#mimetic isomorphism

[worklabournewsresearch]

If Amazon Wants to Be the ‘Earth’s Best Employer’ it Needs to Listen to Employees

Harvey, G. (2022, May 5). If Amazon wants to be the ‘Earth’s best employer’ it needs to listen to employees. The Conversation. https://theconversation.com/if-amazon-wants-to-be-the-earths-best-employer-it-needs-to-listen-to-employees-182016 

Geraint Harvey writes: “In his farewell letter to shareholders last year, Amazon CEO Jeff Bezos announced a new mission for his company: ‘Earth’s best employer and Earth’s safest place to work.’ The company has since added these goals to its list of corporate values. ...But the company still has a lot of work to do. Amazon has been dogged by negative reports about working for the organization, including gender and racial bias toward workers and ‘abusive mistreatment’ by managers, an intensive pace of work leading to high incidence of worker injury and workers being underpaid.”

“So far, Amazon has vehemently opposed trade union recognition, engaging in union suppression practices, like resisting trade union recognition through coercion. For example, Amazon has been holding mandatory meetings with workers and distributing written information in a bid to influence union votes and situating mailboxes for ballots in parking lots that are near security cameras. ...At the same time, Amazon employs union substitution practices to reduce the perceived need for a union among workers, such as raising wages in response to the campaigns for union recognition.”

“Employee retention aside, trade unions play an important role in identifying operational problems and forcing management to resolve them, rather than to seek cost effective and ultimately counterproductive ‘fixes.’ In this way, trade unions impose beneficial constraints on firms through which they constrain managerial activity. For instance, unions force management to invest, rather than reduce costs, for the long term benefit of the company and its workers. If Amazon provides its employees with a meaningful involvement in the organization and a voice at work, there are implications for the nature of work elsewhere.”  

Additional Information

Update on our vision to be Earth’s Best Employer and Earth’s Safest Place to Work. (2021, June 1). Amazon. https://www.aboutamazon.com/news/operations/update-on-our-vision-to-be-earths-best-employer-and-earths-safest-place-to-work

Freeman, R. B., & Medoff, J. L. (1979).  The Two Faces of Unionism. National Bureau of Economic Research.  https://www.nber.org/papers/w0364

Soper, S. (2021, June 28). Fired by bot at Amazon: ‘It’s you against the machine’. Bloomberg. https://www.bloomberg.com/news/features/2021-06-28/fired-by-bot-amazon-turns-to-machine-managers-and-workers-are-losing-out

Doucouliagos, C. (2019, May 8). Unions do hurt profits, but not productivity, and they remain a bulwark against a widening wealth gap. The Conversation. https://theconversation.com/unions-do-hurt-profits-but-not-productivity-and-they-remain-a-bulwark-against-a-widening-wealth-gap-107139

Kim, E., Stewart, A., & Long, K. (2022, May 3). Insiders reveal what it’s really like working at Amazon when it comes to hiring, firing, performance reviews and more. The Business Insider. https://www.businessinsider.com/work-at-amazon-jobs-performance-reviews-hiring-firing-interviews-warehouses-delivery-drivers

Photo source: Bumsted, R. (2022). [Photograph]. Associated Press. https://theconversation.com/if-amazon-wants-to-be-the-earths-best-employer-it-needs-to-listen-to-employees-182016

[collapsedsquid]

The implicit expectation of O’Neill and Guinan’s essay is that individual countries can effectively lead by example. ‘Corbyn’s Labour’, they write, ‘represents a historic opportunity … for the creation of a new economic model – one capable of drawing support from all those who want an equal and democratic society’. This amounts to a theory of change: ideas are contagious. Or, in the academic parlance, the Corbynomic model travels via 'mimetic isomorphism', as governments respond to the high degree of uncertainty in the global economy by looking for success stories further afield. One of the primary goals of Democracy Collaborative, the US think tank where Guinan is Senior Fellow, is to facilitate this process by exchanging best practices between communities on ‘both sides of the Atlantic’. Untouched, if not overlooked, are the international institutions that command a coercive isomorphism, pressuring governments to adopt the neoliberal institutional arrangement and disciplining the ones who don’t. From Tunis to Quito, raging protests against the International Monetary Fund suggest that mimesis is a political strategy too small and too slow for the urgent task of transforming global governance; coercion must be met with coercion, power with power. O’Neill and Guinan view global transformation as a product of their institutional turn, bubbling up from the grassroots. But in most cases – particularly in countries of the Global South that lack coercive power against transnational corporations and international financial institutions – it is actually a precondition.

