertheless, in spite of intensification of labour associated with workers’ new attributions(vertical and horizontal enrichment of tasks) and an increase in the demand for schooling inselecting workers, it seems that no improvement has occurred in the compensation received byworkers, neither in salaries nor in benefits. Salaries seem not to follow increase in productivityor reduction in benefits, and new hiring is carried out under ever larger demands and ever lowersalary patterns, a situation made easier by a context of generalized unemployment. Thissituation becomes more serious in small and middle-large companies, which cannot follow theconditions related to salaries, and specially benefits found in larger companies. In its turn, in acontext of generalized unemployment and weakened trade unions (with the usual exceptions),their capacity to negotiate innovations is low.

6) The re-structuring process intensified two trends noted in the course of this study: on one hand,the externalization/internalization of activities associated with the process of focusing on corebusinesses, and on the other, the reduction in the number of suppliers, associated with intensepressure to formalize quality, enhance flexibility, and cut costs. This means that, from thestandpoint of vertical inter-firm relationships, major changes have been introduced in thedivision of work between firms and in the nature of the relationships between client firms andsuppliers. In order to survive within this context, companies have invested heavily not only inmachinery and equipment, but also in quality programmes and schemes for retraining theirworkers.

This situation has increased the relationships of the companies with a number of institutions inthe regions analysed, in order to expand the possibilities of access to resources and know-howthat cannot be found in-house. This means that the companies have sought to participate andbuild up relationships with various types of institutions, partly in order to mobilize funding,ensure access to up-to-date information, and resolve urgent problems, but also because theseforms of relationships/participation are of vital importance for the dissemination of knowledgeon the correct forms of organization and the subsequent legitimization and institutionalization ofnew practices. Trade unions and employer associations, consulting firms, the vocational training

34

system, technical schools, universities,and financing agencies are examples of institutions,which play a vital role in the links that constitute what could be called communicationsnetworks.

In this sense, there is a revitalization or establishment of communication networks amongcompanies, town halls, trade unions, and employers’ associations, financing agencies,consultancy companies, and education institutions, specially the system of vocational education,technical schools, and universities. However, these co-operative efforts have been made difficultdue to factors such as an environment of fierce competition, lack of previous associativeexperiences, conservative culture inherited from the ”miracle” period associated with thetraditional practices of the Taylorist-Fordist model of efficiency. The difficulty in the relationsamong companies and labour trade unions is an example of this kind of inheritance and also ofits fragility, a consequence of the unfavourable situation of the labour market.

It was thus possible to conclude that co-operation initiatives between various types ofinstitutions have become extremely important for the survival and growth of some companies,contributing equally to their adaptation to the new demands related to product quality and labourforce skills. This indicates a reconfiguration of institutional relationships. Thus, it is possible tostate that the relationships between these companies and a number of different types ofinstitutions are playing an increasingly important role in the survival and development of a morecompetitive industrial network in the regions studied. Within this new scenario, theresponsibility and importance of the institutions in the educational system have becomeincreasingly vital for the social and economic development of the various regions (see ArticleVI).

7) With regard to the companies studied in the Campinas region, from the middle of the 1990sonwards, the upturn in the growth of the Brazilian automotive complex and the intensificationof the competition on a national and international level violently accelerated the re-structuringprocess of the enterprises in this production chain. During this period, the diffusion oftechnological and organizational innovations appears associated with the increase ininvestments and a sustained movement of increase in productivity and the re-location ofindustrial plants that are translated in the reduction of volume and the re-location ofemployment. Even though the Campinas region is one of the privileged areas in the location ofnew investments, the intensification of the process of reorganization of this commodity chain inan environment of increasingly fierce competition and the increase in imports (global sourcingstrategies), has provoked an intense concentration movement through fusions/acquisitions oreven closing down of enterprises (see Articles V and VI).

Under these conditions, the process of re-structuring along the commodity chain intensified twotendencies observed in articles III, V, and VI: on the one hand, the externalization/internalization of activities associated with focusing processes and, on the other hand, thetendency toward the reduction in the number of suppliers associated with the enormous pressuretoward the formalization of quality, flexibility, and cost reduction. Thus, from the point of viewof the vertical relations, we will see significant transformations in the division of labourbetween the enterprises and changes in the nature of the relation between clients and suppliers.So as to survive in this environment, the small enterprises have strongly invested not only inmachines and equipment, but also in quality and re-training programs for their workers.Thisscenario has, to a certain extent, altered the configuration of the horizontal relations andincreased the enterprises’ relationship with different institutions located in the region. Thisprocess has important consequences not only for the employment structure (labour divisionamong enterprises) but also for labour profile. The increase in productivity appears clearlyassociated with the introduction of technological and organizational innovations, linked to theconcept of flexible specialization and has involved the intensification of labour and greaterdemands of schooling for the hiring of labour, but in a context in which the labour market isextremely unfavourable to the workers and in which the workers’ unions find themselves

35

considerably weakened.

8) During the 1990s, the transformations in the national and international scenario and the openingup of the Brazilian market affected the footwear cluster in Rio Grande do Sul (RS cluster forshort) in a different way. Even though the activities of the footwear enterprises continue to beconcentrated on production, a stage in the chain in which the value added is relatively low(around 20%) and its main competitive strategy continues to be based on the reduction of thelabour costs, these transformations led to important changes in the configuration of cluster (seeArticle V).

For example, the consolidation of the opening up of the Brazilian market engendered anintensification of the relationship between the cluster producers and the suppliers and externalproducers, leading to difficulties on the level of internal cohesion. Two examples areparadigmatic with regard to this new situation: in the cluster, the footwear producers’ preferencefor imported machinery (causing a serious crisis for the local machine producers) and themassive exports of semi-treated leather - the wet-blue - which, in turn, has established a supplydifficulty for the local producers. Besides these two examples, there is no doubt that thepossibility of having access, both rapidly and at a low cost, to the supply from suppliers locatedin other countries can cause a serious threat, as it precisely hits the key element of the cohesionof the cluster, i.e., the facilities arising from geographical proximity.

Other issues related to the globalization of the markets also seem to threaten the continuity ofthe RS cluster. It is worthwhile highlighting the ”Chinese phenomenon”, which, in little morethan five years, took up a priority role on the international footwear market, practically outdoingalmost all the footwear producers of a low- or medium-low price range on the North-Americanmarket. On the crest of this wave, many enterprises of the cluster under study were directly(among those that traded with the American market) or indirectly (those that were sub-contracted by export enterprises) jettisoned from the market. In this context, the shutting downof many enterprises and the dismissal of thousands of employees were observed.

In the outcome of this process, it is possible to highlight some trends concerning changes in theconfiguration of the RS cluster. In the scope of industrial organization, a kind of centralizationof the subcontracting process was noticed, through the consolidation of the facção as atransaction emerging from this type of relation. By means of the facção,51 the hiring enterprisesincreased the demand for subcontracting of the finished shoe and reduced the demand for thesubcontracting of parts, that was predominantly carried out by workshops. In this new format,the relation between the enterprises and the workshops was weakened and the workshops startedto give preference to the relationship with the facções. On the other hand, the growth ofunemployment triggered off the constitution of some workers’ co-operatives. Some of these co-operatives, which at the beginning of their creation were stimulated by some entrepreneurs andrepresentatives of municipal town halls, had their production practically all dedicated to one orfew enterprises. The production of these co-operatives is also oriented toward finished products,especially intensive labour and low-price products.

