Globalisation and Organisational Change Week 2 Summary The article that I have chosen for this week summary is ‘Death of a Factory: Market Rationalism’s Hidden Abode in Inner-City Melbourne’ by Rob Lambert. The writer of this article presents a brief overview of the historical development of this local business, an account of the texture of the social relations of production at the Chef factory and the organisational culture the management had created. Chef has been Australia’s leading stove producer since the 1960s.
Their innovative development of the gas burner technology not only received recognition in Australia but they manage to secure a lucrative royalty deal with a Japanese manufacturer which increased their sales reaching a turnover of $ 8 million by the early 1970s. However, due to the takeover, the intense work, high risk and innovation by Chef has come to an end. On the other hand, the writer also wrote about how the General Manager, Ron Barbano who played a pivotal role in making the working environment in the factory a meaningful way of life and not just a place to work for all the diverse employees working at Chef.
In addition, employees refers the factory as ‘my home’ because they were valued as persons, independently of skills and position, grow up together and did many activities with their colleagues and bonded as a community. Meanwhile, Barbano believes that his management style has been influenced by Max Flockhart, his father, and the Young Christian Workers. He learned that as a manager, he needs to understand the needs and aspirations of shop-floor workers and give them security so that they can do their job well as they know they are secured.
It is also said that he treated everyone like his friend without caring about his status. Barbano’s commitment to security and equality was able to unite the immensely diverse migrant workforce which has the potential of social conflict if it has not been managed well. Besides that, the writer also explains on how the workers felt that the environment would have been different if they were a multi-national company as they will be more bureaucratic principle and process. Chef, under Barbano, would bend the rules to look after people.
An example was given whereas Chef continued to pay an employee who discovered she had cancer and needed treatment. The good treatment of workers led to a profound return of commitment from the employees to the factory hence this culture of commitment transforms contractual relationship into community relationship. Besides that, the cultural value to equality is also very strong in Chef. Employees told the writer about their wonderful experience working for years in the company and was treated the same as the others without any significant level between the management and labours.
The writer also gave an illustration on how because of cultural equality, Chef accepted David Weston who was classified as a mentally handicapped person to work with them. It is believed that due to the good culture such as communication and reaching out, David was suddenly able to communicate to the astonishment of his minder and medical supervisors. Furthermore, Chef’s management had been practicing a form of lifetime employment.
However, due to the competitive market pressure flowing from deregulation, these commitments came under increasing stress after 1995. The demands of the globalising market placed Chef’s strategy into jeopardy. The stripping of tariffs in the 1990s increased the market share of imports hence the competition between two main Australian producers, Email and Chef became more intense. Email continuously cut the price of Simpson stoves as they were able to subsidise due to their dominance in the fridge industry to undermine Chef’s profitability.
The competitive war was effective as Email displaced Chef as Australian market leader in the late 1990s and this caused Chef to be bought by Southcorp who wants to use Chef’s profit to advance their wine making interest. Besides that, as more multi-national corporations pump their products into Australia, Chef’s market has confined to the Australian market. This forces Chef to accept downsizing and cost cutting in order for them to remain in the market thus contradicting with their 30 year commitment.
Measures was taken to save Chef but Electrolux has already stated in their negotiation that they would only acquire Email if the Chef factory was closed and cooker production rationalised into one factory in Adelaide. In my opinion, Electrolux should at least be responsible to the workers of the closed factory. Most of the workers had breath, lived and grow with the factory so if they are not able to relocate them to Adelaide they should at least give some benefits to these workers in order for them to be able to feed their family until they obtain a new job.
However, globalisation is cruel and it is a different playing ground where only the fittest will survive hence it can be said that Electrolux is just playing its role to increase its domination in the industry. I believe that the workers should move on and look for another job immediately as they have families to feed. Hopefully, they are able to get a job with the same environment but I feel that it is very hard to find another organisation as unique as the organisation culture Chef had created and to come across another manager like Ron Barbano will be impossible especially in multi-national corporations.