Automation of America's Offices, 1985-2000

December 1985

NTIS order #PB86-185055
Recommended Citation:

U.S. Congress, Office of Technology Assessment, Automation of America Offices

(Washington, DC: U.S. Government Printing Office, OTA-CIT-287, December 1985).

Library of Congress Catalog Card Number 85-600623

For sale by the Superintendent of Documents

U.S. Government Printing Office, Washington, DC 20402
.

Foreword

Automation of America Offices, 1985-2000, assesses the consequences of

the continuing and rapid introduction of information and telecommunications technologies in offices: the workplace of about 45 million Americans. The use of computers and new communication systems in offices is bringing about fundamental

changes in employment patterns, the skills needed for white-collar occupations,

and the quality of worklife and the office environment. These changes will affect

all industry sectors, since office work is a growing component of every industry

as well as all public sector organizations.

The study, requested by the Senate Committee on Labor and Human Resources and the House Committee on Education and Labor, will also be of interest

to many other congressional committees because it addresses a wide range of subjects of concern to industry, government, and educational institutions, and to employers, employees, and their organizations.

OTA wishes to thank the many people and organizations that contributed

to this assessment through advisory panels, workshops, interviews, and other

means of sharing their information and experience with us. The final responsibility for the study, however, rests with OTA.

Director

. . ///
Automation of America’s Offices Advisory Panel

Charles E. Branscomb

Vice President, Telecommunications

Communication Products Division

IBM Corp.

Dennis Chamot

Associate Director

Department for Professional Employees

AFL-CIO

Robert L. Chartrand

Senior Specialist

Congressional Research Service

Library of Congress

Marvin Dainoff

Professor of Psychology

Miami University

Rosalyn L. Feldberg

Visiting Research Scholar

Henry A. Murray Research Center

Radcliffe College

Thomas G, Hermann

Chairman, Law Office Technology Committee

American Bar Association

Squire, Sanders, and Dempsey

Robert C. Hughes

Vice President and Group Manager

Business and Office Systems Marketing

Digital Equipment Corp.

Barbara B. Hutchinson

Director, Women’s Division

The American Federation of Government

Employees

Henry C. Lucas

Chairman

Department of Computer Applications and

Information Systems

Graduate School of Business

New York University

Lois Martin

Processing Services Director

FBS Information Services

Karen Nussbaum

Executive Director

Nine-to-Five: National Association

of Working Women

Robert M. Peabody

Assistant Vice President and Director of Office

Automation

Mutual of Omaha

Randy J. Pile, Jr.

Department Head

AT&T Information Services

Robert Ellis Smith

Editor and Owner

Privacy Journal

Vernell K. Munson Sutherland

President

Knowledge Systems

Ralph E. Upton, Jr.

Director

St. Augustine Technical Center

iv
Automation of America’s Offices: OTA

John Andelin, Assistant

Assessment Staff

Director, OTA

Science, Information, and Natural Resources Division

Fred W. Weingarten, Program Manager

Communication and Information Technologies Program

Project Staff

Vary T. Coates, Project Director

Benjamin C. Amick III, Analyst

Marjory S, Blumenthal, Analyst

Janet DeMott, Detailee-DHHS

M. Karen Gamble, Analyst

Mary Ann Madison, Research Analyst

Zalman Shaven, Senior Analyst

Administrative Staff

Liz Emanuel Shirley Gayheart Patricia Keville

Renee Lloyd Audrey Newman

Contractors and Consultants

Eileen Appelbaum

Christopher P. Astriab

Alan Porter

Georgia Tech Research Corp.

Larry Hirschorn

University of Pennsylvania

Joan Greenbaum

Institute for Labor Education and Research, Inc.

Larry McClure

Northwest Regional Educational Laboratory

William Neufeld

Jon Turner

New York University

Anne Posthuma

University of Sussex, United Kingdom

Tora Bikson

Rand Corp.

Kathleen Christensen

Research Foundation of the City University of New York

Leslie Schneider

Harvard University, Kennedy School of Government

Marlene Thorn

IMT Associates

Alan Westin

Educational Fund for Individual Rights
Office Automation in Federal Agencies

Lewis B. Arnold

Systems Policy Staff, Office of Information

Technology

Justice Management Division

U.S. Department of Justice

K, C. Bacher

HQ/USAF/DAX

The Pentagon

Ross Bainbridge

Information Resources

U.S. General Accounting Office

Roger Bullock

Director, Information Resources

Federal Maritime Commission

Eliot Christian

Office of the Associate Administrator for

Information Resources Management

Veterans Administration

‘Claire Dolan

Human Resource Management Analyst

Internal Revenue Service

PM/HR/HRT

Barry L. Freedman

Manager, OMB Systems

Automated Systems Division, Office of

Administration

Executive Office of the President

Esther Georgatos

Office of Data Management and Telecommunications

Veterans Administration

Michael J. Gilbride

Chief of the Office Automation Division

(office of the Managing Director

Federal Communications Commission

Carolyn Hahn

U.S. Department of Transportation

Terrell Hicks

Director of Management Systems

Tennessee Valley Authority

Charles Hudnall

Information Processing Staff, Office of the

Assistant Director for Administration

National Science Foundation

David Johnson

Office of Information Resources Management

Agency for International Development

H. Kasprzak

Department of the Army

HqDA, DAIM-PSP

Tom Kurihara

U.S. Department of Transportation

Christos Kyriazi

Management Information Services

U.S. Department of Commerce

Alan Kotok

Chief of Planning and Development Staff

U.S. Information Agency

Coyeen Lawton

Office of the Assistant Secretary for Administration

and Management

U.S. Department of Labor

Barry Leonard

Acting Director, Foreign Affairs Data Processing

Center

U.S. Department of State

Howard E. Lewis

Director of Information Systems

U.S. Department of Energy

Steven Malphrus

Federal Reserve Board

Hal Niebel

Information Systems Office

U.S. Department of State

Charles B. Newton

Office of Information Resources Management

Federal Emergency Management Agency

Ern Reynolds

Special Assistant to the Deputy

Undersecretary for Intergovernmental Affairs, Office

of the Secretary

U.S. Department of Health and Human Services

Jack J. Sharkey

Director, Office of Data Management and

Telecommunications

Veterans Administration

John Strain

Office of the Assistant Secretary, Program and

Resources Management

U.S. Department of the Treasury

Wally Velander

Office of the Associate Administrator for

Management

National Aeronautics and Space Administration

Lydelle Wertheimer

Human Resources Technology Group

Internal Revenue Service

vi
Office Automation Quality of Worklife Workshop

Nicholas Ashford

Director, Center for Policy Alternatives

Massachusetts Institute of Technology

Dean Baker

Associate Professor, UCLA School of Public Health

Center for Health Sciences

Tora Bikson

Senior Scientist

Rand Corp.

David Celentano

Department of Behavioral Science and Health

Education

School of Hygiene and Public Health

The Johns Hopkins University

Michael Delarco

Program Manager, Air, Toxics, and Radiation

Monitoring Research Agency

Ray Donnelly

Occupational Safety and Health Administration

U.S. Department of Labor

Charles E. Grantham

Human-Technology Specialist, Local/Office Systems

Honeywell, Inc.

Judy Gregory

Research Associate, Department for Professional

Employees

AFL-C1O

Mary Haan

University of California, Berkeley

Bonnie Johnson

Corporate Strategic Staff

Intel

Susan Klitzman

Division of Environmental Sciences, School of Public

Health

Columbia University

Philip Kraft

Center for Survey Research

University of Massachusetts

Andrea LaCroix

Post-Doctoral Fellow, Department of Epidemiology

School of Hygiene and Public Health

The Johns HQpkins University

Charlotte LeGates

Director of Communications

Computer and Business Equipment Manufacturers

Association

Mary Murphree

Regional Administrator, New York Women’s Bureau

U.S. Department of Labor

Diana Roose

Research Director

Nine-to-Five

Jan Rowland

Epidemiologic Consultant

Art Rubin

Research Psychologist, Center for Building

Technology

National Bureau of Standards

Steven Sauter

Section Chief, DHHS PHS CDC NIOSH

Applied Psychology and Ergonomics Branch

Lawrence Schleifer

Stress & Motivation Research Section, DHHS PHS

CDC NIOSH

Applied Psychology and Ergonomics Branch

Tapas Sen

Division Manager, Human Resources

AT&T

Richard P. Shore

Bureau of Labor Management Relations and

Cooperative Programs

U.S. Department of Labor

Michael Smith

Associate Professor, Department of Industrial

Engineering

University of Wisconsin

Jeanne Stellman

Associate Professor, School of Public Health

Columbia University

Jon Turner

Department of Computer Applications and

Information Systems

Graduate School of Business

New York University

Hal Vreeland

Center for Preventive Research

National Institute of Mental Health

vii
Reviewers and Other Contributors

Eileen Appelbaum

Temple University

Walt Baker

IBM Corp.

Tora Bikson

Rand Corp.

Robert Bednarzik

U.S. Department of Labor

Sharon Canter

Manpower Temporary Services

Kathleen Christensen

City University of New York

Steve Coil

Inc. Magazine

Keith Cooley

MSA

Gerald Davis

Harbinger Group, Inc.

Jim Day

Council of Vocational Educators

William J. Dennis, Jr,

National Federation of Independent Businesses

Steven Deutsch

University of Oregon

Claire Dolan

Internal Revenue Service

Colin Drury

SUNY, Buffalo

Claudia Goldin

University of Pennsylvania

Joan Greenbaum

LaGuardia College

Bill Grenawalt

Optical Coating Laboratory, Inc.

Heidi Hartmann

National Research Council

Ron Hertzfeld

National Council on Compensation Insurance

Margaret Hilton

Communications Workers of America

Timothy L. Hunt

W. E. Upjohn Institute for Employment Research

Jim Jackson

Prime Computer

Laura Johnson

Social Planning

Council of Metro Toronto

Judith Karnm

Bentley College

Kenneth Kraemer

University of Southern California, Irvine

Charlotte LeGates

Computer and Business Equipment Manufacturers

Association

Dave LeGrande

Communications Workers of America

Dennis Little

Merit Systems Protection Board

Andrea Long

University of Michigan

Donald Marchand

University of South Carolina

Robert Mason

Metrics Research Corp.

James McInnerney

IBM Corp.

Charles McMillion

House Committee on Small Business

U.S. House of Representatives

Jack Mileski

Digital Equipment Corp.

Mark Mueller

AT&T Information Systems

Mary Murphree

U.S. Department of Labor

Keith Nelms

Georgia Institute of Technology

William Neufeld

Consultant

Gregory Nicklas

Communications Workers of America

Norman Nissenoff

Thierry J. Noyelle

Columbia University

Margrethe Olson

New York University

Olov Ostberg

Swedish Telecommunications Administration

Bruce Phillips

Bonnie Johnson Small Business Administration

Intel

.,. VIII
Joanne Pratt

Joanne Pratt Associates

David Roessner

Georgia Institute of Technology

Carol Romero

National Commission for Employment Policy

Diana Roose

Nine-to-Five: National Association of Working

Women

Fred Rossini

Georgia Institute of Technology

Mike Roush

National Federation of Independent Businesses

Arthur Rubin

National Bureau of Standards

Peter Sassone

Georgia Institute of Technology

Steven Sauter

Robert A. Taft Laboratories

William Scheirer

Small Business Administration

Perry Schwartz

Georgia Institute of Technology

Tapas Sen

AT&T

Phil Shelhaas

IBM Corp.

Richard P. Shore

U.S. Department of Labor

OTA Reviewers

Michael Smith

University of Wisconsin

Wanda Smith

Hewlett-Packard

Roberta Spalter-Roth

George Washington University

Ronnie Straw

Communication Workers of America

Sharon Szymanski

The Labor Institute

Jim Taylor

Sociotechnicd Systems

Thomas Taylor

Mountain Bell

Maureen Tierny

AT&T

Jon Turner

New York University

Hal Vreeland

National Institute of Mental Health

Steve Weyl

Syntelligence

Frank White

Human Systems Incorp.

Robert Yellowlees

American Telesystems Corp.

John Alic, Senior Analyst Eugene Frankel, Senior Analyst Gretchen Kolsrud, Program Manager

Audrey Buyrn, Program Manager Linda Garcia, Analyst Karl Kronebusch, Analyst

Wendell Fletcher, Senior Analyst Julie Gorte, Analyst Linda Roberts, Senior Analyst
Contents

Chapter Page

1.

2.

3.

4.

5.

6.

‘i’.

8.

9.

10.

11.

12.