Finally, regarding the labour profile, a greater demand for schooling of the workers has beenobserved among the larger enterprises. This change in the criteria of selection, reflect, in mostcases, demands for a more committed attitude toward the enterprise and the new proceduresrelated to the quality of products and processes, i.e., a new attitude among labourers.

51 Facção is a small firm, sub-contracted to produce shoes integrally. The subcontracting firm etablish thedesign, bath, and final price and add it’s label to the product. It is a new configuration (after the mid 1990s)in this cluster.

36

3.2 Main changes in the Brazilian industry, 1970-1999The technological and managerial innovations that began to be adopted following World War II arebeing propagated as a new paradigm of industrial organization all around the world. This paradigmis qualitatively different from the Taylorist-Fordist model of efficiency (based upon the scientificmanagement of labour) with origins in the beginning of the Second Industrial Revolution. The newmodel began to be established in the 1940s and 1950s, and its diffusion has been accelerated duringthe crisis of the 1970s. During the 1980s and 1990s this process intensified due to the greatcompetitive pressures stimulated by Japan's entry into the North-American and European markets(see Articles I and II).

The metal-working industry, and especially the automotive industry which was the birthplace of theprevious industrial paradigm, has held a privileged position in this process of change. This diffusionprocess has taken the form of imitation and recreation, trial and error. Ideas, methods, andmanagement techniques have diffused, based largely upon imitation of the so-called "Japanesemodel". Hence, in the Brazilian case, one can trace a simultaneous diffusion of ideas and newtechniques, many of which are in conflict with those traditionally used. More than the introductionof technological innovations, the application of these tools on the firm level signifies a highlycomplex process of social change, reversing established norms and models of behaviour which werefamiliar to members of organizations, establishing new systems of authority and control andcreating new sources of insecurity and anxiety (see Articles I and II).

The diffusion of a new paradigm of efficiency, associated with the process of globalization of theeconomy and the abandonment of the model of development based on import substitution,transformed the work organization and the inter-firms relations in the Brazilian industry, changingthe volume, structure, and location of employment as well as the content and hierarchy of skills.The re-structuring of the Brazilian industry occurs in a context characterized by crisis, economicinstability, recession and unemploymentt as well as by political re-democratization and growinginfluence of the labour movement. It is within this scenario that we see the slow abandonment of theimport substitution model, in an economy in which the domestic market is extremely significant inspite of its great contraction, especially at the crisis peak (1981-1983 and 1990-1992).

The automobile chain, and particularly the autoparts industry, has been subject to an intense re-structuring process in the last two decades. The autoparts industry – especially the leading firms inthis sector – is crucial to the understanding of the dynamics of technological innovation in themetal-mechanical complex. This industry occupies a central position, between, on the one hand, thelarge auto assemblers, and, on the other, the large chemical, metallurgical, and machine industries.Innovations in the autoparts industry affect the industrial matrix both up-stream and down-stream.

The Brazilian automobile industry started in the 1950s as an international industry. Multi-nationalswere given special incentives to install plants in Brazil, as part of the import-substitution policy thenprevailing in the country. From the multi-nationals’ point of view, this fitted the new ‘internationaldivision of labour’, and access to the large and unexplored internal market in Brazil was animportant consideration.52 This industry had a steady growth until 1980, based on a protected andexpanding internal market.

In the early 1980s this situation changed, with several years of crisis and recession, which led, in1981-1982 to a 30% reduction in production and employment. The early 1980s were also years ofimportant changes in the industry worldwide, with the Japanese entering the USA and Europeanmarkets. All these factors led to the beginning of a re-structuring process, with the slowabandonment of the import substitution policy. In the middle of the 1980s, the response to the crisiswas an increase in exports, mainly to Europe and the USA. This in turn led to a defensive re-

52 The international literature shows that during this period there was a strong re-structuring of the world industry with a‘new international division of labour’. Several of the large car manufacturers from Europe and the USA installed plantsin Brazil in the late 1950s and were followed by their main autoparts suppliers (Gitahy and Bresciani, 1998).

37

structuring of the leading firms,53 oriented by the guiding principles of the new paradigm ofefficiency. Increasing exports as a compensation for recession on the internal market was helped byexport incentive policies put in practice at that time. This in turn led to a concern in quality,54

although changes were introduced only partially and more through reorganization than throughlarge investments in new machinery.

Eventually, the economic crisis of 1990-92 and the opening up of the Brazilian economy intensifiedthis re-structuring process. With economic stability (from 1994), firms made new investments, newfirms came to Brazil, and there was a strong geographical reallocation of the automotive industry,previously highly concentrated in São Paulo. During the 1990s, transformations in the national andinternational scenarios and the liberalization of the Brazilian market affected in different ways theproduction chains under study. In both of them (shoe and autoparts production), however, theintensification of the competition induced the firms to re-structure themselves, introducinginnovations oriented by the perception of the actors involved in these processes regarding theguiding principles of the new paradigm of efficiency.

The introduction of these innovations: a) modifies the daily practices at work (routines, procedures,modes of producing, indicators, criteria, status symbols, habits, and values), and, b) the division oflabour within companies and between companies (inter-firm relations) as well as betweencompanies and different institutions, ssuch as those within the educational system. These processesaffected the configuration of the industrial fabric in the regions studied. As a consequence, and inconjunction with the general trend towards market liberalization and reordering of globalproduction, we can observe significant changes in patterns of competition, technology, andmanagement in different production chains.

Chart 5 is a synthesis of such transformations in the Brazilian automobile chain, comparing the1970s, the 1980s, and the 1990s. These transformations are studied by distinguishing between threetypes of patterns, namely, competition, technological, and management patterns. The competitionpattern characterizes the econonomic context faced by firms and their competitive strategies. Thetechnological pattern summarizes the innovations introduced within and between firms. Themanagement pattern describes the changes in three dimensions: company structures, the structure ofskills and labour management policies, and the nature of relations with trade-unions (industrialrelations).

As we can see in Chart 5, the following differences can be observed:

• In the 1970s: a) a competition pattern characterized by expanding production, directed to theprotected internal market; b) a technological pattern clearly oriented by the Taylorist-Fordistparadigm of efficiency; and c) a management pattern oriented by the same paradigm, butcombined with the authoritarian character of the political context in which they are inserted(military dictatorship).

53 ‘Defensive re-structuring’ means a situation when no new plants or equipment/machinery are heavy involved, butrather changes in organizational and management aspects of existing plants. This re-structuring was strongly influencedby the Japanese model of lean production (Gitahy and Bresciani, 1998).54 From 1992, ISO 9000 was compulsory for the European market.

CH

AR

T 5

: CH

AN

GE

S IN

TH

E B

RA

ZIL

IAN

AU

TO

MO

BIL

E P

RO

DU

CT

ION

CH

AIN

Com

petit

ion

patt

ern

Tec

hnol

ogic

al p

atte

rnM

anag

emen

t pat

tern

Tec

hnol

ogic

al a

nd o

rgan

izat

iona

l (pr

oces

s) in

nova

tions

with

in th

e co

mpa

nies

Inte

r-fi

rms

rela

tion

s (c

lient

/su

pplie

r)C

ompa

ny s

truc

ture

Skill

s st

ruct

ure

and

labo

urm

anag

emen

t pol

icie

sIn

dust

rial

rel

atio

ns

Equ

ipm

ents

/ mai

nten

ance

Wor

k or

gani

zati

on /

prod

uctio

n m

anag

emen

tQ

ualit

y

1970

s•

Prod

ucti

on a

imed

for

the

prot

ecte

dan

d ex

pand

ing

dom

esti

c m

arke

t

•E

lect

rom

echa

nica

leq

uipm

ent a

nd C

NC

initi

al a

dopt

ion

•C

orre

ctiv

em

aint

enan

ce, c

arri

edou

t by

spec

ializ

edde

part

men

ts

•A

ssem

bly

lines

•R

igid

task

s di

visi

onan

d ”r

outin

izat

ion”

•Sp

ecia

lized

line

s•

Func

tiona

lor

gani

zati

on a

nd“r

outi

niza

tion

”•

Inve

ntor

ies

•T

radi

tiona

lqu

alit

y co

ntro

l via

insp

ectio

n; la

te in

the

deca

de, i

niti

alQ

C e

xper

ienc

es

•V

erti

cal p

lant

s•

Lar

ge n

umbe

r of

sup

plie

rs•

Con

flic

ts in

the

prod

ucti

onch

ain

•B

urea

ucra

tic

and

wit

h a

larg

e nu

mbe

rof

hie

rarc

hica

l lev

els

•T

op-d

own

deci

sion

mak

ing

proc

ess

•Fu

nctio

n-ba

sed

orga

niza

tion

(dep

artm

ents

div

ided

by f

unct

ion)

•In

tens

ive

use

of s

emi-

skill

ed w

orke

rs•

Hig

h pe

rson

nel

turn

over

to r

educ

ew

ages

and

dis

cipl

ine

wor

kers

•Jo

bs a

nd w

ages

stru

ctur

es b

ased

on

wor

king

pos

ition

and

task

s (b

road

ran

ge o

fw

ages

leve

ls)

•A

utho

rita

rian

dir

ect

man

agem

ent

•T

rade

uni

ons

kept

und

erco

ntro

l by

labo

r la

ws

(CL

T)

and

polic

ere

pres

sion

.•

Com

pani

es r

esis

tanc

e to

trad

e-un

ions

and

uni

ons

lead

ersh

ip r

epre

ssio

n•

Cla

ndes

tine

grou

ps p

lus

Cip

a (H

ealth

and

Saf

ety

Plan

t Com

mitt

ee)

1980

s•

Dom

esti

c m

arke

tcr

isis

and

cont

ract

ion;

incr

easi

ng e

xpor

tsto

the

USA

and

toE

urop

e, in

aco

ntex

t of

fier

ceco

mpe

titio

n in

the

inte

rnat

iona

lm

arke

t

•E

lect

rom

echa

nica

leq

uipm

ent,

intr

oduc

tion

ofm

icro

elec

tron

icau

tom

atio

n (r

obot

s,C

NC

/DN

C s

yste

ms

CA

D/C

AM

) lo

calis

edin

nova

tion

s•

Mai

nten

ance

dece

ntra

lizat

ion

and

inte

grat

ion,

plu

s T

PM

•A

ssem

bly

lines

•In

trod

ucti

on o

fpr

oduc

tion

cells

,gr

oup

tech

nolo

gy•

Dec

reas

ing

inve

ntor

ies

•D

ecen

tral

izat

ion

•L

ocal

ized

expe

rien

ces

wit

hJu

st-i

n-tim

e/K

anba

n,FM

S, s

emi-

auto

nom

ous

team

s•

Prod

ucti

on w

orke

rsst

arts

to p

erfo

rmm

aint

enan

ce a

ndqu

alit

y ta

sks

•”Q

ualit

ym

ovem

ent”

inte

nsif

icat

ion

•D

iffu

sion

and

aban

don

of Q

CC

expe

rien

ces

•In

crea

sing

diff

usio

n of

SPC

(sta

tistic

al p

roce

ssco

ntro

l) a

nd o

ther

pro-

qual

ity

tech

niqu

es•

TQ

M•

ISO

900

0ce

rtif

icat

ion

•N

ew d

edic

ated

pla

nts

•L

arge

com

pani

es s

tart

dow

nsiz

ing

and

exte

rnal

izat

ion

•In

trod

ucti

on o

f su

pplie

rsde

velo

pmen

t pro

gram

mes

•B

egin

ning

of

exte

rnal

Jus

t-in

-tim

e

•D

ecen

tral

izat

ion

•D

owns

izin

g•

Bus

ines

s un

its•

Man

agem

ent b

ypr

oces

ses

•M

ultif

unct

iona

l”t

eam

s” a

nd/o

r”p

roje

cts”

•D

eman

d fo

r hi

gher

educ

atio

n le

vel

•In

crea

sed

prop

orti

onof

ski

lled

wor

kers

•C

hang

es in

the

job

and

pay

stru

ctur

e•

Intr

oduc

tion

of

part

icip

ator

ypr

ogra

mm

es;

man

agem

ent c

hang

esat

titud

es•

Inte

rnal

res

taur

ants

dem

ocra

tiza

tion

•W

orkf

orce

sta

bilit

ypo

licie

s.

•R

edem

ocra

tiza

tion

,ac

tive

trad

e-un

ions

•St

rike

s, c

onfl

icts

•N

ew le

ader

ship

, wor

ksco

unci

ls•

Wag

es q

uest

ion

as m

ain

prio

rity

•C

entr

aliz

ed c

olle

ctiv

eba

rgai

ning

1990

s•

Tra

de li

bera

lizat

ion

polic

y•

Agr

eem

ents

defi

ned

for

the

auto

mot

ive

com

plex

bet

wee

ngo

vern

men

t, un

ions

and

com

pani

es•

Dom

esti

c m

arke

tgr

owth

, exp

orts

toM

erco

sur

•N

ew in

vest

men

ts,

new

pla

nts

arou

ndth

e co

untr

y

•E

xten

sive

use

of

mic

roel

ectr

onic

auto

mat

ion

•T

PM, d

ecen

tral

ized

supp

ort t

o pr

oduc

tion

•M

aint

enan

ce ta

sks

exte

rnal

izat

ion

(out

sour

cing

)

•A

ssem

bly

lines

•M

achi

ning

cel

ls•

Plan

ts s

egm

enta

tion

•D

ecre

asin

gin

vent

orie

s•

Dec

entr

aliz

edsu

ppor

t to

prod

uctio

n (q

ualit

y/m

aint

enan

ce)

•N

ew q

ualit

ypo

licie

s di

ffus

ion

wit

hin

all t

heau

tom

otiv

e ch

ain

(qua

lity

mov

emen

tin

tens

ific

atio

n)

