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Management the difference for foreign firms in Britain

By Rushworth M. KidderStaff correspondent of The Christian Science Monitor / November 14, 1980

Cardiff, wales

Tadashi Nagata gestures across the clean, modern Panasonic factory toward a group of Welsh employees doing finali inspections on color television sets. Behind them runs a long conveyor -- for rejects.

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"In Japan we need not such a conveyor," the assistant general manager says simply. There, rejects are so few -- perhaps 0.1 percent -- that the inspectors merely set them aside for later pickup.

Part of the problem in their three-year-old South Wales operation: Components or poorer quality than are available in Japan. He says the "death rate" on locally made integrated circuits sometimes reaches 30 to 40 percent.

Another difficulty: a work force unused to such exacting work, ingrained with militant unionism, and riven with absenteeism.

There are the symptoms of the infamous "British disease," said to be marked by low productivity, high costs, and insufferable industrial relations. Again and again, these factors are blamed for the decline of British industry.

Yet Panasonic, and scores of other Japanese, continental, and American companies, have set up very successful operations in Wales -- and, in fact, in many other regions around Britain. Panasonic, a product name of Matsushita Electric, employs 400 people to make 60,000 television sets a year for the British market, and is opening another factory here next year.

Why, when so many companies here are going to the wall, are such operations making Britain work?

This correspondent has asked that question of dozens of industrialists, trade unionists, and financial and management consultants in England, Wales, Scotland, and Northern Ireland over the past 18 months.

The one answer that keeps coming up: sound management. With it comes a corollary: Britain's malaise is in large part the fault of bad management.

To be sure, a variety of other causes are also blamed for Britain's industrial problems:

* The legacy of the Industrial Revolution which leaves the nation littered with antique factories and emcumbered with outmoded processes.

* A combination of financial factors -- high taxes, a strong pound, high interest rates, and a conservative banking system with a "gearing" ration than often requires a greater proportion of initial investment than in other countries.

* A work force that is entangled in a maze of interunion rivalries, is steadily demanding more pay for less work, and (many feel) would really rather not work at all.

A large share of the blame, many agree, does fall on the unions. "But they're not the underlying cause," says a London-based management consultant. The real problem appears to be a management that would really rather not manage.

In a country where managers are often not allowed on the shop floor without a shop steward's consent, it is easy to blame unions for the "we-they" split between workers and executives.

But the split is enforced from the top as well. One English manager recalls how, when he went to work for Boeing in Seattle 20 years ago, he was astonished to find a famous test pilot queueing up for coffee in the same line with a floor sweeper -- and talking with him.

Here the tradition is still one of separate dining rooms and canteens for different grades of workers -- and of corresponding attitudes about separation on the job.

Some trace the problems to a management tradition left over from the great days of the Commonwealth. Then, captive markets required few selling techniques. Cheaply harvested natural resources poured into the country, and profits apparently piled up no matter what the manager did.