Yet even among observers explicitly focused on global affairs, there remains significant resistance to the ‘international institutional turn’. Fascinatingly, these objections come from both sides of the debate that recently erupted between the historians Perry Anderson and Adam Tooze. Anderson, channelling the Western Marxist critique, believes that the so-called liberal international order is just ‘one more cloying euphemism for US control’; any effort to reform these institutions is bound to reproduce US hegemony. The international institutional turn, according to the Anderson perspective, is a trap; its advocates the useful idiots of empire. Tooze, a master of the financial mechanics of globalised capitalism, believes that the liberal international order basically does not exist: global capital is ‘anarchy’, and its institutional managers operate ad hoc. The international institutional turn, from the Tooze perspective, is a chimera. No political project can grow out of quicksand; better to settle for technical tweaks and improvisational changes. ‘If globalized capitalism under conditions of partial democratic legitimation is the only game in town, the majority of the population, the “99 percent” may have an existential interest not in debating Ordnungspolitik, but in energetic and unprincipled discretionary action by technocratic crisis-managers’, writes Tooze, saying the quiet part of his political project loud.[vii] Both arguments essentially reify the actually existing architecture of international institutions – call it internalised Tina – and deactivate the internationalist imagination. The result is that much of the recent writing on the crisis of international relations is elliptical. ‘It remains unclear, though urgent’, writes legal scholar David Singh Grewal, ‘to determine what direction an international politics after neoliberalism could take’.

[antoine-roquentin]

The initial rise of McKinsey and other management consultancies was due less to the force of their ideas or the ability of their people than to government anti-monopoly legislation, specifically the Glass Steagall Act of 1933. According to Christopher McKenna, in addition to separating commercial and investment banking, “the legislators also outlawed the consultative and reorganizational activities previously performed by banks.” This created an opening for management consulting firms: “Corporate executives, aware that the New Deal laws prohibited them from employing trade associations, industry cartels, or bankers to create industry benchmarks and to learn about administrative innovations, turned instead to management consultants as their primary source of interorganizational knowledge.” At McKinsey, there are benchmarks for everything, whether it’s the percentage of expected R&D savings following a pharma merger or the cost of temporary IT labor in the American Southwest. Over the years, McKinsey’s work with pretty much every player in every industry has made it the panopticon of global business, willing to share what competitors are up to (as anonymized “best practices” of course), for a price.

In addition to the favorable regulatory environment, McKinsey’s pro-market, hyper-rational ideas spread through what organizational theorists Paul DiMaggio and Walter Powell call “mimetic isomorphism,” the tendency of institutions facing uncertainty to become more and more alike. In a quest for legitimacy in the eyes of employees, customers, and competitors, “Large organizations choose from a relatively small set of major consulting firms, which, like Johnny Appleseeds, spread a few organizational models throughout the land.” As a result, “…schools assume the structure of the workplace, hospital and university administrations come to resemble the management of for-profit firms, and the modernization of the world economy proceeds unabated.”

McKinsey’s reorganization of most of the large companies in post-war Europe demonstrates mimetic isomorphism in action. Facing extreme uncertainty and pressure from American firms, European companies modeled themselves after organizations perceived to be successful (American ones) and relied heavily on a single source of vital resources (McKinsey). Whether American corporate success was due to the decentralized organization model or the fact that their competition was in literal ruins is of little consequence. Decentralization took off because the cool companies decentralized, with McKinsey whispering in their ears. The net effect of these forces was to exacerbate some of the most damaging trends in contemporary life: the growth of wealth inequality and the increased insecurity of private employment.

In the 1950s, McKinsey consultant Arch Patton pioneered the field of executive compensation after discovering that worker wages had risen faster than management wages. (Gasp!) This led to a lucrative business: helping executives justify more and more extreme paychecks. According to the Economic Policy Institute, the typical CEO made 20 times the median employee’s compensation in 1965. In 2015, that ratio had climbed to 286. When Patton was asked in the 1980s how he felt about his legacy, he had one word: “Guilty.”

In the corporate world, the most terrifying words in the English language are: I’m from McKinsey, and I’m here to help. The firm’s appearance is known as a harbinger of layoffs (one of most famous representations of consultants in pop culture is “the Bobs” from Office Space). While McKinsey will claim that it never identifies individuals to be cut, its willingness and effectiveness in recommending the axe begins in its roots. In 1935, James O. McKinsey left the firm he started to run a client, the Midwest department store chain Marshall Field. He was tasked with implementing the cost-cutting measures he recommended, resulting in “McKinsey’s purge” of 1,200 employees. In The Firm, McDonald writes, “McKinsey was a true forerunner of the 1980s revolutions in reorganization, downsizing, and rationalization– which are really just layoffs in different guises… McKinsey once argued that it ‘only assesses situations, not people.’” Note the classic obfuscation. What are situations without people? McDonald goes on, “…it may not be too far off the mark to suggest that McKinsey has been the impetus for more layoffs than any other entity in corporate history.”