•Fo

cusi

ng (

prod

ucts

and

/or

clie

nts)

•O

utso

urci

ng p

olic

ies

(ext

erna

lizat

ion

and/

orin

tern

aliz

atio

n)•

Pres

sure

for

cos

ts r

educ

tion,

to f

orm

aliz

e qu

ality

sys

tem

san

d fo

r fl

exib

ility

thr

ough

out

the

prod

uctio

n ch

ain

•Su

pplie

rs’

deve

lopm

ent

•E

xter

nal j

ust-

in-t

ime

diff

usio

n•

“Ind

ustr

ial c

ondo

min

ium

s”an

d “m

odul

ar s

ourc

ing”

expe

rien

ces

•G

loba

l sou

rcin

g

•In

tens

ific

atio

n of

the

rest

ruct

urin

g an

dde

cent

raliz

atio

npr

oces

ses:

•H

iera

rchi

cal l

evel

sdo

wns

ized

•B

usin

ess

units

•M

anag

emen

t by

proc

esse

s•

Mul

tifun

ctio

nal

”tea

ms”

and

/or

”pro

ject

s”•

Hor

izon

tal s

truc

ture

and

deci

sion

mak

ing

proc

esse

s

•D

eman

d fo

r hi

gher

educ

atio

n le

vel

•M

ultis

killi

ng•

Tea

m w

ork

•L

ower

per

sonn

eltu

rnov

er•

Fore

men

new

rol

es•

New

wag

es s

truc

ture

s•

Mor

e tr

aini

ng a

ndin

form

atio

n•

Prof

it s

hari

ng•

Flex

ible

wor

king

tim

e

•M

ore

com

plex

age

nda

(aut

omot

ive

polic

ies,

inno

vati

on, e

tc)

•D

ecen

tral

ized

, bip

artit

ean

d tr

ipar

tite

colle

ctiv

eba

rgai

ning

pro

cess

es

Sour

ce:

Git

ahy

and

Bre

scia

ni (

1998

:22)

.

39

• By the 1980s: a) a competition pattern characterized by the contraction of domestic market andincreasing exports to the USA and Europa; b) a technological pattern characterized by defensivere-structuring oriented by the new paradigm of efficiency55; and c) the management patternchanges slowly, oriented by same paradigm, but in a context of political redemocratization andextremely active trade-unions.

• Finally, in the 1990s: a) a competition pattern of characterized trade-liberalization policy,agreements defined in the automotive complex between govermment, unions, and companies,domestic market growth and redirection of exports to Mercosur and new investments and newplants around the country; b) a technological pattern characterized by the intensification of there-structuring process oriented by new paradigm of efficiency; and c) the management patternchanges, oriented by the same paradigm and industrial relations characterized by a morecomplex negotiation agenda, decentralized bipartite, and tripartite collective bargaigningprocess, but in a context of reduction of employment .

In the past few years there has been an enormous productivity increase in investment and sales anda sharp decline in employment. This is due to an intense re-structuring process, which occurred in aperiod of crisis and economic recession on the internal market associated with an increase ininternational competition, fostered by the gradual discarding of the import-substitution policy. Inthe 1990s there has been a new phase of significant structural changes in the world-automotiveindustry and in the place occupied by the Brazilian automotive sector in this re-structuring process.In the previous decade, firms used exports as a way out of the crisis on the internal market. Thiswas particularly true in the autoparts industry. In the 1990s, by contrast, the opening was ‘to theinside’ (importing). The last few years have seen a sharp increase in the absolute and relativeparticipation of foreign vehicles in the Brazilian consumer market. The constitution of regionalblocs is also very significant, with Mercosur (Argentina, Brazil, Paraguay, and Uruguay) increasingits share of the automotive market and redistributing industrial plants among those countries(Gitahy and Bresciani, 1998).

In 1995 the automotive industry56 was responsible for approximately 3,8% of total Gross DomesticProduct (GDP) and 12,9% of industrial GDP in Brazil (Associação Nacional de Produtores deVeículos Automotores (Anfavea), 1996 and Sindicato Nacional da Indústria de Componentes eMotores (Sindipeças), 1996). It generated a total of 5,4 million jobs directly and indirectly,57

including 214,000 in the autoparts sector and 115,000 in the auto-assembly sector (Anfavea, 1996).In 1989, however, this same sector had been responsible for 7,1% of total GDP and 21,6% ofindustrial GDP, creating 5,6 million direct and indirect jobs, with 310,000 in the autoparts industryand 143,000 in auto assembly. In absolute terms, sales grew from US$24,4 billion in 1989 to US$26billion in 1995, with production rising from 1,06 million cars in 1989 to 1,63 million in 1995, whiledirect employment fell from 453,000 in 1989 to 329,000 in 1995 (Anfavea, 1996).

The most important trends over the decade for the automotive production chain in Brazil are asfollows: a) economic stability associated with a policy of attracting new investment and the pressureto re-structure as a strategy for facing new international and national competition has resulted inincreased investment, associated with a strong movement towards re-location of the industrialplants in the automotive production chain. In a context of increased production, sales, andinvestment, with a fall in employment, the location of new plants and the closing of old ones havegenerated intense disputes and growing antagonism between different regions; b) the intensificationof competition, both within Brazil and internationally, has led to an intense movement towards

55 In these years it was clear, even in same company, that the convivence and/or the clash of visions and values werebased on the two different paradigms.56 Here defined as motor vehicles, motor-powered agricultural machines, and autoparts.57 The up-stream and down-stream links of the automotive industry involve more than thirty economic sectors: mining,steel, glass, tyres, chemical products, batteries, alcohol and petrol, transport services, sales, marketing etc. The auto-parts industry is in a key position between the car assemblers and basic inputs industries.

40

concentration in the autoparts sector, with joint ventures, acquisitions, and the closing of firms; c)there has been a significant increase in imports, especially direct imports by assemblers, whichexcluded exports in 1995; and d) the Mercosur countries have become more important as marketsfor autoparts exports.

3.3 Final discussionThe process of diffusion of what we are used to call, even today, ”technological and organizationalinnovations” in Brazilian industry, is already twenty years old. Some time ago I realized that manyof the things we call ”new” are already quite old. Just to give some examples I would like tomention, that the first NC lathe, manufactured by Romi (a Brazilian company), dates back to 1978,the first experience with QCC, at Metal-Leve, was carried out in 1975, the first cells at Clarkoccurred in 1981, and the beginning of the implantation of SPC in these two companies took placein 1983. Thus, researches carried out at the end of the 1990s are dealing with a process oftransformation which is almost two decades old.

In this period, we witnessed, not only within companies, but also in the most varied types ofinstitutions, a complex social process of trial and error and successive changes, concerning both thesize, characteristics, and depth of the innovations adopted, and the actors’ perception of their natureand meaning. These actors are not the same: today, we interview new generations of managers,engineers, and workers; many of our interviewees of the 1980s have already retired, have beendismissed, or become consultants. When we meet acquaintances who survived, they like to tell uswhat happened after the last time we had been there58. I would like to point out again, that theprocess of diffusion of this set of innovations implies transformations in the everyday work, inmodes of producing, thinking, and feeling.

