INTRODUCTION

FOREWORD

CHAPTER 1: PRODUCTIVITY AS THE DEVELOPMENT STRATEGY

1.1 Why productivity?

1.2 The modern view of productivity

1.3 Needs for productivity movement

CHAPTER 2: EVOLUTION OF NATIONAL PRODUCTIVITY ORGANIZATIONS

CHAPTER 3: NPO ROLES, ACTIVITIES, PRODUCTS AND SERVICES

3.1 The main roles and activities

3.2 Emerging roles, products and services

Annex I

Annex II <

CHAPTER 4: NPO GOVERNANCE AND ORGANIZATIONAL STRUCTURE

4.1 Impact of changes in external environment

4.2 NPOs' governance: the mass stakeholders

4.3 The need for an institutional mechanism

4.4 Considerations for productivity centres' structure and funding sources

CHAPTER 5: CASE STUDIES ON NATIONAL PRODUCTIVITY ORGANIZATIONS

5.1 Canadian Labour Market and Productivity Centre (CLMPC)

5.2 Japan Productivity Center for Socio-Economic Development

5.3 Germany: Rationalisierungs-Kuratorium der Deutshen Wirtschaft (RKW)

5.4 Korean Productivity Center

5.5 Singapore Productivity and Standards Board

5.6 National Productivity Institute of South Africa

5.7 Thailand Productivity Institute

5.8 Foundation Polish Productivity Centre

5.9 Some lessons from NPO experiences >

CHAPTER 6: INTERNATIONAL EFFORTS IN PROMOTING PRODUCTIVITY

6.1 Cooperation between NPOs

6.2 International cooperation agencies

6.3 The international and regional NPO network

6.4 The ILO in productivity promotion

CHAPTER 7: GUIDES FOR FEASIBILITY STUDIES ON SETTING-UP AN NPO

7.1 Needs and objectives of the feasibility study

7.2. Guide questions for conducting the feasibility study

CHAPTER 8: FUTURE PROSPECTS

INTRODUCTION

The productivity movement is a nationally-concerted effort of many public and private stakeholders to attain economic and social progress through productivity improvement and involving active participation of business, industry, workers, government, academia, community groups and other interested parties. Its goal is to improve the quality of life through a better working environment, higher income and an equitable distribution of the fruits of productivity improvement.

National productivity organizations are established as important catalysts for promoting the productivity movement among individuals, enterprises and nations. The International Labour Organization plays an important role in promoting the productivity movement throughout the world, particularly in strengthening institutional mechanisms and developing local capabilities in enterprise and public service productivity improvement, as well as playing a networking role in arranging the exchange of experience between different national and sectoral productivity organizations, and integrating social and economic concerns of productivity movements.

This publication is an attempt to look into the evolution of the productivity movement and national productivity organizations; the changes in their roles, activities, organizational structures, future prospects and the main reasons behind them. It is based on contributions from the main authors and the ILO's experiences during the last 50 years in supporting countries in productivity promotion as an important factor to poverty alleviation, economic growth, and improving the quality of life.

The authors of this publication are:

Joji Arai, Secretary General, International Productivity Service (IPS), Washington DC, USA, and former Director of the International Cooperation Department, Japan Productivity Centre.

Joseph Prokopenko, Head, Productivity and Management Development Programme, ILO, Geneva.

Arturo Tolentino, Senior Specialist on Entrepreneurship and Management Development, §and Manager of the Action Programme on Productivity Improvement, Competitiveness and Quality Jobs in Developing Countries, ILO, Geneva

We would also like to acknowledge the contribution of Mr. Yasuhiko Inoue, Director of Overseas Technical Cooperation, Japan Productivity Centre for Social-Economic Development, and at present the advisor of JICA to the Thailand Productivity Institute, who prepared a number of cases on NPO activities for this publication; and to Ms. Lydia Badia for the technical preparation of this publication, and Ms. Beatrice Mann for her help with typing the manuscript.

FOREWORD

National productivity and competitiveness result from the intimate interaction of factors at the meta, macro, meso and micro levels. At the meta level are the socio-cultural factors that influence values and attitudes towards productive and quality work. It includes the capacity of the society to achieve strategic concertation towards common national development objectives. At the macro level are the macro economic policies that create the conducive and enabling economic environment that encourages and demands from the economic actors and enterprises to be productive and competitive. At the meso levels are the supportive micro-economic policies and governmental and private institutions that are implementing programmes. At the micro level are the enterprises who, through various efforts like managerial capability building, workers' skill and competency development, improvements in the production process and structures, alliances and networking, etc. are making productivity and competitiveness improvement a reality.

Among the most important meso institutions are the National Productivity Councils and National Productivity Organizations. By performing their various roles as productivity promoters, catalyst and mobilizer, capability builder, etc., they in fact influence and strengthen the productivity and competitiveness factors at the various levels. Through spearheading programmes such as national productivity awareness and education campaigns they help develop the national values and attitudes that appreciate good work and quality performance and are supportive of learning, innovation and change. Through mobilization of a tripartite and multi sectoral national productivity drive, they create the mechanisms and institution for national concerted efforts towards productivity improvement. By initiating and helping in the review and formulation of macro and micro economic policies, they help create the conducive and enabling policy environment. By networking and helping other institutions, they help build a strong supportive institutional infrastructure, and through their training, consultancy and information they help enterprises acquire the managerial and workers' capabilities to effect and implement the "high road" to productivity and competitiveness improvement. Through the pioneering and capability building in industry, they help improve the production processes, build the human competencies essential to continuing productivity and competitiveness improvement. Through the promotion of participatory approaches to productivity they help improve the quality of jobs.

This paper is produced under the Action Programme on Productivity Improvement, Competitiveness and Quality Jobs in Developing Countries. With increasing globalization, it is more and more appreciated that productivity improvement is crucial to a country's competitiveness and its integration into the global economy. With the opportunities for growth of output and trade and the increased competition offered by globalization, it is important for countries to develop the capacity to pursue strategies for productivity and competitiveness improvement of industries supplying local and international markets. Particularly for developing countries, productivity improvement is essential to create more jobs through growth from new investments and to sustain jobs in the face of increased competition.

The Action Programme promotes the "high road" to productivity improvement and competitiveness, i.e. approaches that aim at achieving both economic and social objectives at the same time. It is developing various guides and manuals on improving productivity and competitiveness through innovation, participation, human resource development, labour-management cooperation, and better working conditions, among others. It is documenting national, sectoral and enterprises level "best practices" in productivity and competitiveness improvement. The manuals and guides and the best practice cases will be disseminated through publications, national workshops and seminars as well as through undertaking of policy and programmes development advisory services.

Arturo L. Tolentino

Manager

Action Programme on Productivity Improvement, Competitiveness and Quality Jobs in Developing Countries

CHAPTER 1: PRODUCTIVITY AS THE DEVELOPMENT STRATEGY

1.1 Why productivity?

Social and economic development means bringing a better future to the people. The ultimate goal of productivity improvement as a driving force of economic development is to improve the quality of life of the people.

This is a key factor that enables society to generate value added through an optimal mix of available resources - human knowledge and skills, technology, equipment, raw materials, energy, capital and intermediary services. Its growth contributes towards the prosperity of nations, makes companies competitive in the global market, and thus contributes to the quality of life. Without people's resourcefulness and efforts in improving productivity, humankind would have run out of means of survival and progress as the rate of increase of land, labour and capital (fruits of the past labour) could not keep pace with that of a population increase.

In the past, nations and people fought for better access to these basic factors to generate value. The strong took from the weak to enjoy a better quality of life. But the contemporary world no longer permits shifts of value added through exploitation. The only way to survive and prosper today and in the future is to become more innovative and productive.

For four thousand years the quality of life had not improved much until the 18^th century when the Netherlands changed it through the development of the guild, banking systems and accelerated international trade. Toward the end of the century, England surpassed the productivity level of the Netherlands through the industrial revolution. Eventually Germany and theUSAovertook England toward the end of the 19^th century. Though relative abundance of land and natural resources helped theUSAto be among the winners of two World Wars, it was the country's high level of productivity that enabled it to become an important world power. In the past 150 years the average annual productivity growth rate of theUSAwas 1.8 per cent as compared to 1.6 per cent of OECD countries.

Today, the pace of human progress is even faster. During the industrial revolution it took fifty years for Britain to double the income of its people. In the beginning of the 20^th century it took thirty years for theUSAto double the people's income. It now takes less than ten years for China to do so. Technological progress, rising levels of education, a relative decline in transportation and communication costs and general trends in liberalizing trade by governments are changing proportionate contributions of factors for progress. Abundance of land space, ready accesses to natural resources and increasing populations are no longer important advantages. While the world's productivity as GDP (Gross Domestic Product) divided by number of workers has grown at 2.6 per cent between 1985 and 1996, international trade has been growing twice as fast. Export orientation of many governments replaced the past failure of import substitution policy for faster growth. The companies sought better return on investment in the global market. The global markets are becoming the economic battleground.

With higher productivity resulting in higher foreign exchange reserves, a nation can buy the needed resources as long as it can compensate for price differentials with higher value added generated from the processed resources. Changes in the nature of services now make them exportable. A vital factor is skills and intellectual capital levels of the workforce which add value in the processing of material, energy and information resources.

Primarily, the quantitative and qualitative contributors to productivity improvement were land, technological innovation, investment in new plants and equipment, quality of the labour force, systems improvement, application of the principles of economy of scale and scope, government policies and regulations, and management's ability to create the optimal mix of these factors. Technological innovations increased value added by introducing new products/services into the marketplace through more efficient processes. Investment in new plans and equipment made labour substitution more effective. The skills, knowledge, attitudes and motivation of the workforce determined the levels and quality of output when combined with the preceding factors. Systems improvement arising from application of industrial and process engineering increased efficiency. Application of the economy of scale made it possible to reduce the cost of operations. Government policies and regulations determined the availability of a physical and scientific infrastructure, educational and training systems, the health of a financial market, the degree of economic liberalization, and its relations with business, labour and market behaviour. The ability of management to create the best combination of all the above contributory factors and their effective use determined competitiveness of the organizations. Goods and services are purchased and consumed when offered for the lowest prices with the highest quality, delivered at the moment when needed and followed with proper after-sale services. Finally, fair and equitable distribution of the fruits of productivity improvement enabled people to enjoy a better quality of life.

Since the International Labour Organization supports all efforts in raising living standards and increasing productive employment and promoting cooperation between governments, workers and employers for many years, productivity has been a key issue in ILO activities. This is due to its impact on economic and social development, its importance as a source of income and as an integrative objective encompassing improved labour/management cooperation and worker participation. Productivity is one of the best criteria for enterprise competitiveness and a long-term strategy for governments, employers and employees in alleviating poverty and promoting human rights and economic democracy.

Indeed, productivity objectives, accepted by all parties concerned, become the important instrument of just distribution of wealth, sound industrial relations and democratic workers' participation. It is also the best approach in balancing efforts between different economic, social, and environmental objectives.

Productivity and poverty alleviation. There is strong macro-economic and statistical evidence that the more effective (productive) the national economy, the higher the personal income of workers and the lower the rate of inflation in the long-term. It also means more national income for social distribution for those who are young, old, handicapped or unemployed. Better productivity also provides more profit for investment to promote enterprise development and economic growth in underdeveloped regions. Therefore, high productivity packaged with good distributional and development policy is the best available means for poverty alleviation.

In this regard, it is important to avoid confusion of priorities. First - productivity, and second - distribution. One can not distribute what has not been produced.

Productivity and promotion of employment. Long-term international statistical trends show that there is a strong correlation between national productivity and the level of employment. The more productive an economy, the more competitive it is in the global markets and the lower the unemployment rate. The more productive an enterprise, the more income it can generate and save for new investments and creation of new jobs. Short-term effects of productivity, combined with business cycle effects on unemployment growth, could be met by sound economic and social policies and measures. Therefore, productivity is not only the best indicator of where to invest and create more jobs, but is also the source of funds for new jobs creation and redeployment of people. Labour policy emphasizing employment alone, without focus on productivity, is inflationary by nature and doomed to fail.

Productivity and human rights, democracy and tripartism. Full realization of human rights can only be achieved through effective economic and social development. Economic democracy can also be exercised through entrepreneurship, self-employment and small enterprise development which would provide opportunities for everyone to set up their own firms or businesses, start an individual activity or join formal employment. These numerous undertakings would only survive on the basis of higher productivity, providing a conducive political and institutional environment to exercise such economic democracy. The system of tripartism in the long-term provides economically and socially effective choice and opportunity to participate. The most important bottom-line objective of tripartism is a more effective, free and peaceful organization of economic and social activities to promote participation and gainsharing between major stakeholders. Therefore, productivity improvement as the main source of income could be one of the main and common objectives of social partners. In fact, not just (income) distribution, but productive wealth creation and distribution is the main strategic objective of tripartism in the most successful countries. Having a distributional objective alone destroys tripartism and promotes aggressive and hostile relations between government, employers and workers, as well as inside each of these groups.

Productivity and labour standards. The promotion of certain norms and labour standards, without taking into account the enterprises' competitiveness and productivity, could result in additional and often prohibitive costs in reducing competitiveness which in turn would lead to the deterioration of working conditions, enterprises closing and job losses. This particularly concerns developing countries and economies in transition. A sure way of promoting labour standards practically is to promote them in a package with measures for productivity improvement. In this case, they would be more eagerly and voluntarily accepted by employers. Also, productivity growth could provide a more sound financial framework for introducing more demanding labour standards without undermining competitiveness.

There is also positive relationships between productivity improvement and working conditions, safety and health, labour-management cooperation, the degree of workers' participation, etc. The problem is to identify and maintain a certain balance in their promotion and productivity improvement - or optimize their interrelationships at any given time of the enterprise and country development.

The productivity movement philosophy which values human resource development as the most important productivity factor, would also embrace labour standards and norms as a means and framework for further human resource development (HRD) within the productivity improvement package. Therefore, productivity movement and productivity objectives, if properly introduced into company and country strategies, have more potential in promoting decent working conditions and quality of life than legislative mechanisms alone.

Productivity and sustainable development. Because of serious environmental effects resulting from an overtaxed ecosystem, efficient use of resources (which is actually productivity) has become a major strategy for achieving sustainable development. This strategy indicated that it is not growth per se that must be adopted but the "how" of economic growth that is more crucial. In the broad sense, sustainability means that unit of raw materials and energy to an economy and the output of waste materials and heat must be within the regenerative and absorptive capacities of the ecosystem. It is clear that they are close positive links between productivity and sustainable development.

However, effective productivity movement depends very much upon the concept of productivity adapted by people and their organizations.

1.2 The modern view of productivity

Traditionally, productivity is considered as a ratio between input and output. However, this is not explained by the linkage between enterprise output and its usefulness to society- the consumer. Output, therefore, is increasingly replaced by sales or to eliminate the impact of external suppliers by value added. Since labour is the very important productivity factor in many cases, some managers believe that excessive reduction of labour costs is equal to productivity improvement. This is one of the most common misunderstandings of productivity leading to just short-term results or even an end to the company. People do not only cost but they are also value creators. Productivity, in the modern sense, is a situation in which one creates more than consumes. So the emphasis is on creation rather than on reducing labour costs.

When workers are forced to work harder and longer hours without due compensation or an improvement in the quality of life, even under the name of productivity improvement, they are "exploited". Productivity also is often confused with "efficiency", "rationalization" or "profitability". In reality, the modern understanding of productivity is doing things right at the least possible cost in the least possible time with the highest possible quality and to the maximum level of satisfaction of the customers and employees. In this sense, productivity is a total business concept rather than a "rationalization of production", and productivity also has social dimensions, not only economic ones.

In recent literature, the reader may find that productivity and quality are the same. They are not. Quality is rather one of the most important factors and conditions for higher productivity. Productivity actually means "producing better" and not necessarily "producing more". With high quality we will have fewer rejects, less rework, less wastage, lower cost and hence better sales and higher productivity. Thus, quality of products, processes and services contribute to higher productivity.

When using the term "quality", we mean not only final product or services but the quality of the whole production process and the quality of the total production/organizational system - this term moves very closely to productivity. In this sense, the quality of all what and how we are doing could be synonymous to productivity. Since the most important productivity factor is human resource effectiveness, the quality of people (both managers and employees) is also closely related to productivity. When we talk about the quality of people, it is not only skills and knowledge, but also their level of motivation, cooperation, commitment, values, attitudes and culture. From this point of view, productivity improvement can also be synonymous with human resource development.

Finally, enterprise and people productivity is the result of not only internal enterprise factors discussed above, but the external ones as well; the most important of which are the quality of government economic policy, public administration, social and business infrastructure, political stability and cultural specifics - society as a whole.

It would be interesting to see how different cultures and national practices influenced the development of productivity concepts. The early American concept of efficiency-oriented productivity was synthesized with the concept of creating new social order for improving the quality of life of people through tripartite efforts of employers, employees and the government. The latter idea was strongly advocated by the International Labour Organization and gave birth to a European concept of productivity with participation of the social partners.

While the applications of scientific management principles, case oriented analytical business management practices, and power-based bargaining were prevalent in theUSAindustrial scenes at the time, Europeans opted to combine the American practices with their ideal of a participatory decision-making system and cooperative labour-management relations in promoting their national productivity movement. American management's emphasis on the input end of the productivity system backed by technologies was complemented by the European concept of fair and equal participation by social partners in the movement and distribution of the fruits of productivity with emphasis on creating a humanistic working environment.

1.3 Needs for productivity movement

Real and long-lasting productivity improvement can not be achieved without broad popular productivity movement with active involvement of all major stakeholders. Such productivity movement can not be successful if productivity increase is to be realized through exploitation, and the employees who are to be driving forces in productivity movement will not have incentive to participate in it. In order to be a successful movement, it needs to have a broad support by business, employees, government, consumers, academia and the general public.

Therefore, beneficiaries of productivity improvements should not be only employers and employees, but consumers, government and the broad population. Gains should be fairly distributed among all productivity movement stakeholders. To employers and managers, productivity gains in the form of higher profit return to capital can mean the improved capability to: expand capital formation resulting in more and better goods and services and more employment opportunities; upgrade technical capability, resulting in the improved quality of products and further productivity; and to improve competitive position in the market. To the employees, increased productivity means: an increase in compensation - gains resulting from improved productivity are shared by employees in the form of increase in wages/salaries to sustain their efforts; better working conditions - in a firm with high level of productivity, better working environment and better emotional climate are fostered; better sense of well-being - employees derive greater sense of well-being when they see their efforts pay off; job security - a firm attaining a high level of productivity is more stable; development of skills and other capabilities - a fair share of the productivity generated is also deployed in employees' training and development to ensure their work satisfaction, personal career development and further productivity improvement.

For the consumer, productivity gains mean lower prices of goods and services. Productivity improvement will decrease production cost per unit which may contribute to the consumers in terms of lower prices and more goods and services at better quality. As the level of productivity rises, outputs become more competitive, both in terms of quantity and quality. Thus, better quality goods and services are made available to the consumers.

To the broad public and communities, higher productivity means reducing the effects of inflation, a higher standard of living, provision of more employment opportunities, reducing social conflicts since more goods and services are made available at affordable prices due to increase in consumers' purchasing power, a better natural environment and community services. To the government, improved productivity means the capability to provide more and better social services and to carry out development programmes more efficiently.

The government could greatly contribute to productivity movement through developing a supportive environment by maintaining a productivity monitoring system, conducting policy evaluations, formulating supportive policies and providing support services and infrastructure for productivity movement. It can also contribute to public awareness raising, setting-up national awards and recognition systems as well as building-up the national capabilities such as national HRD programmes, provision of the supportive institutional infrastructure.

Employers and managers could set up the enterprise productivity improvement programmes supported by different gainsharing systems, adopt modern HRM practices, provide training and development of personnel, promote creativity and innovation and create a participating environment.

Workers and their organization could promote positive attitudes to productivity improvement, actively participate in developing and implementation of different productivity incentive schemes, improving industrial relations, supporting workers' education and training, and a better quality of working life.

The General Conference of the International Labour Organization (ILO) in its 26^th Session in Philadelphia in 1944 reaffirmed the fundamental principle that "labour is not a commodity". It also affirmed that "All human beings, irrespective of race, creed or sex, have the right to pursue both their material well-being and their spiritual development in conditions of freedom and dignity, of economic security and equal opportunity". These principles became the starting point for the productivity movement and for establishing national productivity organizations around the world.

CHAPTER 2: EVOLUTION OF NATIONAL PRODUCTIVITY ORGANIZATIONS

Despite the fact that the concept of productivity has been known for a long time, the establishment of productivity institutions to promote a productivity movement nationwide took place only about 50 years ago. The US was the first country to start the modern productivity movement with the establishment of the War Production Board during World War II to initiate studies to improve the performance of US industries through efficient allocation of resources. It then took a lead in restructuring the European economies under the Marshall Plan. The US shared its resources, technologies, management systems and practical methods with other countries, starting with Britain, through study tour programmes and consulting by American experts, and then extended financial and technical assistance later to Asia. This initiative and initial funding sparked the worldwide productivity movement.

The American concept of efficiency-oriented productivity was later synthesized with the European concept of creating a new social order to improve the quality of life through the tripartite efforts of employers, employees and governments. The latter idea was strongly advocated by the International Labour Organization and gave birth to a European concept of productivity with the active participation of social partners. This concept of productivity movement, based on the tripartite structure of a national productivity organization (NPO) representing business, labour and government, was universally accepted and advocated by the ILO since the 1950s. New catalytic organizations to promote national movements were established throughout Europe.

The NPOs set up in the 1950s were responsible for putting together "productivity teams" and coordinating their programmes. Each recipient nation of Marshall Aid was expected to create (and in the case of Germany's RKW - to resuscitate) such a centre.

To ensure that capitalism had a human face and to promote cooperation between workers and employers, the organizational structure of these centres included representatives of both employers and trade unions.

The primary goal of these organizations was to promote a nationwide productivity movement for the economic development and betterment of the quality of life. This movement was more than the development and implementation of productivity programmes at company level, and generally assisted by many private research, training and consulting organizations. The goal was to involve major stakeholders - business/industry, labour and government (directly or indirectly) - by starting the nationwide productivity movement through public awareness campaigns, conferences, symposia, cooperative workplace programmes and other forms of the productivity culture development.

Armed with this new concept, the British Productivity Council was established in 1948 to assist the British industries to learn management know how from the US. Between 1948 and 1952 some 66,000 British business executives and union leaders visited the US under its auspices. They produced half a million copies of reports covering the study tours in order to ensure wide dissemination of information and sharing of new knowledge. Outstanding recovery of the economy of the UK supported by the productivity programmes gave rise to the establishment of productivity centres in Western Europe.

As a central coordinating body of those centres, the European Productivity Agency was established in Paris in 1953 to further pursue the goal of technological innovation, human dignity and inspiration for creating a better quality of life. A primary mission of the organization was to assist in restructuring the national economies through coordinated productivity-oriented activities of various NPOs by sharing information and experience.

The NPOs gradually built-up their own experience through study tours and networking and were able to provide firms with professional advice, information and consultancy on productivity improvement matters, and, because of the integrative nature of productivity (improvements in all areas and functions contribute to productivity), some NPOs became conglomerates of functional institutions and services (for example the National Productivity Centre (NPC) in Greece which even today is the largest in Europe, and the National Productivity Institute in Israel). These NPOs conducted studies in productivity statistics, provided training and consulting services to companies, organized productivity promotion campaigns, published and distributed productivity related information, ran national and sector conferences and workshops, and developed international cooperation with other related institutions in productivity areas.