Would these companies have laid off their employees, McKinsey or no? The presence of data-driven outsiders provides cover for executives to do things they may not have done otherwise. McKinsey could also point out that their competitors were taking similar steps (probably following the firm’s recommendations). Would these companies have survived without mass layoffs? In some cases, no, but in many cases, alternatives were possible but not considered (like looking at executive compensation or the cost of expensive consultants). Sometimes, layoffs are not even framed as necessary, like when McKinsey client Proctor & Gamble laid off 13,000 workers and the CEO said the public “has come to think of corporate restructuring as a sign of trouble, but this is definitely not P&G’s situation.”

In most companies, the fastest way to find savings is to reduce headcount, but McKinsey doesn’t have to live with the consequences of the decisions it makes—the irreparable damage mass layoffs can do to a company’s culture and operations, in addition to the impact they can have on the lives of the terminated.

small part of a long and wonderful article. see also McKinsey Advised Purdue Pharma How to ‘Turbocharge’ Opioid Sales, Lawsuit Says (NYT)

In 2009, McKinsey wrote a report for Purdue Pharma saying that new sales tactics would increase sales of OxyContin by $200 million to $400 million annually and “suggested sales ‘drivers’ based on the ideas that opioids reduce stress and make patients more optimistic and less isolated,” according to the lawsuit.

It was that year that Craig Landau, then Purdue’s chief medical officer and now its chief executive, had an email exchange that included a McKinsey consultant about how to counter mothers whose teenagers had overdosed on OxyContin. The solution: bring in patients to emphasize how the drug helps to relieve pain.

In 2013, amid the rapidly intensifying opioid crisis, the federal Drug Enforcement Administration and the Justice Department reached a settlement with Walgreens, the second-biggest American pharmacy chain. Walgreens agreed to new procedures to crack down on illegal prescriptions. In a report to Purdue Pharma, McKinsey said that “deep examination of Purdue’s available pharmacy purchasing data shows that Walgreens has reduced its units by 18%.”

According to the lawsuit, McKinsey recommended that Purdue “lobby Walgreens’ leaders to loosen up.”

McKinsey also recommended that Purdue redirect its sales force to focus on doctors who were especially prolific prescribers of OxyContin, according to the suit. One slide made public by the attorney general’s office, attributed to McKinsey, focused on one doctor in the town of Wareham, Mass., who almost doubled his annual output of OxyContin prescriptions after a big increase in visits from Purdue sales representatives.

If doctors resisted, McKinsey recommended that Purdue employ “patient pushback,” getting patients to lobby for OxyContin, according to the suit....

In 2018, after it spent years advising Purdue Pharma on how to increase sales of OxyContin, McKinsey published a report titled: “Why we need bolder action to combat the opioid epidemic.”

[thevividgreenmoss]

McKinsey claims to be the distillation of the free market at its best, a true meritocracy made up of the top people from the top institutions who are culled through the “up or out” system (if you stop advancing, you’re asked to leave). And if the free market knows best, then why not go to the best of the free market?

And as much as the firm likes to position itself as a truth-teller, objectively scouring the data to come to recommendations, with a group of people who jumped through every hoop to sit at the commanding heights of society, how likely will they be to recommend an idea that challenges their audience (who, almost exclusively, are wealthy, powerful men)? The facts and data all indicate that a single-payer healthcare system would be more effective and cost-efficient, but how likely would McKinsey have been to recommend that to a President Romney looking to solve the healthcare crisis (again, prohibitions on policy aside)?

This belief in the superiority of the free market at the expense of government didn’t start with Romney (or Reagan or Goldwater). In 1958, McKinsey consulted on the organizing of America’s response to Sputnik, NASA. According to historian Christopher McKenna in The World’s Newest Profession:

“From NASA’s establishment, the organizational structure that Glennan and the consultants from McKinsey & Company devised for the space agency promoted the use of outside contractors over building internal expertise… Beyond the bare minimum of internal technical expertise, however, the McKinsey consultants argued that America’s ‘free enterprise society dictates that industry should be given as extensive a role as possible.’”

This approach, “may have dismayed the agency’s engineers, but the response cheered NASA administrators.” By 1964, 90 percent of NASA’s $5 billion budget went to private companies and 350,000 contractors supported 32,500 NASA employees. Bill Clinton’s declaration of the end of big government in 1996 and George W. Bush’s pledge to substitute contractors for half of the remaining federal workforce in 2002 were influenced and made possible by the work that McKinsey did in establishing the contractor state. In an ironic twist, two months before the disastrous rollout of healthcare.gov, McKinsey warned senior White House staff that, “the project lacked comprehensive testing, noted many functions were dependent on contractors and warned against taking risks to meet deadlines.”