It is important to point out that a constant in the studies carried out from the middle of the 1990sonwards in different production chains is what we call increase in productivity59. Either studyingindividual companies or analysing sectorial data, using different databases, from the 1990sonwards, we observe that employment decreases, whereas production and/or sales increase with animpressive regularity60. Thus, if new investment and movements of economic growth produced astrong positive impact on employment from the 1930s to the 1980s, from the 1990s onwards weobserve a huge increase in productivity, which, as a result, has economic growth with employmentreduction. Associated with this increase in productivity, we observe an impressive intensification of

58 If, in the beginning of the 1980s, in order to conduct a research on innovations, it was necessary to search for a fewcompanies which were innovating through some indicator (at that stage, we used to search for automation equipment,since both researchers and managers interviewed understood innovation as new machines based on microelectronics),and many of the questions in our questionnaires (made with our colleagues’ support, production engineers, team matesin multi-disciplinary projects) were not understood not even by the engineers interviewed; today, the conceptsassociated to the so-called new paradigm are part of the common language of any interviewee, independently ofcompany size, from its directors to shopfloor workers (Gitahy and Cunha, 1999).59 Economic indicator considered ”positive” and synonymous with rise in competitiveness, which does not convinceme: when we change the ways of organizing things, it is necessary to modify the performance indicators, or at leasttheir interpretation.60 Data from RAIS (that contains only information on the formal labour market) can help us to visualize this situation:between 1991 and 1996, GDP grows 94%, whereas employment in all economic activities grows just 4%. Using thesame data, between 1986 and 1996, Brazilian transformation industry suffers a loss of 1,096,100 jobs in absolutenumbers. As examples, in chemical industries, data from Abiquim (Associação Brasileira das Indústrias Químicas)show that, between 1991 and 1996, to a reduction of employees under CLT regime (Consolidação das LeisTrabalhistas, Consolidation of Labour Laws). CLT-employees/workers hired under these laws are in the so-calledformal labour market and therefore protected by these laws as distinguished from other workers not fornally employed)of about 48% (loss of 51,879 jobs) corresponds an increase of 44% in the net sales (increase of US$5,063,183). In allsectors in which I have been working, automobile complex (assemblers and autoparts manufacturers) and white-goodindustry have results similar to the degree of dramaticity, either using data from RAIS or from their respectiveassociations (Anfavea, Sindipeças, Abinee and Eletros). See Gitahy and Bresciani, 1998, Gitahy and Cunha, 1999, andAraújo and Gitahy, 1998.

41

labour, which, among other symptoms, is translated into real epidemic occupational diseases(increase in stress, RSI - Repetitive Strain Injury epidemics)61.

This situation, which, on the one hand, generates an immense insecurity among all actors involved(present in all interviews), on the other hand, induces an intensification of the relationship amongdifferent kinds of institutions, especially between companies and the education system, and thereconfiguration of the institutional relations in the regions studied.

The nature and the rhythm of present changes have been leading to an intense social demand ofanalyses which goes beyond the ideologies of the ‘neo-laisser-faire’ and the reification of ‘market’,and which allows the formulation of policies which allow us to face new and old challenges. It is inthis environment that the debate on the institutional forms, which are more conducive to economicgrowth and welfare, reappears and is made more intense.

In this sense, to understand the process of diffusion of the new paradigm in the Brazilian case, itimplies capturing the dynamic of this social process, identifying the actors, their perceptions, andattitudes and their concrete experiences. Therefore, we need to think about the transformations inprogress in terms of multiple choices of concrete actors with regard to given social and economicconditions and take up again the debate on the social effects of the ”new technologies”, rescuing theuse of terms and their meaning for the actors of concrete processes of re-structuring, be they”losers” and/or ”winners”, identifying the exclusion and inclusion mechanisms. On the other hand,a convergence effort is necessary, or at least a communication effort with a more ample group ofdisciplines dedicating themselves to the field of labour studies.

Disciplines and research traditions differ both in their objects and the tools used in the study. Eachobject of study has a set of problems and leads to the development of different concepts, techniques,and approaches. This is not the place to present a history of the evolution of these disciplines, thepaths through which we have reached excessive ”specialization”, and even a ” hermeticism ofdisciplinary languages”, to the point of making the experts in each area ”blind” to the phenomenawhich belong to the area of competency of the neighbour expert62. The fact is that, in the last twodecades, the need to think of the change on the macro and micro levels took us to a resurgence ofclassic issues in the human sciences, themes for which the disciplinary boundaries are fainter. Animportant element for such convergence was the accumulation of empirical studies in manydisciplines, closely following processes of innovation and, por ende, mapping relations. Little bylittle, studies on companies, research institutions, and relations among them were accumulated andthe reality was revealing itself simpler and more complex than our arsenal of reified concept. Thescientific work often takes us to find out the obvious through complex paths.

However, in this process of convergence, in which several disciplines start to borrow conceptsamong them, we have to face new types of communication problems: concept A’ reappears next asA”, an operation which, when made carefully, can be very interesting, but, if used carelessly, canonly promote even more confusion (e.g., when someone, sometimes involuntarily, uses A’ in thesense of A”, creating A’’’).

The situation gets more complicated when the concepts produced in our scientific ”laboratories”spread to the media, and are transformed in ”recipes of modernity”, starting to change the everydaylife of the most diverse organizations. It has already happened with ”paradigm”, ”flexibility”,

61 ”Data from Centro de Referência em Saúde do Trabalhador (CRST), in Campinas, show that RSI represented, in1997, 79% of the cases of occupational diseases registered at this centre. The high incidence of RSI both in the servicesectors, banks, and in the industry has been characterized by those who study worker’s health as a real epidemics causedby introduction of new technologies, change in labour organization, maintenance of fragmented and highly repetitivetasks, multi-function, and great intensification in the rhythm of work, long working hours, and lack of breaks (Barreto,1997; Oliveira, 1998)”, in Araújo and Gitahy (1998).62 For a discussion on the effects of specialization in scientific work, see Morin (1982).

42

”Fordism and Taylorism”, ”quality”, ”competencies”, ”employability”, ”qualification”63, and nowwith ”networks”.

Dealing with an extremely polemic, attractive, and current theme, we, as researchers, have faced inour everyday work the difficulties of our double role of scholars and actors in this process oftransformation (of which we are not always aware), and dealt with a material in which not only ourperceptions and expectations are mixed up, but also those of our interviewees..

The great merit of the studies on networks and productive chains, governance structures, and otherpaths we started to take in the last few years is that they have been allowing us several researchexercises and designs, which allow us to identify, map, and even hierarchize a really ample set ofsocial and economic relations (e.g., relations among companies, relations with other kinds ofinstitutions and the local society, power relations within globalized productive chains, etc.), identifydiffusion paths, articulated changes within companies with changes in the relations with theirsurroundings, etc.

The risk is to use such concepts in a reified way. In our field and in our society, it is almost naturaland unconscious to reify the ”new” and ”more” as synonymous with good and positive, ”firstworld” as more advanced (whatever its meaning), qualification as technical education, etc.,”flexible specialization” and ”industrial districts” as models to be pursued, and even to call newinstitutionalities phenomena, which have always been there and which our theoretical perspectivesand views prevented us from seeing.