The Outlook for Office Automation: 1985-2000 . . . . . . . . . . . . . . . . . . . . . . . . 3

Productivity and Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Training and Education for Office Automation . . . . . . . . . . . . . . . . . . . . . , 75

The Changing Nature of Office Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Office Automation and the Quality of Worklife . . . . . . . . . . . . . . . . . . . . . . ..125

Confidentiality and Security Issues With Office Automation. . ...........171

Home-Based Automated Office Work . . . . . . . . . . . . . ...................189

Off-Shore Office Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ...211

The Automation of Federal Government Offices . . . . . . . . . . . . . . . . . . . ,233

Office Automation in State and Local Governments. . ..................265

Office Automation in Small Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .283

Office Automation and Differentially Affected Groups:

Women and Minorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...297

Appendix A—The Technology of Office Automation. . . . . . . . . . . . . . . . .307

Appendix B–OTA Case Studies ..., . . . . . . . . . . . . . . . . ..., . . . . . . . ....330
,

Chapter 1

The Outlook for Office

Automation Technology, 1985-2000
Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Organization of Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Looking to the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

What is Office Automation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Understanding the Impacts of Office Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Technology of Office Automation–Present and Future . . . . . . . . . . . . . . . . . . . . . . .

Distributed Information-Handling and Networking . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Proliferating Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 . . . . . . . . . . . . . .

The Capture of Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Communication Between Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

How Rapidly Will Office Automation Occur? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Possible Consequences of Office Automation, 1985-2000 . . . . . . . . . . . . . . . . . . . . . .

Economic and Employment Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Training and Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Organizations and Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Office Workers and Their Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Data Security and Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Home-Based Office Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Off-Shore Performance of Office Work.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Federal Government Office Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State and Local Government Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Small Business and Office Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Working Women and Minorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Policy Issues for Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Further Discussion: Policy Issues and Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Conversion to Part-Time, Temporary, and Contractor Status . . . . . . . . . . . . . . . . . . . . .

Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. . . $ . . . . . . . . . . . . . . .

Labor/Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Health and Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Data Security and Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Home-Based Clerical Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Off-Shore Office Work By or For U.S. Firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Federal Procurement Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Federal Personnel Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State and Local Governments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Small Businesses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Women and Minorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ... ... ... ...~. . . . . .

Figures

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Figure No. Page

l-1. Changing Structure of the Work Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

l-2. History of Technology Used in the Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

l-3. User Institution Model of Technological Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Chapter

The Outlook for Office

Automation Technology, 1985-2000

INTRODUCTION

America has become an information society.

Our economy is driven as surely by the incessant demand for information as it is by the

continuing necessity of converting raw materials into finished products.

The majority of American workers are now

white-collar workers, and about 45 percent of

all American workers work in offices. (See figure l-l. ) Office work is rapidly being “automated, ” or computerized. What does this mean

for the productivity of office workers and the

number of office jobs that will be available in

the future? What skills will white-collar workers need? What job ladders will be open to

them? Will the quality of their working life

be better, or not as good? What new opportunities and new problems can we expect, as a

result of sweeping technological change in

America’s offices?

These were some of the questions that led

the Senate Committee on Labor and Human

Resources and the House Committee on Education and Labor to ask the Office of Technology Assessment (OTA) to conduct a study of

the growing use of microelectronic information

and communication technologies in office work.

With less than 3 percent of the labor force

now employed in agriculture and the proportion of blue-collar workers steadily declining,

the automation of white-collar work inevitably raises concerns about the number of jobs

that will be available for the still growing labor force in the long-range future. This report

deals with those white-collar workers who primarily work in offices, although information

technology is also affecting others, for example, department store clerks and supermarket

cashiers.

3
4 Automation of America’s Offices

But American industry is now participating in a global economy. Competition for both

world markets and domestic markets is a powerful incentive for seeking higher productivity.

Microelectronic technology has enormous potential for increasing productivity in whitecollar work, which is a large and growing part

of every industry sector.

The office is the primary workplace for many

industries, such as banking, insurance, and real

estate, but the office is also a vital element

of every industry from manufacturing to farming. An OTA assessment of factory automation, for example, found that”. . . the salaried

or white-collar work force will constitute a

larger proportion of manufacturing employment “1 in the future. Increased productivity

in office work thus would contribute to productivity and growth in all sectors of the

economy.

The demand for information will continue

to grow. With computerization, the unit cost

of collecting, processing, distributing, and

using information will decline. More kinds of

information will be gathered and used for new

purposes, and many new information services

and products will be created. Demand for information and increased productivity are two

major factors in the employment equation; the

consequences of office automation for office

‘U.S. Congress, Office of Technology Assessment, Computerized Manufacturing Automation: Employment, Education,

and the Workplace, OTA-C IT-235 (Washington, DC: U.S. Government Printing Office, April 1984).

employment will depend in large part on the

interactions between them.

Just as the successive waves of mechanization of farm and factory work have changed

U.S. society and economy, so will the automation of white-collar work. Social and economic

transitions in the past have raised policy issues that had to be addressed, and in many

cases are still being addressed, by Congress.

The new wave of automation will also create

both opportunities and problems that demand

the attention of Congress.

Technological change is also related to questions already on our political agenda, such as

comparable worth and pay equity, international trade, and health and safety in the workplace. The effects will eventually be felt by

everyone—producers and consumers; managers, professionals, and clerical workers; large

and small organizations; the private sector and

the public sector. The role that information

and communications technologies will play in

offices in the future, and the opportunities and

problems they present, thus concern all Americans and all of their representatives in Congress.

This report puts before its readers a broad

range of likely consequences of office automation, and calls attention to large areas of uncertainty. It points to some public policy issues that are emerging or may arise. Many

other questions must and can be resolved only

by the informed choices and cooperative efforts of individuals and organizations.

ORGANIZATION OF REPORT

After a brief look at the context of office ceptual framework or model that guided the

automation from the perspective of history, assessment. It then summarizes the findings

this chapter highlights some expectations of the assessment, identifying policy issues

about the technologies and their development that are likely to concern Congress over the

over the next 15 years. It introduces a con- next decade.
Ch. l—The Outlook for Office Automation Technology, 1985-2000 ● 5

Many of these issues are just coming to public attention and have not yet been widely discussed; specific proposals for dealing with

them have not been put forward. A few of the

issues, however, are already before Congress

or are apt to be the subject of congressional

consideration in the near future.

Chapters 2 through 6 discuss the possible

effects of office automation in more detail.

They deal with potential effects on employment levels; the kind of training and education needed for office work; changes in work

content, jobs, occupations, and organizations;

the quality of work life, the office environment

and labor management relations; and the security and confidentiality of information.

Chapters 7 and 8 consider two alternatives

to conventional offices, made feasible and economically attractive by office automation. The

first of these is home-based work, especially

the use of the worker’s home as the primary

or sole site for clerical work. The second is offshore performance of data-entry operations,

in which work is sent off to be done in countries with lower paid workers.

Chapters 9 and 10 look at office automation

in the public sector— Federal agencies and State

and local governments.

Chapter 11 is a brief survey of the limited

information currently known about office automation and small businesses, an important sector of the economy that is just beginning to

automate its offices.

Chapter 12 considers the implications of

office automation for two groups that are likely

to be particularly strongly affected: working

women and minority white-collar workers.

Appendix A describes office automation technology as it is now and as it is likely to develop between 1985 and 2000.

Appendix B summarizes case studies of the

automation of several offices to provide some

examples of the changes that occur when

offices are automated. In particular these examples illustrate the variety of offices affected

and the difficult transition stage that occurs

as offices automate their work.

The summary discussion in this first chapter is keyed at appropriate points to later chapters, where the reader will find more lengthy

discussions.

LOOKING TO THE FUTURE

During the present transitional stage of office automation, there are many problems that

are real but do not require congressional action. Some of the fears that people have in anticipating technological change later prove

groundless. Many problems are resolved by

ingenuity, trial and error, and negotiation between groups that have competing interests

but a shared motivation to benefit from technology. Structural changes in the economy,

on the other hand, can create lasting inequities and conflicts. They can also open up new

opportunities to resolve old issues and realize

new social benefits.

OTA chose a 15-year perspective because

Congress will be concerned less with ephemeral

effects and transitional problems than with

long-range structural changes. These structural changes are likely to become clearly visible only after office automation has been

widely adopted and organizations learn to use

its full capabilities.

Information and communication technology

is itself rapidly evolving and expanding its capabilities. The range of technological choices

that an organization has for accomplishing any

given information-related objective is wide.

The number of manufacturers and vendors of

office automation equipment is large, and the

competition between them is strong. This suggests that the technology of office automation

will be strongly influenced over the next dec-
6 ● Automation of America’s Offices —

— . .

Photo credit L/brary of Congress Photo credit. Michae/ J SnJIfh

The evolution of the office environment is shown in these two photos from 1897 and 1980.

Perhaps in the future there will

ade or more, by the needs and wishes of the

users.

The as-yet-undetermined characteristics of

future office automation technology will strongly

influence the social consequences of the automation of white-collar work. But changes in

the U.S. economy and society are not, or need

not be, entirely technologically determined.

They depend in part on choices and decisions

made by individuals and organizations, and

they also can be guided by public policy.

The conclusions of this assessment are there

fore conditioned by unavoidable uncertainties

about the choices that users will make, about

economic growth, and about future public policies. Major directions in the evolution of the

technology can be discerned, but when these

technical improvements will occur is more uncertain. It is most prudent to assume that some

technical breakthroughs may come sooner than

be a truly paperless office.

now projected, rather than later, since this has

happened repeatedly in the last few years.

Also uncertain is the speed with which offices will adopt new technologies. This will be

influenced by general economic conditions, but

in the last decade office automation has been

less sensitive to these factors than many expected. Because it can be accomplished incrementally and with relatively small investments,

adoption of office automation may be much

wider, more general, and more rapid than has

often been the case with new technologies. This

makes transitional problems more visible and

structural problems more important-e. g., displaced workers will have fewer options for adjustment if their occupations are affected in

most regions and most industries in a relatively brief period. It also indicates that decisionmakers should now begin to attentively

monitor the changes that are occurring, in order to be prepared to deal with problems that

may arise.

WHAT IS OFFICE AUTOMATION?

Almost any place where information handling is the main activity is called an office,

whether it is one person at a desk or a complex hierarchy of executives, professionals, and

clerical workers. For the purposes of this report, the office is wherever “office work” is

done, and “office work” is the processing and

use of information for the purpose of track-
Ch. l—The Outlook for Office Automation Technology, 1985-2000 7

ing, monitoring, recording, directing, and supporting complex human activities.’ One of the

striking consequences of information and communication technologies is that together they

make much “office work” independent of the

place where it has usually been performed; that

is, they allow it to be done in the home, in airplanes and trains, and in other countries.

For the purposes of this report, the term “office automation’ is used broadly to mean the

application of microelectronic information

technology and communication technology to

office work. It includes large “mainframe”

computers, smaller minicomputers, personal

computers or microcomputers, stand-alone

word processors, and the many diverse com-

‘By extension, people also speak of places where other

professional work is done as an office–e. g., a dentist’s office.

In this report we attempt no rigorous definition of what is or

is not office work, but use a commonsense approach. We have

generally excluded from consideration such peripheral or specialized places of white-collar work as the dentist’s office, the

scientific laboratory, and the draftsman’s office.

munication devices and systems that can link

them together.

The first offices may have been in the homes

of Babylonian merchants or Phoenician traders,

or perhaps they were construction project

offices in the palaces of Egyptian Pharaohs.

Almost certainly something like an office came

into existence as soon as records could be kept

of the exchange of goods, on clay tablets,

chisled stones, papyrus, and quipus.3 Office

work is inseparable from commerce because

it is concerned with gathering, keeping, and

using information about human activities, and

particularly those activities that have to do

with the production and exchange of goods

and services.

If office work began in the homes of merchants and traders, it has nevertheless for most

of history been done in central locations close

to the production of goods and services.4 The

office plays the same role for an organization

that the brain plays in a living organism. It

receives information flowing in from all parts

of the organization (or organism) and from the

external environment, processes that information and sends back responses, instructions,

and commands through an extended nervous

system—established channels of communication.

At the dawn of written history, clerks and

scribes were the first office workers. Information handling work has always carried with

it a degree of respect or status (even when

many scribes were slaves) because it requires

skills and education that, through most of history, few people had.

The tools used in this work were for thousands of years very simple, basically writing

implements and something to write on, and

some means of storing the records written or

received. As the scale of human activities increased, the information about them became

more voluminous and more diversified. The

tools became slightly more sophisticated (a

3Quipus were knotted cords used by the Peruvian Indians

(who did not develop writing) to keep records.

‘One of the effects of new communication and information

technology may be to allow office work to again be done in

homes; see ch. 7, “Home-Based Automated Office Work. ”
bookkeeping ledger rather than a stone tablet

or roll of papyrus) and office workers became

more numerous and more specialized. When

clocks were invented, the work became more

subject to measurement, pacing, and management control. When electric communications

were invented, it became less sensitive to proximity but more sensitive to time.5 But not until the advent of the telephone, the typewriter,

and the adding machine, near the end of the

19th century, was a significant part of the work

automated. (See figure 1-2.)

The mechanical stage of office automation

was followed by the electromechanical stage,

with electric typewriters and calculating machines. The present age of computers began

a little more than 15 years ago, and this assessment looks forward for another 15 years—

together, only about one generation in human

terms, and less than the working lifetime of

a white-collar worker.