The hollowing of NASA was not an isolated event. According to The Firm, in the 1980s, McKinsey helped Carlos Salinas privatize 85 percent of Mexico’s state-owned businesses, Margaret Thatcher do the same in Britain, and West Germany do the same in East Germany. The firm has played a role in privatizing government assets in Latin and Central America, Eastern Europe, and Asia. In some of these cases, privatization was inevitable, but in many, McKinsey made it more likely. Inexperienced leaders looking to make a mark turn to McKinsey for ideas, and they are all too eager to recommend privatization. The firm can point to all of its experience managing privatization elsewhere, as well as the influx of cash and positive Western press about how this shows you’re a “serious reformer.” Beyond the fees, McKinsey is motivated to do this work by its pro-market ideology. That privatization increases inequality, primarily benefits the wealthy, is not immune to corruption, and fundamentally shifts management incentives towards pleasing shareholders and away from the public interest is of little concern to McKinsey.

Beyond the literal privatization of public assets, the steady creep of corporate approaches to governing amounts to privatization in all but name. Government cannot and should not be run like a business, as even the Harvard Business Reviewadmits. One particularly egregious example was McKinsey’s recommendation that the BBC use an internal market to buy and sell services, which led to endless internal negotiations to do tasks as simple as reserving studio time. McKinsey’s perceived success at improving corporate governance has led to calls from publications like the Economist that it may be “McKinsey’s turn to try to sort out Uncle Sam.” In anticipation of the beginning of Obama’s presidency, the magazine unironically hoped that “Obama may favour McKinseyites in much the same way as his predecessor seemed addicted to hiring alumni of Goldman Sachs.” As we all know, the Goldman Sachs-stuffed Treasury Department led to stable markets and steady growth throughout the Bush administration. They go on to hope that Obama hires “the best technocrats” like Ford Motor CEO turned Defense Secretary Robert McNamara. That these two parties contributed to and presided over the financial crisis and Vietnam War respectively apparently does nothing to shake the Economist’s confidence in the wisdom of technocratic businessmen.

...In addition to the favorable regulatory environment, McKinsey’s pro-market, hyper-rational ideas spread through what organizational theorists Paul DiMaggio and Walter Powell call “mimetic isomorphism,” the tendency of institutions facing uncertainty to become more and more alike. In a quest for legitimacy in the eyes of employees, customers, and competitors, “Large organizations choose from a relatively small set of major consulting firms, which, like Johnny Appleseeds, spread a few organizational models throughout the land.” As a result, “…schools assume the structure of the workplace, hospital and university administrations come to resemble the management of for-profit firms, and the modernization of the world economy proceeds unabated.”McKinsey’s reorganization of most of the large companies in post-war Europe demonstrates mimetic isomorphism in action. Facing extreme uncertainty and pressure from American firms, European companies modeled themselves after organizations perceived to be successful (American ones) and relied heavily on a single source of vital resources (McKinsey). Whether American corporate success was due to the decentralized organization model or the fact that their competition was in literal ruins is of little consequence. Decentralization took off because the cool companies decentralized, with McKinsey whispering in their ears. The net effect of these forces was to exacerbate some of the most damaging trends in contemporary life: the growth of wealth inequality and the increased insecurity of private employment.In the 1950s, McKinsey consultant Arch Patton pioneered the field of executive compensation after discovering that worker wages had risen faster than management wages. (Gasp!) This led to a lucrative business: helping executives justify more and more extreme paychecks. According to the Economic Policy Institute, the typical CEO made 20 times the median employee’s compensation in 1965. In 2015, that ratio had climbed to 286. When Patton was asked in the 1980s how he felt about his legacy, he had one word: “Guilty.”

[musicwillalwaysmeanlove]

Tumblr has a for you page now and honestly this mimetic isomorphism can fuck off

[businessmodelscholar]

▶ Why are companies so similar, especially those operating in the same industry? Institutional theory and the concept of isomorphism* explain this similarity. It is all about companies trying to gain legitimacy, because that's what determines their performance. There are three types of mechanisms of isomorphism: 1) coercive, 2) mimetic, and 3) normative. These forces push companies to follow similar behaviors. Every now and then, a new (disruptive) company enters the industry causing patterns of what is considered "normal" behavior to change. *DiMaggio & Powell (1983). . However, being too similar to other companies leads to intense competition, so being different is good too. The question then becomes, to what extent should you be similar and to what extent should you be different to achieve high performance? . #businessmodelscholar #businessmodel #business #phd #phdlife #organization #organizationtheory #institution #institutionaltheory #isomorphism#imitation #optimaldistinctiveness #strategy #entrepreneurship #entrepreneur #manager #concept #learnfastwithbms