Thus, it is a case of, on the one hand, analysing the principles that guide the ”models” under debateand their similarities and differences from the principles that guide the former paradigm in the lightof the social, political, and economic process that has induced its dissemination, and on the otherhand, analysing its dissemination in the Brazilian case. I believe, like Schuman (1992), that a newvision of the form of use of labour in the scope of the changes in progress and that their concretesocial effects cannot be analysed, be it within the straitjacket of the ”positive” or ”negative” aspectsor in the criticism with emphasis on the continuity argument (Neo-Taylorism), or even in that of thesolution to all problems, do adhere to survive à la MIT.

On the one hand, it is a case of trying to understand the changes that are taking place in Brazil in acontext of globalization and regional integration associated with the dissemination of a newtechnological and organizational efficiency paradigm. On the other hand, the complexity of thisprocess, be it by the structural heterogeneity that characterizes it, be it by its history and theperformance of the diverse social actors. It is necessary to distinguish between different rhythms ofdissemination of innovations, the differences between the ”discourse” and the practices in a processof trial and error, and permanent tension between conservation and innovation, breaking off withtechnological determinism and the straitjacket of the polarization of the debate between the”positive” or ”negative” effects of the new technologies. It is also necesary to demystify thesimplifying generalizations present in the most diverse forms of orthodox and technocrat discourse,independently of the political-ideological orientation, pointing at the importance of the democraticforms of negotiations of the changes.

In this sense, I think that this disquieting and fascinating moment is a moment of greattransformation for humankind, a moment which began in the crisis of the 1970s, and it is alsoextremely useful for us collectively to make an effort of systematic reflection and search formeaning or meanings in our global village.

It is a matter of trying to answer the question asked by Touraine (2000 [1997]) in ‘Can we livetogether?’, i.e., how to ”escape from the disquieting dilemma between the uniform model of worldglobalization, which ignores the diversity of cultures, and the isolation of communities, which

63 This is a term much used by all of us and with an immense variety of meanings, especially at the moment in which westart to try to order something in terms of more or less.

43

confirms the exclusion of the other”64. It involves an effort to retrieve the links between changes indaily practices and the construction of new economic and social institutions oriented to solidarity,which takes us, using the terms employed by the Zapatists in Chiapas, to ”a world where there isplace for many worlds” [”un mundo donde quepan muchos mundos”].

In order to achieve that, it is necessary to overcome all traces of what Bettelheim (1991:264) calledghetto mentality, understanding that ”all of us need to expand the feeling of community beyond ourown group... not because all men are essentially good, but because violence is so natural in men astheir tendency to order”.

Latin America in general, and Brazil in particular, given, as Touraine (1989:16-17) observes, theirextreme political, economic, social, cultural, ethnic, and religious heterogeneity and complexity(Morin, 1998:11), on the one hand, and, on the other, the great temptation of populism, i.e., ”thedesire of change within continuity, without the violent rupture that capitalist and socialistindustrialization went through” (Touraine, 1989:17), are fertile fields for considering thetransformations which we are facing on our planet65.

References

Abreu, Alice Rangel de Paiva; Gitahy, Leda; Ramalho, José Ricardo e Ruas, Roberto (1998) Reestruturaçãoprodutiva, trabalho e educação: os efeitos sociais do processo de "terceirização" em três regiões do país,Relatório Final do Subprojeto 4, Projeto II, do Programa de Pesquisa em Ciência e Tecnologia,Qualificação e Produção CEDES/FINEP/PCDT-CNPQ.

Abreu, Alice; Gitahy, Leda; Ramalho, José Ricardo and Ruas, Roberto (2000) Reestruturação produtiva,trabalho e educação: os efeitos sociais do processo de "terceirização" em três regiões do Brasil,CINTERFOR/OIT, Colección Herramientas para Transformación, Montevideo pp 200 (in press).(Productive Restructuring, Work and Education. The Social Impact of Industrial Outsourcing in ThreeRegions of Brazil, in Portuguese)

Aglietta, Michel (1976) Regulación y Crisis del Capitalismo, Siglo XXI Editores, México, 1979.

Ahrne, Göran (1994) Social Organizationd Interaction inside, outside and between organizations, Sage,London.

Araújo, Ângela Maria Carneiro and Gitahy, Leda (1998) “Reestruturação Produtiva e Negociações Coletivasentre os Metalúrgicos Paulistas”, paper presented at the 1998 meeting of the Latin American StudiesAssociation in Chicago, Illinois, September 24-26, 1998.(Productive Restructuring and Collective Bargaining among the São Paulo Metal workers, in Portuguese).In: http://lasa.international.pitt.edu/98papersframes.htm.

Araújo, Ângela Maria Carneiro and Gitahy, Leda (1999) “Os sindicatos face às transformações do mercadode trabalho: químicos e metalúrgicos na região de Campinas”, (The Unions face labour markettransformation: chemists and metal workers in the Campinas region) paper presented at the IX BrazilianCongress of Sociology – Sociology for the 21st Century, UFRGS, Porto Alegre , August 30 - September03, 1999.

Barreto, Margarida (1997) ”Lesões por esforços repetitivos (ler): que danos causam no cotidiano dasmulheres”, em Oliveira e Scavone (orgs) Trabalho, saúde e gênero na era da globalização, AB editora,Goiânia.

Bendix, R (1956) Work and Authority in Industry - Ideologies of Management in the course ofIndustrialization, Harper and How, New York.

64 What implies, for this author, the reconstruction of a conception of social life based on institutions (back cover of theSpanish edition, CFE).65 For this author (Touraine, 1989, back cover of the Brazilian edition): ”In face of a West obsessed by its interests andpleasures, and an East confined in political totalitarianism or in religious integrism, Latin America experiences withmore force and imagination than whatever other part of the world the search for a new modernity, a new renaissance”.

44

Berger, P. and Luckman, T. (1966) The Social Construction of Reality, Doubleday: New York.

Bettelheim, Bruno (1960) The Informed Heart, Penguin Books, London, 1988.

Bettelheim, Bruno (1991) ”Libertação da mentalidade de gueto” in A Viena de Freud e outros ensaios,Editora Campus, Rio de Janeiro, pp:237-264.*

Björkman, Torsten and Lundkvist, Karin (1987) "Work Relations, Capital Accumulation, Technological andSocial Change" in Himmelstrand, Ulf (ed.) The Multparadigmatic Trend in Sociology, Almkvist& Wiksell,Uppsala.

Boyer, Robert (1987) "Technical Change and the Theory of Regulation", mimeo, CEPREMAP, Paris.

Braverman, H. (1974) Labour and Monopoly Capital, Monthly Review, New York.

Burns, T.R and Flam, H. (1987) The Shaping of Social Organization - Social Rule System Theory withApplications, Sage Publications, London.

Callon, M. (1992) ”The dynamics of techno-economic networks” in Coombs, R., Saviotti, P. & P. e Walsh,V. Technological Change and Company Strategies: Economical and Sociological Perspectives, HarcourtBrace Jovanovich Publishers: London.