An important function of the NPOs was to set up and develop other specialized organizations which dealt with productivity consulting or training consultants. The German RKW nurtured many specialized organizations to the point where they were able to do their own consultancy. At that time, the "scientific management" and "rationalization" approaches of the 1920s were still flourishing, particularly in the countries of northern Europe. By the early 1960s, trade unions were becoming restive about these approaches in productivity promotion and which was supported by the emerging "economic democracy" concept.

These first NPOs managed to prepare about 25,000 productivity team members. An important feature of this was when returning to their companies, team members were expected to play a consultant's role by disseminating their findings and recommendations. There was hardly an enterprise at that time which was not, in one way or another, affected.

From being more or less centralized administrative bodies organizing study missions, these NPOs took on new roles which differed from one country to another. In the larger countries, a first move was towards regionalisation. At that time, Germany's RKWs had many more staff working in the offices of the Länder than at headquarters. In the UK, local productivity associations were established in the main regions, and even in a small country like Belgium, regional and sectoral centres were set up.

In 1959, the European Productivity Agency declared that productivity is a state of mind. In Rome the consensus sentiment that "productivity is an attitude that seeks the continuous improvement of what exists" has become a conviction of many that one "can do better today than yesterday, and that tomorrow will be better than today". Furthermore, it requires constant efforts in adapting economic activities to ever changing condition, and the application of new theories and methods. It is a firm belief in the progress of humanity. The concept was well received and became the basic philosophy of many productivity organizations which were established later.

At the beginning of the 1960s, the most important trend in productivity movement was the recognition of the limitations of "rationalization" and the need to embrace such elements as skills, knowledge and attitudes. The integrative and "horizontal" nature of productivity which can optimize investments and efforts between different business functions has finally been recognised.

For example, German RKWs have maintained a "balanced" position between employers' economic aspirations and workers' technological training, managerial improvements and "the social side of enterprise". By the 1980s, regional productivity bodies linked to the central RKW were only formal. Virtually all their finance now comes from productivity services rendered and regional government programmes for which they compete with other business-support organizations and independent consultants.

The success of the European productivity programmes and financial and technical assistance from the US started a similar movement in Japan in 1955. In Asia, the leading role in promoting productivity movement was being played by the Japan Productivity Centre (JPC). Then labour and management agreed on the following main principles of a national productivity movement: improving productivity ultimately expands employment; labour and management should cooperate in productivity improvement; and the benefits from higher productivity should be shared between labour, management and society at large. These contrasted with the attitudes of European trade unions who even in the 1970s affirmed that productivity improvement was a job killer. Explanations for this attitude included their attachment to the 1930s and 1950s concepts that "work" meant using physical power rather than brain power; that there was too much domination by "experts" - industrial engineers who knew "the best way" of doing a certain task; that time and motion studies were used to tell workers how best to perform their tasks, and that motivation should be a case of "being nice to workers" rather than stimulating greater performance.

Observation of a rapid growth in productivity in Japan as a result of the movement during the 1950s and 60s, and the recovery of the economies of Europe, triggered the establishment of productivity centres in several countries in Asia. In 1961 Japan, Taiwan, Korea, Nepal, Pakistan, the Philippines and Thailand agreed to establish the Asian Productivity Organization (APO) as an inter-governmental institution to facilitate a regional flow of information on productivity. Its goal was to act as a non-political catalytic agent in enhancing the Asian economy through mutual cooperation in improving productivity.

The establishment of the APO and the initiatives of political leaders in Asia sparked a surge of national productivity movements in the region with heavily government-funded productivity centres acting as catalysts in promoting the movement. The membership in APO expanded to include 18 countries in Asia. This movement facilitated the accelerated enhancement of productivity and economic growth of East and South-East Asian countries during the 1970s, 80s and through the 90s.

The economic slowdown at the end of the 1960s was the result of a revolution against monotony. The solution of the 1970s was to give workers more power in decision-making processes. Productivity was forgotten and the focus was on "control" and participation in the company's power structure. In Tony Hubert's words it was "the decade of legislation, rules and regulations, not to solve productivity issues, but to provide for a new distribution of power in Europe".

The resuscitation in the 1980s of concern about productivity and emphasis on the organization of the workplace was mainly brought about by the Japanese. Through quality control and productivity improvement groups, Japanese managers tapped the brains and experience of their entire workforce. The approach has been rapidly refined into Total Quality Management (TQM), a buzzword of the early 1990s.

Productivity centres have also been established in Canada and the US in parallel with the numerous consulting firms and other business service organizations to provide business with easier access to modern management and productivity techniques and approaches. The US discovered its productivity problems at the same time as it felt the competitive pinch from Japan. In 1970, the National Commission on Productivity was established which later added "Work Quality" to its title to attract trade union participation. Then it changed to "Quality of Work" and then to "Quality of Working Life Centre". This centre sponsored local productivity centres doing research and consultancy on productivity measurement, technology transfer and transforming adverse labour-management relations into cooperative modes. It also appears indirectly to have given rise to the American Productivity Centre, a purely private sector initiative.

In Latin America and the Caribbean region, the productivity movement at the national scale did not receive profound development until the 1990s. Very few institutions playing the role of the NPOs are in operation in these countries (Barbados, Chili, Costa Rica, Brazil). A few year ago there was interest in setting up an NPO in Columbia. It was only by the end of 1990s that there has been some signs of activity to revitalize the productivity movement in this region.

In South Africa, the National Productivity Institute (NPI) during its 25 years of existence, with 170 persons on its payroll, was the most active in the region providing productivity consulting services to public and private businesses.

The success of Asian countries later on triggered the movement in Latin America, Africa and other parts of the world. The collapse of the totalitarian system released Central Europe and the USSR from the centrally-planned economy and facilitated a spread of the productivity movement in this region as well. The development of the productivity movement has become of critical importance to these economies in transition. In Central and Eastern European countries, the central-planning mechanism disintegrated at a much faster rate than the market economy was created. Production and technological links have broken down between enterprises, economic growth has declined rapidly and productivity has fallen considerably. Despite this, the issue of productivity in general in this region is still of very low priority. Furthermore, trade unions are also too suspicious of the productivity movement to cooperate.

However, there are signs of a growing interest at different levels in the productivity movement. Some of these countries have managed to set up national institutional mechanisms for productivity promotion and consulting services. Even before the economic reforms began, the ILO provided assistance to the former Soviet Labour Ministry to initiate a productivity movement and provide consulting services. A study visit to Japan, Singapore and Thailand was organized by the ILO for the team headed by the former Minister of Labour. As a result of these efforts, the All Union Productivity Centre and eight other productivity centres were set up in former Soviet Republics, although very few of them have survived the collapse of the USSR.

Japan provided assistance with the establishment of a National Productivity Centre in Hungary and Poland. In the Ukraine, the National Productivity Centre was established in the summer of 1992. The Polish, Hungarian, Russian and Ukrainian NPCs have already been integrated into the European Association of National Productivity Centres (EANPC) as associate members.

Since these countries have not yet developed competitive private consulting practices in productivity areas, the role of NPCs in economies in transition could be particularly important in providing productivity consulting services and management training. Currently there are about 100 productivity institutions located throughout the world.

CHAPTER 3: NPO ROLES, ACTIVITIES, PRODUCTS AND SERVICES

3.1 The main roles and activities

The primary mission of the majority of NPOs has been and still is to facilitate improvement of quality of life through productivity and competitiveness promotion.

The roles of the NPO could be considered only in relation to the nation and its main "target" groups. These are government agencies, enterprise managers, employees and employers' organizations, scholars and opinion leaders, students, community leaders and the broad public.

Within the frame of the primary mission of the NPOs, their roles vary (see Table 1) and depend upon the specific mandate of the NPOs, policies of the funding agencies, needs of their clients, stages of economic development, cultural and social environments and the quality of leadership.

However, despite the above diversity, it is possible and useful to identify the most common NPO roles, which are as follows:

1. Promoting the productivity improvement and productivity culture

Productivity has often been perceived as a concept with unfamiliar content, therefore, both enterprise managers and labour sometimes resist or are hesitant in tackling productivity improvement programmes. NPOs must undertake promotion activities with the purpose of rectifying such attitudes by clearly defining productivity concepts, benefits of productivity and developing productivity culture and awareness, and preventing potential misunderstanding.

2. Assisting enterprises in productivity improvement through building their own capacities

The NPO is expected to offer support to enterprises through training programmes, guidance and consulting on practical productivity improvement measures, providing various information on methods and techniques (measurement methods, etc.) related to productivity improvement.

3. Acquisition, processing and disseminating information.

The NPO must acquire and disseminate various information about productivity improvement strategies, approaches, methods and techniques as well as the best lessons from local and international experience.

• Coordination with other organizations involved in productivity improvement, playing the catalyst role

The NPO is often not the only organization promoting productivity improvement. Many other organizations are also involved (or supposed to be involved) in similar efforts. The NPOs should play the role of catalyst and networker for other organizations involved in productivity promotion.

Thus, the most important roles and activities of NPOs could be summarized as follows:

The first important activities are dealing with attitudinal change and developing awareness among people involved in productivity improvement.

The second area is improving the performance capability of enterprises through upgrading management competence, corporate organization and management systems, improving HRM and HRD and enhancing performance of the enterprise as a whole.

The third important area is promoting productivity initiative among organizations through networking between research and educational institutions and enterprises, developing better cooperation between trade unions and employers, and promoting productivity improvement programmes to enterprises.

Finally, the policy and regulatory environment for productivity improvement remains of critical importance to unblock business and human potential. This could be done by assessing economic and business policies and regulations and their impact on productivity and competitiveness, providing advisory services on upgrading various productivity factors such as energy supply, transportation, technology and removing systemic barriers hindering productivity improvement.

To facilitate the implementation of the above roles and activities, the following NPO programmes are becoming very important:

• Training programmes including study tours to advanced countries with an emphasis on acquiring new management competence;
• Information dissemination through study reports, conferences, seminars and workshops and technical publications;
• Providing consulting services and developing professional management consulting;
• Public awareness campaigns, including award programmes;
• Developing relevant training materials and methodology;
• Setting-up libraries for productivity experts, programme participants and the general public; and
• Productivity measurement research, analysis and policy recommendations.

Some NPOs engage in developing training facilities and equipment, raising efficiency of information systems and assisting companies in systems development and integration; cooperating with other NPOs; providing employee assistance programmes including occupational safety and health issues; developing cooperative labour-management relations; undertaking different company surveys, etc. Examples of major trust areas of some NPOs are provided in Annex I.

Let us consider some of the most important NPO activities in detail:

Training Programmes

Study tours: Many centers organized extensive study tour programmes to advanced countries with heavy emphasis on site visits and learning from practical experiences. With large variations in the productivity levels and stages of economic maturity, site visits are the quickest way to learn about best practices. The study tour objectives pursued by the participating groups changed from learning about practical production or marketing management to strategic and information technology-oriented topics. A flow of information from one superior country with best practices to the followers changed to multi-country studies as countries moved into developing their own expertise in different areas. The format of the study tours became multiple from single industry orientation to generic multiple sectoral studies. Some became joint research and resident studies by both sending countries and hosting countries. Others became study and training programmes involving a fairly large number of participants as study boat cruise projects with many ports of calls and onboard classroom lectures, virtually turning large boats into schools with captive students. Other assumed duel purposes of study tours and trade missions. Although many European centers which once attained sufficiently high technological levels to compete with the other countries, phased out training study tours. Both domestic and foreign site visit programmes remain important revenue-producing projects for many centers in Asia as well as in the US and Latin America. The business will pay for the opportunities to learn about new technology, products, process and markets.

Even the US which used to be a one-way provider of information and new knowledge started to send study groups to other countries in the 1980s. Many domestic training programmes, seminars, workshops and lectures are usually followed by site visits providing participants with important learning opportunities. The recent revival of US productivity is attributed to the results of corporate efforts to learn efficient processes from other domestic and foreign companies through study tour programmes just as much as consulting and analytical academic studies.

Seminars, workshops and courses: NPOs are in an ideal position to develop short and medium-term seminars, workshops and courses to expose corporate executives, union leaders, government officials and professionals to emerging new knowledge and quickly upgrade workers' skill levels. Though in-depth generic and academic knowledge needs to be obtained at the academic institutions, NPOs are in a unique position to be able to quickly and flexibly organize seminars, workshops and courses composed of academicians, corporate executives and consultants as lecturer groups to fill in the urgent training and experience gaps.

Still popular are short (a few days to one week) and medium-term (up to three weeks) programmes offered by many NPOs in such areas as human resource development; manpower planning; compensation and inventive administration; job analysis and job evaluation; labour-management relations; cost control; internal audit; marketing strategy; strategic planning; corporate financial management; production control; vocational training programmes and others.

Although the topics are not new, the contents have undergone such substantial changes that many corporations are now forced to review traditional practices and shifts to internationally acceptable processes and standards. Human resource programmes now place heavy emphasis on empowerment of employees, team building, incentive pay systems and motivational programmes.

Relatively long-term diploma courses are offered by some NPOs to quickly upgrade the skill levels of engineering staff and plant workers. They include industrial engineering, management information systems, and cost analysis and control.

NPOs can be highly effective organizations in filling gaps offered by academic institutions and business schools, by providing employees with practical knowledge. For example, a long-term course (up to one year) on consultancy is offered by a few centers in countries where a well structured and comprehensive business school system (graduate level) is not yet available.

The center's ability to select outstanding lectures from various schools and corporations builds a reputation as an outstanding teaching institution of practical business administration. Because of the fine achievements of past programmes, the diplomas awarded by NPOs are viewed by the business community as good credentials. Many of the graduates of NPO-sponsored courses became highly effective in-house consultants, executives and independent consultants.

Some other generic management, technology and skill-oriented short and medium-term NPO training programmes could be in the following areas: quality management; business process reengineering; company restructuring; benchmarking; CAD/CAM/CIM (Computer Integrated Manufacturing); industrial robotics; flexible manufacturing system; simultaneous engineering; industrial automation, etc.

To cope with emerging new trends in the reduction of middle managers and staff as a result of restructuring, NPOs are developing new programmes to reduce hardship on employees and smooth transitions which would cover mid-career development, retraining and placement, pre-retirement planning and refresher courses on general management.

Although most of the medium-term and long-term training programmes are conducted in the NPO training center, some programmes are run at company sites. Similarly, some NPOs offer extensive employee orientation programmes for the newly hired on corporate culture, basic skills, team work and labour-management relations.

The development, implementation and follow-up of training programmes span-off a series of other related programmes by building networks of relations with the participants. The most common are:

• Time series attitudinal survey: Since former participants in the NPO programmes are more sympathetic toward NPOs' causes, questionnaires are often sent to them to run a time series behaviour surveys as well as to detect corporate reactions to acute generic issues confronting the business and labour communities.
• Organizing the follow-up study groups: Many former participants in the programmes are organized into follow-up groups to be updated on newly emerging trends.
• Networking groups: NPOs act as intermediaries in facilitating networking relations among former participants. Networking groups are highly effective bodies for NPOs to forecast possible reactions of business and labour communities to new programmes they plan to develop.
• Affinity groups: Loosely-knit affinity groups are formed by former participants' groups for annual get togethers, major public relations events or public awareness campaigns undertaken by NPOs.

Convergence of productivity and quality gave birth to many NPO programmes such as the introduction and application for ISO 9000 certifications; the introduction to ISO 14000 and its implications; and the training of internal auditors, etc. Some NPOs developed ISO, CS (Customer satisfaction indices), HE (Home economics for product development and testing), EA (Employee assistance) centers to assist clients in applying for certification and training of experts. Some of the examples of training programmes are presented in Appendix 1 to this chapter.

Conferences and symposia

Because of the extensive contacts NPOs have in government, business, academia, unions and professional circles, they sponsor many conferences and symposia dealing with topical, generic and acute issues. Some NPO-sponsored top management seminars attract large audiences from abroad as they offer unique opportunities to hear from the nation's top political, business and labour leaders on their philosophy, future prospects and strategies. The symposia give unique pointers in forming future strategies.

NPO-sponsored international and regional conferences expose managers to perspectives of world class speakers from business, labour, public and academic communities around the world on topical issues such as global competitiveness, privatization and restructuring trends, environmental and technological impact and related issues. The symposia and conferences provide opportunities to develop broad perspectives not confined to the national boundaries. The conferences and symposia also improve the global image of the hosting countries.

Publications: Publications are still the primary medium of wider communications. All NPOs publish bulletins, house journals, newspapers, newsletters, reports and books. The quality, contents and appearance of publications improved substantially throughout the years. The recent progress in information technology prompted NPOs to use electronic media in addition to the traditional printed media. Many NPOs now carry home pages on the Internet making data internationally accessible. Some market their data on benchmarketing, best practices, books and reports over the system for a fee. Others use the Internet for marketing of seminars, workshops and courses in order to reach wider audiences.

Consultancy

One of the important programmes of NPOs is consulting. NPOs build extensive internal expertise through implementation of their own training programmes and advisory services. In addition, some NPOs train business consultants as part of their training programmes. Some are retained as in-house staff consultants and others as contract-based consultants on an as needed basis. Depending upon the expertise required for consulting operations, independent consultants with MBA degrees or corporate executives with specific expertise are hired by NPOs to provide consulting services to their clients. Range and time periods of consulting service vary depending upon the clients' needs. Many NPOs are supported by a fairly large number of consultants so that they are able to cope with a wide range of requirements of their clients. Expertise in demand include generic business consulting, organizational restructuring and development, general corporate performance reviews and recommendations, developing corporate strategic plans, personnel policies and administration, quality improvement, production control and labour-management relations. Some NPOs offer technical consulting on structuring information systems, systems integration, factory automation, office automation, benchmarking, local networks and other areas. Usually the consulting services offered by NPOs are limited to solving practical problems at company levels.

Public awareness campaigns and award programmes

Public awareness campaigns have been important to NPOs to promote productivity, culture and positive attitudes and values. Such campaigns aim at students, workers, managers, professionals, government officials and politicians and the broad public.

Many centers now use award giving as an effective tool for promoting their campaigns. Competition for the awards stimulates interest in best practices and corporate efforts to excel. Some awards became well-known not only nationally with extensive media coverage but also globally with the lasting prestige that such awards carry. When the awards are accorded such prestige, NPOs initiate assistance programmes for corporate candidates so that they may learn about the requirements for becoming recipients of the awards.

Some well-known awards offered by NPOs are Singapore Quality Award, South African Productivity Award, Korean National Productivity Award, Mexican Presidential Award, and Japanese Management Quality Award. Often heads of states or prime ministers hand out such awards with extensive media coverage.

Many NPOs run essay contests to promote public interest in productivity and run various events in the designated Productivity Month or Week. Some examples of public awareness campaigns at award programmes are given in the boxes 1 and 2.

Box 1: Representative Public Awareness Campaigns USA A series of public hearings was held in the Senate and the House of Representatives on the importance of productivity. US Department of Commerce and US Department of Labour took initiatives in launching the productivity movement followed by the establishment of a National Productivity commission whose functions were succeeded by the American Quality and Productivity Center. Major TV networks and radio stations donated air time to run public messages. The campaign was co-sponsored by the American Association of Broadcasters. Occasionally, US Presidents presented the awards and events were extensively covered by the public media. South Africa Launches nationwide National Productivity Week every year with a series of seminars and forums. Sponsors public presentations by well-known foreign scholars with extensive public media coverage. Promotes the productivity concept through a series of TV and radio interviews and news inserts. Information Center provides the public with publications. Thailand Sponsors radio and television programmes: organizes and sends study missions to overseas and domestic sites known for high performance; publishes reports, and newspapers; sponsors events for targeted industrial groups, youth organizations, clubs, and industrial estates; sponsors special events, exhibitions, competitions and contest. Mexico Sponsors a series of public seminars and workshops for promoting quality and productivity. Utilizes TV programmes and radio interviews to cover the events extensively. Publishes case reports and journals.

Production of training and informational materials

Usually, NPOs develop training and informational materials for their courses, workshops and for general distribution. The materials and subjects covered have substantially changed in the past several years. Written materials changed to filmstrips, movies, video tapes and now electronic media. Direct access to the materials through electronic media became possible and many NPOs now market their training materials through the computer. Electronic media is broadly used in such areas as introduction to productivity, quality, competitiveness and labour management relations particularly relating to information technology, are ISO 9000 and ISO 14000, various standards, skill classifications and upgrading and other related topics.

Many NPOs run libraries stocked with tens of thousands of books, journals and other publications covering productivity and other related issues. Many libraries can now provide microfiche, electronic data, and offer intermediary services to reach outside databases.

To produce such materials and programmes, some NPOs conduct research in productivity either on a continuous basis or when they encounter topical issues that affect the productivity movement. Some of the studies often conducted by the NPOs include measurement of productivity levels and trends, international comparisons, value added analyses of publicly listed domestic corporations, attitudinal surveys of corporate employees, compensation surveys, and other related issues. They carry other researches on consignment from the governments or social institutions. Some of the subjects recently covered by NPOs for analyses and policy recommendations include labour market, social welfare and employment; future of worker-management relations; administrative reform and productivity; energy and environmental issues; white collar and service sector productivity; gain sharing and productivity; social environment and new business startups; technology auditing and transfer; economic restructuring and quality of working life; productivity measurement and benchmarking.

The internal staff of NPOs often undertake the research projects in cooperation with local academic institutions, experts from business and labour organizations. Their reports are frequently used by government policy makers, business and labour decision-makers, academicians, students and the public.

Development of NPO facilities

Many NPOs built their training and consulting facilities away from congested downtown to create a captive and pleasant study environment. Some have connecting lodging facilities at the site (Greece, Malaysia, Japan, Philippines). Recent developments in electronic technology make it possible for the remote locations to be wired with the NPOs' downtown offices and other institutions for the concurrent multi-location training. A computer hookup enables the participants to view audiovisual presentations on monitors or large computer projected screens and react to lecturers' remarks instantaneously. The availability of television-conferencing makes it possible even to participate in a lecture series originating in foreign countries with a broadcasting system installed at the lecturer's location, NPO head offices, training centers, regional centers and other sites (Cyprus, Greece, the Philippines, Korea, Japan). Some NPOs run electronic colleges.

NPOs offering technical courses on robotics, factory automation and office automation have test laboratories installed with robotics, model transfer lines, and NC (Numerical controlled) machines for students to receive hands-on instructions (Korea, Taiwan, Greece). The laboratories also enable NPOs to develop control systems and experiment new layout/processes and product designs.

There are some questions as to whether NPOs are capable and should provide such practical training in the field of new hardware technology at the level as those offered by engineering schools, highly specialized vocational training schools, company-supported training institutions or government-supported industrial extension programmes. What NPOs can do in this area is limited to filling the gap until specialized private delivery of such training services become available. Where such services are abundantly provided by other organizations, perhaps NPOs' emphasis should be limited to a study of the impact of such technology on human resources management and development, as well as on how to abate the negative physical and psychological impacts on employees.