Through the mechanical and electromechanical eras of office automation, whitecollar work

continued to be labor intensive. Capital investment in office work has always been low compared to capitalization in other economic sectors such as manufacturing and agriculture.

‘Note that until the 1840s, and the invention of the telegraph, it might take days or weeks to communicate with another

office in a different part of the country. Until the transatlantic

cable of 1866, it took at least 4 weeks for a merchant to send

a message to his field agent in Europe and get a response, and

it might take months to exchange messages with the ship carrying his goods, since he could not know when and where it

would make port.

About 85 percent of office operating costs are

labor costs.

Now capitalization is occurring rapidly, in the

form of information and communication technologies that are transforming the nature of

white-collar work.

Many other forces have affected office work

in recent decades. The scale, geographical

scope, and concentration of economic enterprise, and therefore of offices, has increased.

Some sectors of industry and commerce have

expanded and some have shrunk in importance. The growing pervasiveness of science

and technology as components of the economy

has both increased the demand for data and

changed the nature of the information handled in offices. There has been a strong tendency to professionalize and credentialize many

occupations.

The office work force has also changed. The

average educational attainment of office workers has increased, yet the educational gap between office workers and the general population has narrowed or disappeared. Women,

once a very small part of the office work force,

now make up the larger part of it. Changes

in values, lifestyles-and some claim, the work

ethic-have affected office workers along with

all others in society.

These trends are all important. But technology or the tools people use, have a primary

affect on their work, how it is done, and how

it is rewarded by society.

UNDERSTANDING THE IMPACTS OF OFFICE AUTOMATION

In carrying out this assessment, OTA used of effects: substitution, adaptation, and transa simple ‘conceptual model as an aid in look- formation.

ing for the possible effects.8 (See figure 1-3.)

It suggests that when organizations adopt new The new technology usually replaces an older

technology, there are likely to be three kinds technology or human labor, or both. There are

direct substitution effects, both at the task

‘This model was developed by J.F. Coates and V.T. Coates; level and at the organizational level. As word

for an example of other as~essrnents in which it has been used, processors and computers replace the typewriter,

see V.T. Coates, et al., A Retrospective Technology Assess- bookkeeping ledgers, and payroll systems, and rnent: Submarine Telegraphy (San Francisco: San Francisco

Press, 1980); and V.T. Coates, “The Potential Impacts of Ro- other communication systems augment telebotics, ” The Futurist, February 1982. phones, there are effects on productivity, size
. .

Ch. l—The Outtook for Office Automation Technology, 1985-2000 ● 9

— — .

Figure 1-2.— History of Technology Used in the Office

I (Third phase off!ce automation) 1

Local area networks, integratad systems.

Non-impact printers.

(Second phase otflce automation) Software packages for microcomputers.

Microcomputers ●

Optical scannlng and recognittcm equipment ●

Video display terminals for data/text processing ●

[

(First phase offtce automation)

1 Facsimiie transmission ●

Etectronic(solid state) calculating machines.

Microchip computera ●

Magnetic tape "seletric” typawritars.

Magnetic tape (replacing punched cards).

Magrtetic ink character reoognit@rr (cfteck proof lngfsorfin@ ●

Electronic digitat computers (trsdstor$}.

Efeotronic digital computers (vacuum tubes).

I

Electrification Era (1920-1960) 1

. Data processing - telewriters

c Data processing - computypers

● Data processing - paper tape or card:

● Xerographic duplication

● Mechanical listing printing calculators, 4 functions

. Punched card syatems (e.g., PayrOfl)

● Oict@ting/stenographic machines with plastic belts

● Common language concept for business machines

● Bank check sorting/proofing machines

Dialing Telephones

● ✥●❅❃▼ ❒

* Machine accounting systems(central records, control, payroll)

 Multilifh duplicating (offset printinfj

 Addressograph/multigraph with automatic f-

● Adding/subtracting calculating machines

 [Ditto machines (gelatin duplcating)

● Power statistical accounting machine

● Bookkeeping and billing machines (combinations of typewriting

and computing machlnesj

● Loose-leaf leadger Sheet$

I 1

● Muttigrapff

(Mechanical Era 1800-1920)

● Two-color typewriter rfbbon

. Addressograph

● Adding machine, Ilstlng and non-listing

. Hotlerith machtnes {card punch, tabulating and sorting machines)

. Cash qister

● ComPtometar Oakutattrrg maohirm

. M\mtqr@f maoftina @wmil Wttln$ duWMiW

* Pnaumatie tufnis

● Qlotating and $tanOgmpW faaohifraa

● Wa@One

● Catbon paper

* Typawritar

# . stia~ cwpming machine

● Fountain pen

1 I I 1 I I I t I I I 1 I 1 I I I I I

1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990

SOURCE Off Ice of Technology Assessment
10 . Automation Of America’s Offices

Figure 1-3.— User Institution Model of Technological Change

I

‘Innovative

technology

technology may be

modified to suit

needs of users better

Institution

adopts technology to

carry out existing

functions more

efficiently

J

lnstitution

changes internally to

take better advantage

of new efficiencies

J

\

Other institutions

I

may be created, or

old ones changed,

to utilize new

technology

Competition

between

institutions

develops new functions

and activities made

possibly by additional

capabilities of the

technology

I

institution

Step I

Step II

Step Ill

Step IV

SOURCE Joseph T Coates, “Aspects of Innovation” Public Policy Issues in Telecommunications Development, ”

Te/ecornmunications Po/icy, vol. 1, No. 3, June 1977.

of work force, job content, the skill required

of workers, etc. These effects are perceived as

“good” or “bad” depending on one’s perspective and interests.

The institutional structures, culture, operating procedures, and management expectations at this point still reflect the old workflow and work process. Tension is created

because the characteristics of the new technology are different, and the requirements for

effectively using it are different. Until this tension is resolved, the full benefits of the substitution are not realized and productivity may

even fall. Many organizations are still at this

stage in office automation.

The institution deliberately or “unconsciously, ” by plan or by trial and error, begins to

modify itself to suit new ways of doing things.

This is the adaptation stage. The adaptations

may include for example formal reorganizations, shifts in power relationships, adjustments in responsibilities, or changes in the way

workers are recruited and compensated.

Two kinds of problems may arise in this

phase. If significant changes are made quickly

and by explicit decisions, they may evoke resistance and resentment from those who lose

power or who are uncomfortable with any

change in the status quo, especially when people do not understand the reasoning behind
Ch. l—The Outlook for Office Automation Technology, 1985-2000 . 1 1

the changes or have not participated in the

decisions. On the other hand, if adaptations

are not planned, there may be a long period

of frustration and inefficiency before common

sense indicates just what changes are necessary.

The third kind of effects, transformations,

come about because new technologies are likely

to have entirely new capabilities not offered

by the older technologies. The organization

may develop new activities, products, or services, using these capabilities. For example,

computers offer not only a more efficient way

to do bookkeeping, but also the capability for

continuous inventory control, not possible before. They make it possible to target mailings

to special customers, and track the results.

Some organizations began, as soon as they

computerized their own data processing, to offer these services to others. This round of effects may bring about the restructuring of an

industry or of the mix of industries within the

economy. The financial services industry,7 for

example, used the new technologies to avoid

legal boundaries between banks, insurance

companies, brokers, and other elements of the

industry.

Some organizations fail to adopt new technology, even when it becomes the norm among

competitors. They risk eventual obsolescence

and failure. For example, mail order businesses

that have not automated customer services

are in serious trouble. The feedback loop in

the model is important; further development

of the technology is shaped by the market and

by the demands of users. New businesses may

be spawned that specialize in innovative use

of the technology, or specialize in helping other

firms use it.

‘See U.S. Congress, Office of Technology Assessment, Effects of Information Technology on Financial Services Systems,

OTA-CIT-202 (Washington, DC: U.S. Government Printing Office, September 1984).

THE TECHNOLOGY OF OFFICE AUTOMATION–

PRESENT AND FUTURE

The dominant trends in office automation,

from 1985 to 2000, are likely to be:

●

●

●

●

●

●

a continuing strong movement toward

microcomputers and toward distributed

data access and data handling, usually superimposed on rather than superseding

centralized automatic data processing;

more powerful, easier to use, software;

a strong trend toward linking and networking of microcomputers, minicomputers, mainframes, and peripheral and supporting systems;

increasing choice among technological options for accomplishing information handling objectives;

more and more capture of data at the point

of origin, decreasing the need for repeated

keyboarding and centralized data entry;

and

growing capability for communication, be

tween devices, between organizations, and

between locations.

Distributed Information-Handling

and Networking

In about three decades, there have been three

overlapping phases of computer-based office

automation: centralized computing, decentralized or end-user computing, and networking.8

Before the last decade, large organizations

were preoccupied with computerizing their

mass data handling and typing, and were developing large systems and a corps of computer specialists to run them. This gave rise

to the familiar “EDP” (electronic data processing) or “ADP” (automated data processing) center, staffed by computer specialists,

primarily for batch processing of data and the

development of large corporate databases.

‘The reader who wants a more detailed description of office

automation technology (but one still intended for the lay reader)

and a discussion of the outlook for its development over the

next 15 years, may go directly to app. A.
72 . Automation of America’s offices

—

In industries that deliver customer services,

such as insurance, this phase is sometimes

called “back office automation, ” since it chiefly

affected the part of the office characterized

by large numbers of clerical workers doing the

kind of paper processing seldom seen by the

consumer. They entered data into the computer using “dumb terminals’ ’-i.e., using

keyboards that fed data to a large central computer that did the processing. Many organizations established central word processing

departments or pools, in which specialized clerical workers took over the “typing” (or at least

the keyboarding of all lengthy documents) for

a department or for the entire organization.

The second phase of computerization began

in most organizations about 1978 to 1980, with

the introduction of small stand-alone word

processors and microcomputers or personal

computers (PCs), used by people who are not

computer specialists. Software packages allow people who know little about computers

or the arcane skills of programming to draw

on databases or add to them, to manipulate

text and quantitative data, to generate tables

and graphic displays, and to exchange information with other computer users, without the

direct mediation of computer specialists. PCs

are increasingly used by managers and professionals as well as by support staff. Many executives who would not ever have typed now

use word processing to draft letters, memos,

or reports, or generate reports using spreadsheet software.

This has come to be known by the awkward

term “end-user computing. ” Today, the use of

computers by nonspecialists-end-user computing—is a highly visible trend. End-user computing is not replacing central computers, but

is often added to or superimposed over a centralized EDP process within an organization.

The third phase is already beginning-the

linking together of microcomputers, and the

linking of microcomputers to mainframes or

minicomputers so that they can act (compute)

either independently or as an extension of the

larger central processing unit. For the next decade, networking will be a major trend in office

automation.

Such linked systems can also connect computers with printers and copiers, and with outside communications systems (telex, telephone

lines, cables, etc.) to create “integrated office

systems. ” Networking is not easily implemented. Because of the wide diversity in hardware, software, and interface mechanisms pro

tided by vendors, it is often difficult to connect

devices and systems so that they can “talk

to each other” or work together as an effective system. In spite of these problems, in the

last 2 years many organizations have developed “networks” or linked systems, and the

trend is rapidly gaining momentum.

Differences between centralized EDP computing systems and end-user computing will

gradually blur. The first and second phases

of office automation, considered separately,

often appear quite different, but it will become

less important whether a worker is using a

dumb terminal, or a PC that is networked to

other computers, because they will be able to

access the same databases and perform roughly

the same functions.

Proliferating Options

Broad choices among vendors, devices, systems, software packages, connecting devices,

communications technologies, and service pro

viders now characterize office automation. This

range of choice, and the rapid evolution of the

technology, creates problems for organizations

that want to plan their automation rationally

over a long period. However, it also allows

offices to automate their work a few tasks at

a time, if they so choose.

Microelectronic office equipment is a highly

competitive industry, and this has contributed

to both declining prices and expanding capabilities. The computer industry has become

a consumer industry. Large volume buyers

(e.g., the Federal Government) have a less dominant influence over the direction of technological development than the cumulative choices

made by the great number of middle and small

size organizations. Even within large organizations, the purchase of microcomputers and

word processors has often been relatively un-
Ch. 1—The Outlook for office Automation Technology, 1985-2000 ● 13

controlled and the authority to choose between

competitive brands has often been decentralized and dispersed. Thus, considerations such

as the overworked phrase “user friendliness’

have become important in the design of office

automation.

A striking feature of the market so far has

been that only a few older office technologies

have been eliminated completely.g Many have

preserved their special niche, often by incorporating microelectronic components–e.g.,

the typewriter and microfiche. Technologies

that were once separate are converging-typewriters become like word processors that in

turn become almost indistinguishable from

personal computers. Telephones incorporate

small computers, and computers serve as communication devices. No one piece of equipment

does everything but nearly all do more than

one thing. As a result, users can put together

devices and components to meet specific needs,

and there are few obvious limits to what information-handling tasks and functions can

be automated in the long run. Few critical technical barriers exist to future higher processing speeds, larger memories, much improved

input and output technologies, and full communication between systems and devices without regard to distance.