Carvalho, Ruy (1987) Tecnologia e Trabalho Industrial: as implicações sociais da microeletrônica naindústria automobilística, L&PM, Porto Alegre.

Castel, Robert (1998) As metamorfoses da questão social: uma crônica do salário, Editora Vozes,Petrópolis.

Castro, Nadya A. and Dedecca, Claudio S. (1998) ”Flexibilidade e precarização: tempos mais duros” inCastro, Nadya A. and Dedecca, Claudio S. (edit.) A Ocupação na América Latina: Tempos mais Duros,Série II Congresso Latino-americano de Sociologia do Trabalho, ALAST, São Paulo/Rio de Janeiro, pp: 9-18.

Dosi, Giovanni (1984) Technical Change and Industrial Transformation - The Theory and an Application tothe Semiconductor Industry, MacMillan Press, London, 1986.

Gereffi, G. (1994) ”Global Commodity Chains and Third World Development , Duke University, november.

Gereffi, G. (1995) ”Contending Paradigms for Cross-Regional Comparison: Development Strategies andCommodity Chains in East Asia and Latin America”, in In: SMITH, P., ed. Latin America in ComparativePerspective: new approaches to methods and analysis. Boulder, CO: Westview Press, 1995.

Faria, José Eduardo (1999) O Direito na Economia Globalizada, Malheiros Editores, São Paulo.

Fleury, A.C.C. (1978) Organização e Trabalho Industrial: um confronto entre teoria e realidade. Tese deDoutorado, POLI/USP, São Paulo.

Fleury, A.C.C. (1988) “Impactos sobre a Organização do Trabalho: Emprego e Renda na Indústria Metal-Mecânica”, Poli/USP, São Paulo (mimeo).

Gitahy, Leda (1983) “Crise, Trabalho e (des)Emprego”, mimeo, CEDEC, São Paulo.

Gitahy,Leda (1988) "Algumas considerações sobre os efeitos sociais da microeletrônica", (mimeo). ProjetoProspectiva Tecnológica para a América Latina, NPCT/UNICAMP, Campinas.

Gitahy, Leda. (1992) "Na direção de um novo paradigma de organização industrial?", trabalho apresentadono XVI Encontro Anual da ANPOCS, outubro, Caxambu.

Gitahy, Leda (1994a) “Inovação Tecnológica, Subcontratação e Mercado de Trabalho” in São Paulo emPerspectiva, Vol. 8 nr 1, pp 144-153, São Paulo

Gitahy, Leda (1994b) ”Reestruturação Produtiva, Trabalho e Educação” in Gitahy, Leda (ed.)Reestructuracción Productiva, Trabajo y Educación en America Latina, Red Latino Americana deEducación y Trabajo CIID/CENEP, Buenos Aires e IG/UNICAMP, Campinas, pp 9-29. (ISBN 85-8536905 1). (Productive Restructuring, Work and Education, in Portuguese).

Gitahy, Leda (1996) “Redes e Flexibilidade: o conceito de ”redes” e sua utilidade para estudar o processo dereestruturação produtiva na América Latina”, paper presented at “Seminario-Taller: Reconversión,Eslabonamientos Productivos the Productive Restructuring Process in Latin America, in Portuguese)y

45

Competencias Laborales”, Red Latinoamericana de Educación y Trabajo, Mtb, OIT/Brasil, Brasília, abril.(Networks and Flexibility: the concept of "networks" and their utility in studying the productiverestructuring process in Latin America. In Portuguese).

Gitahy, Leda (1999) ”Redes e flexibilidade: da mudança das práticas quotidianas a uma nova tramaprodutiva”, work presented at the 1st session of the Seminário Temático Interdisciplinar Os Estudos doTrabalho: novas problemáticas, novas metodologias e novas áreas de pesquisa (Studies on Work: newproblems, new methodologies and new areas of research )1999-2000. (Networks and flexibility: fromchanges in daily practices to a new productive scheme, in Portuguese). In: http://www.sociologia-usp.br/seminari.htm

Gitahy, Leda and Bresciani, Luís Paulo (1998) ”Reestruturação Produtiva e Trabalho na IndústriaAutomobilística Brasileira”, Textos para discussão nr24, DPCT/IG/UNICAMP, Campinas.

Gitahy, Leda and Cunha, Adriana Marques (1999) ”Redes y flexibilidad: reestructuración productiva ytrabajo en la industria de línea blanca” in Montero, C.; Albuquerque, M. & Ensignia, J. (eds) Trabajo yEmpresa entre dos siglos, Ed. Nueva Sociedad, Caracas (ISBN 980-317-155-0), pp 79-103. (Networks andflexibility: Industrial Restructuring and Labour in The White Goods Industry, in Spanish)

Gitahy, Leda and Fischer, Rosa (1996) "Produzindo a flexibilidade: algumas reflexões sobre as aventuras edesventuras da gerência pós-moderna", paper presented at II Congreso Latinoamericano de Sociologia delTrabajo, GT13, Águas de Lindóia, december (Producing Flexibility: some comments on the adventures andmisadventures of post-modern management, in Portuguese).

Gitahy, Leda; Humphrey, John; Lobo, Elizabeth et Moyses, Rosa (1982a) "Luttes Ouvrieres et Luttes desOuvrieres a São Bernardo do Campo" em Cahiers Des Ameriques Latines 1982 serie Sciences de l"Hommen.26, Institutte des Hautes Etudes d'Amerique Latine. Université de la Sorbonne Nouvelle-Paris III, Paris,pp 11-38.

Gitahy, Leda; Hirata, Helena; Lobo, Elizabeth e Moyses, Rosa. (1982b) ”Operárias: Sindicalização eReivindicações (1970-1980)” in Revista de Cultura e Política n.8, junho, 1982, CEDEC/Cortez Editora,São Paulo pp 90-116.

Gitahy, Leda., Leite, Márcia and Rabelo, Flávio (1993) “Relações de Trabalho, Política de RecursosHumanos e Competitividade” in Study of the Competitiveness of Brazilian Industry Study, Thematic BlockV, Theme 3, Campinas, IE/Unicamp-IEI/UFRJ. (Industrial restructuring and the firm: quality programs,policies of human resource management and industrial relations, in Portuguese). In: http://www.mct.gov.br

Gitahy, L. and Rabelo, F. (1988) "Os Efeitos Sociais da Microeletrônica na Indústria Metal MecânicaBrasileira: o caso da Indústria de Informática" in Anais do Seminário Padrões Tecnológicos e Políticas deGestão: Processos de Trabalho na Indústria Brasileira, DPCT/IG/UNICAMP, Depto deSociologia/FFLC/USP, FEA/USP, São Paulo.

Granovetter, M. (1990). “The Old and the New economy Sociology: a History and an Agenda” in Friedland,e Robertson, F. (eds) Beyond the Marketplace: Rethinking Economy and Society, Aldine de Gruyter: NewYork.

Hill, Stephen (1991) "How do you manage a flexible firm? The Total Quality Model" in Work, Employment& Society, Vol. 5 Number 3, september pp 397-415.

Hobbsbawn, Eric (1995) A Era dos Extremos - O Breve século XX 1914-1991, Companhia das Letras, SãoPaulo.

Hoffman, K. and Kaplinsky, R. Hoffman, Kurt and Kaplinsky, Raphael (1988) Driving Force: The GlobalRe-structuring of Technology, Labour and Investment in the Automobile and Components Industries,Westview Press, Boulder.

Humphrey, John (1982) Fazendo o milagre: controle capitalista e luta operária na indústria automobilísticabrasileira, Vozes/CEBRAP, Petrópolis.

Langlois, R.and Robertson, P. (1995). “Innovation, Networks and Vertical Integration”, in Firms, Marketsand Economic Change, Routledge: London & New York.

Leite, Elenice (1994) ”Trabalho e Qualificação: a Classe Operária vai à Escola” in Gitahy, L. (org.)Reestructuracción Productiva, Trabajo y Educación en America Latina, Red Latino Americana de

46

Educación y Trabajo CIID/CENEP, Buenos Aires and IG/UNICAMP, Campinas, (Lecturas de Educación yTrabajo, n. 3), pp: 215-225.

Leite, M. (1992) “Modernização tecnológica e relações de trabalho no Brasil: notas para uma discussão” inOutras Falas.....em Processo de Trabalho, Escola Sindical 7 de Outubro, Belo Horizonte.

Littler, C. (1978) "Understanding Taylorism" in British Journal of Sociology, Vol. XXIX, nr 2, June,Routledge and Kegan Paul Ltd.

Lobo, E; Humphrey, J; Gitahy, L. and Moyses, R. (1984) "La Pratique Invisible des Ouvrieres" in (Collectifd'auteurs), Le Sexe du Travail: Structures Familiales et Systeme Productif Presses Universitaires deGrenoble, pp 255-275. (ISBN 2.7061.0225.x). (The Invisible Activities of Women Workers, in French).

Mayer, Arno J. (1981) A Força da Tradição - A Persistência do Antigo Regime (1848-1914), Companhia dasLetras, São Paulo, 1987.

Merkler, Judith A. (1980) Management and Ideology - the Legacy of the Internacional ScientificManagement Movement, University of California Press, Berkeley.

Morin, Edgar (1982) Ciência com Consciência, Publicações Europa-América Ltda, Portugal.

Morin, Edgar (1991) O Método 4. As idéias Habitat, vida, costumes, organização, Editora Sulina, PortoAlegre, (edição brasileira de 1998).

Oliveira, Eleonora M. (1998) ”Corpos saudáveis e corpos doentes na nova organização social do trabalho”,Trabalho apresentado no Seminário Trabalho e Gênero: mudanças, permanências e desafios., ABEP,Campinas, 14 e 15 de abril.

Peliano, J; Gitahy, L.; Cassiolato, M.; Bicalho de Souza, N.; Neder, R & Carvalho, R. (1987) Automação eTrabalho na Indústria Automobilística, Ed. UnB, Brasília. (ISBN 85-230-0245-6). (Automation and Workin the Automobile Industry, in Portuguese)

Perez, Carlota (1985) "Microeletronics, Long Waves and World Structural Change: New Perspectives forDeveloping Countries" in World Development, Vol. 13, nr. 3, pp. 441-463, Pergamon Press, Great Britain.

Piore, Michel and Sabel, Charles (1984) The Second Industrial Divide - possibilities for prosperity, BasicBoks, New York.

Rachid, Alessandra and Gitahy, L. (1995) ”Programas de Qualidade, Trabalho e Educação” em Em Aberto,nr 65, pp 63-93, Brasília.

Ruas, R. (1994) “Reestruturação socio-econômica, adaptação das empresas e gestão do trabalho”, in Gitahy,L. (ed. ) (1994) Reestructuracción Productiva, Trabajo y Educación en America Latina, Red LatinoAmericana de Educación y Trabajo CIID/CENEP, Buenos Aires and IG/UNICAMP, Campinas, (Lecturasde Educación y Trabajo, n. 3), pp 95-107.

Sabel, Charles F. (1982) Work and Politics - The division of labor in industry, Cambridge University Press,Cambrige, Massachusetts.

Sabel, C. (1993a) “Reading the Writings on Economic Development”, in the SSCR Group on EconomicDevelopment and Labour Flexibility “, New York.

Sabel, C. (1993b) “Learning by Monitoring: the Institutions of Economic Development”, in Handbook ofEconomic Sociology, Princeton University Press: Princeton, NJ

Santos, G. V (1999) Novas tecnologias e formas de gestão da produção e do trabalho na indústria capixabade celulose de mercado, Master dissertation, DPCT/IG/UNICAMP, Campinas.

Schmitz, H. (1992) "On the clustering of small firms" in IDS Bulletin, Vol. 23, n. 3, july, Brighton.

Sengenberger, W. and Pyke, F. (1992). “Industrial districts and local economic regeneration: research andpolicy issues”, in Pyke, F. & Sengenberger, W. (eds.) (1992). Industrial Districts and Local EconomicRegeneration, International Institute for Labour Studies: Geneva

Stutzman, Elizabeth Bortolaia Silva (1981) Política Empresarial de Controle da Força de Trabalho:Rotatividade como Dominação, Masters’ dissertation, FFCL/USP, São Paulo.

Touraine (1997 [2000]) Podremos vivir juntos? La discusión pendiente: El destino del Hombre en la Aldea

47

Global, Fondo de Cultura Económica, México. Can we live together? Polity, Oxford.

Touraine, Alain (1989) Palavra e Sangue - Política e Sociedade na América Latina, Editora da UNICAMP/Trajetória Cultural, Campinas.

Watanabe, S. (1983) "Market Structure, Industrial Organisation and Technological Development: The Caseof the Japanese Electronics-based NC-Machine Tool Industry", ILO, Geneva.

Womack, J.P, Jones, D.T. and Roos, D., (1990) The machine that changed the world, Rawson, New York;Collier Macmillan, Toronto; Maxwell Macmillan International.

Zarifian, P. (1995) "Novas Formas de Organização do Trabalho e Modelo da Competência na IndústriaFrancesa", paper presented at Workshop Implementation of New Forms Work Organization”, MTb, OIT,Poli/USP, DPCT/IG/UNICAMP, FGV/SP, Rhodia S/A, Indústrias Gessy Lever Ltda, 15-18 August 1995,São Paulo.

ISSN 0282-7492ISBN 91-554-4778-3

Acta Universitatis UpsaliensisComprehensive Summaries of Uppsala Dissertations

from the Faculty of Social Sciences

Editor: The Dean of the Faculty of Social Sciences

A doctoral dissertation from the Faculty of Social Sciences, UppsalaUniversity, is either a monograph or, as in this case, a summary of a numberof papers. A few copies of the complete dissertation are kept at majorSwedish research libraries, while the summary alone is distributedinternationally through the series Comprehensive Summaries of UppsalaDissertations from the Faculty of Social Sciences.(Prior to July, 1985, theseries was published under the title “Abstracts of Uppsala Dissertationsfrom the Faculty of Social Sciences”.)

Distributor:Uppsala University Library,

Box 510, SE-751 20 Uppsala, Sweden