The New Competition: Institutions of Industrial Restructuring

Why is America losing its competitive edge in basic industries ranging from automobile manufacture to consumer electronics? The reason, Michael Best shows, is the rigid command and control structures that are typical of big business in America. America firms lack the organizational flexibility of the "new competition" practiced by companies in Italy, West Germany, and Japan. The secret to the success of these foreign firms is that they are organized from top to bottom to pursue continuous improvements in methods, products, and processes. They seek competitive advantage not through lowest-cost production but through superior product design. This requires an unusual degree of organizational flexibility, which in turn demands organizational commitments to problem solving, constant attention to detail, and an integration of thought and action in the work place.

The New Competition posits a strategic tension between market competition and cooperation in successful industrial societies. Instead of bargaining with suppliers and customers at arm's length, firms can forge consultative relations with them, facilitating the flow of valuable advice, suggestions, and information and crucially modifying a key processor design. Instead of engaging in price rivalry, companies can pursue product-related rivalries that increase their international competitiveness. Best envisions a new role for national industrial policy―one not of bailing out sick firms in dying industries but of shaping industrial sectors and markets. It would encourage firms to cooperate in terms of the form that competition takes, one that involves products instead of prices.

Michael Best analyses this development by drawing on a wide range of material from Britain, Europe, Japan and the United States. He examines the different perspectives on business organization during the age of Fordism - such as those developed by Galbraith, Holland and Chandler - and contrasts these accounts with the characteristics of successful competitors in the contemporary 'post-Fordist' age. He develops the paradigm of strategic planning in order to analyse firm, sector and intersector dynamics. He also draws out the implications of the new competition for industrial policy in Britain and elsewhere, giving particular attention to the role of national investment banks and enterprise boards.

This thoughtful and original book will be of interest both to students in economics and industrial sociology, and to anyone concerned with the problems raised by economic decline and industrial restructuring in Western societies today.