Many NPOs have excellent classes equipped with computers to run courses on the applications of computers starting with simple hands on experience for executives or office staff up to sophisticated CAD/CAM/CIM system development (Singapore, Hong Kong, Korea, Taiwan, Japan).

Being aware that information technology and information services are the fastest expanding businesses in the world, many NPOs have developed sophisticated internal information systems. Some have installed LAN systems with fibre optics and use networking and electronic mail systems for internal communications as well as with their clients. Many NPOs have developed internal capability to offer software development and system integration services to small businesses, governments, hospitals, schools and companies under contractual agreements. Some NPOs use the systems extensively in marketing their services electronically (US, Singapore, Hong Kong, Korea, Japan). Other NPOs, with installations of large computers, provide service bureau operations to their clients (Japan, Korea). The Information Systems Department became the biggest revenue earner at the JPC-SED.

3.2 Emerging roles, products and services

NPOs' development cycle and shifts in roles

It is a well-known fact that the roles of the NPO depend upon the levels of social and economic development as well as institutional traditions. It would be useful to consider emerging roles and services of the NPOs from the point of view of stages of their development cycle.

Stage one: Learning and awareness period

They learn from the experience of other productivity institutions with good track records by selectively adopting programme approaches - seminars, workshops, forums, campaigns, organizational structures, industry and product specific programmes - in order to obtain public understanding, involvement and support for the productivity movement.

Stage two: Management guidance and action orientation period

They translate public awareness into development of needed actions - consulting, academic and practical course development, model company project development, skill-upgrading of managers and workers.

Stage three: Sustained and participatory period

As the economy matures, the movement becomes well rooted in the business and union communities. The NPOs become involved in supportive roles for companies and communities to sustain growth through labour-management cohesiveness, small group activities, environmental programmes, the development of standardization and databases and similar activities.

Stage four: Social and global productivity period

As information, knowledge, goods, services, money and people move across the national borders faster, the national productivity movement has to shift to a global movement. NPOs develop programmes to cope with international outsourcing, strategic alliances, networking, learning and flexible organizations, educational and administrative reforms, regional and global cohesiveness as residual "soft" factors (knowledge, quality, skill upgrading, innovative technologies) become more important in sustaining productivity growth rather than the traditional quantitative "hard" factors.

The latest changes in international economic, social and political environments forced the NPOs to focus their attention more and more on the following news areas:

• Effectiveness of investment in R&D, educational and social infrastructures;
• Negative ecological impact of some productivity enhancement efforts on national, regional and global environments;
• A diversion of social capital to non-value-producing activities;
• Needs to adopt emerging new technologies without waiting for sufficient educational and skilled levels of the workforce in order to compete in the marketplaces quickly;
• Convergence of concepts of productivity and quality;
• Sustainable and perhaps slow productivity growth;
• Fiscal deficits as a result of shifting priorities to national health and welfare programmes, public investments to stimulate growth and global competition; and
• Developing new organizational concepts, and many others.

New areas, products and services

a. Policy research and recommendations

Because of waning public support for the productivity movement and inevitable conflict between economic effectiveness and social orientation of the philosophy of productivity movement, more and more NPOs take initiatives in conducting research on social productivity in which public interest is conspicuous and makes public policy recommendations such as: future social implications of capitalism, productivity and labour markets; future stakeholders in the productivity movement - affinity groups, youths, women, immigrants, representatives of NPOS, environmentalists, etc.; measurement of public sector and administrative reform performance; sustainable development and green productivity; comparative analysis of the performance of educational reform and systems; learning organization and productivity; etc. Social productivity research and policy recommendations when accompanied by proper media campaigns and practical programmes, will enable the government and businesses to recognize the important contributions NPOs can make to social and economic development.

• Database development and networking services, which include the following information and services:

Awards and award recipients databases. Many NPOs give nationally recognized awards to organizations for their outstanding performance, such as Singapore's Quality Award, Japan's Management Quality Award, South Africa's Productivity Award, the Canadian Business Excellence Award, the US Baldrige Award, Mexican Presidential Quality Award, Deeming's Award, European Quality Award, etc. NPOs should not only develop a database on the award recipients to share information on best practices in their countries, but also act as intermediaries in enabling companies to access databases on recipients of other countries' awards so that companies may benefit from best practices throughout the world.

High performance databases and networking. In addition to the recipients of the awards, data on the runners-up in the contests and citations on world-class performers are available from academic journals, business magazines and publications from professional organizations in various categories, such as best market performers, best workplace, best total quality management, etc. NPOs should act as intermediaries in enabling companies to have access to data in the public domain and further should play the role of catalysts in assisting companies to establish benchmarking relations with targeted companies.

Outsourcing and partner search networks. Liberalization of trade and increase in foreign direct investment will accelerate business activities among advanced countries as well as between developed and developing economies involving large and small companies. While large businesses may establish outsourcing relations, overseas manufacturing bases, joint-ventures, independent partnerships, subcontracting and other forms of bilateral and multilateral relations with their own resources, small businesses may encounter difficulties in accessing local information on financial markets, government regulations, market conditions, workforce characteristics, religious and social constraints. NPOs may act as an intermediary in assisting small businesses in their search for domestic and foreign partners, subcontractors and customers. Being training institutions, NPOs will be able to develop needed generic and specific training programmes for incoming investors and clients.

Standards and skill training and certifying networks. Globalization is spreading and countries are becoming mutually interdependent. In the field of computer manufacturing, while architecture, microprocessors and software are designed and developed in the US, East Asian countries manufacture memory chips, mother boards, monitors, hard drives and flat panels. Japan's shipments of parts, components and production machines already exceed that of finished products. An availability of the skilled workforce determines where the highest value can be added. In order to build outsourcing arrangements, it becomes vitally important that investors know the skill levels of local workforces. Many countries such as Germany, France and Japan have skill standardization and certification programmes. Host NPOs may establish networking relations with investing countries' NPOs in acquiring information on the skill and knowledge levels of workers required, and develop, with the participation of client companies, training institutions or NPOs of investing countries.

Industrial extension programmes. NPOs of developing countries may take initiatives in developing industrial extension programmes in cooperation with development agencies, governmental institutions, training authorities, school systems, and business groups, manufacturers of production machinery and office equipment. The programme could be patterned, for example, after the US extension programmes with NIST (National Institute for Standards and Technology) or other similar organizations in other countries acting as a core organization with the support of several technology centres located at various junior colleges in transferring technologies to small businesses. NPOs may play the role of NIST in training employees of small businesses and upgrading their skills in the efficient use of machines and equipment associated with the technologies. The programme will ensure wider dissemination of information and dispersion of sophisticated skills of the workforce for quick industrialization of the countries.

Benchmarking and networking of educational institutions. Traditionally, educational institutions always closely guard their independence. Nations that administer standard national achievement tests can know about the levels of academic performance of their students. In schools under bureaucratic national systems, administrative costs tend to increase disproportionately to the academic cost and educational results. Cost effectiveness of the system is rarely evaluated. The knowledge levels of the workforce are rapidly replacing traditional contributory factors as a vital key element of productivity increases. NPOs should work with teachers and school administrators to develop indices to measure the cost effectiveness of the school systems and the progress they make. A database should be developed so that administrators and teachers may access it to learn about the best practices. NPOs should also act as intermediaries in facilitating networking among schools. The NPOs' findings as a result of their participation in the system could be incorporated in their policy recommendations regarding educational reforms.

Mental health survey, data analyses and trend forecast. The JPC-SED has developed and implemented an elaborate mental health programme covering a large number of samples for them to be able to develop mean psychological profiles of organizations and employees. The samples enable experts to link psychosomatic symptoms to environmental causes. With the use of bio-feedback and the consent of the organizations and employees, surveys are conducted and profiles are built for organizations and individuals for analyses and possible medical and social remedial actions. This programme is an important tool in the employee assistance programme. However, NPOs should consider its effective use in identifying organizational deficiencies for corrective actions rather than medical purposes.

The work environment is an important aspect of the quality of work life. Various attempts were made to index various human resource factors such as management participation, organizational structure and reward systems and to link them to economic outcomes, such as profits and sales. While economic analyses proved weak linkage among the factors, psychological analyses of actual human emotions, psychosomatic symptoms and work behaviours more directly point to management deficiencies. Such analyses enable management to detect a labour-management crises before the relations deteriorate between the two. They also point to needed remedial actions rather than vague generic recommendations based upon the economic indexes of qualitative factors. With such dramatic changes in NPOs' roles and areas of activities, these products and services provide a serious modification to their organizational strategies and structures.

Annex I

Examples of major thrust areas of representative NPOs

NPOs Thrust areas & programmes

Australia Membership forums and network meetings

Education and research - college courses

National conferences, seminars, forums & study tours

Franchising and contracting of programmes

Students' work experience programmes

Australian Quality Awards

Publications service

Austria Consulting and training on technology transfer, corporate innovation, internationalization

Small business services - strengthening competitiveness, fostering innovation and globalization

Training of young entrepreneurs

Belgium Research, consulting and training in ergonomics, occupational stress, shift work, and improvement in working conditions

Production of training videos and publications

Brazil Public awareness campaign for promoting quality and productivity movement

Training of productivity facilitators

Personnel specialists training

Development of intra and inter-firm productivity indices

Sectoral productivity measurement

Publication of newsletters, papers and training materials

International cooperation and exchange with other NPOs and related institutions

Study missions for employers and workers on cooperative labour-management relations

Development of college and graduate level courses on Production Management jointly with local universities

Canada Development of labour-management joint recommendations on policy issues such as economic restructuring with emphasis on workplace changes; access to capital for small businesses, labour market adjustment and transition, improving financial market

Chile Information service - comparative measurement data, benchmarking, subcontracting resource data, measurement methodology

Enterprise assistance - firm level productivity analysis, administration of National Technical Assistance Funds, productivity improvement methodology

External technology transfer - identification of possible technology, assistance in contract negotiation, application assistance

Research and development - technical support, promotion of national technology funds

Worker training - national training campaigns, performance measurement, workshops, courses, seminars

Work relations - new management style

Promotion - public awareness campaigns

Publications

Taiwan Management and technical consulting service - investment feasibility study, quality management, production control, production technology service, quality function deployment, Tabuchi quality engineering, reengineering, ISO 9000, environmental management

Labour-management relationship enhancement programmes - promotion of new culture, development of human-oriented management programmes

Employee career developing planning

Training programmes - top management as business management development, manufacturing management, MIS, on-site training

Publicity and publications - production of audio and video training materials, books, journals, bulletins and magazines

Cyprus Management development and training programmes, consulting service, research

Public administration - skill upgrading of public servants, management development workshops, seminars, consulting service

Mediterranean Institute of Management - management education to college graduates, management diploma programmes

France Research, experimentation, development of methodology - prevention of occupational risks, security, health and well-being, organization of working time development of employees' skills and competencies, analysis of future needs of companies, employment conditions and qualifications

Promotion of innovative development - working condition and global efficiency, innovative methods of technological, organization and social change, improving working conditions

Promotion of cooperative labour-management relations - negotiation assistance, promotion of social dialogue, implementation of public policies

Publications - monthly magazines, books, brochures, guides

India Management training and consulting - productivity management, general management, productivity measurement, inter-firm comparisons, corporate planning, project management, operations research, total quality management, quality circles, organization analysis, productivity and wages, productivity and bargaining, production management, material management, work measurement HRD, labour-management relations, organization development, participatory management, information management, supervisory development, worker development, marketing management, financial management, computer applications

Technology training and consulting - technology management, energy conservation, energy audits, fuel efficiency, point maintenance system, corrosion control, a safety audit, pollution control, hazardous waste management environmental management, resource conservation

Publications - journals, guides, manuals and monographs

Ireland Business consulting - productivity measurement, new forms of work organization, world class manufacturing, employee involvement, environmental business management, social dialogue

Israel Training, consulting & research - advanced automation and robotics technology, productivity enhancement programmes, labour relations and human behaviour, total quality management, effective sales and marketing systems, promoting creative thinking, advancing women's careers

Productivity awareness campaigns

New Zealand Training, consulting and advisory services - best workplace practices, productivity and quality improvement at workplaces, workplace reform, shift from line management to teams, measuring performance, rewards and recognition systems, developing cooperative industrial relations models

The Philippines Promotional activities, training, labour-management operation

South Asia Productivity awareness campaign - National Productivity Week, National Productivity Awards, study missions abroad, networking for growth forums, information services, conferences, publications, readership surveys

Training and education - business economic education and mathematics for school teachers, economic literacy training, basic business principles, courses on productivity and quality improvement, on-the-job training for non-supervisory workers, junior management training, leadership development

Strategic studies - productivity gainsharing, wealth distribution, softwood industry and tourism study

Consulting services - Human resource development, marketing and sales leadership, world class manufacturing approach, industrial engineering, process reengineering, warehousing, streamlining manufacturing systems, benchmarking, inter-firm comparisons, micro-business support system, skills empowerment

South Africa Productivity awareness campaign - National Productivity Week, National Productivity Awards, study missions abroad, networking for growth forums, information services, conferences, publications, readership surveys

Training and education - business economic education and mathematics for school teachers, economic literacy training, basic business principles, courses on productivity and quality improvement, on-the-job training for non-supervisory workers, junior management training, leadership development

Strategic studies - productivity gainsharing, wealth distribution, softwood industry and tourism study

Consulting services - Human resource development, marketing and sales leadership, world class manufacturing approach, industrial engineering, process reengineering, warehousing, streamlining manufacturing systems, benchmarking, inter-firm comparisons, micro-business support system, skills empowerment

Thailand Training and consulting - general management, human resource management, financial and accounting management, marketing management, industrial engineering, quality management, personnel management, office management, productivity management, computer applications, ISO 9000

National promotional campaign - seminars, workshops, radio and television programmes, newspaper articles, exhibitions and competitions, study missions

Research - indigenous management style, productivity enhancement

Resource centre - books, videotapes, statistical information, international data

Annex II

Countries

Training Programmes

Cyprus Turkey USA Korea

Basic supervisory training for industrial supervisors; Certificate in business administration; Basic entrepreneurial skills and characteristics; Leadership and problem solving; Vocational training in machinery, electrical equipment, vehicle repair and maintenance, welding, metal working, machining; Accelerated vocational training in "weaving, sheet metal, building maintenance. Manager and worker training on quality control, tools and processes; Human Resource Development; Benefits, incentive pay systems, working conditions, etc.; Theory and practical applications of marketing, cost reduction, motivation, leadership, HRD and training of trainers. Establishment of corporate performance measurement, gainsharing and other forms of variable pay; Customer satisfaction, building critical skills for customer relations; Productivity and quality, process mapping, implement TQM, continuous improvement, transformation of the workplace, enhancing individual power, teamwork, facilitators; Benchmarking, organizing and managing benchmarking, internal benchmarking, transfer of best practices. Factory automation, CAD/CAM, microprocessor, robotics, programmable logic controller, flexible manufacturing system; Office automation, software engineering, software development, production management information system; Diploma courses: Cost control specialist training, management consulting specialist training, MIS specialist training, marketing specialist training; Medium-term courses in corporate planning, internal auditing, job analysis, trainer training, sales management and marketing strategy, business feasibility study, international financing

Annex II continued:

Countries

Training Programmes

Hong Kong Japan

AutoCAD applications in engineering drafting, 3D modelling methods and techniques, AutoLISP for advanced users; Micro station PC software, 2D level CAD, PC software training, 3D CAD; Autodesk3D Studio 3D computer graphics and animation, 3D modelling special material creation, rendering configuration and parameters setting, batch and network rendering video post, IAS; Internet and WAW hands-on workshop for executives, HTML basic and homemade editing the WEB applications for businesses. Career refreshment courses: generic management training to broaden executives' perspectives for possible transfers to other organizations; Data bank development for flexible employment; MOL Certificate skill development courses: HRD-selection, hiring, evaluation, labour relations, salary and benefit administration, safety, development of education and training; motivation; financial analysis, accounting, cost analysis, purchasing and sales, taxes, public listing, production systems, physical distribution, process and operations analyses, quality management, consumer protection; Entrepreneurship college: theory and feasibility study for business startups, new business forums, market and field studies, development of business plans.

CHAPTER 4: NPO GOVERNANCE AND ORGANIZATIONAL STRUCTURE

4.1 Impact of changes in external environment

While national productivity organizations have been going through the growth cycle described in the previous chapter, all nations experienced tremendous changes in their socioeconomic environment. Irrespective of differences in the degrees of maturity in their economies and rates of productivity growth, the following phenomena have affected all nations:

• Collapse of the centrally controlled economies;
• Changes in competitive advantages of nations and contributory factors to the growth;
• Changes in product technology - new products with more soft systems incorporated and integrated with services;
• Changes in process technology - flexible, lean, agile and intelligent manufacturing;
• A shift from the manufacturing to service-oriented economic structure in the West and a rapid rise of the manufacturing sector in Asia and Latin America;
• Slow population growth and extended longevity of people;
• Instant electronic accessibility to sources of information and learning opportunities;
• Increasing interdependence of nations - outsourcing, keiretsu affiliation, networking, strategic alliances;
• A widening gap between the rich and the poor;
• Deterioration in the quality of the environment;
• A shift from the economy of scale to the economy of scope;
• Requirements of higher generic educational background from workforce to cope with changes in technology, product and service, quality and customer demands; and

• •The global impact of financial crises in Asia and Russia (1997/1998).

These changes in external environments forced the NPOs to focus their attention on many new areas, among which there were negative ecological impacts of some productivity enhancement efforts on national, regional and global environments: a diversion of social capital to non-value producing activities; needs to adopt emerging new technologies without sufficient educational and skill on levels of the workforce to cope with them in order to compete in the marketplaces quickly; convergence of concepts of productivity and quality; sustainable and slow productivity growth; fiscal deficits of nations forcing governments to shift priority to national health, welfare programmes, and public investments to stimulate economies and global competition; and many other areas. The growing ambiguity of the future increases the need to develop new organizational concepts for the NPOs.

Also, as nations' debts mount and as their outcry for administrative reform becomes louder, the public becomes accustomed to short-term thinking. This is reducing the public support for long-term strategic projects including productivity movement. While there will be support for NPOs in the fast growing regions where people can see the tangible results of productivity improvement, public support will fade when the countries' economies mature and productivity growth slows. Under these conditions, NPOs will have to offer immediately distinctive products and services in the market places in competition with private research and training institutions and consultants. To be extremely sensitive to both public and private needs, the governance of the centers also may have to change.

The global pressure for liberalization will force many developing countries to accelerate the elimination of restrictive regulations with respect to the flow of money, goods, services and workers. Multinational corporations (MNCs) will increase foreign direct investment primarily to seek market expansion and to take cost advantage of the workforce in developing countries, and for their national interests to disappear in pursuit of higher returns.

Altruistic and long-term goals of productivity movement for a better quality of life with an emphasis on preserving the ecological environment, will be in conflict with a short-term orientation for quick return on investment except for countries capable of generating value-added by developing new environmental technologies and producing pollution control and abatement equipment. A public awareness campaign has a limit in persuading the society to become convinced of the noble cause of the movement unless immediate and tangible results can be shown. Market sensitivity in the development of sellable projects will be a key to continuing the productivity movement and the NPOs themselves. All these have dramatic implications on NPOs governance and organizational structures.

4.2 NPOs' governance: the mass stakeholders

The NPOs' task of reconciling the interests of a larger number of pressure groups than just the three social partners, will become more and more difficult in the future. The basic tripartite structure of NPOs, consisting of labour, management and government will certainly need to be preserved. However, governments are becoming less involved and the influence of labour unions in many countries is waning as their density declines. The neutral and eclectic position NPOs assume in compromising the pursuit of their ultimate goal and satisfying the needs of different society groups in the free market, require strong and much broader political and public support.

Whether an NPO remains as a catalyst for the national productivity movement or becomes one of many training, consulting or research institutions depends upon public commitment. NPOs need to constantly revive government and public interest in the productivity issues so as to involve the bipartisan political leadership into the movement without bureaucratic constraints.

While there are a few OECD countries where the union density has increased or remained constant, the general trend of the major economies was for it to decline as the nations' economies shifted from manufacturing to service-orientation. Although the primary objective of the productivity movement is to improve the quality of life by reflecting the voices of stakeholders in the decision-making process, the emerging trend will undoubtedly affect governance of the bipartite or tripartite centres and their scope of activities. As for worker representation, where union density is waning, elected representatives of employee affinity groups may be added to reflect the workers' views and their needs.

In order to survive and avoid becoming bureaucratic, NPOs need to develop market sensitivities in policy and programme development. Their governing bodies will have to embrace national leadership of various interest groups, such as consumer groups, environmental groups, standardization organizations, information service groups, health care industry groups, teachers' groups, academics, youths, etc., in search of new policies and services. Their representatives' input will broaden the scope of NPOs' activities.

There are glass ceilings for women, for example, in many countries which artificially hold down women's productivity performance. Women's groups also should be brought in for their input in improving their workplace performance and the quality of their lives through equitable distribution of wealth, training and promotion opportunities. In addition, youth groups should be embraced for they are the ones who have to shoulder the responsibilities in the future. Since both birth and death rates are declining while numbers of populations over sixty-five years old are increasing, the younger generations have to carry an extraordinary burden of supporting the increasing number of older people when the world is moving into a slow growth era. Without productivity enhancement, their quality of life will most certainly decline. The older people save less while current youths are more consumption-oriented.

A decline in the national savings rates mean less investment in infrastructure, plants and equipment and research and development which are essential ingredients for economic growth. They have their own values, philosophy and ethical standards different from the babyboomer contemporary generation as well as the older matured generation. Value orientation changes from job and career to instant self-satisfaction.

The youth will want their own input in determining their future opportunities of education, employment, safety, living and work environment. Given a proper environment, the younger generation can be extremely innovative. For this, it is also important that they learn the need for productivity improvement.

The quality of education and training will determine opportunities for productivity improvement. Educators' input should be sought in NPO policy and programme development. In turn, educators should be introduced to the immediate and long-term needs of the business communities and the working population.

Just as important as teacher and student groups are media groups. The media provides a basis for new values, philosophy and codes of behaviour for younger generations who are in search of new paths for their future. Involving the media also will be useful for NPOs in developing a new altruistic productivity campaign including environmental issues. Long lasting commitment for the future productivity movement needs the involvement of national leaders of all stakeholders. Multiple structure of the governing bodies will therefore improve the market sensitivity of the NPOs.

Taking into account the above considerations, as well as the global experience in productivity institutional mechanism, the main active stakeholders of a nation-wide productivity movement usually are (or should be):

• government represented by central and local authorities, including the most important ministries dealing with industries, agriculture, education, health, environment and infrastructure;
• employers' organizations and their federations;
• chambers of commerce and industries;
• trade unions and other workers' organizations;
• academia;
• NGOs and institutions providing independent professional services;
• public information and other media; and
• other important stakeholders (women's groups, religious groups, youth organizations, etc.).

Similar stakeholders interested in productivity promotion could be identified and organized at the local community level with the main task of implementing the strategies and policies developed at the national level, as well as to carry out their own specific local policies and plans.

The most important possible roles and functions of the main national stakeholders in productivity movement should be as follows:

Government - financial support;

- productivity promotion efforts;

- providing a market for NPO services;

- participation in NPOs' strategy development;

- political support;

- "watch dog" to ensure active participation of its agencies;

- status builder for the NPOs.

