Theory and practice of shopfloor decision making in manufacturing

Today, manufacturing firms are much more likely to delegate substantive decision making power to their shopfloor workers, to give these workers training and access to profit sharing, then they were even ten years ago. This dissertation attempts to understand why this change has occurred by using theoretical models and empirical analysis of manufacturing firms in Australia, the US and the UK. Understanding this change is important for two reasons. First, manufacturing is still one of the largest employers in these countries, and these changes are having a substantive effect on the income, quality of work life and mobility of these workers. Second, all three of these countries have government policies that either provide incentives for firms to give their employees training or incentives for firms to give their employees profit sharing. Chapter 2 develops a theoretical model that enables an improved understanding of why manufacturing firms delegate decision making power to production line workers and provide those workers with training. Hypotheses generated by the theoretical model are tested on a data set based on an economy wide survey of Australian manufacturing firms (AWIRS 1995). Chapter 3 develops an empirical model for analyzing the complementarity between the use of self-managed work teams and formal training programs. This model is estimated on a data set based on a large economy wide survey of US manufacturing firms (NES 1994). Chapter 4 develops a theoretical model that enables an improved understanding of why manufacturing firms delegate decision making power to production line workers and give those workers profit sharing. The chapter further develops an empirical model for analyzing the complementarity between two simultaneous choices, allowing the complementarity to be affected by measured and unmeasured characteristics. Hypotheses generated by the theoretical model are tested on a data set based on a large survey of British production line workers (WERS 1998).