The Capture of Data

A large proportion of the work in today’s

offices involves putting data into computers.

Whether data is generated within an organization or drawn from outside the organization,

it usually must be keyboarded into computers

for further processing. This is especially true

for data that is collected on a disaggregated

basis–orders placed or received, ticket stubs,

invoices, checks, transport forms, vouchers,

customer complaints, etc. When organizations

exchange information either directly or through

a client (e.g., payments and receipts, or a patient sending hospital bills to a health insurance provider) the information often must be

‘Reprography has just about eliminated the multilith,

mimeograph machine, and carbon paper—but not entirely. As

yet, electric typewriters have not completely eliminated mechanical typewriters.

rekey boarded even if it came from one computer and goes into another computer.

But much of this work is being eliminated,

or is likely to be eliminated in the future. Increasingly, computers are able to communicate directly with each other, through modems

or other technological means. A second way

of eliminating data-entry work is to allow (or

require) a consumer or client to enter information directly into the organization’s computer.

This happens, for example, when a bank’s customer uses an automated teller machine (ATM)

to deposit or withdraw funds or shift funds

between accounts, or when he/she uses a home

computer to instruct the bank to pay his/her

monthly utility bill. A third way of eliminating data-entry work is to have the computer

directly read typed or printed information with

optical scanning technology; or to enable the

computer to “hear” and store information conveyed by voice (i.e., speech recognition). Optical scanning devices are improving rapidly and

increasingly in use; speech recognition technology is in an earlier stage of development,

but is already being used in a limited way.

A critical determinant of the results of office

automation over the next 15 years is the outlook for computer input technology. Data entry, including word processing, is probably the

largest single computer-related category of

clerical employment today. Organizations are

seeking and finding ways to avoid the necessity of keyboarding data for a second, third,

or fourth time. Beyond that is the possibility

of never having to keyboard it. If this happens, then both the number of jobs dedicated

to data entry, and the costs of data handling

will decline dramatically-at least, for a given

volume of data.

Communication Between Organizations

As already noted, one way to avoid secondary entry of data is for interacting organizations to exchange data directly from computer

to computer. For example, a hospital computer

may send bills directly to the health insurer’s

computer, which instructs the bank’s computer to transfer funds; the bank’s computer
74 ● Automation of America’s Offices —

Photo credit: Bell Labs

One characteristic of office automation is the integration

of computing and communication technologies

then notifies the hospital’s and the insurer’s

computer that the payment has been accomplished. As another example, the computer of

a manufacturer may receive an order from the

computer of a customer, then order and coordinate the shipment, with the payment handled and recorded by direct communication

between the computers of the buyer, seller,

and bank. A few pairs of organizations are said

to have such linkages operating at present;

more are likely to do so in the future.

How Rapidly Will Office

Automation Occur?

Office automation may proceed more rapidly and penetrate economic activities more

thoroughly than have other waves of automation. The pace of technological change has, in

the past, repeatedly confounded expectations;

sometimes it has been slower than expected,

sometimes more rapid. Much depends on the

resources required to adopt new technology,

the time required to recover the necessary investment, and the economic conditions that

prevail. Particular factors of importance are

the costs of capital and labor; the availability

of people to use and manage the new technology; the structure of the adopting industry

or industries, and their competitive environment; and a variety of social and behavioral

factors that can be collectively called organizational culture.10

An examination of these factors in relation

to office automation points to a relatively

broad and speedy adoption. The role of offices

and office work is tending to increase in every

sector (i.e., there is more “paper work’ or information-handling in the production of all

goods and services), and automation can be

adopted by and adapted for offices in every

industry sector. Many kinds of office activities are similar in all organizations-generating

text, keeping records, circulating memos, preparing payrolls, filing, etc. Because many kinds

of office automation can be implemented incrementally, and at relatively low cost, it can

be adopted by small as well as large offices.

There are a variety of reasons for automating information-handling, from reduction of

labor costs, to improving the quality or variety of services, to reaching a larger market

in a given time. If an organization adopts automation for the purpose of providing new services or products, or reaching a new market,

its competitors may feel forced to do likewise.

The effects of technological change often depend on how rapidly that change occurs. Problems may solve themselves if there is much

time to adjust. On the other hand, opportunities not quickly grasped may be forever lost,

or problems left to drag on may fester. Later

chapters of this report will point to organizational and behavioral problems that could slow

the adoption of office automation. At present

however, it appears that these are largely transition problems for which many solutions are

being developed.

“’The analysis here and in ch. 2 draws on an OTA contractor report, J.D. Roessner, “Market Penetration of Office Automation Equipment, Trends and Forecasts, ” November 1984.

This report is part of an OTA contractor report, A.L. Porter,

et al., “Office Automation Outlook: 1985 -2000,” February 1985.
Ch. l—The Outlook for Office Automation Technology, 1985-2000 ● 1 5

THE POSSIBLE CONSEQUENCES OF

OFFICE AUTOMATION, 1985-2000

Some emerging and potential policy issues

identified by OTA are of interest because contending parties have already voiced their concerns, and in some cases, related proposals are

before Congress. Most of the policy issues,

however, are of more long-range concern or

are contingent on conditions anticipated but

still in the future.

In relation to most of the policy issues, some

attempt has been made to indicate potential

congressional responses. This is done to indicate the range of conceivable policy interventions. OTA has not fully evaluated all of these

policy options in terms of their own possible

effects, or the pros and cons of adopting them,

either in this chapter or in the course of the

assessment.

Economic and Employment Effects

Increased Productivity

By the mid-1990s nearly every office will

have at least one computer, just as nearly all

offices now have telephones. There will probably be a terminal of some kind for at least

every two or three office workers. Since many

organizations will by then have adapted their

work process and work environment to the new

technology-although restructuring and change

will surely continue—many solutions to current transitional problems should be available.

Office productivity should increase significantly.

Productivity in white-collar work is difficult

to define and measure, as is discussed in chapter 2. But however productivity is perceived

by a specific office or industry, significant increases as a result of office automation will

affect employment levels, at least for some office occupations.

Employment

There will certainly be a significant reduction in the hours of labor associated with a

given volume of information-handling. The

magnitude of the reduction will depend in part

on the technological trends noted above and

in part on management strategies.

The reduction in labor will be most significant in the clerical/support occupations, especially those that predominantly involve data

entry. Fewer lower level workers would in itself indicate a need for fewer first line supervisors and managers. But the span of management control can also be broadened by

automation of the work process. Thus, fewer

managers may be needed (again, for a given

volume of information-handling). Some of the

tasks of lower level managers can be automated, or be taken over by clerical workers

who are lower paid, so this tier of jobs is again

likely to shrink. Some of the tasks of paraprofessional or technical workers may follow

the same route. Professional occupations are

less vulnerable, but not immune to the substitution and adaptation effects of automation.

Whether or not organizations have as their

primary motivation for adopting office automation a reduction (or constraint on growth)

in the work force, relatively few can yet demonstrate that they have achieved that result.

Many have hired more workers. OTA case

studies, internal corporate studies, interviews

with business executives, and reports in trade

literature have repeatedly shown such shortterm inefficiencies resulting when a new technology is introduced into a workplace, process,

working group, and organizational structure

not yet designed to use it to best advantage.

Yet most evidence suggests that in a given

task, time and labor saving from automation

is significant. Some tasks or steps are eliminated entirely.

Declining costs and the proliferation of new

uses and needs for information argue for a

strong and continuing growth in the volume

of information-handling and thus for a steady

increase in the office workload. The growth

in demand for information and the reduction

in labor associated with information-handling
16 ● Automation of America’s offices

are two competing trends—both associated

with information and communication technologies —that will affect the level of future

office employment. Which force outweighs the

other is surely a judgment call; it may ultimately depend on broad economic conditions,

other unforeseen technological developments,

and choices and decisions made in industry,

government, and society at large.

Because in the past, employment growth as

a whole has continued through periods of technological change, many economists believe

that the number of office jobs will continue

to grow strongly in spite of office automation.

Others doubt this because of the high potential efficiency of microelectronic technology

in office work (especially clerical work), which

has always been very labor intensive, especially since the economy is generally not expected to grow as rapidly in the future as it

has in some past decades. For example, a recent scholarly article suggests reasons for the

“common misconception” that future economic growth spurred by high technology will necessarily provide a net increase in jobs; the

authors said, especially speaking of computers

that:

, , . the impact of (new) technologies is likely

to be more widespread than that of past technologies because their cost has declined so

sharply relative to their capability and relative to the costs of labor . . . (and) the economic

context has changed considerably from the

past. ”

The present capability for economic and employment forecasting is not good enough to

resolve this very large uncertainty.

Thus, it is possible that there will be continuing strong demand for additional office workers. The most likely outcome, however, is slowing

growth in the number of office jobs and even

eventually an absolute reduction in the number

of jobs in offices. While the latter outcome is

by no means certain, there is sufficient evidence pointing in this direction to justify

—

“Russell W. Rumberger and Henry M. Levin, ‘iForecasting

the Impact of New Technologies on the Future Job Market, ”

Technology Forecasting and Social Change 27, 1985, pp.

399-419.

watchful concern by Congress, and to merit

efforts to improve the monitoring of employment trends so that corrective or compensating actions can be taken when and if they are

needed. Recent employment forecasts should

not lull policymakers into complacency. This

is an area fraught with uncertainty.

If the number of office jobs continues to

grow, no congressional action will be called

for; if that growth falters or reverses, there

will immediately be strong demands for Federal

intervention. However, early signs of trouble

may be missed. At present, the Federal Government is poorly equipped to detect or understand early signals of problems arising from

structural changes in the economy related to

technology.

Labor force and employment data collection

does not support analysis of emerging trends

because it is necessarily collected, aggregated

or disaggregated, and analyzed in categories

that reflect the occupations and jobs framed

around old technologies or occupational/disciplinary tools. Census data is necessarily old

(in terms of today’s rapid change) by the time

it is available for analysis. Econometric models

are insensitive to realistic expectations about

new technology and the changing substitutability of capital for labor. There is a great need

for improved databases, for greater attention

to advancing the state of the art in both technological and employment forecasting, and for

building and institutionalizing a capability

that combines and integrates those two disciplines. No agency now has a strong capability of this kind, nor the resources and specific

mandate to develop such a capability; moreover, there is very little Federal funding available for research into crucial areas of economics, social science, and organizational

behavior related to this area. ’2

The critical question for Congress at present

is not one of immediate interventions, but how

to improve the capability of the Federal Government to understand, and thus be prepared

“Hearings of the Science Policy Task Force of the House

Committee on Science and Technology, Sept. 17-19, 1985.
Ch. I—The Outlook for Office Automation Technology, 1985-2000 ● 1 7

to respond to, technological and structural

changes that are occurring in the United States

and other advanced industrial nations.

Conversion of Employee Status

Office automation may enable employers to

convert more employees into part-time and

temporary workers or independent contractors. This allows offices to adjust their labor

costs to a fluctuating workload, to reduce some

overhead costs, and to eliminate or externalize some secondary labor costs (benefits packages). While some workers prefer and seek

opportunities for part-time employment, the

number of involuntary part-time or temporary

workers has been slowly and steadily increasing. Significant growth in the use of part-time

and temporary work forces could ultimately

reduce the number of full-time jobs for those

who need or desire them. It may also shift

responsibility for benefits and protective mechanisms such as health insurance, unemployment and disability insurance, and retirement

income to the worker, costs that may ultimately have to be assumed in part by the

taxpayer.

Job Opportunities

In some occupations and industries, those

tasks that have historically been at the crossover point between clerical jobs and lower level

management or professional jobs have been

automated. In other occupations or industries,

office automation has been used to narrow and

specialize clerical tasks or to deprofessionalize tasks. In this way, some important channels of career mobility (job ladders) have been

truncated. These effects are of special importance to women and minorities. In some industries or organizations those channels have

only been opened to women and minorities

within the last decade, and are looked to as

a primary opportunity for escaping from poorly

paid occupations and segregated “women’s

work .

Office automation also creates some new categories of jobs, or new specialties within existing occupations. Proficiency in solving prob

lems related to office automation has given

many people the opportunity to create special roles for themselves and has led to new

job ladders and career paths. Men and women

with the capability, imagination, daring, and

opportunity to rise to this challenge are moving into the upper levels of organizational hierarchies. Whether or not this career path will

create anew pool of potential senior managers

or chief executive officers, only time will tell.

Some of the likely effects on employment

are not inevitable results of office automation,

but result from management/institutional

choices about the combination of technologies

adopted, the way they are implemented, and

the way the work is restructured. But to the

extent that the technology may encourage

business decisions to be made only on the basis of narrowly framed, near-term cost considerations, this could have a negative effect

on both long-term productivity and future opportunities for productive and rewarding employment for many Americans.

