Act 2, SCENE 1: Restructuring R&D
The relative autonomy of Apricot R&D
Mitsubishi Electric’s lack of success in its own venture into personal computer design and manufacture, together with the continuing pressures on even its mainframe business, provided a basis for Apricot’s management to enjoy considerable autonomy and initiative. It meant a recognition at Mitsubishi headquarters that Apricot was operating in a different sector and commercial environment to that of the parent firm, with differently tailored expertise, particularly in regard to PC design and development. Thus British managers emphasised that Mitsubishi had largely left Apricot management to run the division in the way they regarded as appropriate, and this was particularly the case in relation to R&D.
Certainly British managers believed that Apricot’s very distinctiveness as a design centre, and indeed its attractiveness to Mitsubishi Electric, lay in its capacity for rapid and necessarily risky design and development decisions, which allowed effective competition in the PC market, and this was very different to the balance of quality and risk involved in building mainframes for the heavy engineering customers of the Mitsubishi Electric group. Interestingly, this assessment was powerfully echoed by a Japanese informant with experience in Mitsubishi’s own PC venture, who commented that
Mitsubishi Electric is a big enterprise, too big. What this industry is, is very quick moving, from the point of view of competitiveness and pricing ... Like Apricot, we need to move quickly - quickly means three months .... Mitsubishi Electric wanted to have such kind of capability. Of course, they had a lot of engineers, fundamentally, technically, they are strong, strong, but the decision making process in Japan is very hierarch[ical], even if an engineer had a good idea. ... Mitsubishi Electric enterprise is not so quick moving, Apricot, phew [very quick]. [3]
In turn these differences were seen to reflect historical differences in markets, but also to highlight the ways in which Mitsubishi had to learn from Apricot to match the dynamics of the PC sector:
... this industry is moving so quickly, and moving so quickly means we have to introduce or we have to buy something from vendor, software, hardware, we have to ... try with not matured things at that time, and we have to assume ... if I didn’t do it Compaq will do. .... But in Japan, particularly Mitsubishi Electric’s ... direct sales, that means you have a company, a big organisation, the IT section, you have some plan to invest in 100 branches to have ... But Apricot is into a different market, fundamentally, even if it looks like physically the same ... But now in Japan we can’t expect the sudden growth of the systems market business, but then overall as [a] company how [can we] increase our volume? That means indirect sales, that means a more tough battlefield. ... In that case products should be good, but delivery times, final adjustment doesn’t matter, because we can have competitiveness [3]
Thus the distinctiveness of the role assigned to Apricot underpinned the considerable autonomy given to the British subsidiary compared with the branch plants of many Japanese multi-nationals. This meant that, while a small number of highly experienced Japanese engineers were seconded to Apricot, Japanese managers played a relatively limited role, and the relationship was largely mediated through the development, modification and ratification of business plans:
Mitsubishi Electric acquired us and allows us to run semi-autonomously as a business so we forecast our sales; we forecast our profits and loss. We forecast our own investments and have to justify our own investments and at the end of the year answer for our performance against what we said we would do. Each year we have a very formal and strong business planning process ... We are measured against them, so if you like there is a fair amount of latitude in setting up what the business plan and what the business strategy should be; having set it and stuck your name on the bottom of it, then as a leader of a business unit, as Peter is, he is expected to deliver on that. So it won’t just be that Mitsubishi Electric say ‘oh we are ready for R&D. You should invest twenty per cent per year additionally in R&D’. [1]
The Distinctive Approaches of Apricot and Mitsubishi Engineers
When design and development engineers from Mitsubishi Japan and Apricot did work together this highlighted major differences in their experience and priorities which were grounded in distinctive patterns of professional formation and different configurations of design, manufacturing and marketing both within their enterprises and the wider sectors of which they were a part. On the relatively rare occasions when they were involved in joint projects, these differences became quite evident, as a British informant emphasised:
The people here aren’t inclined to sit down and write specs, they want to get on and do things. There’s been a management laxity there which, OK, we’ve lived with it and that’s the way it is. But also the Japanese have this traditional, long winded, quality approach to things, and the PC market just won’t hold that. You can’t have three month schedules for a disc drive, you’ve got to do it in a month. .... they are very well established long term company that have real, very clear views on what they think the customer wants and the market wants, and there is quite a lot of inertia in that system. The QC department in Mitsubishi Electric is very much the ruler of the roost in relation to changes of specs and what you can get away with, what you can’t get away with, whatever, and it’s just massive inertia to change that culture, that perception. I think that the stuff that they do, though, on the other hand is very good, it benefits the customer ultimately because the products are much more stable, much more mature, but you lose one, two months on the window, other people are in there, products just aren’t as competitive when they are released as they ought to be. [4]
Indeed numerous informants contrasted the systematic but cautious approach of the Japanese engineers with their heavy emphasis on engineering fool-proof systems, and the adventurous but unsystematic approach of the British engineers who emphasised speedy incorporation of current innovations.