Employers - represent their constituents' interests;

- feedback on enterprise needs in productivity services;

- identification of the market for NPO services;

- participation in strategy development;

- promote labour-management cooperation in NPOs;

- contribute to assessing the business environment.

Trade unions - represent the interests of workers;

and workers - promote labour management cooperation;

- productivity gainsharing;

- working conditions and social concerns;

- promoting work ethics and productivity culture.

Academia - research and development in productivity areas;

- education in productivity-related areas;

- awareness building;

- productivity constraints identification and analyses;

- facilitating a legal environment conducive to productivity;

- productivity measurement and statistics;

- environment friendly technologies;

- promoting productivity culture;

- linking academia with enterprise needs;

- networking with NPOs.

Education - promoting productivity culture in curricula;

- productivity awareness building among students;

- promoting positive work ethics and attitudes;

- preparing and disseminating literature on productivity.

Similar but more specific assessment of the roles of other stakeholders included into the design of the NPOs should be done to secure their purpose-orientation and active participation in the productivity promotion institutional mechanism.

4.3 The need for an institutional mechanism

In order to organize, support and coordinate the nation-wide and local activities of these organizations and individuals interested in productivity promotion, and a well designed and manageable institutional mechanism, the following five dimensions of productivity promotion must be covered: geographical - to cover the most important regions of the country; sectoral - to cover industry, services, agriculture, infrastructure and public administration; vertical - to cover workers, professionals, managers of all levels, and government structure up to the very top level; issues - to cover economic policies, restructuring and privatization, export promotion, technology transfer and dissemination, human resource development and training, quality drives, globalization, etc.; demographic - to cover youth, students, women, minorities and the unemployed together with the economically-active population.

These objectives and tasks enable us to outline the design of the national institutional mechanism. Since productivity improvement depends on both national level (economic and structural policies and the quality of public administration) and micro-level (the quality of managerial, professional and labour resources), the institutional mechanism to support productivity movement should embrace both macro and micro levels.

The major blocks of this mechanism (or National Productivity Organization - NPO) could therefore be as follows:

• National Productivity Council (NPC)
• Productivity Centre (PC)
• Local branches/representatives (LBR) of the PC, if appropriate.

Such design would secure vertical (NPC - PC - enterprises and broad public) and horizontal (NPC - LBR) linkages to cover the above dimensions of the productivity movement. The main roles of these major blocks could be as follows:

The role of the NPC

The NPC would be responsible for developing nation-wide strategies and policies for productivity promotion, linking it with long-term economic and social development objectives and providing integration and focus to the different government ministries' activities in promoting productivity and competitiveness and securing a conducive business environment for SME and entrepreneurship, while looking after broader society interests and coordinating them with the interests of other stakeholders and social partners.

The NPC would also develop policies and strategies for the productivity centres' activities within the framework of the national productivity movement objectives, and the most urgent and important country economic and social objectives. The NPC would work closely with the Government, Parliament, social partners, NGOs and other stakeholders. The NPC would also provide constructive feedback to both the Government and the PC, business communities, workers' organizations and other stakeholders on the country's productivity status and the main productivity barriers to be dealt with at different economic levels. The NPC could also propose changes in legislation and regulations (through relevant mechanisms) to eliminate or reduce productivity constraints in the macro-economic environment.

Given the importance and the broad nature of its objectives and roles, it is imperative that the NPC should be under the direct patronage of the Prime Minister's Office in order to secure the active participation and support of all ministries and government agencies in developing and implementing the country productivity strategies and policies. No one single ministry would be able to fulfil this task due to obvious reasons of a vertical nature of national authorities and certain competition between the state agencies which would be damaging to the final result. The NPC should not be the ownership of any single ministry.

However, the Prime Minister could ask one of the most important ministries (for example, the Ministry of Industry) to look closely after the NPC on his behalf if necessary. The design of the NPC would ensure that top-level leaders from the ministries and NGOs were represented in the NPC. The delegation of these duties to lower level officers without decision-making powers would only compromise the status of the NPC and productivity movement as a whole.

The role of the productivity centre

The PC could serve as the secretariat of the NPC and as executive body of the productivity promotion policies and strategies developed by the NPC, as well as to provide services to the following main groups of clients: government and its agencies, enterprises and their managers, local communities, media and education institutions in promoting productivity culture, private providers of different consulting services to the government and enterprises and the broad public.

Other PC services would be as follows:

• productivity and competitiveness research, comparisons and benchmarking;
• productivity measurement methodology and statistics;
• producing information and its dissemination among PC major clients and stakeholders;
• providing advisory services to national and local policy-makers;
• training and developing managers, entrepreneurs, professionals and workers in areas not covered by private sector institutions;
• productivity awareness and culture building;
• bridge between the best foreign and local practices and experiences and those who need them;
• participation in developing and commenting on existing legislation, rules and regulations which could potentially damage productivity and competitiveness promotion;
• developing different private service providers and their associations (training, management and engineering consulting, conference and workshop organizers, etc.);
• networking with existing major providers of training, consulting and other productivity services both in the private and public sectors; and
• representation at regional/international productivity organizations (APO, PAPA, EANPC, etc.) and international events related to productivity promotion.

The productivity centre's strategies should be looked at in the following three dimensions. At the national level, the PC should concentrate on facilitating improvement of the general business environment, labour legislation, promote restructuring, privatization and competitiveness, export orientation and using more sophisticated approaches and methods. At the enterprise level, the PC should emphasize the promotion of basic productivity techniques and tools (QCs, 5-S, time management and discipline, maintenance and waste management, team-work, etc.). With the accumulation of experience and the build-up of a better productivity culture, as well as market demands for more sophisticated productivity services, more complex approaches and methods could be developed and used. At this stage, it would be more important to start with the simple techniques and tasks to obtain visible results which demonstrate the effect of productivity movement. At the third level which would be the broad public, it could initiate and maintain mass promotional campaigns on productivity ideas, concepts and culture aimed at workers, students in education institutions, the youth, public officers, etc. Mass media, workshops, conferences, training programmes in schools and universities would introduce important mental changes to building positive attitudes to productivity, quality and competitiveness, cooperation and team-work.

4.4 Considerations for productivity centres' structure and funding sources

Given the above roles, the structure of the productivity centre should provide organizational conditions to successfully implement them. This means that the PC should have the following structural components:

• research and development, productivity measurement and statistical functions;
• management training functions;
• management consulting functions;
• vocational training functions (if relevant);
• enterprise and entrepreneurship development functions;
• productivity promotion and marketing functions (productivity campaigns, weeks, months, contests, etc.);
• productivity information and publication functions; and
• support for NPC activities.

Since it is unrealistic for any newly established productivity centres to be able to immediately implement these and perhaps other functions at the mature professional level, it would be important to start with networking with existing well-developed professional organizations working in similar fields and involving them in implementing national and local productivity strategies and programmes. Effective networking and close cooperation with private sector organizations would help create a lean and effective organization structure without unnecessarily expanding the staff. This would correspond to the more modern global trends in developing productivity organizations and closer partnerships with the private sector.

The main roles of the PC should be:

• local productivity capacity builder;
• integrator of national resources and expertise around national objectives;
• catalyser and organizer of the productivity movement;
• productivity services provider (training, consulting, enterprise development);
• productivity culture promoter;
• informational clearing house in productivity areas;
• networker;
• etc.

To play these roles effectively, it is of critical importance that productivity centres should be administratively independent from any single authority, including the government. It should be owned collectively by all stakeholders like NPOs in the economically successful countries. However, it does not mean abdication from government support and promotion of the successful PC. The roles and interest of the government would be reflected through NPC representation which would develop productivity movement and PC policies and strategies. The operational activities of the productivity centre should be highly autonomous and be subject to control by all stakeholders and its clients. This means that it should be designed as a private or semi-private organization (as a non-profit NGO).

When a global trend is for administrative reform to reduce national debt, it is difficult to continue to receive financial support from the government. NPOs have to show their ability to produce tangible results in return for the public funding. The governments should be considered as actual and potential clients. Their employees now represent about 20 to 30 per cent of the working population. The budget reduction of governments means outsourcing to the private sector providers of many current functions performed by the governments today. Such services as productivity measurement of the public sector, including national, local and municipal governments and subsidized organizations may be offered by NPOs. They may contract with the public sector for training courses, seminars and workshops for government officials including mid-career development, placement requirements, pre-retirement planning and other related topics, when they face a massive layoff.

The NPOs may help the government in developing a database on administrative reform programmes of various countries and their after-effects. NPOs also may help develop and sponsor international conferences on competitiveness, international trade, intellectual property rights, technology transfer and other related topics when they become acute issues needing bilateral and multilateral negotiations. The coverage of controversial and emotional issues by neutral NPOs may be more acceptable than arguments of government negotiators. Having media group input in the policy-making arena of NPO boards will make media coverage of those events easier. NPOs may also undertake research contracts on those topics for possible publication and broad dissemination as neutral research institutions.

There are numerous other ways to serve the government as a client for fees which will also attract political leadership to the NPO's activities and for possible future funding.

There could also be the need for organizational restructuring of the NPO. Organizationally, many of them are vertically structured with each section or department undertaking an specifically designated function. This is contrary to highly competitive private sector efforts to make customer satisfaction a supreme priority of the organization. Most of the NPOs are structured vertically because of the historical development for their own internal benefits rather than their customers who pay for their services and products. Just as in the private sector, NPOs need to restructure themselves as customer-driven, staff-empowered fishnet-type organizations for most efficient operations, communications and delivery. Contingency and task-oriented teams need to be formed to respond to customer needs quickly and dissolved when the tasks are accomplished in order to move onto the next project. Teams should include not only in-house staff, professionals and researchers but also outsiders to broaden their knowledge base. The NPO staff should be able to identify the needs of their clients and resources, coordinate experts' input, and finally to deliver recommendations to the client's satisfaction.

The rapid progress in technologies and globalization makes it necessary for them to have extra knowledge and skills, particularly in the area of information technology. There will be needs to search globally for required information, make quick selection decisions, and process it in the form that best fits the requirements of their clients. They need to develop the ability to work in teams, not only domestically but also with foreign teams electronically. They may need to look into feasibility of applying new principles of biological (organic) integration and theory of complexity in exploring new organizational concepts.

The policymaking bodies of the centers (councils, advisory councils and board of directors) consist of national leaders in businesses, unions, academe and governments. They represent the basic components of stakeholders in the productivity movement. The movement relies upon their programmes based on factor analyses with a view toward fair and equitable distribution of fruits of productivity improvement among the stakeholders. Because of the wide scope of responsibilities NPOs undertake, the boards of directors of NPOs are usually supported by policy research and recommendation committees composed by experts from the sectors representing the stake holding interests in the productivity movement. The composition of the committees and their scope of coverage have undergone considerable change from the traditional labour market, employment policy, labour-management relations to emerging social and global issues.

Some of the committees of NPOs dealing with the topical issues are programme committees, management development committees, social policy committees, energy conservation committees, environmental protection committees, transfer of productivity technology committees, industrial relations committees, competition committees and many others.

The boards usually receive policy recommendations from the committees in defining the frameworks for strategic policies and programme planning. These committees directly handle day-to-day operations of the NPOs (Canada). In some countries, the boards are structured under advisory councils which set the basic framework for policy-setting (South Africa, Singapore, Hong Kong and India). Representatives of major funding agencies/ministries with designated representatives of the stakeholding sectors compose the councils. Usually, the NPOs were established as semi-governmental non-profit institutions subject to legislative mandates, but their non-profit status enable them to maintain neutral positions in dealing with politically sensitive issues.

The comparative illustrations of the composition of the board of Directors/Councils of the NPOs for 19 countries representing different regions is provided in Table 2.

Table 2: Composition of the Board of Directors/Councils of

National Productivity Organizations

1 = Original structure

2 = Current structure

Countries	Government	Business	Unions	Academe	Other insti-tutions & associations
US 1 2 Canada 1 2 Australia 1 2 China 1 2 Japan 1 2 Korea 1 2 Mongolia 1 2 Philippines 1 2 Germany 1 2 Finland 1 2 Denmark 1 2 Cyprus 1 2 France 1 2	x x (non voting) x x x x (liaison only) x x x x x x x x x x x x x x	x x x x x x x x x x x x x x x x x x x x x x x	x x x x x x x x x x x x x x x x x x x x	x x x x x x x x x x x x x x x	x x x x x x x x x x x x x x
Greece 1 Mexico 1 2 Chile 1 2 Brazil 1 2 Venezuela 1 2 Costa Rica 1 2	x x x x x x x x x	x x x x x x x x x x x x	x x x x x x x x x x	x x x x x x x x x	x x x x x

What is interesting is that most of the national productivity councils include all major social partners - business, trade unions and government, some of them include representatives from academia and other institutions, including NGOs. They really reflect the fact that productivity improvement is the concern of everybody.

CHAPTER 5: CASE STUDIES ON NATIONAL PRODUCTIVITY ORGANIZATIONS

5.1 Canadian Labour Market and Productivity Centre (CLMPC)

The National Productivity Council (the predecessor of the CLMPC) was established in 1960 under the initiative of the Canadian Government. The council consisted of twenty-five members, including five from industry and five from labour. Its goal was to promote continuing improvement in production efficiency through cooperative labour management relations. The narrowly defined scope and labour's apprehension that the activities placed excessive emphasis on productivity concerns made the Council an ineffective organization to address Canada's productivity improvement needs. The succeeding organization, the Economic Council of Canada, was established as an advisory body to the Government in 1975 with emphasis on research. In subsequent years, the Canadian Government attempted to bring together labour and business for possible continuation of useful dialogue between them, outside the adversarial context of traditional collective bargaining. The determination of the Canadian Government to develop business-labour consensuses through discussion of policy recommendations by various task forces consisting of government, labour and business representatives were supported by all social partners.

The persistent efforts of labour (Canadian Labour Congress) and business (Business Council on National Issues) in the creation of a new neutral and bilateral body with government funding, but without government interference, resulted in the establishment of the Canadian Labour Market and Productivity Centre in 1984 with the following mandate:

• •To involve labour and business in examining productivity issues on a national, sectoral, regional and local basis, from the shop floor to the board room and in the public and private sectors.
• •To examine, enhance, and contribute to all work-related factors, increased economic growth, domestic and international competitiveness, greater productivity and the shared benefits from productivity gains.
• •To inform, educate and heighten the awareness of Canadians to the benefits which flow from higher economic growth and productivity.
• •To engage in any activity, related to the above objectives.
• •To recommend policies and programmes that will stimulate economic growth and job creation, and improve productivity to meet the economic and social needs of Canadians.
• •To establish sectoral committees to analyse and assess the medium and long-term manpower needs of Canada with respect to skilled trades, manpower training and retraining needs, the roles of educational institutions, adjustment assistance programmes, manpower mobility programmes, immigration policy and manpower needs and unemployment insurance matters.
• •To put into place appropriate information exchange mechanisms to provide the general public with data on the manpower demand and supply in Canada.

A series of video tapes and publications were produced in order to promote the productivity movement. The CLMPC staff participated in many functions to promote the public understanding of its role. Many labour research workshops and seminars were sponsored. The "Labour Research Exchange" and the "Canadian Business Bulletin" were periodically published to brief the public on the consensus views of labour and business.

The CLMPC also worked with sectoral committees, such as shipbuilding and ship repair, space industry, plastic processing industry, steel trade and employment congress in order to create cooperative relations between labour and management. Throughout the1980s the CLMPC actively engaged in research, conferences, workshops and meetings to promote joint approaches in solving major social and economic problems, to develop public policy recommendations on labour market and other economic issues. In 1987 the CLMPC acted as an important intermediary in establishing National Forums on the Economy nurturing the mutual trust between business and labour in dealing with controversial issues of the Canada-US Free Trade negotiations. Its' task-force challenged government to give labour and business more influential role in designing and delivering labour market programmes and policies. Toward the end of the1980s the CLMPC was asked by the Government to manage national public consultations to design the Labour Force Development Strategy. These efforts resulted in 135 recommendations to the Government. One of the results of these recommendations was setting up the Canadian Labour Force Development Board.

One of the important areas of the CLMPC is human resource training and development policies. A National Training Survey was conducted resulting in public recommendations for economic restructuring that had a profound impact on the Canadian economy. Its' joint Committee on Economic Restructuring developed twenty-seven recommendations including such subjects as access to capital for small business, adjustment and transition programmes, and joint approaches to workplace change. The CLMPC sponsored a series of seminars and workshops at provincial sectoral levels with participation of a large number of business executives and union leaders. The Task Force on Workplace Change developed a number of learning tools for both management and workers, the Task Force on Access to Capital assessed the role of labour-supported investment funds as a source of capital financing, etc.

In the beginning of the 1990s when the sustainable development of Canadian industries became a critical issue, the CLMPC undertook research on adjustment in environmentally-sensitive industries and their relations with local communities; reviewed the unemployment insurance system, maternity and parental leave benefits; the role of women and economic restructuring and their participation in entrepreneurship. In 1994 the CLMPC sponsored a special National Forum and International Productivity Symposium where the issue of social productivity was raised beyond the traditional bounds of productivity related to economic indicators.

The CLMPC also assisted with productivity promotion in some Latin American countries including Mexico, Chile, Argentina, Brazil, Bolivia and Columbia. It developed bilateral cooperative relations with the countries and their productivity institutions.

In 1995 when the Canadian Government experienced a series of budgetary constraints, its financial support for the CLMPC declined forcing it to undergo a drastic structural change. Staff size was reduced and new strategy for targeting a niche market was adopted. The result of this was better focus on stimulating dialogue and better understanding between business and labour at all levels of the economy and defining the key emerging issues and promote appropriate response through joint approaches to social and economic issues particularly at the workplace and sectoral level. The CLMPC as before concentrated on developing joint advice on public policy, particularly on labour market and economic restructuring issues, and productivity expertise resources and services to business and labour when requested.

In order to pursue these objectives the CLMPC decided to place emphasis on the following activities:

• •To provide forums for management and labour representatives to discuss specific social and economic issues such as the challenges of adjustment at the workplace and sectoral level; access to capital; the changing nature of work, etc.
• •Setting up task force projects on access to capital and adjustment; environment protection and workplace change resulting in published reports, sponsoring seminars and workshops.
• •Organizing training programmes and public conferences on the above subjects.
• •Providing consulting services to government and the private sector, technical assistance to developing countries in the area of human resources development, skill training and analyses, chairing and facilitating joint labour-management economic restructuring initiatives for provincial governments, and assisting developing countries in strengthening national productivity organizations.
• •Assisting businesses and labour organizations in improving cooperative relations.
• •Information gathering for identifying emerging issues, raising financial support and marketing the CLMPC's expertise.

5.2 Japan Productivity Center for Socio-Economic Development

The Japan Productivity Center was established in 1955 with aid from the United States under its technical and economic assistance programmes designed for Japan. Throughout the second half of the 1940s and 50s, the Japanese labour movement was ideologically leftist and radical and there was an acute need to introduce cooperative labour-management relations in the economy. The Japanese leaders who were exposed to activities of the British Productivity Council and new industrial relations theories advanced by the Tavistock Institute were eager to initiate a new movement. Based upon a consensus of the Japan Federation of Economic Organization, Japan Employers' Association, Japanese Chamber of Commerce, Committee for Economic Development, and various Japanese Government Ministries, the JPC was structured as a tripartite institution consisting of representatives from labour, management and academia. Its goal was to promote national productivity movement through the creation of harmonious workplaces. Its guiding principles were simply :(1) to recognize that in the long term productivity improvement creates new employment opportunities; (2) both labour and management must work together; and finally (3) the fruits of productivity improvement must be shared fairly and equitably among the contributors--labour, management and the general public. The JPC's major programmes at the time of founding were:

• •International exchange programmes (learning from Americans and Europeans);
• •Research in productivity measurement, improvement methods, and new concepts in industrial relations;
• •Training courses, workshops, symposia and conferences;
• •Dissemination of information through training programmes, conferences, publications, library, and mass media;
• •Guidance and consulting services to enterprise management; and
• •Public relations and productivity awareness campaigns.

Through vigorous efforts in the 1950s and 60s to materialize the labour-management consultation programmes, the center succeeded in changing the mind set of management and labour so that the concept of sharing destiny together became well established by 1970. Unlike in Europe where the co-determination systems were based on legislation, Japan opted to make the process voluntary, one based upon mutual trust. A majority of companies and major unions subscribed to the consultative system which drastically reduced loss of time due to walkouts and strikes. It also enabled Japanese industries to introduce teamwork, high performance workplaces and small group activities in the early stages of the economic development.

In the 1950s and 60s heavy emphasis was placed on learning from the US and Europe through study mission programmes, publication analysis, seminars and workshops with participation of foreign experts. As new knowledge expanded, the JPC's scope and intensity of activities also expanded. It also acted as the primary mover in giving rise to the birth of new organizations such as Japan Consumers Association, Japan Industrial Engineering Association, Japan Marketing Association, Japan Materials Handling Association, Japan Logistic Systems Association, and Social and Economic Congress. Though US aid was terminated in 1962 and government subsidies declined to a few per cent of its total revenue, with the support of business and industry the JPC expanded services and programmes which included data processing and information technology services, graduate level business administration courses, one year consultant training programme, employee assistance programmes, large scale management training programmes on board chartered ships, and other unique activities.

In the 1970s occupational mental health programmes were launched with emphasis on understanding the linkage between psychosomatic symptoms and the mental health of employees and organizations and the development of effective remedial programmes for both companies and individual employees. Besides actively participating in the Asian Productivity Organization (APO) to assist Asian neighbours, the JPC also took initiatives in launching "reverse programmes" to introduce the Japanese techniques--process technology, marketing and pricing strategies, flexible manufacturing systems, automation and robotics, etc., to the US and Europe through sponsorship of a series of international conferences, study tour programmes and workshops. From the initial efforts of attaining industrial development through productivity in the 50s, 60s and 70s, its emphasis shifted to creating a welfare society with fair and equitable distribution of wealth among the major stakeholders without getting involved in collective bargaining processes.

In the 1980s, Japan's economy grew at the fastest rate among the OECD countries, and many of the JPC's key programmes--international exchange, systems development & integration, consulting and other management development courses, top-management seminars, mental health programmes, industrial relations programmes, and others--attracted tens of thousand of clients and the JPC became the largest self-supporting productivity organization. Programmes relating to the quality of life, a pleasant working environment, harmony with foreign business and culture, health care, environmental improvement with broad volunteer participation, and other social issues, also became popular in the 1980s.

Through the APO and under bilateral agreements with several countries including Russia, Costa Rica, Poland, Ukraine, Brazil and China, the JPC assists other countries in their national productivity movement by receiving study groups, sending experts and setting up model plants.

Maturing of the Japanese economy, the growing disparity in productivity levels among various economic sectors while egalitarian wealth distribution prevailed, the relatively closed nature of the Japanese markets, the excessively cohesive and sometimes corruptive business/government relations and conformity-oriented social behaviour of the Japanese caused Japan to suffer from a prolonged recession in the 1990s. Pessimism prevailed in the society and its revenues declined in these conditions to better serve the public, business and unions by expanding its scope to cover social issues. The JPC merged with the Socio-Economic Congress of Japan (a sister think-tank organization specializing in studies of policy implications and social issues) in 1994. The new JPC-SED, in additional to running the traditional programmes, now makes a series of policy research and recommendations through a score of high level committees to the public and government in the following areas:

• •Political and administrative reforms;
• •Energy conservation, environmental protection and sustainable development;
• •Social systems and social policies, including social welfare issues;
• •Revitalization of industrial activities with new pricing structure;
• •Labour-management relations; and
• •Information technologies and international technology transfer.

The JPC-SED also launched a new "Management Quality Award" programme in 1996, using a holistic view in judging candidate companies' policy, structure, programmes, performance and social implications of corporate activities in the selection process. The programme is becoming a key factor in reviving interest in productivity among business and union executives, the academic community and the public.

Japan was often cited as a shining example of a good productivity movement. Lately its luster has faded with the economy in a tail spin in the last five years. However, the JPC-SED is still a good model for centres struggling to become self-supporting. It may be a good model for many other countries where residual factors (education, technology, culture) still make substantial contributions to economic growth.

5.3 Germany: Rationalisierungs-Kuratorium der Deutshen Wirtschaft (RKW)

RKW's predecessor, Reichskuratorium fur Wirtschftlickkeit (Imperial Commission for Economic Efficiency), was established in 1921 to set-up standards for corporate operations and introducing mass production techniques after the First World War. Heavy emphasis was placed on the applications of scientific management and time management systems that were prevalent in the US at the time. The rationalization movement aimed to improve production efficiency of German companies and standardization of business management. During the 1930s social repercussions to rationalization forced the RKW to focus its attention on the impact of rationalization on individual workers. Various committees within the RKW concentrated their efforts in introducing uniform accounting methods and improving corporate performance during the 1920s and 30s.

The RKW was reconstituted as Rationalisierungs-Kuratorium der Deutshen Wirtschaft (Rationalization Commission of the German Economy) in 1950 to increase productivity of German companies through the rationalization movement. Heavily financed under the Marshall Plan, the RKW concentrated on acquiring new technical and management knowledge from the US. Its structure included labour as a social partner in the rationalization efforts and emphasis shifted to the impact of human resources in enterprises. During the 1950s, while the German economy was rapidly growing, the RKW concentrated its efforts on analysis of corporate performance to make recommendations to companies for improvements. This programme resulted in later establishment of highly developed consulting service in the RKW.

The accelerated competition and stagnating domestic demand toward the latter half of the 1960s, that continued into the 1970s, prompted Germany to focus its attention on the integration of its economy with Europe. The RKW refocused its efforts on introduction and applications of market-oriented management through consulting and offerings of training programmes on corporate planning, goal-oriented management and strategic management. The change in the economy also brought out needs for the development of new products and markets, applications of office automation and improved production processes.

During the 1980s, German companies developed comprehensive approaches to innovation strategies, innovative production processes, office automation and cost reduction. Accordingly RKW's services expanded to cover a wide range of management topics with the goal of ensuring long-term corporate development through innovative capacity, flexibility and efficiency. Particular emphasis was placed in offering programmes to foster improvement of the small business sector.

Currently the RKW offers a wide range of services including research and analyses of small and medium-sized enterprises, consulting, access to scientific databases, training courses, workshops and seminars on general, personnel, administrative, marketing, production management, new business startups, material management and industrial relations.

The RKW develops and provides information on facts and trends in the structural change in the country. The main office is responsible for: (1) Evaluating research results for small and medium-sized companies; (2) Developing consultancy and advanced training concepts and guides, and; (3) Disseminating information.

The "Technical" Department provides a special service, "information acquisition through data bank researches", that enables companies to receive current economic and technical information from the most important data banks. Likewise, the "Business Management" Department's documentation unit offers technical literature surveys on current themes of practice in business and personnel management. The "Building Industry" Rationalization Group, also a department of the main office, was established to safeguard and improve the technical, economic and social efficiency of medium-sized companies in the building industry. Another department, the "Packaging" Rationalization Group (RGV), involves the analysis and processing of packaging problems from technical, economic and, to an increasing extent, environmental points of view.

The "International Relations" Department helps companies to succeed abroad. This means that it assists with the necessary relevant information about central and eastern Europe and the Asian-Pacific region. The RKW took initiatives in developing new workshops, training courses, seminars and consulting services to help companies entering into foreign markets. The "International Relations" Department is also in charge of the "Cooperation Exchange" (since 1965). This RKW service has managed to arrange about 2,000 business contacts. Its integration into the programmes of the European Commission for the promotion of cross-border collaboration has been particularly successful.

RKW's regional offices are responsible for the implementation of (1) approximately 8,000 consulting assignments annually on corporate management, marketing, accounting, EDP, engineering, and personnel management; (2) internal advanced training; (3) external advanced training, and; (4) expert symposia, congresses and courses. For example, among the subjects covered in advanced training are: environmental protection; manufacturers' liability; company successions; product planning and control; corporate strategies for the single European market; and women in management.

Formation of the European Union expanded RKW's scope of operations. In addition to the expansion of its operations to former East Germany, Eastern Europe and other parts of the world, it now plays an important role in the development and applications of Business Cooperation Network established by a task force of the EC Commission in linking European organizations and small businesses across national boundaries. The networks not only enable small businesses to have access to databases but also potential partners in Europe. The RKW acts as an intermediary for small businesses to establish contacts with other European and foreign partners. The RKW's on-line data bank service enables small businesses to have accesses to various data sources.

The RKW is one of the best organized and equipped national productivity organizations in Europe with fine achievements. Along with the Greek Productivity Center, its range of operations is broader than most of the other highly specialized NPO operations in Europe. The RKW is now key leader of the national and regional productivity movement.

5.4 Korean Productivity Center

The Korean Productivity Center in South Korea was founded in 1957 by scholars originally as a non-profit organization with the goals of (1) promoting public awareness of productivity through publications; (2) teaching managers scientific business management ; and (3) providing consulting service to business. Throughout the 1950s and 60s, the center launched and concentrated its efforts in promoting information and consulting services to introduce business know-how from the US and Europe with strong support from the Government.

In the 1960s through funding and technical support from the UNDP, ILO and the US, it launched renewed productivity improvement efforts. Tens of thousands of managers were trained in the advanced management methods. The centre placed emphasis on the introduction of standard cost management, quality improvement, cost reduction methods for exporting and export-substitution goods and public capital. It also assisted the Government in the policy-making process of export expansion and process improvement in the public sector. The centre also expanded international activities through APO and the Conseil International Pour L'Organisation Scientifique-supported projects. A Productivity Award programme was initiated to promote productivity consciousness in the business community. It also embarked on the development of an extensive consumer movement.

In the 1970s the Korean economy became firmly established with export industries leading the expansion under strong protective government policies and a favourable global climate for export expansion. The rapid economic progress, however, was accompanied by accelerating inflation, high unemployment and conflicting labour-management relations, requiring policy adjustment in resource allocations, educational system, industrial structure and companies.

The adverse effects of an excessively rapid expansion of the domestic and overseas markets, protective support of the Government extended to companies and disruptive labour movement reduced the business community's enthusiasm toward the productivity movement. The centre faced a problem of shifting to self-financing its operations. In close cooperation with the APO, US and European experts, the centre moved to facilitate introduction of advanced management practices, particularly in the area of cost reduction. Although both governmental and foreign financial assistance declined during this period, the economic expansions triggered by a boom in the construction industry in the Middle East helped the business to support the centre's activities.

The second oil crisis toward the end of the 1970s, and the subsequent global economic stagnation, gave rise to inequity in the growth of the Korean economy, high inflation and friction with other countries. To cope with these changes in the business environment, the Government chose to make the productivity movement a key project for the nation in the 1980s. Companies were encouraged to create productivity departments to analyse performance and develop corporate productivity policies and programmes. At the same time, quality circle programmes and small group activities were actively implemented by the companies. Although the company-level productivity improvement programmes were spreading through the business community, a lack of coordinated national efforts by organizations promoting the productivity movement became conspicuous. The Presidential Decree in the beginning of the 1980s recommended (1) to develop a comprehensive productivity plan; (2) to coordinate administrative and financial support; (3) to develop plans for the campaigns and to evaluate their results; and (4) to review policy implications. The policy change and subsequent financial support both from the government and business sector made the KPC the leader in the comprehensive national productivity movement and revitalized the centre's activities. The KPC expanded its promotional programmes, developed specialized training programmes for workers and increased its efforts to educate the company staff in productivity methods and approaches.

It also shifted its emphasis from large enterprises to medium and small business entities. The KPC also launched factory automation and office automation programmes to prepare business for the 21st Century. It also strengthened its international cooperation activities.

The KPC expanded programmes to cover many areas of business management through study missions, industry-specific training and educational programmes, and consulting services. Throughout the 1970s heavy emphasis was placed on quality improvement and cost reduction programmes. Though it experienced setbacks in two oil crises, high inflation, termination of foreign aids, and a change in the government's focus on the use of the construction industry as a primary driver of the economy, it managed to mobilize government and industry support. It promoted industry to play the primary role in developing the Korean economy with the government playing the supporting roles. The centre promoted labour-management cooperation, small group activities and incentive benefit systems. The Government organized the Central Productivity Promotion Committee to help support the productivity movement. Under the Industrial Promotion Act of 1986, the KPC was reorganized as a special corporation with the goal of (1) promoting the national productivity improvement programmes; (2) refocusing attention on small business; (3) promoting factory automation; (4) running productivity campaigns; and (5) facilitating international exposure through conferences. The government and the industry increased their funding of these operations to the tune of several million dollars.

Toward the end of the 1980s and into the 90s, Korea again suffered from labour disputes at workplaces disrupting productivity at the company level and growth of the national economy.

Realizing the need for redefining the productivity concept, the KPC reaffirmed the following goals:

• •to advocate open market policy;
• •to strengthen competitiveness through a slower wage rise;
• •to encourage technological innovations; and
• •to establish cooperative labour-management relations.

In order to attain these goals, the centre facilitated close communication with the society and the clients' companies by sponsoring monthly breakfast meetings, questionnaire surveys and closer cooperation between academics. The human resource development programmes became key projects to bring about industrial peace. Although the government's financial support declined, the business communities increased their support by threefold enabling the KPC continuously to support its activities. The surveys also showed strong public support for this centre. However, the biggest issue the centre is still to overcome is the labour's lingering suspicion that productivity is only for the benefit of management.

The current thrust areas of the KPC are as follows:

• •National productivity promotion campaign--designation of "Productivity Week," National Productivity Awards, publications of successful stories, essay contests, use of TV and newspapers.
• •Development of management consultancy in the areas of business process reengineering, benchmarking, organizational development, time-based competition, learning organization, strategic planning, manpower planning and organizational development, job analysis, personnel management, career development, marketing management, demand forecasting, financial analysis, cost analysis, fund management, industrial engineering, including plant layout, material handling, JIT, 5S, TQM, TPM, FMS and MIS.
• •Training and development (l-4 week courses) in the subjects of pneumatic & electro-pneumatic control, electro and servo-hydraulic control, CAD/CAM, microprocessor, robotics, PLC, FMS, computer programming, software engineering, business process reengineering, production management, information system, cost control, personnel management, MIS, marketing and industrial engineering.
• •Factory Automation--planning, designing, training and developing supporting structures.
• •Information technology--computerization (feasibility study to implementation including selection and integration of hardware systems, providing extension services, development of organizational structure and training).
• •Quality management--ISO 9000 certification, consulting in connection with application and preparing for auditing.
• •Development and production of audio-visual training materials.
• •Development of productivity statistics--labour productivity indices, value-added productivity indices, international comparison.
• •Productivity research--industrial policy studies, factor analyses, white collar productivity, economic forecasting, large companies and SME relations, technology assessment, labour market structure, labour dispute solutions, gainsharing, wage cost trend and forecasting, international trends in collective bargaining and agreements.
• •International cooperation--acting as hosts and participants in APO-sponsored training programmes, organizing and sending study missions to Japan, the US and Europe.

Today the Korean industries face a global shift from suppliers' market to consumers' market. Cost reduction and lower prices alone do not guarantee their market shares anymore. Increased wealth of Korean consumers, their sophisticated buying patterns, their demands for quality products and services, timely deliveries and after-sales support are forcing corporate management to change their strategies. Their shift from input-orientation to better and higher value added to customers and the society is becoming imperative. The management is also becoming cognizant of the need to aspire and involve their employees in the process as internal customers to make them innovative. The society also demands environmental consideration in the production and marketing of products and services. The lingering suspicion of workers regarding productivity needs to be eliminated and cooperative labour-management relations need to be developed.

Under these new conditions, the centre is planning to develop programmes to assist its clients in setting-up new corporate culture for harmonious labour-management relations; encourage corporations to adopt more sophisticated management of technological innovation and innovative production systems, effective applications of information technology, and high performance workplaces; promote business process innovation, flexible organization and team-based work processes; and encourage skills upgrading, career development and performance-based incentive systems.

During the 1980s and 90s, as the Korean economy grew rapidly with the KPC acting as an effective catalyst in introducing electronics, mechatrononic and robotic technologies. While Europe, Canada, South Africa and Japan made cooperative industrial relations their priority, Korea's emphasis had been on introducing product and process technologies and skill development of managers and workers. Although the approach contributed substantially toward the rapid economic growth, it caused some suspicion of management's enthusiasm toward the industrial peace by the labour movement resulting in disruptive labour-management relations. The KPC is now refocusing its attention on this area to improve industrial relations.

5.5 Singapore Productivity and Standards Board

Its predecessor, the National Productivity Board, was established in 1972 with strong initiatives of visionary political, business and union leaders with the assistance of the UNDP and the ILO. Free-trade and export expansion-oriented policies of the national political leaders led the National Productivity Board to develop unique programmes besides traditional workplace improvement, training and other related activities offered by other similar institutions. They are the promotion of international standards, technological innovations, skill upgrading, and certification programmes to conform with national policies. Its objective was to develop a world-class quality workforce through a national productivity movement.

The primary objectives of the NPB were to contribute toward the overall economic growth and competitiveness of Singapore by nurturing productivity consciousness, upgrading the skill level of the workforce, fostering good labour-management relations, and helping companies adopt a holistic approach in management.

During the 1970s the NPBs emphasis was on creating high performance workplaces through harmonious labour-management relations. An incentive pay system was promoted to improve workers' productivity. The NPO assisted businesses in acquiring technologies from the US and Japan to upgrade industrial and business performance. Through the development of training programmes, with increasing investment in worker training, it assisted businesses in raising the skills and competence of workers. The programmes were primarily labour oriented as a contributory factor to productivity improvement.

A major productivity drive was launched in 1981 with programmes on productivity promotion, assistance to companies and productivity measurement. During the l980s, with the rapid growth of Singapore supported by a well educated and trained workforce, foreign direct investment increased dramatically, causing the board to focus its attention on building necessary physical and intellectual infrastructures in the private sector. Training programmes included systems approach, quality improvement and applications of information technology.

Facilitating in Singapore's attainment of the highest level of economic performance in Southeast Asia, the NPB now focuses its programmes on such residual factors of the economic growth as technological innovation, research and development, sophisticated use of information systems, customer-driven quality systems, high performance workplace, etc., beyond the traditional quantitative factors of investments in labour, plant and equipment. It adopted a holistic approach toward the productivity movement with a view to maintaining sustainable growth of the country's economy and the quality of life.

In 1996, such changes caused the National Productivity Board, with the primary function of advocating a humanistic approach to the economic activities, to merge with the National Institute for Standards and Industrial Research with the function of applying technologies and quality standards in the business community. It also took over a part of the functions of the Economic Development Board in strengthening small and medium enterprises. The new Productivity and Standard Board's goal is to strengthen the competitiveness of Singapore and to maintain sustainable economic growth.

The PSB now engages in the following activities in addition to the above-mentioned:

• •International cooperation--It is assisting other countries and foreign institutions in the development of joint research, technical exchange, workshops and training. Partners in these efforts include Japan, Norway, China, Vietnam, Cambodia and Myanmar under bilateral and multilateral agreements. The Board now acts in teaching roles in many international projects.
• •Certification and Recognition--ISO 9000 certification, standard and quality certification under various national schemes. It now acts as an ISO 9000 registrar for domestic and foreign companies as the convergence of quality and productivity concepts becomes more accepted. It certifies the companies' compliance with the provisions of ISO 9000 and other national standards such as the Ozone Depleting Substance Free Process Verification Scheme and Singapore Laboratory Accreditation Scheme.
• •Environmental programmes - It is supporting a green productivity movement in Asia for sustainable development of the region and promoting promulgation of the provisions of ISO 14000.

The governance of this organization included representatives of government, employers, labour movement, academia and other national institutions. The Board played a key role in the rapid rise in Singapore's productivity, whose per capita GDP is now the highest in Southeast Asia. Strong public support for the productivity movement, foresight of the Board's policy-makers, concerted efforts of the Board's staff and forward looking innovative programmes represent an ideal model for countries trying to launch a national productivity movement. The Board's current numerical goal for Singapore is an average annual total factor productivity growth of 2 per cent, a labour productivity growth of 4 per cent and a GDP growth of 7 per cent.

The Board's key activities today could be summarised as follows:

• •Productivity promotion through continuous public awareness campaigns with the theme of "Innovation and Quality."
• •Manpower planning and development, skills upgrading, and retraining of workers.
• •Technology application through technology information service, linkage service to technology sources, assistance in establishing partnerships, testing and analysis service, product/process improvement and development services, and applied research and technology transfer service.
• •Industrial development through transformation of businesses, formation of economic grouping for higher performance, networking with the trade and professional associations, diagnostic service and referral to government agencies for special assistance for small businesses through the Enterprise Upgrading Center.
• •Standards and quality development through promotion of international standards for improved foreign market access, development of internationally acceptable standards, coordination with foreign standard-setting organizations, quality measurement, total process and product quality improvement.
• •Incentives management providing loans and technical assistance grants for SMEs and support for individual worker training.

Annually the PSB selects companies for outstanding performance in quality improvement and awards them the Singapore Quality Award. The presentations of the Awards are made by the Prime Minister with extensive media coverage. It also assists and supports small groups and quality control circle programmes at companies. A special Skill Development Fund supports a large number of on-site and on-the-job training programmes.

Generally, the PSB performs an invaluable function in promoting productivity movement in Singapore with a holistic approach. It administers many programmes normally performed by the government agencies in business development. The tripartite and non-profit orientation of the PSB enables it to run many coordinated parallel programmes with common goals for attaining high performance without being subject to bureaucratic turf fighting prevalently seen in other countries. The small, yet strategic location of the country, with a well-educated workforce led by strong political leadership enabled the country to develop and apply comprehensive productivity programmes. It could be an ideal model for many developing countries for the time being.

5.6 National Productivity Institute of South Africa

The NPI was established in 1968 as an executive body of the Productivity Advisory Council which sets the basic policies and strategies within the framework of the economic and social policy of the government. Its objectives are (1) assisting companies in their productivity improvement programmes; (2) promoting productivity awareness; and (3) conducting productivity research for improving labour and capital productivity in South Africa. It was structured as a tripartite non-profit organization representing government, business and labour.

The original programmes were based upon the principles that (1) both labour and capital productivity must be improved; (2) education and training contribute to a productive workforce; (3) more wealth must be created through better financial performance of the organization; and (4) the gains from productivity improvement must be shared by shareholders, workers and consumers. The NPI conducted productivity surveys in specific industries, assisted in establishing company productivity units, developed a productivity measurement model (financial performance arising from price recovery and productivity), etc. The programmes specifically designed for labour included a productivity awareness campaign and promoting favourable climates for productivity bargaining.

For example, during the 1960s the clothing industry was targeted for a study of measurement of performance and to launch the programmes for productivity enhancement. In the beginning of the 1970s, the knitting, spinning, foundry, and auto repair industries were added. By 1973 the original productivity measurement model was developed and throughout the1970s studies were expanded to include footwear, furniture, sawmill, sugar mill and canning industries. An innovative administrative productivity programme for clerical staff was developed. The productivity measurement model was widely accepted throughout the world by the end of 1970s. The programmes also included the service sector, telecommunications and retail trade. The National Productivity Award programme was also initiated as a part of the nationwide public awareness campaign.

In the first half of the l980s, the NPI expanded the programmes to the agricultural sector with its productivity units covering agricultural cooperatives, fruit picking and packing as well as agricultural machinery, mining, and construction industries. It also initiated quality circle movement and productivity programmes involving local municipalities and hospitals. During this time, the NPI staff was doubled from forty to eighty and the number of board members was increased. The first week of September was designated as Productivity Week.

Throughout the latter half of the 1980s the scope of the activities was expanded to include printing, pharmaceutical and tourism industries. The NPI also promoted decentralization of companies as a key productivity programme in cooperation with the Decentralization Board. Its staff also served on the Economic Committee of the President's Council on Competitiveness.

In the beginning of the 1990s, the slow growth of the South African economy resulted in the reduction of funding from the Government forcing the NPI to increase its income from its services. The slowdown of the economy negatively affected South Africa's basic industries such as food processing, textiles, apparel and footwear. The NPI developed restructuring plans for the industries with emphasis on creative marketing approaches. It also carried out numerous projects to introduce new concepts on plant layout and production process improvement including the Just-In-Time system. The efforts were also concentrated to make tourism a high value added industry for the country. The fiscal constraints forced NPI to shift its emphasis to consulting services as a viable operation. A decision was also made to restructure the organization by streamlining its major thrust in the areas of productivity promotion, productivity strategy, training, education, and consulting.

A study on the commuter transport industry was launched to develop a performance measurement model. Its innovative productivity accounting system--Resource Allocation Strategy--was integrated with training programmes for the public sector. Company-specific workshops were developed in order to maintain sales of the programme as an important income source. The NPI also focussed its attention on effective applications of information technology by the industries through consulting and for its own use. New constraint management programmes developed in the US were introduced to South Africa with the NPI spearheading the promulgation efforts in the industries. With a view toward long-term planning for South Africa, the NPI concentrated its efforts on the development of new teaching methods for mathematics education. The Center for Productive Education was established as an affiliated entity with special tax status.

In order to assist companies to restructure to cope with the shifting political and social environment, the NPI developed quantitative assessment methods of the company climate in which the companies needed to develop practical restructuring plans. The NPI helped many businesses in redesigning organizational structures through applications of industrial engineering and information technology. In lieu of the continuing stagnant economy that forced companies to become hesitant to long-term commitments, the NPI shifted its emphasis to a short-term oriented project in assisting companies in obtaining ISO 9000 certification. However, it continued the efforts to support the quality circle movement in South Africa as well. The benchmarking programme was also promoted in an attempt to put a stop to the decline of textile, clothing, lumber and other industries.

By the middle of the 1990s, South Africa's economy slowly recovered its vivacity. To cope with the new needs of business and industry, the NPI shifted its interests from a sectoral orientation to a regional (provincial) orientation. More programmes were designed for general improvement of regional economies across all industries to stimulate higher levels of employment. A new series of the "Workshop Challenges" programme was launched targeting both management and labour in the provinces. In the productivity award programme, a new small business category was created to stimulate their entrepreneurial competitiveness. A World Productivity Assembly was sponsored to broaden the perspectives of South African businessmen and union leaders and to stimulate the neighbouring countries' interest in international cooperation for mutual help. The NPI also assisted provincial governments in developing new programmes for economic education.