Training and Education

A major factor in achieving the full productivity benefits of office automation is the availability of workers skilled in its use. From the

standpoint of organizations and their managers, an adequate supply of trained workers

to meet future needs is critical. From the standpoint of office workers, access to training and

the ability to master new skills is critical.

In the short term, the training need not be

lengthy or excessively expensive. The trend

in both hardware and software is toward greater simplicity for the user, and more opportunisty for self-teaching based on training procedures built into the technology. However,

because office automation often brings about

a drastic redesign and resequencing of tasks,

both initial and continuing training is essential.

Training provided by vendors and by some

employers is highly system- and task-specific.

For the user, this makes training easier, but

limits its future usefulness. Economic pressures, however, motivate some employers to

provide no more than minimum training. Many
78 . Automation of America’s offices

organizations, in deciding to automate, have

underestimated the continuing training and

support that is necessary, and these costs can

dwarf the original investment. Some employers also see it as in their interest to make training as narrow, specific, and brief as possible.

In that way they have minimum investment

in workers who could then be lured away, and

replacement workers can be trained rapidly.

But this practice can also trap workers in

dead-end jobs and limit their ability to move

up to jobs of wider scope and higher skill requirements.

Many organizations are providing their workers with ample training both in their own interests and from a sense of responsibility to

their workers and to the larger society. This

is a significant cost to the employer. While

in the long run it may increase the productivity benefits that the organization seeks, it

may also defer the realization of sought for

cost reductions.

Workers just entering the labor force also

need training, at least in specific tasks or with

specific systems. Those aspiring to management positions increasingly seek advanced

training in business and business technology

before entering the labor market. In recent decades, there has been a strong trend toward

externalizing training costs and lateral recruitment-i.e., depending on colleges and

commercial schools to train workers, and hiring from the outside at the management level

rather than advancing people from lower levels

within an organization. Enrollment in business

schools, vocational schools, and adult education courses has been rising. The students,

rather than an employer, bear the cost of this

training; but since it is often out of reach for

lower income families, this raises questions

about equitable access.

Public schools and community colleges are

to some degree handicapped by the costs of

providing instructors and a wide range of

equipment for students to learn on, especially

since the technology is constantly changing

and instructors themselves must be continually learning. Commercial schools may be in

some ways better able to respond quickly to

market changes-i. e., to be able to invest in

up-to-date technology and retraining for instructors. Again, the costs to workers of commercial courses, in terms of both money and

time, mean that the most disadvantaged populations are put at a further disadvantage.

Organizations and Jobs

There is much controversy at present around

the question of whether office automation enhances or “de-skills” office work. De-skilling

means the standardization and routinization

of tasks, in such away that human knowledge,

judgment, and decisions are minimized and

the technology (in this case a computer) directs,

controls, and paces what a worker does.

Office automation can be used to de-skill

tasks. It is, and has been, so used in many

organizations that process huge volumes of

standardized data. More data can be processed

in a given time, by less highly trained (and

lower paid, more easily replaced) workers, with

less variability in outcome and-supposedly

but not always in practice—with lower error

rates. Professional tasks can also be de-skilled,

by building sorting rules, decision trees, and

analytical processes into computer processes

and software packages.

For the worker, this may mean less job interest and satisfaction and increased stress.

Factory-like offices could repeat the worst mistakes and problems created by manufacturing assembly lines. However, rationalizing

work (i.e., simplifying and routinizing it) can

also create new white-collar jobs for people

with less ability and training than is required

for some other office work. These jobs are

highly valued by people whose employment

opportunities are limited, or who are just entering the job market.

Office automation can also be used to enhance jobs, by relieving people of routine

repetitive steps. Jobs can be designed to integrate simple tasks into fewer broader tasks

so that the worker has a better sense of the

purpose and outcome of the work. Informa-
Ch. 1—The Outlook for Office Automation Technology, 1985-2000 . 19

tion systems can also give a worker access to

knowledge that could previously be obtained

only through advanced professional education,

and thus allow a nonprofessional worker to

take over interesting tasks previously considered the privileged province of the professional.

For example, clerks can use computerized databases to search for information that formerly

only a lawyer, medical doctor, biologist, or

Ph.D. in history or anthropology would have

known about. Some organizations are deliberately using office automation to upgrade and

enhance work at all levels. As a result, they

can sometimes develop a flatter institutional

structure and reduce the costs of management.

Other kinds of organizational restructuring

are likely to occur. There is evidence that adoption of large computers tended to lead to centralization of control. Adoption of end-user

computers could lead toward some decentralization of decisionmaking. These shifts in power depend less on the characteristics of the

technology than on the characteristics of the

organization and its management strategy.

Almost always some redesign and restructuring of the flow of work is necessary, leading to shifts in responsibilities, jurisdictions,

allocation of resources, and relationships between coworkers and between working groups.

Communication patterns within the organizational hierarchy are likely to change. Typically

problems arise over “ownership of information” and responsibility for assuring the integrity of organizational data banks.

There is more flexibility in implementing office automation than in most changes in basic

technology; thus management has an even

greater responsibility for the outcome. The

ways in which organizations are implementing office automation and redesigning their

work processes are rich in innovation and

diversity. Results in terms of productivity will

be a matter of debate for some time to come.

Some organizations will be disappointed in

their expectations, and this may make others

more cautious about moving into office automation. But a great deal of cross-learning and

shared learning is occurring, and many organizations may learn from the experience of industry leaders and thus shorten their own

troublesome transition period.

Both in terms of productivity (because of

the importance of motivation and job satisfaction) and in terms of equity and quality of

work life, problems of work de-skilling, occupational downgrading, and disappearing job ladders could result in serious social problems.

The handling of such problems is, in our system, usually a management prerogative or a

matter for labor-management negotiations.

Experience shows that the most fruitful strategy, both in terms of productivity and job

satisfaction, is usually some form of worker

participation or representation in the search

for solutions. Less than 20 percent of office

workers in the United States are represented

by unions (although the growth of white-collar

unions is said to be a high priority for labor

organizations at this time). Organizations are

now using or experimenting with other mechanisms for worker participation in decisions

related to technological change and job design.

Office Workers and Their Workplace

With more and more Americans working in

offices, there is growing attention to the quality of work life in offices, to job satisfaction,

and to the effects of office work on physical

and mental well-being. Office automation has

aroused some added concerns in terms of the

long-range effects of physical and mental

stress, and fears related to work with computer

video display terminals (VDTs).

Workers using VDTs have increased complaints about eyestrain and musculoskeletal

problems. Better workstation design, improved

human/computer interfaces, and work breaks

from long periods of VDT work can greatly

alleviate these problems. There is no evidence

as yet that such problems, while serious in

terms of day-to-day discomfort, lead to any

organic deterioration or chronic disease or illness. However, evidence from other occupations with heavy workload and repetitive tasks

suggests musculoskeletal strain in VDT work

may lead to chronic health effects.
There has been serious concern over reports

of clusters of reproductive failures and accidents among clerical VDT workers. Epidemiological investigation has so far not explained

these scattered clusters; but scientific research

has failed to find any possible cause related

to VDT technology.

OTA has reviewed current information and

ongoing research in this area and concludes that

there is at this time no good basis for fear of

VDT effects on reproductive processes. Scientific research should continue to be monitored

for new findings.

However, office automation can increase

stress on users. Stress is not always bad; it

can be viewed as increased challenge. But some

forms of continuing, unrelieved stress are

clearly harmful. Concern in the past has emphasized the so-called “executive heart attack, ’ but there is growing evidence that clerical workers are most likely to suffer from

continued stress. Computer pacing and computer monitoring, which result in reduced autonomy or control over one’s work and performance level, or which induce continuing

visual and musculoskeletal strain, significantly

add to stress. Fear and anxiety over one’s ability to learn and perform effectively or to

change one’s management and supervisory

strategies, as well as perceived job insecurity,

create stress. There is increasing evidence that

long-term high levels of stress are conducive

to several kinds of chronic illnesses.

Visual and musculoskeletal problems currently can be alleviated through appropriate office and workstation design; stress-related illness or disease is more difficult to control and

may emerge as the greatest public health problem among office workers in the future.

Involvement of workers in decisionmaking

about office automation and work redesign appears to reduce stress levels. Organizations

that have successfully sought the participation of users at all levels of the organizational

hierarchy have reported that this led to higher

productivity.

In some countries, there is already legislation or regulation related to office automation

and quality of work life; for example, West

Germany and France have regulations requiring regular eye examinations for VDT workers, and in Sweden there are standards calling

for periodic work breaks.

Data Security and Confidentiality

Data security and the confidentiality of data

in computers and data banks is a continuing

concern. End-use computing adds to these concerns primarily because there is wider access

to data and to means for manipulating it; data

disks are easily lost, stolen, destroyed, or copied; computers are linked to other computers

providing greater access; and small computers

are not usually monitored or physically guarded.

Control of databases is often separated from

responsibility for their integrity and reliability. Most end-users are not as well informed

about the requirements of confidentiality for

client and employee data as are computer professionals. In addition, office automation often

allows work to be done away from the office,

in airplanes, at home, or in client offices, which

further increases vulnerability.

Data can also be destroyed or made temporarily inaccessible by accidents, electrical

outages, or natural disasters. As more and

more data exists only in electronic form, and

as day-to-day operations become more dependent on technology, there is greater need for

secure back up.

Federal agencies, like private sector organizations, are faced with new problems in protection of data security and confidentiality as

a result of decentralized office automation. But

government offices have, in many cases, been

more sensitive to this problem than has industry in general. Personal data about Federal employees or agency clients, however, may

be inadequately protected.

There are both technological and procedural

means for protecting data. Most organizations
Ch. l—The Outlook for Office Automation Technology, 1985-2000 ● 2 1

have established these with regard to centralized EDP operations, but often overlook the vulnerability y of data processed by end-user devices.

Organizations moving into office automation for

the first time may not realize the threats until

serious problems arise.

Home-Based Office Work

A special and important capability of office

automation technology, resulting from the convergence or combination of information and

communications technology, is to allow work

to be done at a distance from the office. The

worker’s home can become the primary work

site. Home-based clerical work, with the work

performed on a piece-rate or hourly basis, could

increase significantly in the next few years. Already controversial, it would then become much

more so.

The opportunity to work at home is highly

valued by many workers. Many professionals

now do part of their work at home, by their

own preference and at their own and their employer’s convenience. This flexibility is mutually beneficial and should be protected. A second kind of home-based, computer-mediated

work is the performance of office services (e.g.,

word processing, data entry, analytical studies,

computer programming, or consulting) by entrepreneurs who establish small businesses in

their own homes. They sometimes find barriers to operating their businesses in the form

of zoning laws or confusing tax provisions, but

such ventures are proliferating in spite of this.

Many women, in particular, are gaining business skills and experience in this way.

A more controversial form of home-based

office work is the farming out of clerical office

work (e.g., data entry and word processing)

to be done in homes, usually by women and

especially by mothers of small children. Homebased workers are often paid at piece-rates or

hourly rates. They may be former employees

converted to the status of independent contractor, thus giving up employee benefits.

Critics object to this form of home-based work

on the grounds that it eliminates jobs for regular employees and constitutes unfair competition, tending to depress the general level of

clerical wages and preserve the segregation

of women into the lowest level office jobs. They

also argue that it is difficult to assure the workers of safe and healthy working conditions;

and that it weakens social pressure for the

establishment of child day care centers, accommodations for handicapped workers in the

office, and other social services needed by

workers employed under more conventional

conditions.

A work-at-home opportunity at present is

almost always sought by the worker, not forced

by the employer. The most common reason

is the need or the wish to combine paid employment with care of children or other household responsibilities. Some home-based work

programs are designed for physically handicapped or retired workers.

At present only a few thousand people are

engaged in homebased clerical work. However,

the technological and economic conditions exist for substantial expansion in the future. If

home-based workers begin to compete with

office-based workers for a shrinking number

of clerical jobs, then this issue will be much

more highly visible and controversial.

Bills have been introduced before Congress

that would encourage home-based computer

work by means of tax credits. The AFL-CIO

has called for a ban on home-based clerical

work. Other groups argue for enforcement of

existing occupational safety and health laws

and other worker protection laws in homebased work.

There are legal questions to be resolved regarding the status of some of those designated

as independent contractors; IRS has recently

ruled that those accepting work only from one

employer/organization must be regarded for

at least some purposes as employees, not contractors.

Off-shore Performance of Office Work

Some U.S. firms have relocated their dataentry operations to other countries to take

advantage of low labor costs. Intermediary en-
22 ● Automation of America’s Offices

trepreneurs also make off-shore data-entry

services available to U.S. firms. Recent advances in communications technology are making this activity increasingly cost effective, and

it is also being encouraged by the Federal Government as a mechanism for assisting economic

development in Caribbean countries. However,

if predicted technology developments reduce

the need for large-scale data entry, off-shore

sourcing of data entry will probably cease to

expand.

Off-shore clerical work for U.S. firms now

involves only a few thousand workers, chiefly

in the Caribbean countries but with some in

the Far East and India. With further improve

ment in communications services, this activity could expand considerably in politically stable developing countries in many regions of

the world. The governments of many developing countries, and U.S. economic development

experts, perceive valuable potential benefits

in encouraging this activity. It does, however,

represent a direct loss of U.S. data-entry jobs.

Federal Government Office

Automation

Effects of office automation will be felt in

public sector as well as private sector offices.

In Federal Government offices these effects

have implications for procurement policy, personnel policies, and budgetary planning. They

may have implications also for the delivery

of government services, the access of citizens

to government information, and the ability of

citizens to participate in public decisionmaking. This report only briefly considers such

effects on the quality of governance, primarily in terms of the possibility that loss of accountability could result from erosion of established bureaucratic communication channels.

Present procurement and acquisition policies

have, in general, allowed the Federal Government to keep pace with the private sector and

to adapt office automation technology to the

needs of Federal agencies. There are some conspicuous exceptions and some unsolved problems. Chief among these problems are the lack

of compatibility among devices, which is hampering networking within agencies and between

agencies and field offices; and the lengthy

procurement cycle for large systems, which

is out of step with the rapid evolution of the

technology.

Gains in Federal office productivity are obvious, yet hard to measure or document. Some

agencies have been able to handle greatly increased workloads without a proportionate increase in the work force. There are, however,

built-in disincentives to achieving maximum

cost reductions. Government managers are

offered few rewards, and may suffer subtle

penalties for reducing the number of people

they supervise or cutting their annual expenditures. Grade level or promotion may depend

on the number of people one supervises, and

unexpended funds may encourage further

stringent budget cuts.

There has been strong pressure by the Administration to reduce Federal employment.

There are some indications that office automation may have already contributed to curbing the growth of the Federal work force. A

significant reduction in the number of clerical

workers and a change in the ratio of clerical

to professional and administrative employees

seem to have occurred, along with changes in

job content and skill requirements that are

likely to continue to accelerate.

The Federal Government has a responsibility to see that changes in Federal white-collar

employment, working conditions, and career

opportunities are managed smoothly, equitably, and with due concern for civil service employees. There should be continuing reexamination of job classifications and classification

criteria. Uncertainties in future employment

levels should affect present recruitment and

hiring, and projected changes in future employment needs should also guide the planning for

retraining and redeployment of present employees. Such changes are not being systematically tracked, studied, or considered in personnel or budgetary planning.

Since 1975 there has been a slight rise in

average grade levels, which was strongly criticized by the Grace Commission as overgrad-
Ch. l—The Outlook for Office Automation Technology, 1985-2000 . 23

ing. The changes in occupational distribution

(i.e., a smaller proportion of clerical workers)

may have contributed significantly to this

slight rise. Neither the Office of Personnel

Management nor Congressional Budget Office

has accounted for this factor in their analysis

of the grade level rise. If the number of lower

level workers has been reduced, and will be further reduced, then efforts to hold constant the

average grade level will significantly hinder the

ability of the Government to attract and hold

highly qualified middle and upper level employees.

State and Local Government Offices

State and local governments are struggling

to manage an increased workload, partly resulting from present Federal policies, without

a proportionate increase in staff. The more

than 78,000 governmental units in this country show a rich diversity in approaches to office automation, both in large systems for

many governmental operations and more recently in end-user computing. Small cities and

rural counties are lagging in use of office automation, in spite of the opportunities presented

by microcomputers. In part, this probably results from lack of access to expertise to help

them in choosing and supporting office equipment and training workers.

There is, at this early stage, little information about the aggregate effect of automation

on local and State government offices across the

country. Evaluations of productivity so far

show mixed results. Some researchers, in specific States and localities, have found evidence

of increased productivity and of work force

reduction, others have not. Some researchers

have reported findings of standardization and

depersonalization of government services, of

strong reinforcement of the existing distribution of bureaucratic and political power, and

of increased difference in the relative access

of citizens to government information.

Small Business and Office Automation

The effects of office automation on small

businesses are of particular concern to Congress because of the vital role that these organizations play in job creation and in innovation. Small computers and improved software

packages appear to make office automation

more practical for small organizations, but can

still represent a significant capital investment

in comparison to their assets. The time required to make informed decisions about equipment, to redesign work procedures, and to train

staff, plus the lack of in-house expertise in trouble shooting and problem solving are also significant problems.

Although computer vendors identify small

business as an active and growing market, there

is little empirical evidence about the results of

their experience with office automation so far.

Optimists hope that automation may allow

small firms to expand their markets and successfully compete with larger organizations.

Pessimists fear that many will incur capital

costs beyond their ability to support. Their

experience should be carefully monitored for

emerging public policy concerns.

Working Women and Minorities

The effects of office automation are of particular concern to women. Most clerical jobs

are now held by women, and one-third of working women are in clerical occupations; they

are vulnerable to displacement. Women now

in clerical positions are trying to move into

managerial and professional jobs, but some

job ladders may be truncated by automation.

In managerial and professional occupations

that are vulnerable to office automation, women tend to have less seniority than men. On

the other hand, some new jobs and occupations, offering good potential for advancement,

are being created by office automation; access

to education and training for these specialties

is vital for women.

As skill requirements and training prerequisites for traditional office jobs change, their

comparability to other jobs changes, but these

shifts may not be reflected in changes in job

titles or even in formal job descriptions. Debate over pay equity and comparable worth requires understanding of the changing nature of

office work and its changing skill requirements.
Office automation is also of particular in- Minorities, especially Black and Hispanic womterest to minorities, and for similar reasons. en, are disproportionately represented in jobs

Clerical jobs have often been the first step in likely to be directly affected by office autowhite-collar work for disadvantaged groups. mation.

POLICY ISSUES FOR CONGRESS

A number of policy issues have been identified above, and are discussed in more detail

in the following chapters. OTA has concluded

that:

Many of the concerns that have been

raised with regard to office automation

are transition problems that will be solved

by market forces and by the common

sense and ingenuity of users—they do not

require Federal action of any kind.

Some concerns–most importantly, the

possible effects on future white-collar employment levels—are matters of long-term

national interests. They merit watchful attention, and Congress should begin now

to make sure that the nation is prepared

to deal with them if and when conditions

warrant action. This however will be difficult to do, because the capability to detect and understand emerging structural

change in the economy is poor. Better economic and employment data and development of improved forecasting techniques

are urgently needed.

There are a few specific issues of immediate concern; some of them are already the

subject of legislative proposals before Congress or State legislatures. These include,

for example:

–documented or suspected health problems associated with office automation,

●

●

●

—proposals to encourage or to ban homebased office work, and

–largely unexamined relationships between pay equity and comparable worth

questions and the changes associated

with office automation.

There are also specific issues of concern

to Congress in its oversight of Federal

agencies and activities, including:

—the implications of Federal office automation for procurement, personnel, and

budgetary policies, and

—adequacy of present provisions to assure data security and confidentiality

and continuation of Federal functions

under emergency conditions.

An emerging issue, which may become

more important and more controversial in

the near future is the beginning trend

toward off-shore sourcing of data-entry

work.

There are several groups for whom the

effects of office automatic are particularly important and whose interests merit

special attention:

—women in clerical, managerial, and professional office positions,

—minority workers, and

—small business firms.

FURTHER DISCUSSION: POLICY ISSUES AND QUESTIONS

Employment

fice jobs is already affecting large numbers

In the immediate future, the anticipated ef- of people. It is therefore attractive to think

fects on employment are only possible or prob- of immediate actions that would position Conable. There is little evidence that decline in gress to act in timely fashion when and if the

growth in, or reduction of, the number of of- need becomes real. A prudent preparatory
Ch. 1—The Outlook for Office Automation Technology, 1985-2000 25

strategy would be systematic monitoring and

research to clarify the emerging effects of office automation and provide an alarm signal

if they seem likely to exceed acceptable limits.

This would require actions to improve the collection and collating of occupational and employment data, and improved mechanisms for

monitoring and analyzing structural changes

in the economy.

It is difficult to track and demonstrate even

long established employment trends because

the kinds of data collected by the Bureau of

the Census, the Bureau of Labor Statistics,

and other government agencies change over

time. The way in which those data are aggregated or disaggregated, and the way they are

labeled also change. The various bureaus and

agencies differ, at any one time, in the way

they define categories, so that their data often

cannot be compared and the data from one

agency cannot be used to augment and supplement, or explain, data from another agency.

For example, cashiers may or may not be included with other clericals; “Federal employees’ may or may not include postal workers

and congressional employees; part-time workers may or may not be distinguished from fulltime workers. Sometimes only a highly specialized data expert can disentangle employment data to address a simple question; some

questions cannot be answered at all because

data does not exist. It maybe impossible, for

example, to determine when, and under what

conditions, blacks entered office employment

in significant numbers because no records of

black/white employment were made until recent years.

What data is collected and how it is recorded

depends, of course, on what questions one expects to address. At the present time, no Federal agency has a clear mandate, nor the available resources, to develop an indepth capability

for economic and employment forecasting of

the kind Congress and the executive branch

will need in a future in which technological

change will be continuing and rapid, and will

have pervasive effects on all economic activities. Those agencies with primary responsibility for collecting economic and demographic

data have little capability, and few resources,

for understanding advanced technology and

the way it is likely to evolve in the future. The

Federal agencies with the most highly developed knowledge of new technology, including

computer technology, have no clear mandate,

little capability, and few resources for analyzing economic and employment effects. Moreover, the primary government source of forecasts of commercial information technology,

the institute of computer Science and Technology of the National Bureau of Standards,

has recently suffered a severe cut in support

of its planning and forecasting functions.

This indicates that the ability of Congress

to be apprised of disturbing trends in office

employment, or the broader area of whitecollar

employment, should they occur, is not likely

to improve in the future unless steps are taken

to ensure that this capability is being developed within Government or that support is

available for such research and analysis outside of the Government.

If it should become clear at some future point

that white-collar employment is indeed not

growing, or if there are signs of increasing

structural unemployment, then Congress will

need to consider interventions. At a minimum

it may be necessary to take steps to assure

that changes in employment opportunities do

not differentially burden certain groups of

workers, for example, women and minority

workers. Workers in low-level clerical jobs may

need special assistance in finding other employment. Steps may be needed to assure that

there are entry level jobs for untrained workers, with on-the-job training opportunities.

Sometime within the next 15 years it could

become necessary for Congress to take positive steps to deal with a declining number of

office jobs or white-collar jobs, whether or not

the economy as a whole remains strong. What

steps are appropriate will, however, depend

in part on whether there are available jobs in

other employment sectors for which office

workers may be retrained. The many strategies for consideration in responding to high

levels of employment have not been a focus
26 Automation of America’s Offices

of this assessment; they have been discussed

many times in many places in continuing debates about long-range employment policy.

They include “share the work” or shortened

workweek strategies, strategies to stimulate

economic growth and the creation of new industries, and strategies to ensure or augment

family incomes. Most discussions of such policy actions in the past have focused on blue-

-collar unemployment. Their use to deal with

whitecollar unemployment would require care

ful consideration of the economic, social, and

political conditions under which they would

operate.

Conversion to Part-Time, Temporary,

and Contractor Status

A large increase in the number of full-time

jobs lost to part-time or temporary workers

without worker protection mechanisms (perhaps Occurring due to office automation) could

ultimately burden taxpayers or lead to degradation in the level of social well-being. If Congress chooses to intervene, it could constrain

conversions of employees to other status by

legislative confirmation of recent IRS rulings

that an independent contractor accepting work

from only one organization is in fact an employee; a mandatory minimum ratio between

full-time and part-time or temporary employment; or mandatory pro-rating of benefits

packages and social security contributions. Alternatively, Congress could alleviate some of

the problems of involuntary part-time employment by further actions to encourage or require Voluntary Reduced Work Time arrangements, making involuntary part-timers eligible

for partial unemployment benefits.

Training

Because continuing training and education

are essential both to realize the productivity

gains that office automation promises, and to

alleviate undesirable effects on employment,

Congress may want to consider actions to

assist public school systems in planning and

upgrading white-collar vocational training; encourage school systems and community colleges to provide retraining and continuing

training programs; establish accreditation for

commercial wh.itecollar vocational schools; or

direct the Departments of Labor and Education to develop guidelines for vendors and employers in designing training programs. Should

there be signs of developing structural unemployment among clerical workers, Congress

might then consider providing loans or other

assistance to white-collar workers seeking

training or retraining to move into other jobs

and occupations.

Labor/Management

In general, the transitional problems involved in changing the technological base of

an organization are best solved by the cooperative efforts of managers and workers in redesigning the work process and organizational

structure. The public interest in this process

is that of realizing the promise of increased

productivity for the economy and encouraging fair play for those whose jobs and occupations will be affected. Because most office

workers are not represented by unions, management has a particular need and responsibility to provide opportunities and mechanisms for involving employees in decisions

about technology and its implementation. Given a minimal Federal role, Congress may wish

to consider the desirability of educational or

information programs for employers, employees, and their associations with regard to problems associated with office automation and

strategies that organizations have successfully

used for alleviating them. Other possibilities

to be considered under some circumstances are

clarification of worker rights under existing

labor-management negotiation procedures, or

changes in labor law to require worker involvement in technology-related decisions.

