Start-Up Factories. . - Books in Brief - book review

HR Magazine, May, 2003

By Peter B. Doeringer,

Christine Evans-Klock and David G. Terkla

Oxford University Press, 2002 273 pages, List Price: $39.95 ISBN: 0-19-514747-2

Bringing a new manufacturing facility online is a golden opportunity for a business. It's a chance to put in place new, efficient equipment and introduce high-performance management practices. In Start-Up Factories, authors Peter Doeringer, Christine Evans-Klock and David Terkia study management practices employed by 48 plants launched between 1978 and 1990.

The authors focus on the differences in management practices at facilities owned by Japanese companies and U.S.-based parent companies. Doeringer, an economics professor at Boston University; Evans-Klock, a member of the International Labour Organization based in Geneva; and Terkla, an economics professor at the University of Massachusetts at Boston, found that "Japanese transplants seemed to experience faster rates of growth in output and employment." The authors attribute this to the high-performance management strategies that had been adopted by the Japanese. Among the differences the authors found are:

* Japanese firms focused on recruiting employees who could work in teams, control quality and solve operating and quality-control problems. In contrast, domestic companies looked for workers who were more interested in applicants' knowledge and skill, rather than their flexibility and the ability to learn and solve problems, the authors found.

* Japanese firms tended to create a core of secure, high-paying jobs. The presence of these positions helped attract high-quality candidates and increase retention.

* While both U.S.- and Japanese-based firms offered substantial training, the Japanese firms were more likely to provide job-entry training and cross-training for multiple skills.

* Japanese firms were more likely to create work groups empowered to make decisions and solve problems.

Despite the differences in approach, the authors say the Japanese organizations did not simply import their business practices from overseas. Rather, they "adopted a sophisticated blend of U.S. and Japanese practices in a systematic way."