Thoroughly tested, NPI's on-the-job training programmes became commercially available to interested companies. To cope with a continuing lack of management skills, motivation, and inadequate levels of supervisors, the NPI launched comprehensive management training programmes for both supervisors and senior management. A number of interactive conferences and workshops on management standards were held with participation of foreign experts. To promote the concept of learning organizations and learning culture, debates and studies on the learning process were started under the NPI's initiative involving a consortium of different companies. A management school survey was conducted and completed in cooperation with the Center for Productivity Education--a separate entity with common staff--with strong support from teachers in the school system.

The Productive Capacity of People Index was developed, establishing correlation between environments, culture, capacity of people (education and training) and the quality of goods and services. It will be used to benchmark the current and potential productive capacity of the South African workforce in the global market to develop strategic policies for the nation and individual companies. The NPI also sponsored a number of business management and manpower conferences composed of researchers, academics and practitioners. The NPI continued to promote wider applications of the constraints, management approaches, customer satisfaction, and globalization of business through seminars, conferences and workshops. The scope of interfirm comparisons was expanded to include foreign countries, especially Denmark. Benchmarking work was also expanded to include an American consulting firm. One of the most important contributions of the NPI was its recent initiative in setting-up the Pan-African Productivity Association (PAPA) to promote cooperation among African countries for mutual help and to learn from each other. The NPI is a good example of a national productivity organization taking initiative in developing innovative programmes based upon the solid concept of labour-management cooperations in difficult political and economic conditions.

5.7 Thailand Productivity Institute

The productivity movement in Thailand started with the establishment of the Thailand Management Development and Productivity Center (TMDPC) in 1962. The TMDPC, as a division of the Department of Industrial Promotion of Ministry of Industry, was set up under the UNDP and ILO technical cooperation project.

In the second year of the first 5-year National Economic and Social Development Plan of Thailand, government expectation on TMDPC's activities was quite extensive along with the national plan. Since its establishment, the TMDPC put emphasis on human resource development through training and education and promoting cooperation between people, including management and employees. Before 1980, the TMDPC had 5 major structural divisions dealing with business development, industrial engineering and management, consulting in human resource development and productivity promotion. After 1980, two more activities were added - implementing training projects in productivity and small business development. The centre facilitated the development of human resources with a series of programmes for improving work efficiency, product and service quality, increasing production and sales, and reducing manufacturing and distribution costs. Through its programmes the TMDPC tried to contribute to increasing productivity and its gains leading to a better quality of life and higher standards of living.

Seminars and training programmes implemented by the TMDPC were welcomed by Thai enterprises and such programmes were usually full of participants. However, despite these efforts, the real productivity movement in this country was very weak. One of the reasons for this was that knowledge and ideas were absorbed much better than practical implementation or application of productivity improvement methods were undertaken.

The cultural perception is reflected in a popular saying in Thailand "In the water (we) have fish; in the field (we) have rice", meaning that Thailand is very fertile with plenty of resources. In other words, the Thais practically don't have to work hard for a living.

Trade union activities at that time did not stimulate management in productivity promotion, but rather discouraged it. Employees were neither protected by socially-recognized institutions (trade unions), nor were they enlightened by the trade unions to cooperate in productivity improvement for their own betterment of quality of work life.

Besides, neighbouring countries were also slow in economic development and Thailand enjoyed the lack of competition from them in agriculture. Finally, the activities under the framework of the Government office were limited due to a lack of professionals to cope with diverse and dynamic needs, low compensation for productivity consultants and trainers, and the lack of organizational flexibility to cope with emerging new areas of services such as environmental issues, exports promotion, globalization and localization, etc.

In summary, TMDPC activities focussed mainly on training and there was a distinct lack of attention to productivity promotion practices, awareness building and consulting. There was also a lack of dynamism as a result of being a department of the MOI.

The 1980s changed Thailand from being a country indifferent to productivity to a country with high productivity orientation among business and politicians. Neighbouring countries, especially Singapore and Malaysia, demonstrated high economic growth and improved competitiveness in international markets. Indo-China countries came out with relatively stable economic policies and lower labour costs than in Thailand. The economic structure of Thailand was rather consumer goods oriented and most of the capital goods had to be imported, this had a negative impact on the country trade balance.

Under these conditions, businesses and government once again turned to productivity as the only strategy for economic recovery. The Ministry of Industry (MOI) took initiative in reorganizing the National Productivity Organization. In 1994, the Thai Government approved the establishment of the Thailand Productivity Institute (TPI) as the NPO of Thailand instead of the TMDPC. Though the TPI was set up under general MOI guidance and is to report to MOI Permanent Secretary as one of MOIs' departments, the TPI is to function as a non-governmental organization to ensure flexibility, speed and customer-orientation.

The Thai Government realised that the new TPI still requires governmental support for its activities, at least at the beginning. As a result, the Thai Government decided to:

• • provide 100 per cent of the budget for the first 5 years. The Government expected the TPI to be financially sufficient within this period;
• •organize TPI Board of Directors composed of top-level government representatives, business, trade union leaders, and scholars, and leave future direction on strategy and policy matters to the Board;
• •expand the activities and staff to triple the size of the previous organization (TMDPC);
• •nominate top management of the TPI from the private sector and recruit professional staff from both government and private sector based on expertise and competence;
• •invite international experts to train and develop TPI professionals in training and consultancy;
• •introduce personnel management system for TPI based on professionalism, payment by results and competence for consultants and trainers, personnel recruitment and performance appraisal systems used in private business, flexible organization frameworks, etc.
• •preserve the main functions and organization of the old TMDPC under a different name and merge it with the MOI - concentrating on training public sector and public administration staff.

As a result of this decision, only a limited number of the best officials were transferred from the TMDPC to the new TPI. This means that TPI had to recruit most of the new officials and consultants from the labour market and start its operation with newly recruited personnel.

The new TPI's vision was declared as the following: that TPI should be a national organization widely recognized for its leadership in know-how with respect to productivity enhancement. The institution will have up-to-date knowledge and expertise, data and information, as well as having highly qualified personnel to provide guidance leading to higher productivity in business undertakings.

TPI's main mission and functions were formulated as follows:

• •To develop the institute comparable to those of developed countries by securing, developing and maintaining a sufficient number of high-level expertise.
• •To provide training, consulting and other forms of guidance to all types of business and develop outside experts to help speed-up productivity improvement efforts throughout the country.
• •To continuously promote a better understanding and awareness on the importance of productivity to business and the public at large.
• •To be a comprehensive body of knowledge and expertise related to productivity improvement, and to develop methods and techniques suitable for Thai business conditions.
• •To provide government agencies with key productivity statistics, information and guidance on national policy formulation in productivity promotion.
• •To cooperate and network with other national and international organizations in productivity matters.

The current economic slowdown which hit Thailand in July 1997 and spread over this region, show many problems in Thailand's economic fundamentals. Factories, technology, equipments and work-methods are outdated. Overall management capability is still weak and there is lack of professionalism in running companies. Thailand's competitiveness dropped in recent years because its entrepreneurs have found easier ways to make profit from money speculation than by providing products and services to customers.

Revamping manufacturing processes and management are critical to this country's economic recovery. Thai managers need modern knowledge and skills in company management, product design, sales strategies and market information, etc. Under such circumstances the Government decided to start "Five-year Industrial Restructuring Programs (IPR)" with emphasis on upgrading production technologies and machinery; productivity improvement and process restructuring; attracting foreign investment in strategic industries; improving product design and its development; strengthening regional and rural SMEs; and raising skills and competence.

The TPI is expected to play a key role in implementing this Plan, particularly in productivity improvement and process restructuring. The TPI staff has to study and identify industrial-specific problems and to render consultancy services and various training programmes to the major export-oriented industries, such as food, automobile, electric, textile, leather, furniture, plastic and rubber products, etc. There will be 3,000 target companies and the budget for this programme is about US$170 million.

In implementing this programme the TPI will be the focal point in organizing its realization, including inviting national and international agencies and consultants.

The main lessons from NPO experience in Thailand is that though the Government is to play the key role in setting-up the institutional mechanism for productivity movement, it should give the NPO more strategic and operational autonomy and independence from government agencies. It should be more client-oriented, be able to demonstrate more flexibility and speed in decision-making, earn finance from their activities and compensate their best professional staff. Also, training alone (as it was a focus in TMDPC ) is not sufficient to maintain sustainability and effectiveness of NPOs nation-wide.

5.8 Foundation Polish Productivity Centre

The idea of promoting a productivity movement in Poland began in 1990. The representatives of Polish Government who visited Japan and looked for aid for a new democratic State suggested accepting Japanese assistance in creating a National Productivity Centre instead of just getting credits.

In the middle of 1991, the Polish Association of UN Experts (POLSENZ), together with the UNDP in Warsaw, launched the Productivity Movement to cover 500 enterprises in 3 sectors of the Polish economy: industry (300), agriculture (150) and transport (50). The Programme was backed by the Ministry of Labour and Social Policy as well as by the Ministry of Industry and Trade. At the same time, the Japan Productivity Center offered assistance in the establishment of the Polish Productivity Center. The Polish Association of Engineers, with Swedish Government assistance and the Swedish Productivity Services Federation have initiated a programme called "Productivity for Poland".

In 1992, both Polish and Japanese Governments approved the project of establishing the Polish Productivity Centre. In February 1992, the Ministry of Industry and Trade and the Minister of Labour and Social Policy established the Productivity Council. The three initiator groups mentioned above became members of the Council.

In March 1992, the Council of Ministers' Office agreed to establish the "Secretariat of the Productivity Movement" as the first phase of establishing the Polish Productivity Centre. The legal basis was the Minister's order no. 14/ORG dated June 3, 1992.

In May 1992, the Productivity Council adopted an important document "Productivity Movement - Productivity Programme". The council agreed to take over the main concept from the project launched by POLSENZ.

The main objectives of the Productivity Movement were:

• •a sound improvement of the standard of living; and
• •improving the economic results of industries and tangible growth of individual incomes.

The four guiding principles of productivity movement were:

• •implementation of best management practices and connect them with the transformation process in Poland (restructuring, privatization and adaptation to international standards);
• •fair distribution of productivity gains among managers, employees and consumers;
• •creative cooperation between managers and employees; and
• •a reduction in long-term unemployment in the regions.

In January 1994, the non-profit Foundation Polish Productivity Centre was established by the Minister of Trade and Industry and 53 individual Founders. Among them were managers and businessmen, including the chairman of Regional Productivity Councils, senior officers of the state administration, unionists and scientists.

Stimulated by the Productivity Council and its Secretariat in the regions, 8 Regional Productivity Councils (RPCs) have been established. The main tasks of these councils are:

• •to promote and involve in productivity movement as many enterprises as possible. The target was at least 30 enterprises with some 10 to 15 enterprises at the RPCs establishment; and
• •to launch the productivity movement in enterprises participating in the Regional Councils.

The Foundation's main objective is to contribute to the improvement of the quality and standard of life in Poland through increasing productivity in industry, services and other sectors of economy as well as to promote cooperation between the Government and local administration, and employers and employees' organizations in the area of productivity promotion.

The main guiding principles of the Foundation in promoting productivity movement are:

• •strive to avoid unemployment;
• •fair distribution of the fruits of increased productivity among managers, employees and consumers; and
• •harmonious and creative labour-management cooperation as the basis for enterprise restructuring.

The Foundation PPC is trying to achieve its objectives in productivity promotion through the following activities:

• •developing and promoting the systems of productivity improvement and supporting and co-ordinating the initiatives, actions and efforts undertaken in this field;
• •organizing the exchange of knowledge and the transfer of experiences and achievements of productivity sciences and technology;
• •conducting studies, research and organizing pilot implementations, consulting and supervision related to productivity improvement;
• •initiating and conducting education and training on the best concepts and management techniques relevant to productivity improvement;
• •collecting, elaborating and disseminating professional literature, publications and other educational and training materials;
• •training trainers and consultants in productivity improvement methods and techniques;
• •collaborating with foreign experts and organizations, participating in assistance programmes on productivity, assessing the needs for foreign experts' assistance and providing organizational support for them;
• •publishing books, reports and materials and other information to support educational activities in this area; and
• •assessing the impact of the legal environment on productivity improvement and preparing policy proposals for government.

Up to now, more than 600 state-owned and private companies have participated in different action-oriented projects and training programmes conducted by PPC. The activities are highly supported by Japanese government and the Japanese International Co-operation Agency. Some projects are also supported by British Know-How Fund and the governments of European and Asian countries, as well as the International Labour Organization.

Currently, the most important PPC programmes are: the "Leader programme" aimed at company managers to support enterprise restructuring and privatization, including both practical action-learning activities and training; the "Management of company restructuring programmes" for productivity facilitators, management development, total quality management, including 5S practices, cost reduction programmes, small group activities, sales and marketing management, and capital productivity.

There is a special programme for trade union leaders on the role of trade unions in enterprise restructuring and productivity improvement processes. An important part of PPC training activities is study missions abroad for managers and union leaders to learn foreign experiences in productivity improvement and productivity movement.

E="Times New Roman">5.9 Some lessons from NPO experiences

Many lessons could be derived from the international experiences of NPO operations, including the cases described in this Chapter. Here we will discuss only a few of the most important lessons which will provide some ideas for strategic and operational changes of existing and emerging NPOs in different countries and cultures.

Lesson One: Economic and cultural conditions when launching a productivity movement should provide pressure on the political and business community to realise its importance in order to initiate it. Normally, these are economies entering into a growing model when wastage and lost opportunities, as well as complacency, could be important (South-east Asian countries, Central European transition economies - Hungary, Poland).

Lesson two: It is of critical importance to have a productivity champion- and this could be the enlightened government. In most cases, the most successful productivity movements and NPOs around the world have been initiated by government (Japan, Singapore, Malaysia, India, Cyprus, Greece, South Africa, Botswana, etc.). A government's decisions to set-up NPOs is normally based on such factors as: strong leadership by key government high ranking official(s); export-oriented industrial policy; threat of competition from neighbouring countries; business community awareness and trend towards quality and productivity improvement; maturity of trade union movement and good industrial relations; transition from centrally-planned to market-oriented economy; and many others.

Lesson three: Recognising the importance of technical cooperation assistance when setting-up NPOs from other more advanced countries. The Government may decide to invite technical assistance and advice from various countries or international agencies. In this case, they should be wisely studied from the viewpoint of (1) "late comer's benefit"; (2) sharing the same approaches and methods to achieve objectives; (3) duration of assistance (not too long to get tired of, but not too short to receive superficial technology transfer); (4) self-sustainability of NPO after the assistance; and (5) competitive core competence capability building of NPO during the assistance period. An excellent example of such assistance is from JPC-SED to Asian countries through APO, and to Central and Eastern Europe (Poland, Russia, Hungary, Bulgaria) through JAICA.

However, imported foreign NPO strategies and operational experiences have only limited value. One can not copy an economic condition or organizational and political structure, education and culture level of the population, and many other factors which shape each unique national productivity movement.

Lesson four: The level of productivity services provided by the private sector in different countries through private consultancy and management development institutions, could be decisive in defining the gaps to be filled by government-supported NPOs. For example, in the US, Canada and most of Western Europe, private service delivery is abundant and of relatively high quality. The result is that the NPOs concentrate less on direct assistance to companies and more on networking, setting-up forums to exchange experiences and policy advice to governments. While in less developed countries of Africa and Asia it is very important for NPOs to concentrate on direct productivity consulting and management development, and information dissemination among their company-clients.

In this sense, the role of the NPOs is not to compete with the private sector consulting companies, but to fill in the gaps between the economy's needs and available services as well as to develop further private sector productivity consulting capabilities. For example, it would be inappropriate for Bangladesh to copy productivity movement patterns from Canada or from Germany.

Lesson five: The importance of the position of the NPO in the country's institutional mechanism. It has been observed that NPOs have been placed within different ministries from its original ministry several years after establishment. A replacement is acceptable if, and only if, better results could be envisaged by taking different approaches and methods to achieve the NPOs' objectives. Looking at the cases of Thailand and Bangladesh, the entire Thai Government decided to provide more autonomy to the TPI, while the Bangladeshi Government put its NPO under the Ministry of Industry. The former realized the constraints of being under a government institution, however, the latter took full advantage of including the NPO issues under the Government umbrella but in a different ministry.

What we have found is that the more developed the NPO, the more independent it is from direct government control (JPC-SED, SPB, NPI). In some countries, the fact that the NPO is placed under the umbrella of the Ministry of Labour indicates that the government/public concept of productivity is reduced only to the concept of "labour productivity". This is often the case - the main emphasis of such NPOs is on improving labour productivity (capital, material, energy productivity is often ignored).

In this sense, the best solution is to have a National Productivity Council with representation from the most important governmental and NGO stakeholders (including the ministries of labour, industry, economy, education and sometimes health, etc.). Such arrangements provide more operational autonomy for NPOs, and better reflect the concerns of the whole society and provides an optimal mechanism for governmental participation and contribution to the national productivity movement.

There are several unfortunate examples of the collapsed of NPOs due to one single reason - they were a department of the Ministry. These NPOs had very low professional competence and inexperienced staff. As a result, the business community and private sector refuse to cooperate with them.

Lesson six: An NPO should never limit its activities to training only, and even consulting client companies. It would lose the image of a national organization if it stops promoting productivity in the broad sense through awareness building, educating the public, assisting public administration, contributing to productivity-oriented R&D, and many other functions which would not be carried out by a private, profit-oriented consulting or training organization. Therefore, "promotion activities" play a critical role in the activities of a successful NPO. Productivity promotion is time consuming since it tackles human resource development and the attitude and culture of people. Productivity is often a result of the system of values and culture of people, organizations and countries. Therefore, productivity promotion aimed at these most difficult and important ingredients of a productivity movement would be the most successful.

Lesson seven: The NPO organizational structure and institutional mechanism is the result of specific country conditions and the NPO's mission, objectives, strategies and activities which can not be copied from NPOs from countries with very different factors. What can be easily transferred, however, are the instruments and techniques for productivity promotion and improvement.

Lesson eight: With the development and maturity of an NPO, the main objectives and activities become broader and more sophisticated. There is an evident shift from just management training and development to a more practical implementation of productivity improvement programmes (PIP) through consulting activities to provide advisory services to: government in promoting productivity-oriented economic policies; enterprise and entrepreneurship development; productivity awareness raising; R&D in productivity approaches and techniques; statistics and measurement; sophisticated industrial relations and involving employees and employers in different PIPs; and more socially-oriented productivity movement concepts, including gainsharing, environment protection and sustainable development.

CHAPTER 6: INTERNATIONAL EFFORTS IN PROMOTING PRODUCTIVITY

6.1 Cooperation between NPOs

In recent years, many NPOs have developed ongoing international cooperation and assistance programmes for their foreign counterparts under international agreements between the parties involved or under auspices of ILO, EC (European Community) and other international organizations.

Such cooperation ranges from structuring NPOs, staff training, hosting study teams, developing programmes, preparing training textbooks and manuals, and sending consultants and experts to work with indigenous staff on model plant operations. What was once a sole voluntary task of the US Government at the start of productivity movement after the Second World War, is now shared by many NPOs with funding from aid-giving countries and organizations. Cooperation and assistance greatly contribute to the revival of the economies in transition, Latin and Central Americas, Asia and Africa. Through regularly scheduled meetings, regional conferences, international conferences and network meetings, NPOs share knowledge and experience with each other for mutual help.

APO (Asian Productivity Organization), ILO and EC assist many NPOs in these endeavours, however, voluntary international cooperation among NPOs remains difficult. When many NPOs are scrambling for new sources of funding, it is difficult for them to closely cooperate among themselves in developing joint programmes whether on a bilateral or multinational basis unless they see financial merit in such cooperation. There are occasional productivity conferences where productivity experts meet to exchange views and ideas but discussions seldom produce real action programmes. For example, some important themes for international cooperation could be studies and policy recommendations on transferring international experience in productivity movement, NPO activities in productivity measurement and statistics and international comparisons could be developed.

The ongoing changes in the global environment will force NPOs to weigh the needs for their involvement in global events. When the business communities operate globally in search of the best practices, NPOs can not maintain only domestic orientation. The efforts of business to take pioneering advantages in the marketplace will change the form of traditional corporations to virtual and agile ones. This new business trend requires nations to be able to offer the most knowledgeable and skilled workforces that can produce the highest quality products and services for the lowest cost. Needs for better training and education of the workforce will increase. Cooperative efforts among NPOs in structuring the required programmes in joint ventures will facilitate such process. Such ventures may include the exchange or joint development of training course curricula, exchange of trainers/instructors and joint development of manuals. Joint NPO services to be offered to MNCs may include such issues as orientation programmes for the incoming MNC executives and staff; cooperative assistance to MNCs in their feasibility studies; joint development of databases for partner search and assistance; pre-hiring and pre-placement orientation and training programmes for employees; on-site training programmes; joint development of training manuals; skill training and certification programmes; creation of best practice databases; employee assistance programmes; and many others.

NPOs may be encouraged to cooperate in dealing with the technical and social productivity issues which are and will be global with common concerns such as factor price equalization in the global market; research on productivity and public awareness on preservation of ecology; welfare and social security system for future generations; educational reform; etc.

In addition to face-to-face meetings in international conferences of NPO representatives, perhaps they should work together to develop international electronic forums where NPO representatives often meet for the exchange of knowledge, experience, views and ideas. In order to facilitate development of the forum, it is recommended that NPOs work together and develop directories of productivity centres and a global directory of productivity-related databases which are either electronically accessible or available in written form, including government-originated statistical databases and other databases noted in the preceding section.

Some of the feasibility studies on fundamental issues as well as global data base development will be too costly for a single NPO to undertake. The research findings and databases will be beneficial to all the centres. Just as what's happening in private business sectors, it is about time the NPOs develop a global concept for undertaking the projects under a partnership arrangement. The NPOs need more cohesive global cooperation.

6.2 International cooperation agencies

The role of different national agencies in international assistance is of critical importance to productivity promotion in other countries. Many such agencies like SIDA (Swedish International Development Agency), DANIDA (Danish International Development Agency), CIDA (Canadian International Development Agency), JAICA (Japanese Agency for International Cooperation and Assistance) and others, contribute essentially to enterprise development and productivity promotion among their counterpart countries.

Below is one example of such an Agency's direct impact and contribution to productivity promotion. This is JAICA which has provided for many years essential assistance to developing NPOs in Singapore, Thailand, Russia, Poland, Hungary, Costa Rica, and many other countries around the world.

The most important strategy of JAICA is building local capacities for productivity promotion or "institutional building". As a rule, such cooperation is provided through dispatching long-term and short-term experts; organizing training programmes in Japan for the NPOs' project counterparts; providing necessary equipment and materials; assisting various project activities by forming "Support Committee in Japan" (technical advisory committees); and others.

The content of such technical assistance could be very different depending upon the beneficiary organization's needs. In the case of a newly established NPO, activities start with structuring an organization and formulating frameworks for various activities. In contrast, when the beneficiary is a well organized centre which is already active but which requires strengthening (such as productivity measurement, consulting, or training), stress is placed on training and upgrading the staff related to these areas.

JAICA assistance could also include advice on structuring and operating an organization to be can autonomous body and less dependent upon governmental control, transfer techniques useful for disseminating and promoting the concept of productivity, and raising awareness about NPO activities. Such assistance could also cover methods for measuring productivity, human resource development and providing consulting services. Particular attention is paid to developing cooperative structures between labour and management through programmes for improving labour-management relations.

JAICA assistance programmes also emphasize management and specific technology related to certain industries in their projects. Among managerial techniques are techniques common to various industries such as 5S, safety management, Kaizen activities, TQM, TPM, etc. Industry specific technologies are included to a certain extent in the course of handling a model factory during the technical assistance process. In such a case, industry specific technologies may be transferred through the advice of a short-term expert after a model factory has been chosen.

The most important forms of JAICA assistance include disseminating and promoting the concept of productivity; productivity measurement at enterprise and industry level; conducting surveys on productivity awareness; developing training materials; and setting-up networks for enterprises.

In implementing its assistance programmes, JAICA pays a lot of attention to training its counterparts, organizing study tours, company visits and long and medium-term programmes in Japan. High-level cooperation to meet the needs of a beneficiary country requires the support and advise of Japanese who are thoroughly knowledgeable about the technical fields involved. For this purpose, the above-mentioned support committees are established. The committee is made up of learned persons and the core members are selected from relevant institutions and other sources. The committee assists the activities associated with the project, for example, by formulating a technology transfer plan, determining specifications for materials to be offered, recruiting experts, and arranging for organizations to accept trainees. This system is intended to facilitate smooth and efficient implementation of a project.

6.3 The international and regional NPO network

There are only a few regional and international organizations who's main purpose is direct support of the productivity movement and its national institutional mechanism. We would like to provide a brief overview of only a few of the most active ones.

Asian Productivity Organization (APO)

The APO is an international organization composed of eighteen governments of Asia and created for the purpose of mutual cooperation in promoting productivity movement in respective member countries. Its activities are supported by annual membership contributions and project implementation grants from member governments. It also receives funding and assistance from cooperating national and international agencies and institutions. Major programmes include multi-country projects such as research, surveys, conferences, symposia, study meetings, seminars, technical expert services and training courses.

The other major programmes are country-specific programmes that cater to the specific needs of individual member countries such as deputations of experts to conduct training and consulting, the sponsorship of study missions, and the promotion of bilateral cooperation among NPOs.

The focus of recent programmes include the promotion of various approaches on quality management; assessment of the policy implications of growing intra-regional investment; dissemination of the concept and technologies of cleaner production for environmental protection; identification of appropriate information technology; roles of women in development; development of supporting industries; agricultural diversification; and rural infrastructure development.

The APO annually publishes close to one hundred books, APO Productivity Journals, Productivity Series reports, Symposium and study meeting reports; study mission reports, training manuals and monthly house bulletins.

APO member countries and representative organizations are:

Bangladesh National Productivity Organization

Taiwan China Productivity Center

Fiji National Productivity Board

Hong Kong Hong Kong Productivity Council

India National Productivity Council

Indonesia Productivity Development, Ministry of Manpower

Iran National Iranian Productivity Organization

Japan Japan Productivity Center for Socio-Economic Development

Korea Korean Productivity Center

Malaysia National Productivity Corporation

Mongolia National Productivity and Development Center

Nepal National Productivity and Economic Development Center

Pakistan Pakistan Industrial Technical Assistance Centre

Philippines Productivity & Development Center, Development Academy of the Philippines

Singapore Singapore Productivity and Standard Board

Sri Lanka National Institute of Business Management

Thailand Thailand Productivity Institute

Vietnam Directorate for Standards and Quality, Ministry for Science, Technology and Environment

European Association of National Productivity Centres (EANPC)

The EANPC is a non-profit organization composed of European national productivity organizations and associate members outside of Europe. It promotes cooperation among its members by meeting a few times a year for exchange of knowledge and experiences in operating national productivity organizations. It works closely with the European Commission in developing and implementing its programmes. Its operations are supported by membership fees and fees for contracted services.

The members of this association are:

Belgium Institut National de Recherche sur les Conditions de Travail

Bulgaria Bulgarian Productivity Association

Cyprus Cyprus Productivity Centre

Denmark Erhvervsfremme Styrelsen Erhvervsministeriet

Finland Finish Productivity Center

France Agence Nationale pour l'Amelioration des Conditions de Travail

Germany Rationalisierungs-Kuratorium der Deutschen Wirtschaft

Greece Ellinikon Kentron Paragogikotitos

Hungary Hungarian Productivity Center

Ireland Irish Productivity Centre

Israel Institute of Productivity

Italy Centro per la Produttivita Veneto

Luxembourg Office Luxembourgois pour l'Accroissement de la Productivité

Netherlands NIA TNO Ltd

Norway The Social Partners' Joint Action Programme

Poland Polish Productivity Center Foundation

Russia All Russia Work Protection and Productivity Center

South Africa National Productivity Institute

Ukraine National Productivity Centre

Pan African Productivity Association (PAPA)

PAPA was founded in November 1992 by the member organizations, following a declaration made by representatives of six African countries attending the 7^th Productivity Congress in Malaysia, to provide a forum for promoting and sharing ideas and experience on strategies, techniques and practices for productivity enhancement, accelerated economic growth and social development in Africa. It sponsors assemblies, seminars and workshops; promotes and monitors research studies; serves as a clearing house and develops cooperative research and consulting services. Its members are:

Botswana Botswana National Productivity Centre

Ghana Ghana Institute of Management and Public Administration

Mauritius Export Processing Zones Development Authority & Mauritius Employers' Federation

Mozambique Mozambique Business and Executive Women's Association

Namibia Centre for Resource and Transformation

South Africa National Productivity Institute

Zimbabwe Zimbabwe Institute of Public Administration and Management

International Productivity Service (IPS)

The IPS is a non-profit international coordinating body of productivity organizations located in North America, Europe and Asia. It was founded by the member organizations for mutual cooperation and joint programmes. Its goal is to facilitate a global flow of information on productivity, quality and competitiveness. It sponsors the continuing series of International Productivity Symposia, bilateral conferences and study missions, and acts as a clearinghouse of information. Its members are:

Australia Australian Quality Council

Canada Canadian Labour Market and Productivity Centre

Europe European Association of National Productivity Centres

Japan Japan Productivity Center for Socio-Economic Development

US U.S. Department of Labor

World Confederation of Productivity Science (WCPS)

WCPS is an association of societies in different countries whose objectives are to promote the increase of productivity in all sectors, the quality of working life everywhere, and the worldwide need for an improvement of standard of living. WCPS came into being as a result and a desire for closer collaboration between the various bodies throughout the world involved in productivity promotion efforts. It was conceived as a global association with few legal rules and responsibilities. The structure of the management and corporate form is simple. Running funds are secured through donations, support by members and earnings by confederation activities.

The first Council Meeting of the Confederation was held in London in May 1969, and the first World Productivity Congress was held in Bombay, India in December 1974. The aims of the Confederation include a Productivity Information-Exchange Bank for its members, the establishment of a World Productivity Prize and assistance in publication of productivity literature for educational purposes, etc. Other aims and objectives of the WCPS are outlined in the Oslo Doctrine of Total Productivity based on the conclusions from the 4^th World Productivity Congress.

Essential and paramount to the WCPS is to assist its members in whatever way possible in order to secure better interaction among Fellows (Members). WCPS will therefore support and take initiative for suitable activities in all areas of Productivity Science and Endeavour.

WCPS is comprised of National Chapters representing its driving force in their respective countries and also of individual members in over 60 countries. WCPS has also a World Academy of Productivity Science (WAPS) comprised of a maximum 500 Fellows selected among internationally-recognised eminences for their contribution to the field of productivity science.

To promote the interchange of ideas on productivity, a World Productivity Congress is held every two years and various activities are held regularly in individual countries. For example, WCPS/WAPS provided assistance in setting-up the Pan-African Productivity Association which is now playing a more and more important role in productivity promotion on the African continent.

6.4 The ILO in productivity promotion

The ILO's view on productivity is reflected in the Resolution adopted by the International Labour Conference in June 1984. No longer does the term "productivity" bring to mind long shifts and exhausted assembly line workers slaving away under dehumanizing conditions. It says that " ... as a basic principle of production, productivity improvement must serve the well-being of the people". Actually, without this principal condition, there would be no long-term productivity improvement.

As early as the 1950s, the ILO's activities in productivity were centred around industrial engineering and better organization of shop-floor operations. Later on, its activities were widened to embrace other functions and problem areas of the enterprise and higher management levels.

Over the past 40 years the ILO has been assisting developing countries in the development of management, promotion of small enterprise and entrepreneurship in support of their efforts to attain economic and social goals, and improvement of productivity. This assistance had resulted in the building of national productivity centres and related organizations as focal institutions in over 80 countries, and the introduction of several thousand training and consulting programmes and assignments. With this large pool of experience and expertise, the ILO is today assisting governments, employers and workers in their current efforts to enhance productivity.

Actually, the two main themes that dominated in the 1950's - management training and productivity promotion - and one in the middle 70's - small enterprise development - are again getting more and more attention. In the mid-80's, more attention was given to structural adjustment and privatization as a main macro-economic condition for productivity enhancement in countries with old industrial structures or central planning domination.

The ILO technical cooperation programmes oriented towards productivity improvement consist of the following main services:

• •Productivity improvement advisory services, including needs surveys, analysis of productivity problems and barriers at the national, sectoral and enterprise levels.
• •Management development for productivity improvement, design and implementation procedures and techniques for measurement, improvement and sharing gains from productivity.
• •Productivity network and institution building/strengthening to serve as focal points for productivity promotion.

As a result, a well developed body of experience and know-how in the development and implementation of productivity improvement methods has been accumulated and the ILO has achieved international recognition in this field. Among these methods are productivity management approaches, result-oriented management training, action-learning, planning for improved performance, business clinics, inter-firm productivity comparison and modular packaging, etc., which have been developed and implemented in the field.

There is increasing pressure from our ILO constituents, particularly from governments and employers' associations, for more assistance in productivity promotion. Our main strategies in meeting these new challenges are:

• •awareness building among top-level government officials and leaders of employers and workers' organizations;
• •promoting productivity objectives as one of the main elements of country (and enterprise) economic and social strategies and as a criteria for change; and
• •assisting in project design and implementation in setting-up and strengthening the national productivity organizations when requested, as we have done for many years.

The ILO is also trying to improve the diagnostic capacity of productivity institutions and their ability to respond to innovations to achieve a closer linkage between training and productivity. Most of our operational projects are closely related to productivity improvement through the macro or micro-level approaches. The major themes of these projects are small enterprise development and entrepreneurship development in developing countries. Most of them are in African and Asian countries.

In the 1990s, like most other major international organizations, the ILO has turned its attention to structural adjustment and economic reform in economies in transition to a market economy. We have concentrated on raising productivity awareness at the highest government level, assisting later with advisory services, information, training workshops and networking to NPOs in Poland, Russia, Ukraine, Hungary, Colombia, Mongolia, Philippines, Zimbabwe, Botswana and many other countries.

Our activities at present are also built around productivity with more emphasis on macro-productivity: linking productivity with structural adjustment and privatization, QWL, industrial relations, labour standards and poverty alleviation, promoting productivity growth as a main country objective which could facilitate in solving the most urgent social and economic problems. As can be seen, from being a purely technical problem, productivity is becoming an economic, social and multidisciplinary global policy issue and we feel that not just cooperation but close integration with our partners in the field is critical for future success.

Recognising the critical importance of productivity promotion in the present period of fast changes and globalization, the ILO has launched the Action Programme on Productivity Improvement, Competitiveness and Quality Jobs in Developing Countries to be implemented during the biennium 1998-99. With the opportunities for growth of output and trade and the increased competition offered by globalization today, it is even more important for countries to develop the capacity to pursue strategies for productivity and competitiveness improvement of industries supplying local and international markets.

The Action Programme promotes the "high road" to productivity improvement and competitiveness, i.e. approaches that aim at achieving both economic and social objectives at the same time. It is developing various guides and manuals on improving productivity and competitiveness through innovation, participation, human resource development, good labour-management cooperation, and better working conditions, among others. It is documenting national, sectoral and enterprises level "best practices" in productivity and competitiveness improvement. The manuals and guides as well as the best practice cases will be disseminated through publications, national workshops and seminars as well as through undertaking of policy and programmes development advisory services.

An important objective of this Action Programme is the assistance in building-up national concentration on productivity. The ILO participates in conducting studies and holding national and international conferences and seminars aimed at building-up a national awareness and resolve on the need to improve productivity and establish the organizations that will spearhead the national productivity movement. In Senegal, for example, the ILO assisted in organizing the national workshop that examined the Senegalese need for a concerted national productivity improvement effort and for establishing a National Productivity Centre. As a result of the workshop, a formal effort starting with the undertaking of the feasibility study and learning from the experiences of other countries, the establishment of the Senegalese National Productivity Centre is now being pursued. In Mauritius, during the 1990s, ILO has contributed to national seminars and conferences that focus on specific issues affecting the level of productivity and competitiveness of Mauritian industries. Institutions such as the Export Processing Zone Development Authority and the Mauritius Employer Federation are collaborating in spearheading the tripartite national productivity drive. In the Philippines, ILO helped in the multi-sectoral, multi-agency work that resulted in the adoption of the National Action Agenda for Productivity.

The ILO also contributes to the setting-up and strengthening of national productivity organizations, providing direct assistance in conducting the feasibility studies for the setting-up of national productivity organizations (the latest examples were in Seychelles, Zimbabwe and Pakistan).

In Botswana , for example, assistance was provided in strengthening the programmes of the Botswana National Productivity Centre, assessing the expectations of key stakeholders, undertaking of SWOT analysis and coming-up with strategic changes to help strengthen further its operation. In the case of the National Productivity Institute of South Africa, ILO participated in workshops for key stakeholders and decision-makers that reviewed the activities and the future strategies of the NPI.

The ILO often provides technical inputs to training programmes and courses organized by NPOs and employers' organizations (Iran, Ghana, Botswana, Poland and Philippines are just some recent examples). A main element of these training activities is training the local trainers and consultants involved in productivity and quality promotion.

The ILO always believes in the support and active participation of the social partners, particularly of the employers and workers, as an essential condition for effectiveness and sustainability of productivity improvement. One of the major activities of the ILO in this area is conducting training and seminars for employers and workers' organizations. For example, training activities for employers and workers' organizations of South Asia, Central and Eastern Europe, the Caribbean and Africa have been conducted to secure better cooperation and participation in productivity movement of social partners. The latest example of such cooperation was the ILO Regional Workshop (1997) for English-speaking African countries' trade union leaders on productivity promotion and workers' participation with the active participation of the Japanese trade unions.

ILO provides an active support to international and regional organizations of NPOs. It has a formal collaboration agreement with the Asian Productivity Organization. Under this collaboration arrangement, the ILO assists with technical expertise and inputs to different APO programmes on a systematic basis. ILO also supports and assists PAPA, helping it undertake specific programmes and activities and on certain occasions supporting the participation of representatives of African NPOs in some PAPA activities. ILO maintains very close collaboration with the EANPC in promoting productivity movement in European countries.

The ILO future concerns and strategies

The most important future concerns of the ILO productivity promotion strategies are to develop a high level of recognition, consciousness and awareness of productivity by all parties concerned - employers, employees and government. Systematic productivity-oriented management development; following-up new developments in productivity movements in order to give better advice on policies and practices; improving government and public infrastructure to support organizational and individual initiative and creativeness; developing entrepreneurship; and strengthening national institutional mechanisms for productivity movement will continue to be an important part of the ILO strategy.

Future ILO activities will put greater stress on the sharing of productivity gains and improving motivation since the lack of gainsharing often contributes to productivity programme project failures. The ILO will continue to cooperate with governments, employers and workers' organizations in organizing regional and national seminars, conferences and workshops for their members on productivity and competitiveness, improving general productivity culture and productivity management approaches, methods and techniques. Assistance in strengthening national institutional mechanisms for productivity improvement and their role in productivity training, developing an international network for the organizations, researchers and consultants and promoting cooperation between them at the international level, will be continued.

Technological and demographic changes have increased the role of youth and women in the labour markets. This is why it is important to orient major productivity improvement and human resource development projects (education, training, retraining and work organization) towards these labour force categories. We will become even more concerned with providing policy advice and consultancy on enterprise restructuring and privatization issues which, if carried out properly, could lead to more workplace democracy, higher levels of self-employment, entrepreneurship and, consequently, broader mass participation in productivity drives.

Thus, the ILO will continue its three-level approach to productivity improvement: helping create the policy framework as well as the multipartite support to a concerted national productivity improvement effort; help establish and strengthen the national productivity institutions; and providing managers and workers of enterprises the tools and techniques for managing productivity improvement programmes. More emphasis, however, will be given to national and sectoral level productivity and competitiveness promotion.

While continuing to pay attention to incremental and sustained enterprise-level productivity improvement approaches and strategies, additional effort will be put in understanding, documenting and disseminating productivity improvement approaches involving enterprise restructuring. Given the very dynamic environment, countries in transition and undertaking structural adjustments, and countries recovering from financial and economic upheavals, there is a need to develop the capability of managers and workers alike to manage the restructuring process so that the productivity and competitiveness goals are achieved without debilitating social costs.

CHAPTER 7: GUIDES FOR FEASIBILITY STUDIES ON SETTING-UP AN NPO

7.1 Needs and objectives of the feasibility study

When the establishment of an NPO is being contemplated, it is important that a thorough and deliberate study of its feasibility be undertaken. The chances of the effectiveness and sustainability of the NPO is enhanced if the various critical success factors are built-in to its conception and design. Examination of ineffective and weak NPOs reveal that the seeds for failure are often present right at its establishment. They suffer from many constraints including lack of commitment and support from the major stakeholders, their priorities are not seen to be consistent with the pressing need of the economy, they are subject to unclear expectations, they lack the managerial and administrative autonomy needed to be more proactive and innovative, they could not recruit and maintain highly qualified staff, and their financing is insufficient and erratic. Just as in establishing an efficient, effective and competitive private enterprise, the establishment of a very important organization such as an NPO requires a thorough feasibility and sustainability study, backed-up with well thought-out corporate strategy and business plans.

While the major responsibility for the establishment of an NPO may lie with the government, it is important that the other two major social partners, employers and workers, are fully involved in the undertaking of the feasibility study. For the NPO to be effective in its roles as spearhead and catalyst of a national productivity movement, it is essential that these key stakeholders and actors be among the major proponents for its establishment. They must not only be making calls and petitions to the government for the creation of an NPO, but they must be prepared to commit to playing their part in the national drive towards increased productivity and competitiveness. A national programme on productivity would not materialize and be successful without the full support and participation of employers and workers. Similarly, the success of the NPO rests not just on government actions but more so on the continuing support, involvement and contribution from employers and workers alike. The preparation for the establishment of the NPO, particularly this phase of undertaking the feasibility study, is the time to assess and clarify expectations and to build-up support and commitments of the social partners.

It is essential that the views and expectations, as well as the commitments of employers and workers, are fully reflected in the roles, functions, programmes and even financing of the NPO. Representatives of government, employers and workers' organizations should ideally be members of the multi-disciplinary team that will be undertaking the feasibility study. If representatives of employers and workers can not be full-time members of the team, then it must be assured that they are fully consulted and their commitments are secured at the various stages of the project feasibility study preparation.

Broad-based and intensive consultation should be made. Consultations could be done through separate meetings with the stakeholders and key actors. Joint consultative workshops are useful to share and clarify expectations, understand and appreciated the respective roles of the key actors, agree on the NPO's priorities and strategies and firm-up commitments and contributions.

Right at the very start, it is important for all parties and stakeholders to be clear and to fully understand the roles that the NPO is expected to perform. What sets an NPO apart from ordinary management training and consulting company are its very important roles in catalysing and mobilizing the national concerted effort towards increased productivity. In general, an NPO performs the following functions:

• As promoter of productivity. The productivity centre demystifies productivity, removes misconceptions and translates it into terms that are relevant and consistent with national socio-economic context, development needs, economic structures and development strategies. It helps put the concept of productivity in concrete and operational perspectives that enable policy-makers, government officials, managers, workers and the population at large to identify with and define their roles and contributions to national and enterprise level productivity improvement efforts. It spearheads the national efforts to raise the level of awareness and consciousness of the need to improve productivity.
• As capability builder. The centre undertakes training and consultancy activities aimed at building the skills and competencies among the various institutions and enterprises to undertake productivity improvement activities. It helps build a network of institutions with the competencies to effect productivity improvement at national, sectoral and enterprise levels. This network of institutions in turn constitutes the capability base for sustained and continuing national productivity improvement effort.
• The centre acts as a catalyst and mobilizer, enlisting the support and participation of other groups and institutions into a national productivity drive. It provides technical support and assistance to the major actors of the national productivity drive, e.g. government agencies, employers' organizations, workers' organizations, chambers of commerce and industry, civic groups etc., in conceptualizing, designing and implementing their respective productivity improvement programmes.
• The centre performs the role of information disseminator, collecting data and information on productivity performances and productivity improvement experiences and makes this information available and easily accessible to users.
• As a networker. The centre performs the roles of a linking-pin, actively linking those who need productivity improvement information and assistance to the appropriate resource institutions, national as well as international, public and private, who can respond better to the needs. It operates within a network of technical and management development institutions and taps the collective expertise of the network.
• As initiator and pioneer. the centre pilots and demonstrates the appropriateness and efficacy of specific productivity improvement approaches and techniques. It adapts "best practices" and productivity improvement techniques and approaches to local economic and cultural environment.
• The centre does the work of policy analyst. It undertakes studies and prepares position papers that could trigger policy formulation and legislations. In cases where the centre is the technical secretariat and operating arm of a National Productivity Council, it conducts studies of productivity trends, identifies problems and constraints, and conducts background studies that enables the council to recommend policies, set priorities and evaluate the progress of the national productivity efforts.

These functions may not necessarily be undertaken with equal emphasis and priority by the productivity centre. The centre will have to define its long-term objectives and clearly specify its operating philosophies and guiding principles. Depending on the socio-economic context, the productivity situation in the country, national development priorities, and the present level of competencies in the public and private sectors, the centre will have to establish what its primary mandates should be. These priorities may change over time as the productivity awareness of its target groups develop and as the competencies of public and private sectors' training and consulting capabilities build-up. The productivity improvement needs will change and the centre will have to adjust its operating approaches and develop the programmes of services relevant to the emerging needs.

Two underlying considerations underpin the operations of effective NPOs. One is that it is driven by its mission to improve national productivity and national well-being. It is thus concerned with issues that combine economic and social objectives at the same time. The other consideration is that, as a service provider, it must undertake its operations in the most effective and efficient manner. It must be the model of productivity, and its product and services must be competitive enough or better than those provided by the private sector. It must offer value for money.

The effectiveness and the sustainability of a productivity centre depend a lot on its continued relevance, technical credibility and support of its different publics: government, employers, workers, academe, etc. All of these result from the ability of the centre to maintain its significance and usefulness to all these groups, i.e. being able to anticipate and respond to emerging productivity improvement issues, needs and concerns, being more service and development-oriented rather than being another bureaucracy, being enterprising and innovative, and being able to build and sustain core competencies required to deliver the services needed.

A factor that is becoming very critical to the continued existence of a productivity centre is financial sustainability. Governments, in the face of public finance difficulties as well as the move towards greater decentralization, are no longer in a position or willing to shoulder the full costs of running a centre. A thorough study of how the operations of the centre will be financed in the short, medium and long term must be made when embarking on its establishment. The feasibility of revenue generation and tapping private sector contribution should be considered right at the very start. While the NPO may have to be funded mainly from government subvention for capital and recurrent expenditures at the start, such support should be planned to gradually decrease aiming for self-financing in five years. Government however, as a client, may have to continue to shoulder the major share of the costs involved in programmes such as productivity promotion and awareness campaigns, undertaking of policy-oriented studies, catalysing and coordinating the national productivity movement and other services not directly chargeable to other clients. But just like with other paying clients, dealing with the government must be customer-oriented and business-like, i.e. they are being billed for services rendered and products delivered.

It is imperative therefore that effectiveness and sustainability considerations should be built-in to the conception and design of the centre. Very often, the seeds for the degeneration of a centre into a bureaucratic white elephant are inadvertently implanted when the centre is conceived. For example, provision for multi-sectoral governance is desirable but involves too many parties in operational decision making and in the day-to-day running of the centre and could result in immobility. The check and balance in the government system is useful, but indiscriminately subjecting it to the rules and regulations of governmental service could lead to bureaucracy and red-tape resulting in inertia and lack of initiative, and lack of financial autonomy could lead to technical mediocrity.

7.2. Guide questions for conducting the feasibility study

A thorough feasibility study must be undertaken leading to an organizational design that will give the centre a higher probability of attaining effectiveness and sustainability. This feasibility study should look at the relevance of the proposed centre to the productivity improvement needs of the country, and clarify its niche in the institutional framework in order that it will not become a redundancy; assess the degree of support from the government, the employers and the workers and clarify expectations; assess potential effectiveness in the light of social and cultural factors; design the organizational and administrative structures so that the centre will have the necessary autonomy and flexibility for it to be effective; determine the technical competencies that will be required of the centre; and specify the financing mechanisms to assure its sustained operations.

The following set of questions are intended to serve as a guide in assessing the feasibility of establishing a productivity centre. These are also intended to assist in specifying particular aspects of the organizational design of the proposed centre. An iterative procedure will be necessary as some initial specifications may have to be modified due to constraints posed by the other factors. For example, the limited financial resources that can be mobilized for the centre's establishment and operation will make the initial expectations and roles assigned unrealistic. These questions can also be used in evaluating an existing productivity centre.

Needs and justification for establishment of a productivity centre

At the very outset, the need for a productivity centre must be clearly ascertained. Its establishment must be fully justified and its roles and place within the national development institutional framework must be clearly identified. Its mandates, objectives, operating philosophy and operational policies must be specified. The following questions should be considered:

• •What is the role of productivity improvement in the short-term, medium-term and long-term development strategy of the country? Are there any priority sectors to be developed? With the increasing globalization of the economy, what role does productivity improvement have in enhancing national and enterprise level competitiveness?
• •How do the productivity performance of key sectors compare with that of neighbouring countries, and that of the major competitors in the domestic and international markets? Which sector of the economy needs productivity improvement most?
• •Given the present situation in the country, what are the programmes, actions, and interventions needed to improve the productivity of the key sectors and of the country as a whole? In which specific areas should these interventions be e.g. productivity awareness and consciousness raising, education, skills upgrading, technical and managerial competencies improvement, technology upgrading, etc.? When mapped against the present governmental and private sector institutional framework, are there significant gaps in the mandates and in the programmes such that critical areas and programmes for productivity improvement are not covered? What could be the roles of specific government agencies and private sector organizations, including employers and workers' organizations in a national productivity drive? Are there existing competencies to perform these roles or are these competencies still to be built-up?

• •What is the level of appreciation and understanding of productivity concepts and issues by the government, the employers, the managers, the workers and the public at large? Is there need for programmes to raise the culture of productivity?
• •Given the above, what should the major roles and functions, products and services of the productivity centre be? Who are the major clients and target groups? What are their needs? How are these needs identified and verified? Are there other organizations offering similar or related services?
• •Why is it necessary to establish a separate centre? Can the functions envisaged for such a centre not be performed by an existing government agency, the whole government machinery itself, or by private sector organizations, e.g. consulting organizations? Can the functions be performed by active networking of already existing organizations?
• •Within the existing institutional framework for national development, what degree of authority and political competence must the centre have for it to perform its roles and functions effectively?
• •What should be its underlying philosophy and guiding principles concerning productivity improvement which will guide its operations and institutional development?

Social and cultural feasibility

Productivity is also defined as a state of mind, a culture that seeks and rewards innovations and changes towards better ways of doing things. The development of a productivity culture is one of the major goals of a productivity movement.

While building a culture of excellence is one of the major tasks and challenges of a productivity centre, the existing social and cultural environment within which the centre will be operating will affect its immediate effectiveness. In a situation where the prevailing corporate culture inhibits innovation and creativeness, where enterprises are used to operating as bureaucracies, where enterprise management has been viewed more as administering rather than managing, where rewards are given not according to performance but based more on connections and patronage, and where the social norms reward more conformity rather than enterprise, the centre will have an uphill task. It is necessary to assess the magnitude of the cultural barriers that the centre will face and be very realistic about its expectations. Appreciating realistically the difficulties will lead to better strategies and approaches towards productivity improvement. For this, the following questions should be discussed:

• •What has been the dominant operating economic system in the country: a centrally planned or a market economy? How much appreciation and awareness are there of market mechanisms, competition, quality, and cost-effectiveness? What are the more common success role models of the society: progression and achievements in government bureaucracies, success in political party politics, success in commercial undertakings, or recognition for innovation and enterprise?

• •What is the prevailing corporate culture in organizations and enterprises? What is the predominant work attitude? Is there a sense of urgency for quality and competitiveness? How are rewards and recognition determined? How are wages and remuneration determined: competency based, seniority based, performance based, etc.? Are management functions mainly those of administering and executing decisions and directives from the top? Are workers encouraged to innovate and look for improvement? Are contributions to improvement recognized? Who are the role models within the enterprises? Do their achievements contribute to productivity improvement? Is there a culture of excellence? How easy will it be to introduce change and productivity improvement programmes in government organizations, public enterprises and private enterprises?

Assessment of political feasibility

The effectiveness and sustainability of the productivity centre will depend on the degree of support of key stakeholders of the centre: government, employers, workers, decision-makers and implementors of productivity policies and programmes. This support will depend in turn on whether these key stakeholders see or anticipate that their expectations will be met. These expectations may be technical or political. It is therefore essential to determine who are the most influential in determining continued support to the centre and its programmes and to clearly identify their motivations and expectations. Conflicts and non-congruence of expectations must be identified. The centre should take into consideration these expectations. Those that can not be clearly catered to should be clarified and recognized at the early stage.

The support of key stakeholders is enhanced when they are involved and participate actively in the establishment of the guiding principles, the overall directions and of the priority thrusts of the centre. In this respect, the establishment of a National Productivity Council has been found to be a very effective mechanism for involving the key stakeholders. Having mechanisms for consultations such as tripartite or multipartite advisory bodies, or being the operating arm of a National Productivity Council, has been found to be essential to centres' effectiveness. Such mechanisms give the centre the means to determine priority productivity issues and concerns, thus enabling it to sustain its relevance and have the required backing and support in the implementation of its programmes.

Productivity improvement strategies and programmes cut across the usual functional boundaries and turfs of government ministries and departments. It is therefore advantageous not to have the centre [when it is a governmental or quasi-governmental institution] report or be attached to a particular sectoral ministry or department but rather to have it under an Office whose authority cuts across ministries and departments. This could be the Office of the President or the Prime Minister. In order to make the proper proposals, the following issues should be analysed:

• •Who is (are) the key proponent(s) for the establishment of the centre? What are their key motivations for proposing the idea? Who is the key person behind the idea? Will the support of his/her institution be sustained in the event that the person leaves the organization?
• •Which government agency will be primarily responsible for the operation of the centre (if the centre is to be a governmental organization)? Are its primary mandate and sector coverage consistent with the proposed scope of concern of the productivity centre? Does it have high enough level of authority to influence policies and programmes touching on varied sectors of the economy? Does it have sufficient influence to mobilize resources for the centre?
• •If the centre is to be created out of an existing organization, what is the attitude of the key officers of this organization towards the proposed centre? Does this organization have the credibility and confidence of key political players whose support are critical to the centre's effectiveness?
• •What are the attitudes of employers' and workers' organizations concerning the establishment of the centre? What are their expectations? What are the most important productivity issues to them? Do they have underlying agenda? Is there consistency and commonality in the expectations and agenda?
• •Can the political support to the centre be enhanced through a tripartite or multipartite national productivity council? Who should be composing this council?
• •What must be done to insure sustained political support for the centre? Will this require a particular strategy and programme from the centre?

Technical Feasibility

The credibility of a centre and the confidence that its different clients will have in it will depend significantly on its technical competence and independence. The centre's ability to recruit, develop and maintain people with the required core competencies should be assured. This ability will depend in turn on the degree of autonomy and independence, on the organizational philosophy and operating systems, and on its financial capability to offer the remuneration packages that will be attractive to people with the required competencies. Rewards and recognition must be based on performance, innovation, and results. If the technical competence of the centre can not be assured, then it will likely degenerate into just another bureaucracy. Consider the following questions:

• •What will be the primary roles and functions of the centre? What are the core programmes and services that the centre will undertake? What are the competencies that will be required?
• •What will the centre's operating philosophy and character be? Will it just need to build-up core competencies and rely on networking for specialized competencies and expertise? How will it relate to other private and public training and consultancy organizations? Given such operating philosophy, what are the required attitudes and competencies from the persons who will be managing it?
• •What level of authority and political clout must the centre have to be effective in the performance of its functions (e.g., if the centre will be involved in policy and programmes coordination and in mobilizing workers, employers, government agencies, the general public, etc., into a national productivity movement)?
• •Will the centre have more influence and the needed political clout if it is an operating arm of a tripartite or multipartite national productivity council? Who should be heading this council? To whom should this council be reporting to?
• •If the centre is to be based in an existing organization, or if it will be created through the transformation of an existing organization, what are the attitudes and competencies of the incumbent staff? Does the organization have credibility among the government, employers and workers? Does the organization have the productivity and performance orientation? Will it have the full support of the key officers of the mother organization?
• •Prepare an indicative summary of the 5-year work-plan. What staffing level will such a work-plan require? What competencies will be required? Is there a sufficient number of people with these competencies available for recruitment? What will be required to recruit and retain them? What physical facilities and equipment are needed? How are they to be acquired?
• •How will the competencies of the centre be built-up? Will the centre just have a core technical staff and use short-term services to implement its programmes and projects?
• •Will the centre have the administrative and financial autonomy and flexibility to recruit and retain technically competent staff members? What should be its personnel and remuneration policies to attract and retain competent staff members?
• •What administrative rules and procedures must be put in place so that the centre can engage short-term experts from private and government institutions?

Organizational and administrative feasibility

A productivity centre has to be dynamic and should be able to anticipate and respond to the emerging needs of its public. It should be market-driven, and in the case where it is expected to generate revenue, it should be able to operate in a competitive environment. It must therefore have the necessary operational and administrative autonomy. On the other hand, it may have to operate within the government system for it to be effective in policy and programmes coordination. A certain balance is therefore necessary.

There are some merits in having multi-sectoral involvement when setting the directions and policies of the centre. Involving so many parties in the management of the operations of a centre, however, could lead to paralysis. Putting the centre under administrative policies and procedures governing line agencies of the government could subject it to bureaucratic procedures and cause bureaucratic culture to set-in. Such a system could restrict the flexibility and enterprise of the centre. Making the centre an integral part of a line agency may also restrict its flexibility. For example, regulations on civil service recruitment and compensation may restrict the ability of the centre to maintain its technical competence. Discuss and answer the following questions:

• •How will the centre be governed? Who will set its organizational philosophies, operating policies, priorities and direction?
• •How much degree of administrative, financial and technical autonomy will the centre need for it to be effective? How much flexibility will it require?
• •Who will manage the day-to-day operations of the centre? What should be his/her degree of managerial autonomy and authority? Who will the person be reporting to?
• •Will its administrative and technical staff be under civil service rules (i.e. those for regular government employees) of employment? What are the pros and cons?

• •What legal status should the centre have: a line agency, a public enterprise, a private company, or a foundation? What are the advantages and disadvantages of each form? What are the relevant legislations and regulations concerning its formation? Under the constitutional and legal system of the country, what legal instrument is needed to establish the centre: a law, an executive order, or a company registration?
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• •How will the centre's organization be structured? What is the logic behind the proposed division into functional units? Will the structure allow for flexibility? For coherence of purpose?

Financial feasibility

The financial resources required for the sustained operation of the centre must be anticipated and the present and future sources of funds must be ascertained. Often, in the enthusiasm of setting-up the centre, funding is provided for the start-up but not enough provision is made for its sustained operation. In a period of tight budget constraints, the budgetary provisions for the centre could be curtailed providing only for salaries and recurrent expenditures but nothing for operations. This will seriously undermine the technical credibility of the centre.

It is advantageous to make the centre support part of its operational costs through revenues from operations. This creates the culture of enterprise. It will also instill customer and client-orientation among the staff of the centre. The government should also be looked at as a client/customer. Government funding support and subventions must be reckoned against services that the centre provides to or on behalf of the government.

It is therefore important to have good strategic financial plans for the centre. A mix of sources of funds should be prepared. Identifying the sources of funds for priority programmes is advised (e.g. promotions and awareness campaigns would be mainly funded from government subventions and grants while training and consultancy services would be funded through fees and revenues generated). A programme and schedule towards self-sufficiency may have to be prepared. To decide on the mode of financing, discuss the following questions:

• •How will the establishment and the operations of the centre be financed? If budgetary subventions will be required, what is the financing capability of the country to provide budgets for its establishment and for sustained operations? What has been the experience of similarly situated institutions in the country?
• •How much will be required to establish the centre? How will this initial capital outlay be financed?
• •Based on the indicative three to five year work-plan, prepare the corresponding capital and operating budgets. How will these be financed?
• •Is the centre expected to generate revenue? What are the main revenue generating programmes and services? What are the revenue projections over the next 5 years? Are these realistic estimates? Who will pay for the services of the centre? Why will they buy the services of the centre?
• •Does the centre have the financial autonomy to allocate and disburse funds generated from its operation? Or will the revenues be part of the government general funds subject to the general budgeting and audit procedures?

Organizing the preparatory work

The preparation for the establishment of a productivity centre can be a very involved process. Just as the centre must be well thought-out, the undertaking of the preparatory work needs to be planned carefully to be sure that important steps are not missed and that key supports are not lost because of omissions or political mis-steps. While broad-based support is necessary and involvement of key parties are essential even at this preparation phase, the responsibility for spearheading and managing the preparatory activities and the preparation of the necessary documentation, draft charters and legislations must be clearly assigned to a specific person or group. Adequate resources to undertake the preparatory work must be made available. The following questions should be answered to organize the relevant preparatory work:

• •Who will be involved in the preparations of the establishment of the centre? Who are the key players whose backing are essential for the centre to take-off? Who must be consulted and who must be actively involved in the preparation stages? Is a Steering Committee called for? Are consultative workshops necessary and appropriate?
• •What is the strategy and work-plan for this preparatory phase? Who will be spearheading and be responsible for managing this preparatory phase? What studies and documentation must be prepared? What technical and financial resources are needed? Are the resources available sufficient?
• •Given the above, is the time table for setting-up the centre realistic? Can it be done?

The result of this feasibility study, based on these questions, could provide an excellent informational framework for the NPO design or its structural changes.

CHAPTER 8: FUTURE PROSPECTS

Dramatic global and societal changes are taking place which are affecting the fundamentals of the productivity movement. Unrestricted economic growth with emphasis on industrialization is disrupting national, regional and global ecology. Technological progress, particularly information technology, is changing the needs of the societies. Tough competition for advantages in the global market is widening the gap between the rich and poor, contrary to the intended equitable distribution of wealth. A shift from manufacturing to service orientation in the matured economies is slowing their growth.

Except in regions and countries where tangible results of the movement can be seen, it is becoming difficult for debt-laden governments to continue financially supporting NPOs. Thus they need to find a practical ground for compromising economic effectiveness and social concerns and develop market sensitivity by seeking input from youths, women, consumers and environmentalists, besides the traditional stakeholders (labour, management, government/academia), in policy and programme development. The NPOs' organizational structures also need to change from the traditional pyramid format to a flexible, networking, fishnet-type organization. These changes would present new opportunities for the NPOs to expand their services to national and global communities. They include in-depth and analytical studies of emerging social issues for policy recommendations - greening productivity, sustainable growth, administrative reform, comprehensive energy and raw material policies, the future of educational institutions, social security and youth problems, equitable distribution of wealth, and improvement of quality of working life, etc. The other new services are public sector measurement, global database development, catalytic roles in local, regional and global networking, standards and skill certification, industrial extension, benchmarking for educational institutions and more cohesive international cooperation.

Developing countries are accelerating investments in plant and equipment as well as upgrading of skill levels of their workforce to industrialize their economies. They rely heavily on the transfer of techniques that are the results of past investments of the advanced countries with NPOs acting as the catalysts in transferring the know-how.

Accelerating global competition, declining union density, reduced savings and slower productivity growth will restrain high wages in the advanced countries. On the other hand, an increase in manufacturing capacity and upgrading skills of the workforce of developing countries will rapidly raise wage rates and improve the standard of living.

Eventually the high growth economies will slow down as the return on quantitative input of capital and labour becomes marginal unless the growth is accompanied by the proportionate growth of qualitative and intellectual input supported by well-developed intellectual infrastructure. Emerging industrialized and developing countries will no longer be able to continue to rely heavily on the transfer of the past intellectual achievements (technologies) of the West. A slow-down of a process of technology transfer will gradually reduce the pace of progress as more developing economies mature. This will force the emerging economies to invest more in the educational infrastructure as the source for long-lasting productivity growth.

Accelerating competition for proficient and flexible operations requires some NPOs to contribute to technical education of the workforce as a stopgap measure before the adequate educational infrastructure can be developed. While the NPOs are highly effective catalytic agents in offering practical and quickly accommodating training services, we can not overlook the fact that the basic source of the sustained growth comes from the high quality educational systems that ferment new technologies and nurture innovativeness. As the knowledge and sophisticated skill levels of the population replace traditional quantitative factors for productivity growth, the only way for advanced countries to improve their productivity will be through constant upgrading of the quality of education and knowledge of people.

Because of these conditions, more NPOs in the advanced countries will start to look into the quality of education by creating databases and networking arrangements between schools for benchmarking and to assess and improve the quality of their performance. The NPOs' roles to act as vital catalysts in promoting productivity movement will expand.

Currently, there are three different models an NPO may consider for the future.

• •Growth model. This NPO has a broad national mandate for promoting national movement and facilitating the economic growth with a wide scope of activities that is prevalent in rapidly-growing East and South-east Asian countries. With governance from businesses and unions backed by relatively strong governmental participation, the NPO runs practical training programmes which are unavailable quickly from academic or private institutions. The programmes cover the generic issues of human resources development, strategic management, marketing and production management, and specific skill training involving information and mechatronic technology. The NPO acts as a clearinghouse of information, runs productivity campaigns, provides recognizable awards to outstanding organizations, and offers consulting, skill certification and accreditation programmes. In order to cause a quick shift from the agricultural societies to industrial ones, it gets involved in improving agricultural productivity, offering programmes from soil conservation and farming technologies to structuring efficient distribution systems for agricultural produce. Cohesive regional cooperation exists among the NPOs through bilateral and multilateral agreements for bringing about quick and effective transfers of technology. The prevalent socio-oriented capitalism prevailing in the area enables the NPO to pursue both long and short-term projects. The high growth economies will ensure public support. It is in an ideal position to learn from the experience of the advanced countries while still retaining the old values and culture.
• •Matured economy model. The second model will be that of France, Canada and the Scandinavian countries where the union density remains high or constant with well-built social welfare programmes and systems that ensure labour's participation in the political and economic decision-making processes. The centres can no longer survive on traditional jack-of-all-trades type programmes since there is strong competition from the private sector. What had been advocated as important approaches to productivity improvement are taken for granted as normal performance of business. Labour-management cooperation becomes a norm and a part of the routine social and business systems. Therefore, the NPOs should look for new areas of competitive advantage. In search of new directions and orientation, the centres shift their efforts to research on human resources, policy recommendations, and implementation of work life improvement programmes and other social productivity aspects. Their governance is strongly influenced by unions and other social groups and caters toward improving the quality of working life.

3.Segmented model. The third one is an American model. The goal of a centre is to assist business in improving its performance by offering various process-oriented tools - TQM (Total quality management), TPM (Total preventive maintenance), FMS (Flexible manufacturing system), JIT (Just-in-time manufacturing system), benchmarking, networking, database development, reengineering and others. The centre places heavy emphasis on specific research and programme development of highly segmented techniques for improving the productivity and quality performance of its clients. To survive, the centre needs to develop its own marketable expertise in tool development and implementation.

In all three models, the NPOs should endeavour to act as effective catalysts for improving productivity of the entire economy or units of the economy by creating an optimal mix of available resources as input under the most efficient systems. At the same time, they have to ensure that both management and labour recognize that there should be fair and equitable distribution of the gains of productivity improvement which leads to improvement in the quality of life. The importance of various resources may change. Contribution of traditional input factors of land, capital and labour fade as residual factors become more important.

There is a high probability that all NPOs will go through similar but not exact stages of growth though the movement cycle will differ depending upon economic maturity and cultural and social differences.

The following factors and conditions would lead to these similarities:

Productivity is a vital factor that enables all nations to make economic progress and improve the standard of living of people. It enables companies to become competitive and yield high return for input resources at micro levels and improves the quality of working life. The history of human progress is a record of their struggle for increasing productivity at the rate exceeding that of the population increase. It also determines the competitive advantage of a nation and hegemony of the world power.

The productivity movement is a national movement for attaining economic progress through a productivity increase with tripartite efforts of business/industry, unions (workers) and government/academics. Its goal is to improve the quality of life of people through a better working environment and equitable distribution of the fruits of productivity improvement among the stakeholders - workers (better wages), management/owner (higher returns) and the public (higher quality and lower prices). NPOs are established as important catalysts for promoting productivity movement with the tripartite structure and their basic functions are:

• •to develop and implement training programmes for the stakeholders of the productivity movement;
• •to widely disseminate up-to-date information on productivity and related topics through publications, training courses, conferences, seminars, workshops, electronic media;
• •to develop networks of executives, union leaders and productivity experts;
• •to develop libraries and databases for information dissemination;
• •to run public awareness campaigns on the importance of productivity;
• •to create cooperative labour-management relations and safe workplaces;
• •to assist businesses, particularly small businesses, in improving their performance; and
• •to train management consultants and to provide consulting service.

NPOs need to find an eclectic ground for integrating two contradictory ideologies - short-term individual preference-oriented capitalism and a long-term group-oriented productivity movement. In order to do that, they will need to embrace national leaders of these interest groups in their policymaking bodies. Flexible task force operations, instantaneous sharing of market information, empowered staff, and customer satisfaction orientation will become necessary for the survival of NPOs.

A changing global profile will confront the NPOs with difficulties - depleting funds, fading public commitment and support, and knowledge-based service sector orientation. New training programmes, courses, workshops, seminars and conferences, as well as consulting and advisory services, need to be developed to meet those challenges.

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