Health and Safety

In view of the concern about suspected hazards associated with computers and VDTS, options for Congress to consider include: 1) a public information program to inform employers

and office employees about what is known
.

Ch. 1— The Outlook for Office Automation Technology, 1985-2000 . 27

about the effects of office work on health and

well-being, and what can be done to reduce

visual and musculoskeletal strain and psychological stress; and 2) directing the Occupational

Safety and Health Administration to develop

ergonomic advisories, guidelines, or standards

for use in public and private sector offices and

in design of equipment and furniture used in

office automation.

If these actions and self-initiated organizational management actions to alleviate these

concerns are inadequate, then Congress may

wish to consider legislation limiting the number of hours that workers can be required to

spend continuously in VDT use.

In any case, because scientific evidence is

still equivocal, and significant risks involved

in computerized office work would affect a

large proportion of Americans, Congress could

support the funding of research on the relation of stress to chronic disease and illness

and on the possibility y of reproductive hazards

related to VDT use. It may also wish to establish national mechanisms to monitor the health

status of American office workers.

Data Security and Confidentiality

Previous actions to increase data security

and ensure confidentiality in the handling of

information about citizens have concentrated

on risks from large centralized computer operations. Most organizations have been slow to

recognize additional risks to confidentiality

and security that come with decentralized computers. These risks are largely related to the

increased access to organizational data banks;

the portability of data storage media; and the

lack of knowledge among general users about

privacy laws, the principles of confidentiality,

and established practices for safeguarding

data. Information about clients, employees,

and corporate resources and activities is subject to compromise or misuse. Organizations

need to develop policies and practices that better protect the confidentiality and security of

data that is processed or stored by small computers or other end-user devices.

Existing Federal privacy and security laws

are largely designed to strengthen the ability

of an individual to challenge the use of information about himself or herself. If lack of

attention by organizations to data protection

in decentralized computing leads to serious

abuses, Congress may need to consider more

stringent data protection laws, including liability for breaches of privacy and security.

Home-Based Clerical Work

Because this activity is already controversial, Congress may have to formulate policy

regarding it within the next several years.

Proposals have been made in Congress to provide tax credits for the purchase of computers

for home-based work (and other nonrecreational uses). Other ways to encourage homebased work include legislative actions voiding IRS rulings and court decisions that make

many home-based workers employees rather

than independent contractors, and removal of

other regulatory or tax barriers to home-based

work.

However, Congress may instead wish to discourage home-based computer-mediated clerical work. It could then consider a ban on paid

computer-related employment when the primary or sole work site is the worker’s home,

but would probably wish to distinguish this

employment from similar activities designed

to establish entrepreneurial small businesses.

Congress may, instead, wish to clarify through

legislation the conditions under which homebased workers are employees entitled to the

normal worker protections afforded by law and

equity, and to require pro-rated benefits for

workers accepting work to be done in their

homes.

Instead of banning or strongly discouraging home-based office work, Congress could

insist on rigorous application and enforcement

of existing worker protection laws and regulations to home-based work, including wage

and hour laws, occupational safety and health

regulations, and all applicable reporting requirements. This strategy would require
—

strengthening the resources and capabilities

available to enforcement agencies.

Rather than banning or discouraging homebased work, Congress could adopt a strategy

of increasing the range of employment options

for workers through tax deductions or provision of day care centers; alternative means of

caring for children, aged, or disabled dependents; and by further acting to increase mainstream employment opportunities for handicapped workers.

Off-Shore Office Work By or

For U.S. Firms

The issue to be resolved here involves the

desire for cost-saving for U.S. firms and economic development in Third World Countries

v. the demand for preservation of clerical jobs

in the United States. Congress may wish to

encourage off-shore sourcing, which could be

done by extending further technical assistance

and information to interested companies in the

United States and to development officials in

prospective host countries, or merely by taking no action that would counter presently

favorable market forces.

If Congress wishes, on the other hand, to

discourage off-shore sourcing, it could do so

through restrictions on data flow; additional

privacy protection laws, requirement for more

extensive security measures, etc.; regulations

analogous to “local content” or “buy national’

requirements; imposition of taxes or tariffs,

such as value-added taxes or trigger price tariffs; limitations on the availability or use of

dedicated telecommunications lines; or an outright ban on offshore sourcing.

Federal Procurement Policy

The present procurement policy for automating Federal offices has worked well, but there

are some problems impeding further progress.

Congress may want to consider asking the

General Accounting Office and the Congressional Budget Office (CBO) to reexamine the

effects of present procurement policies and regulations on the ability of Federal agencies to

procure state-of-the-art systems, and to plan

toward integration and networking of Federal

microcomputers and related devices.

Federal Personnel Policy

To assure that emerging effects of office

automation are effectively managed, with full

regard for the rights and interests of civil service employees, Congress may want to consider

asking the Office of Management and Budget,

the Office of Personnel Management, and CBO

to conduct studies and prepare recommendations for changes in personnel recruitment,

retention, job classification, and promotion and

compensation policies to reflect changes in personnel needs, job content, and skills requirements resulting from office automation.

State and Local Governments

Federal policy is to shift responsibility for

many decisions and programs to the local level.

To handle these programs effectively and at

the lowest cost to themselves, local governments need to increase office productivity.

Small government units are lagging in automation. Congress may want to consider block

grants to State governments for this purpose,

direct technical assistance to small city and

county government units, or other means of

assisting small governments in office automation.

Small Businesses

Although there is a risk that small businesses will create fewer jobs if they are encouraged to automate their offices, this could

be offset by increased viability and competitiveness, and enhanced opportunity to grow.

Little is known as yet about small business

office automation. Congress may wish to consider requesting a study from the Small Business Administration or other Federal agencies

of the potential opportunities for and consequences of office automation in small businesses, especially with regard to their overall

viability and their role in innovation, local economic development, and job creation. If addi-
Ch. 1–The Ouflook for Office Automation Technology, 1985-2000 ● 2 9

tional evidence suggests that there is a public ●

interest in assisting small business office automation, options to be considered include an

information and education program for small

organizations considering office automation, ●

or specific technical assistance or financial loan

programs for small businesses for the purpose

of office automation.

●

Women and Minorities

If office automation reduces the number of ●

office jobs, women and members of minority

groups who have historically been disadvantaged in the job market, are likely to be most

negatively affected. Congress may then wish

to consider a series of steps to alleviate their

disadvantage. It could:

take explicit notice of these concerns and

factors in discussion of bills concerning

pay equity and comparable worth, which

are now before committees;

provide incentives for maintaining or improving ratios of female to male employment in labor force reductions associated

with automation;

provide incentives for maintaining the

share of employment held by minority

groups in office work; and

provide subsidized child care facilities or

increased tax deductions for child care to

increase the employment options open to

working parents.
Chapter 2

Productivity and Employment
Contents

Page

The Uncertain Outlook. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

The Framework for Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

What Follows.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Recent Labor Force Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Productivity and the Nature of White-Collar Work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

How Office Automation Affects Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Emerging Occupational Shifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Technology and Recent Trends in White-Collar Employment. . . . . . . . . . . . . . . . . . . . . 56

Part-Time and Temporary Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Analogies From Past Waves of Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

The Future White-Collar Labor Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Policy Considerations: Labor Market Adjustment Options . . . . . . . . . . . . . . . . . . . . . . . . 68

The Need for Monitoring of Structural Economic Change Related to

Information Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Longer Range Policy Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

What Action Is Needed Now? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Tables

Table No. Page

2-1. Growth unselected Occupations as Projected by the Bureau of Labor Statistics,

1982-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

2-2. Percent of Total Work Force in Occupational Groups by Selected Industry

Sectors, 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

2-3. The Growth in the Number of Clerical Jobs, 1950-84 . . . . . . . . . . . . . . . . . . . . . . . . . . 57

2-4. Changes in the Percent of Total Employment for Involuntary and

Voluntary Part-Time Workers as Percent of Total Employment, 1968-84. . . . . . . . . 59

2-5. Shifts unemployment by Industry Sectors, 1900-80 . . . . . . . . . . . . . . . . . . . . . . . . . . 65

2-6. National Unemployment Rates During Recession Troughs and

Recovery Peaks, 1961-84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Figures

Figure No. Page

2-l. Framework Describing the Relationship of Office Automation to Changes

in the Number of Office Jobs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

2-2. Framework for Analyzing Long-Range Effects of Office Automationon

White-Collar Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

2-3. Changing Percentage of Work Force From 1900-80 White-Collar

Compared to Blue-Collar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

2-4. Capital Investment Per Production Worker, 1970-80 . . . . . . . . . . . . . . . . . . . . . . . . . . 57

2-5. Changes in the Percent of Total Employment for Involuntary and

Voluntary Part-Time Workers, 1968-84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Chapter 2

Productivity and Employment

Office automation promises an increase in

productivity in all sectors of the U.S. economy,

because all industry sectors increasingly depend on information as a major component

of products and service. Office automation will

significantly reduce the number of jobs required for a given volume of informationhandling work. It will also fuel a growing demand for information and information processing.

Thus, it is possible that there will be continuing strong demand for additional office

workers. The most likely outcome is, however,

slowing growth in the number of office jobs, and

eventually, an absolute reduction in the number of jobs in offices from some peak in the 1990s.

While the latter outcome is by no means certain, there is sufficient evidence pointing in

this direction to justify watchful concern by

Congress, and to merit efforts to improve the

monitoring of employment trends so that corrective or compensating actions can be taken

when and if they are needed. Recent employment forecasts should not lull policy makers

into complacency. This is an area fraught with

uncertain y.

THE UNCERTAIN OUTLOOK

The first two conclusions—that work required for handling a given volume of information will decrease, and that demand for

information will grow-can be made with considerable certainty. Between these two conclusions and the third, that the number of office jobs may ultimately decline, lie several

large questions. The most important is, “how

much will the total volume of information-handling increase?” Second, what are “information-handling” jobs, and which ones will be

affected? Third, if there is a stable or lower

demand for white-collar work, are there ways

of adjusting without creating structural unemployment ?

This assessment indicates that, with the

amazing capability inherent in computer and

communications technologies, even the needs

of a thoroughly information-driven economy

do not, in the long term, assure rising levels

of white-collar employment equal to growth

of the labor force. That labor force by the year

2015 will be about 142 million people or 35

percent larger than it is now. But the number

of people entering the work force each year

is declining. If the transition to stable or declining office employment is slow enough then the

negative effects would be muted. If there is

strong economic growth, then office employment could continue to grow, although more

slowly than in the past. Strong continuing economic growth like that of the 1950s and 1960s

is not, however, certain in the future.

The overall employment effects of the first

phase of office automation, the large computers installed in the 1960s and 1970s, have

been hard to detect amid other changes in the

economy. But the second phase of office automation, decentralized computing and advanced

communication capability, is spreading rapidly. The third phase, the evolution of integrated office systems or networking, will bring

about much restructuring of the flow of work

in and between offices.

Delayed effects of the first phase and the

emerging effects of the second and third phases

are overlapping. From this perspective, it is

possible to see the latent productivity enhancing effects of office automation as water building up behind a dam. The dam is made of institutional inertia and the unavoidable transition

problems. When that is removed, there could

be a flood of work force reductions, unless

33
34 . Automation of America's Offices

—

workers are channeled into productive new jobs

and industries.

Organizations often resist laying off workers when they adopt labor-saving technology,

preferring, when possible, to let attrition solve

the adjustment problem. This is one example

of institutional inertia. But every year some

firms go out of business and some new businesses are started. New organizations are likely to use new technology from the beginning,

creating fewer jobs than new starts would

otherwise create. This is probably already happening; for example, Dun and Bradstreet reported that in 1984 more new firms were

started than in 1983, but they employed nearly

5 percent fewer people. In the financial, insurance, and real estate industries, which are the

leaders in office automation, the number of

workers hired by new organizations declined

by over 9 percent. ’ If new organizations tend

to create fewer jobs because they make effective use of new technology, then employment

effects would tend to accelerate over time.

Which white-collar jobs will be affected?

Most directly and strongly, they will be clerical jobs. The number of professional and managerial jobs is apt to be less strongly affected,

and professional work may continue to expand

indefinitely in an information society. However, even managerial and professional jobs

are not immune from the labor-saving effects

of office automation.

Businesses are now engaged in strong efforts to reduce labor costs and to increase

productivity. Forbes Magazine reported that

the nation’s 500 largest publicly owned companies (which account for about a fifth of all

civilian employment) expanded their total sales

in 1984 by 4 percent and at the same time

shrank the number of people on their payrolls

by 4 percent, or 840,000,2 Sales per employee

rose by 10 percent, and assets per employee

rose by 11 percent; these are two rough measThe 10~,329 new starts in 1984 hired 578,838 workers

compared to 607,416 new hires for the 100,868 new starts in

1983. See “Dun and 13radstreet Looks at Business, ” a Dun

and l~radstreet subscriber newsletter, vol. 3, No. 3, ill ay-June

1985.

