Introduction
The purpose of this chapter is to extend on the contextual analysis commenced in the previous chapter by focusing on the external forces which were linked to the emergence and development of ergonomics capability in the six cases. In examining these external influences, the intention is not merely to provide a distant backdrop to the processes of central interest, rather an attempt will be made to establish significant linkages between these internal processes on the one hand and external forces on the other.
This c h ap ter s tarts by pres enting a conc eptual mode l of the e x ternal environment. The model has four elements: the firm, the government, the sub sector (of which individual firms are members), and the knowledge environment
(particularly where this relates to the discipline of ergonomics). The elements of this model are reflected throughout the analytical discussion in the remainder of the chapter which proceeds under thematic headings including trade policy, res e arch and development expenditure , the role of government-funded institutions including the New Zealand Industrial Design Council and the Wellington Polytechnic , the setting of standards, and the role of professional networks.
The external environment
In the present study, the emergence and development of ergonomics capability was found to be both constrained and enhanced by complex exchanges between individual fIrms and certain aspects of the external environment. These aspects are shown diagrammatically in Figure 7. 1 .
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Figure 7.1
Educational Institutions
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•. •:!<nowledge Environ�ent
The external environment associated with changes in a fmn's ergonomics capability ." . .., o - (l) III III o � Q)
1 8 1
The model in Figure 7. 1 shows that three elements (firms, sub-sectors, and
government) are each linked to a wider knowledge environment (see Nelson and Winter, 1982: 64). This particular type of environment includes the knowledge
that is available to society at large in the form of products, patents, standards, scientific j ournals, books, etc . It also i nc ludes those i ndividuals and organisations who play a major role in the production, dissemination, and promotion of specialist bodies of knowledge. The centre of the model indicates that firms, the sub-sec tor, and government impact on one another. It is suggested that the latter relationships may influence the degree to which an individual firm will exchange ergonomics knowledge with the wider knowledge environment.
The arrows linking the parts of the model indicate that the various relationships are two-way. Thus, a firm which takes information from the wider knowledge environment may also contribute to it through the production and eventual sale of products. Also, by using two-way arrows, the model assumes that the nature of organisation-external environment relationships falls somewhere between the two extremes of 'environmental determinism' on the one hand, and a wholly ' enacted', cognitive view on the other (see Weick, 1 969; March, 1 9 8 1 ). This
mid-position accepts that while external environments may be created and even ' negotiated' by organisation members (Cyert and March, 1963 : 1 1 9- 1 20), the
external environment also has certain objective characteristics which are distinct from the perceptions of individual actors (Child and Smith, 1 987; Pettigrew, 1 9 8 5 ) . These objective characteristics may (albeit through a process of
subjective interpretation) bring about change within an organisation.
As the various elements in Figure 7. 1 may relate indirectly, their various effects can be difficult to untangle. This is particularly true in respect of the effect of government practices and policies which tend to be particularly diffuse, but are nonetheless highly significant. By comparison, the impact of sub-sector conditions on the exchange of knowledge to and from organisations tends to be more immediate. Given this, the discussion will continue by focusing initially on this particular element of the model.
The term ' sub-sector' refers to a population of organisations which produce similar products and operate in the same product-market(s). As such, a sub sector is broadly analogous to the ' sector segment' referred to by Child and Smith ( 1 98 7 : 572). In the present study, both RDD and Atlas are members of a
sub-sector of the white goods industry which produces electric ranges and other cooking appliances.
Members of the same sub-sector are linked through the effects of their actions on each other. Specifically, as one organisation innovates and proceeds to embody in its products what it has learned, these products in turn shape the competitive environment of other organisations. As indicated by Levitt and March (1988: 3 3 1 ), organisations innovate and learn in a complex context that is itself learning and changing at the same time. This effect is illustrated by Feltex Furniture's decision to produce an 'ergonomic chair' following the release of Formway's Cambio chair, and in PEC 's response to the release of Fuelquip' s C-shaped pumps (see Chapter 4).
The linkages between constituent organisations may be enhanced where rivalry prevails within a sub-sector. Under competitive conditions, organisation members may be inclined to closely examine the ergonomic practices used by competitors as well as the design features that they have incorporated into their products. In the competitive struggle for market share, survival or profits,
,
organisations may be motivated to advance on these practices and product features, or at least follow them. This process lies at the heart of the ordinary, everyday, ' nuts and bolts ' type of innovation which, as Marquis ( 1 982: 43) argues, is largely motivated by the process: 'So long as your competitors do it, so must you'.
While an organisation may try to absorb some of the ergonomics knowledge which is already being applied by other firms in the same sector or sub-sector, there will be limits to the availability of this information. On the one hand, manufacturing organisations which generate ergonomics knowledge may choose not to release this into the wider knowledge environment. This information may be considered to be commercially sensitive. On the other hand, even if an organisation was prepared to share its information, it is unlikely that this would ever be written up in a form expressly intended for external dissemination. For most organisation members, including industrial designers, this dissemination role is not something for which they are rewarded.
Besides using ergonomics information that is available and directly applicable to members of a particular sub-sector, organisations may also reach out to the ergonomics knowledge which is available to society at large. This knowledge
1 83
can be tapped into by reading publications, seeking the advice of experts, or by attending conferences and lecture s. All of these methods were u sed by organisation members in the present study. For example, at Formway, books and journals were consulted and international ergonomics conferences were attended, while at RDD, organisation members attended university courses in ergonomics.
While sectors are predominantly considered in terms of competitive forces which serve to constrain organisational action, sectors may also be viewed in terms of their ability to enable change and innovation. Child and Smith ( 1987), for example, have suggested that sectors may consist of 'networks ' of potential and actual collaborators. In the present research, 'competitors' in the same sub sector did co-operate to some extent because certain aspects of their respective businesses were complementary. For example, in the early 1980s, Formway held an agency for gas-springs and supplied these components to other furniture manufacturers including Feltex Furniture. Similarly, once the petrol pumps designed by PEC are installed on service station forecourts, they are serviced by Fuelquip. More formal collaborative mechanisms were evident in the ' skills arrangement' which gave RDD access to Fi sher and Payke l ' s industrial designers from 1961 to the early 1980s, and in the relationship between Feltex Furniture and CoDesign. In none of these instances, however, was there a substantial exchange of ergonomics knowledge between organisations.
Members of the same sub-sector may be linked in more subtle ways through the language, constructs and strategies which characterise a particular sector. Citing evidence from research studies, Child and S mith ( 1 987) note that senior managers may come to share a similar understanding of a sector's dynamics. Thro u g h the creation of th i s ' c ogniti v e are n a ' (and i t s s u b s e q u e n t reinforcement) , standards, norms, and rules o f the game are established and communicated. These industry-wide 'conventional practices' may provide an important means by which organisations try to control or 'negotiate ' their competitive environment (Cyert and March, 1963 : 120). Cyert and March have argued that where practices are standardised, for example through trade associations, journals, word of mouth, and external consultants, there is a strong likelihood that all competitors will follow it. Rules and practices will be followed, according to Child and Smith ( 1 987), provided there are no major shifts in market or technological conditions.
By following standard practices, organisations can hurrer themselves from the costs associated with overcoming uncerta i n ty and lk a l ing with a moderate degree of environmental change. For exampk, rathe r t han attempt to resolve apparent inconsistencies in the theories and ideas l'tllanat ing from ergonomists, the designers of Feltex Furniture product s dlOSl' i n stead to confonn to the dominant designs in office seating that were ellll'rging in the 'chair industry ' , This i s reflected i n the following quote:
The biggest problem is that you don' t k now what is ergonomically correct. We are quite lucky that t he chai r indu stry has sort of developed their own mediu m sayin g t h is is correct ... you find Formway, ourselves, Furniture Three, Dalllha. We are all starting to develop chairs that do ergonomically the sall ie sort of functions.
Also in its role as 'cognitive arena', a sector or suh Sl'l·tor provides models and
' exemplars ' against which an individual organisat ion ' s strategy, structure and routines can be compared (Child and Smith, 1 9X7 : )(Ih). Such comparison can range from an informal scan of i ndustry p rac t ic e s t o the type of formal 'corporate benchmar
k
ing' exercise which was ulldntakl'1I by Xerox Corporation to determine the structure of, and resources a l loca ted to. industrial design and h uman fac tors activities in ' some of the be s t bu s i nes s e s in the world ' (Wasserman, 1 9 89: 3 6 ) . When applied to the preSl' nt study, the idea of the sector as 'a bearer of external exemplars' is most illsightful, in that it highlightsan absence of structural models which refer ex pl ic i t l y to ergonomics . This contrasts with the range of explicit structural "1Ot/t'/S cited in the ergonomics literature such as human factors groups or sect iolls ( Meister, 1 97 1 ; Crawley,
1 972; Brown, 1 984; Emmons and Neal, 1 984 ; W icha nsky, 1 984), ergonomics
groups (Blaich, 1 9 87 ; Bosman et ai. , 1 990; McCle lland, 1 990) , ergonomic steering committees (Heskett, 1 9 8 9 ) , ergonomic programmes (BCA, n.d.),
ergonomic task forces (Joseph et ai., 1 98(» , and the routine employment of ergonomists.
The only explicit model evident in the present s t Ud y was the 'Ergonomics Group' which operated within RDD from 1987 to 1 9X9. This group had, as an initial objective, the improved design of assembly and clerical workstations within R DD but subsequently it shifted its focus to issues including product design and manufacturability. By contrast, the inclusion of industrial designers in an organisation's design team, which has been identified in this research as a
1 85 primary factor in the emergence and development of ergonomics capability, is not an explicit model, in that to an outside observer, the linkage between the employment of an indus trial designer and ergonomics capability i s not immediately obvious. Instead, ergonomics is buried or hidden from view. Consequently, despite the widespread use of industrial designers in New Zealand manufacturing, this practice does not function directly as an exemplar that will encourage the diffusion of ergonomics capability. The general lack of explicit exemplars of ergonomic practice among the six cases reflects the situation in New Zealand business generally where there are few, if any, sections, groups or other relatively substantial structures which focus specifically on ergonomics. For example, large public sector organisations (such as New Zealand Post, Telecom, and New Zealand Railways) whose counterparts in other counnies have ergonomics groups or sections have never adopted a similar practice, although they have employed consultant ergonomists and industrial designers from time to time on specific projects.
The degree to which an organisation is open to 'exemplars ' may be related to the stability of i ts sector e nvironment. For instance, it has been argued by
.
innovation researchers that the higher the rate of environmental change, the more 'open ' the organisation and the higher the degree of organisational innovativeness (Zaltman and Wallendorf, 1979: 24 1 ) . Change may be indicated
by shifts in the competitive structure of a sector which, in tum, is shaped by competitive forces. These forces vary over time and include the height of entry barriers, intensity of rivalry, the power of buyers and suppliers, and pressure from substitute products (Poner, 1980).
The structures of the three sub-sectors in this study differed and in all instances, there was evidence of substantial structural change during the mid to late 1 980s largely resulting from government policies encouraging economic liberalisation. Of the three sub-sectors, the electric range sub-sector has become the most highly concentrated; by 1 990 there were only 2 manufacturers remaining in New
Zealand as compared to 4 in 1985 and 6 in 1 965. This increase in concentration
occurred against a background of intense rivalry (price wars) , high e ntry barriers, and low market growth due to periods of weak domestic demand and the increased demand for (imponed) substitute products (e.g. wall ovens and cooktops). By comparison, the office seating sub-sector has historically tended to be much less concentrated, with low entry barriers, and weak rivalry due to the adoption of niche positions. As will be discussed more fully later in this
chapter, these structural features tended to change during the 1980s: the presence of imports caused more intense rivalry, there were shifts in the customer base while the demand for more technically complex, 'ergonomically designed' furniture tended to lift entry barriers for local manufacturers. The final sub sector to consider is that which produces petrol pumps. Consisting of three local competitors and no foreign pre sence, this sub-sector is only moderately concentrated. The sub-sector is characterised by a powerful customer base (oil companies) and moderate entry barriers.