However, as we have argued in an earlier Labour Process Conference paper (Elger and Smith 1997) such differences were not merely embedded in broad differences in the social organisation of manufacturing in Japanese and British enterprises or the related processes of professional formation and careers of engineers in the two countries. Rather they were reinforced by more specific contrasts in the enterprise and sector logics of Mitsubishi Electric and Apricot. While the former was a massive engineering conglomerate used to heavy engineering contracts with large corporate and state customers, the latter was a small ‘entrepreneurial’ company producing for a volatile and rapidly changing market. Such differences were highlighted when, as a result of the squeeze on their Japanese computer business, Japanese engineers with mainframe experience were offered for involvement in joint projects with Apricot. The context here was precisely the vulnerable position of Mitsubishi in the computer sector, including the mainframe market:
Mitsubishi Electric are downsizing as well, and they have lots and lots of departments where they are looking for work for those groups, whether it is disc drive evaluation or hardware design, whatever. And so they keep coming to us and saying “look, Apricot, you are short of resource, we’ve got the resource, let us do some for you.” [4]
This meant that the Mitsubishi Electric mainframe group secured an important role as Japanese partners in one of the few joint design projects which were undertaken at Apricot, and brought the specific preoccupations of mainframe engineering with them. However, Apricot managers clearly recognised the specificity of the clash of skills and priorities during the resulting efforts at collaboration. As the same informant commented ‘it [joint project work] would potentially be a lot different if we dealt with the PC sections rather than the main frame sections’. Indeed, a crucial feature of the practical implementation of this joint project, as well as broader liaison between Apricot and its parent was the central mediating role of a leading Japanese engineering manager whose background was in Mitsubishi’s Japanese PC business.
Matrix Management and the Pursuit of System Integration in R&D
Such collaboration in R&D projects between Apricot and Mitsubishi engineers was rather rare, and Apricot’s R&D activities remained very much an arena of British management and technical skills. Nevertheless, the semi-autonomy which Mitsubishi granted to Apricot and its orientation to learning from Apricot did not simply translate into continuity in the organisation of R&D at the British plant. In the mid 1990s R&D moved to a new site which was much closer to corporate headquarters and this move was accompanied by the recruitment of additional staff. Even before the move there had been a series of changes in the configuration of the specialist groupings - software engineers, hardware engineers, mechanical engineers, test engineers - in relation to specific design and development projects, and these were carried further on the new site.
This reconfiguration involved different variants on ‘matrix management’ and culminated in a deliberately more project-focused form of organisation which made project managers more pivotal. This reflected increasing senior management attention to the integration of design, development and manufacturing, with the objective of subordinating these processes more strongly to the cost, delivery and performance features which were required by the rapidly evolving PC market.
The increasing emphasis on the role of project manager was designed to alter the relationship between the work on discrete design elements of specific products and their integration and testing, to reduce the extent to which design limitations were only picked up at the end of the verification process or even after customer complaints. In the earlier structure functional groupings were dominant and the existing project managers had a rather limited role:
the nature of R&D in Apricot, it has been very much functional in the sense that you had each of these functional groups ... that all worked independently of the product. You had a project management thread which has been pretty weak ... if you’ve talked to the project managers they may have commented that they were impotent to a greater or lesser extent, because they had no real direct reports, they had no power to influence the way that product was developed or projects were moved, and they really just served this primary policing role, to blow the whistle to senior managers, who would then go and assert their wills on the staff. So it was a fairly circular, tortuous route for getting decisions made. Quite effective for all of that, I mean we have delivered lots and lots of products, but the successes we’ve had have been pretty much technology focused successes, where integration has been pretty minimal. [4]
As this implies, the established tradition at Apricot, at the time of the take-over and beyond, gave particular weight to technical innovations developed by specialist engineers. The reorganisation challenged this pattern by pushing system architecture and integration responsibilities back up the project design timetable, rather than leaving these issues to be picked up through testing procedures in a way which created a bottle-neck and scapegoats for delays at the end of the design process. Thus an R&D manager described his enhanced role in the following terms:
It just gives each project group a little bit more control over their own destiny. ... now the persuasive skills available to me are a little bit more managerial as we both work for the same guy; me saying to him ‘I think we need to do this and you need to do that’ there is a little bit more weight behind it. So it does change subtly the style of management, but really that is the only change. .... For each of the individual projects you are the person who is responsible for that project so it is a matter of basically taking that R&D design, managing the introduction of that into production; managing the marketing and support organisations; ensuring that they understand what the product is and making sure that they are pushing it forward through the customer. [5]
Top management’s rationale for these organisational changes at R&D was the view that, while the lead time between new designs and delivery to customers continued to fall dramatically, the cost and serviceability of the product rather than its sheer technical innovativeness were becoming increasingly important. This was conceptualised in terms of both a maturation of the market and the growing importance of individual/domestic rather than business customers.
In this regard top management at Apricot had become increasingly involved in trawling for fresh organisational ideas regarding the handling of contradictory demands on the design and manufacturing process, especially in the R&D area in relation to cross-pressures between innovativeness, quality, robustness, price and delivery. By the mid 1990s some of these senior managers had become enthusiastic participants in the DTI sponsored ‘Time to Market Association’, through which they hoped to tap into and exchange experiences across a broad range of manufacturing, though their enthusiasm was not always matched by the assessments of those more junior managers who were expected to draw specific lessons from such an environment. Thus one experienced R&D manager remarked that: