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PFEFFER, JEFFREY. Competitive Advantage Through People: Unleashing the Power of the Work Force. Boston: Harvard Business School Press, 1994. Pp. ix + 288. $24.95
How a company organizes and manages its workforce has increasingly become a source of competitive advantage. What practices help create this advantage and why American companies have not embraced them with any degree of confidence or enthusiasm provide ample material for discussion. Jeffrey Pfeffer's Competitive Advantage Through People offers an impressive analysis of this important and timely topic.
Pfeffer, a sociologist and professor at Stanford Graduate School of Business, describes 16 elements that are present in some degree in those companies that have achieved advantage due to the way they have redefined what he calls the employment relation. The 16 elements are: employment security, selectivity in recruiting, high wages, incentive pay, employee ownership, information sharing, participation and empowerment, teams and job redesign, training and skill development, cross-utilization and cross-training, symbolic egalitarianism, wage compression, promotion from within, long-term perspective, measurement of the practices, and overarching philosophy.
The author is the first to observe that there is nothing new about the elements included on this list. Nor are there any surprises on the list of exemplars (e.g., Lincoln Electric, Nordstrom, Levi Strauss, NUMMI), some of which have embraced many of these elements for decades.
There is substantial evidence for the effectiveness of practices based on these critical elements. Paradoxically, there is also strong evidence that American business has been very slow to embrace them. Pfeffer provides several examples, including the American textile industry's painfully slow conversion to the modular production system, even under economic conditions that render their traditional strategies unfeasible. Cases from the automotive, shipping, paper, and airline industries drive home the point.
"In 1990," the author continues, providing further evidence of U.S. companies' collective failure to adopt sound practices to redefine the employment relation, "barely more than half the firms [in a survey] reported providing 60% or more of their employees with information on their own unit's...