Almost all aspects of industry structure are potentially influenced by government action. As Porter ( 1 980: 28) explains, government may be a buyer or a supplier, and it can directly and indirectly influence competition by the policies it adopts. The varied, and significant, role of government in facilitating the emergence and development of ergonomics capability at the firm-level is clearly evident in the present inquiry and is a major theme that permeates through the remainder of this chapter. Firstly, it will be s hown that, through their impact on the competitive structure of industry sub-sectors, government policies relating to industry assistance"competition, and trade have influenced the nature of the interac tion between i ndividual organi sations and the wider knowledge environment. Secondly, it will be demonstrated that government policy also enabled the emergence of ergonomics capability in the six cases both through the establishment of government agencies and the support of particular training programmes. Throughout this discussion of government structures and policies, the significant role of key individuals will also become apparent.
Import control and technological dependence
Although each of the six organisations in this study forms part of an industry consisting of a relatively small number of local competitors and importers they all belong to the manufacturing sector of the New Zealand economy. This sector has, in the past, been subject to a high degree of government control. It has also been subordinate politically to the country's agricultural sector. Yet, while New Zealand is often viewed as an agricultural nation because the majority of its
exports are of agricultural origin (see Table 7 . 1 ), in 1989 the manufacturing sector contributed more than agriculture to the country's Gross National Product and employed more people.
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Table 7.1
Commodity composition of New Zealand's exports and imports 1967-1990 (Percentage shares of principal items in total export/import)
Exports
Year Wool Meat Dairy Manufactures
1967 24 27 2 6
1980 18 24 14 16
1985 13 22 13 24
1990 9 15 14 25
Imports
Year Mineral Chemicals Machinery Manufactured
Fuels incl. and Goods, etc.
Fertilisers Transport 1967 7 1 1 38 34 1980 20 12 30 20 1985 14. 12 33 19 1990 6 13 39 25 Sources: Chatterjee (1988)
OECD Economic surveys: NZ (various years)
NZ Official Yearbook (various years)
The New Zealand manufacturing sector has largely been shaped by the import licenses and tariffs initially imposed by the first Labour Government in the late 1930s. These controls immediately restricted the flow of imported goods which had at the time been draining the nation's overseas funds. They also led to an increasing diversification within manufacturing and the emergence of industries increasingly dependent on non-indigenous materials (GoUedge, 1 9 64). In particular, the metal working industry became more significant, and there was also expansion in industries including footwear, carpet and chemicals. Further expansion occurred in the late 1 950s as a result of the 'industrial development' policies of the second Labour Government which encouraged large scale non traditional industries such as pulp and paper, and petroleum. In addition to this diversification trend, the overall size of manufacturing units continued to increase. By the early 1980s, the size profile of New Zealand manufacturing
businesses was not greatly different from that of the Australian manufacturing sector (New Zealand Department of Statistics, 1984; 1986).
The trade barriers imposed in the late 1 930s encouraged overseas companies to set up their own manufacturing units in New Zealand. At the same time, some New Zealand-based importers (e.g. Fisher & Paykel) turned from importing to the manufacture of products under license. However, while this import substitution activity resulted in the formation of new industries and the extension of existing ones, the manufacturing activity that took place generally lacked depth in functions such as research and development. The source of product designs along with process technology and components was usually overseas. This situ ation led GoUedge ( 1 9 6 4 : 66) to conclude that ' much of the "manufacturing" in New Zealand consists merely of assembly, mixing, moulding or finishing functions'.
At the time, Golledge was hopeful that the skills, techniques and resources gradually accumulating as a result of exposure to imported technology would result in more production and processing functions being undertaken in New