-Forbes hJagazine, Apr. 29, 1985, p. 231.

ures of increasing productivity. There are other

signals of pressure on employment growth despite continuing job creation. During recent

business cycles, unemployment rates in “business recovery years” have remained higher

than they were in recession years before the

mid-1960s, in spite of the creation of thousands

of new jobs. The number of involuntary parttime workers is continuing to grow. These

indicators are not tied directly to office automation, yet there is a strong possibility that

some of the effects on employment oft wo decades of office automation are now becoming

apparent.

The Framework for Analysis

The long range effects of office automation

on office employment are pictured, in figure

2-1, as a dynamic interaction between:

● growth in demand for information, and

 the labor-saving characteristics of office

automation technology.

Information handling and communication

play a larger and larger role in all economic

activities. This is what is meant by an “information society. ” Computers whet the appetite for information. More kinds of information can be collected. It can be analyzed in more

ways, thereby producing still more information. All of this data can be used in new ways

and easily communicated to more people.

Organizations are likely to find more internal or intermediate uses for information, and

to produce new information-intensive services

or products as office automation technology

makes it possible to combine, package, and

distribute information in innovative ways.

Consumer expenditures appear to be shifting

from hard goods to soft goods and services,

as evidenced by the growth in service industries and in particular by the proliferation of

new financial services in recent years.

Because information-handling costs have always been primarily labor costs, and because

office automation technology is labor-saving,

it is assumed that the cost of informationhandling will decrease. This should, accord-
—

Ch. 2—Productivity and Ernployrnent ● 3 5

Figure 2-l.— Framework Describing the Relationship of Office Automation to Changes in the Number of

Office Jobs

cost

of

information

+ Demand for information

o \

New

information

products and

services

SOURCE Off Ice of Technology Assessment

Time-saving

(conventional

tasks)

Labor-saving char’acterlstics of

office automation technology +

ing to standard economic theory, tend to further increase the market for information.

Office automation is adopted for many reasons, and often reduction of the work force

is not one of the objectives. But it is, by nature, labor saving, even when that is not a

primary motivation for its adoption. This argues for a significant reduction in the labor

necessary for handling a given volume of information.

The statements made above are hypotheses

or arguments often heard in discussions about

whether office automation will lead to an increase or a decrease in office jobs. The purpose of this chapter is to examine these propositions in more detail. They provide a basic

framework for discussing the long-range effects of office automation on future office employment. But there are several levels of complexity that must be considered. Many of these

propositions involve, or conceal, definitional

New

data input

technolo~y

or logical difficulties. The interactions between

them are not well understood. There are other

factors and forces acting on white-collar employment—and intermediate steps in these

relationships —that are ignored in the simple

diagram shown in figure 2-1.

Estimates of the relative magnitude of these

competing forces are judgment calls. Those

who see an increasing demand for information

producing an expanding need for informationhandlers, and those who anticipate new industries or new occupations to create jobs for displaced office workers can not, in the nature

of things, offer a valid description of what

those future products, industries, and jobs

might be. They are therefore often accused of

optimism based on ungrounded faith. Those

who see disturbing signals of future job loss

can point only to fragmentary and widely dispersed evidence that is difficult to compare

or aggregate, and are equally subject to charges

of ungrounded pessimism.
36 ● Automation of America’s Offices

Employment data is notoriously difficult to

work with because job categories and occupational titles are not standardized and change

over time. Projection of trend lines is not very

helpful in discussions of significant technological change, and arguments from analogy to

automation in the past are not convincing because the surrounding social and economic environment has radically changed.

These caveats do not mean that analysis is

useless; they only warn of the degree of uncertainty necessarily involved. It is the task of

policy analysts to advance conclusions in spite

of incomplete evidence, as it is the task of policymakers to make decisions under conditions

of uncertainty.

What Follows

Since OTA’s conclusions about the possible employment effects of office automation

are less optimistic than some recent long-range

employment projections, these will be reviewed

to point out forces and factors that are usually not adequately accommodated by econometric models and that strongly affected the

conclusions of this assessment. These considerations have to do with the way in which technological change erodes the validity of conventional assumptions, disrupts long-term

trend lines, and changes the meaning of established categories of occupations and industry

boundaries.

The conclusion that the number of office jobs

may, between 1985 and 2000, tend to stabilize and possibly begin to decline, rests on the

following points:

Computers represent a fundamental technological change rather than a marginal

improvement; their adoption will resemble that of the telephone and the typewriter rather than that of the industrial

robot. Office automation will be pervasive.

Recent technology/employment forecasts

are flawed and probably understate the

employment effects of office automation.

(See “Recent Labor Force Projections.”)

The potential productivity benefits of office automation are larger than are generally recognized; they have been and will

be masked during a transition period because of technical and managerial problems,

and institutional inertia in adapting to

technological change. (See “Productivity

and the Nature of White Collar Work.”)

Office automation will reduce the need for

labor by sharply reducing the need for

both primary and secondary data entry;

time saving in analytical, computational,

and communication-related tasks; direct

substitution for labor in many tasks; eliminating intermediate and preparatory steps

or tasks; and transferring tasks from

highly paid to lower paid employees (see

“How Office Automation Affects Work”).

Specialized occupations with narrowly

defined tasks will be most directly and

immediately affected (see “Emerging Occupational Shifts’ ‘). Automation will eliminate or reduce the need for tasks characteristic of some “generic” clerical

occupations (i.e., those common to most

or all industry sectors). Growth of some

categories of management occupations

may be sharply constrained or even reversed because of time savings in information collection, analysis, and formatting; time savings in communications;

increases in scope of supervisory attention and monitoring capability; and reduction in the number of workers to be supervised.

There are already possible indicators of

constrained employment growth from office automation, including declining unit

labor costs in the heavily automated financial, insurance, and real estate (FIRE)

industries (see “Technology and Recent

Trends in White Collar Employment”).

Office automation could also encourage

conversion of employees to part-time, temporary, or independent contractor status,

with a reduction in the number of full-time,

permanent jobs (see “Part-Time and Temporary Employment”).

Off-shore sourcing of clerical work, now

small in volume, could increase significantly in the next decade (see chapter 8).

Office automation may have more significant or more highly visible impacts than
—. — .— —

Ch. 2—Productivity and Employment ● 3 7

— —

earlier waves of mechanization and auto- The remainder of this chapter discusses

mation in the United States because the these points in more detail, beginning with a

economy will not be growing as rapidly, review of recent employment forecasts. It ends

it will affect more occupations, and it will with a brief discussion of labor force growth,

cut across industry sectors (see “Analo- possible adjustment mechanisms, and some

gies From Past Waves of Automation”). policy implications.

There are, in many cases, some signs that

technology has contributed to rising unemployment rates since the end of World

WarII.

RECENT LABOR FORCE PROJECTIONS

The Bureau of Labor Statistics (BLS) expects employment in managerial, technical and

professional, and clerical occupations to increase by about 28 percent by 1995.3 Most job

growth is projected to be in the service producing industries (transportation, communications, utilities, trade, finance, insurance, real

estate, government, and “other services”),

which BLS expects to account for 75 percent

of all new jobs, or 18.7 million by 1995. Since

these industries are the ones in which office

automation could have major effects, the BLS

reasoning should be examined closely.

BLS expects that a quarter of all employment growth, 31 million jobs, through 1995

will be in the category of “other services.

Within this category the largest industry is

business services, which includes a variety of

things from business consultants to janitorial

services, and is projected to grow by 5.3 percent per year, with employment growth of 3.9

percent per year. Professional services (legal,

engineering, accounting, etc. ) are expected to

add another 850,000 jobs. Financial and banking services are projected to have strong

growth but “modest” gains of employment

of 1.9 percent per year or 21 percent increase

in 10 years.

The BLS projection assumes: 1) full recovery from the 1982 recession and stable economic growth through 1995, 2) continuing de-

‘George T. Silt’ estri, tJohn hl. I.ukasiewicz, and Marcus E.

E:instein, “Occupational Employment Projections Through

1995, ” Emplo~rment Rejections for 199,5, U.S. Department of

[.abor, Rureau of I,abor Statistics, Bulletin 219’7, March 1984,

p. 44.

cline in the average weekly work hours per

worker, 3) productivity growth at the rates

of the late 1960s and early 1970s, and 4) some

shifts in employment, namely that “new laborsaving technologies will cause shifts to occur

among industries, with many of the old-line

factory jobs giving way to new industries and

occupations . Factory automation and office

automation will displace some workers but

they will have an opportunity to move into

other jobs; what new industries and occupations will be created is not specified.

BLS expects that jobs requiring college or

specialized technical training will increase significantly, as will some less skilled jobs; for

example, nursing aides and orderlies. The BLS

analysts recognize that ‘‘employment growth

in many occupations will be affected by technological change . . . “ and that among these

are typists. Nevertheless, they expect many

office occupations to grow, as shown in table

2-1.

BLS projections show three alternative

growth rates, which are based on alternative

assumptions about the overall rate of economic

growth. The BLS employment projection process links a labor force model, an aggregate macroeconomic model, an industry activity model,

a labor demand model, and an occupational

demand model. Under different assumptions

‘Nlanufacturing employment. which has declined from 25

percent of all jobs in 1959 to under 19 percent, is projected

to hold this share through 199,5. This means that manufacturing would have to create about 4,3 million additional j ohs, or

one-sixth of all new jobs.
38 ● Automation of America’s Offices

—

Table 2-1.– Growth in Selected Occupations as Projected by the Bureau of Labor Statistics, 1982-95

Projected growtha Range of jobs addedb

Occupations Low Moderate High (thousands)

Total : all occupations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23°/0

Total: professional, technical, managerial, and clerical . . . . . . . . . . . . . . . . . . 26

All professional, technical, and related occupations . . . . . . . . . . . . . . . . . . . . 30

Accountants, auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Computer specialists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Economists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Managers, officials, and proprietors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

All clerical workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

File clerks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . O

General clerks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Office machine operators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Computer operator personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Data entry operators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –12

Secretaries, stenographers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Typists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Telephone operators. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

250/o

28

31

40

81

27

28

26

2

9

28

27

–11

26

16

8

28%

31

35

44

84

30

31

29

5

12

30

30

–9

29

19

10

23,336-28,392

11,921-14,165

4,961-5,741

325-373

414-439

9-9

2,476-2,935

4,484-5,489

21-34

642-765

243-284

147-172

–38-–28

644-787

146-185

19-31

aprojectlons were made for IOW, moderate, and high occupational growth scenanos with associated variation by industry

bThe range represents the low tO high estimates

SOURCE GeorgeT Sllvestri, JohnM Lukas!ewlcz, and MarcusE Einstein, “OccupatlonalE mployment Projections Through 1995;’ Ernp/oymen/ Pro)ecfions for 1995,

US Department of LaboC Bureau of Labor Statistics, Bulletln 2197, March 1984, p 44

about economic growth, industry sectors grow

at differentiates. If an industry is expected

to grow, occupations concentrated in that industry are projected to grow proportionately,

with marginal adjustments made to accommodate anticipated technological changes. The

tying of occupational growth to growth in specific industries accounts for some curious outcomes to be noted in table 2-1, which is abstracted from much larger tables in the BLS

projection. For example, demand for economists increases less under the moderate growth

scenario than under either the low or high

growth scenarios, presumably because economists are concentrated in industries that would

expand least in a period of moderate economic

growth.

Some occupations that declined from 1979

to 1982 are nevertheless projected to grow in

the future, because the decline is attributed

to the business recession and it is assumed

that with recovery, past trends in occupational

growth will be resumed. The model does not

separate change due to business cycles from

technological change. For example, drafters

decreased by l.6 percent from 1979 to1982,

but are projected to increase from 2 to 8 percent. Cost estimators declined 2 percent but

growth of 41 to 48 percent is projected. Bookkeepers (hand) declined by 3.9 percent but 13

to 18 percent growth is projected. General

clerks declined by l.2 percent but 27 to 33percent growth is projected.

This mechanical linking of occupational

growth to industry growth suggests that BLS

may underestimate the effect of technological change (and office automation in particular) even though the text accompanying its

projection acknowledges that:

Most office clerical occupations are expected

to grow more slowly during 1982-95 than in

the 1970s because of office automation. . .

Secretaries will increasingly use advanced office equipment in the future, thereby becoming more productive. This in turn will dampen

demand for the occupation. Nevertheless, seeretaries are projected to grow at a rate that

is about average because of the growth of industries in which they are concentrated.5

Anticipated growth in demand for goods and

services, generated through the BLS macroeconomic model, is translated into a projection of industry activity (e.g., growth rates)

through the use of input/output analysis. As

a commentary on the BLS methodology notes:

(Input/output modeling) . . . assumes, for example, fixed coefficient production; that is,

‘Silvestri, Lukasiewicz, and Einstein, op. cit., p. 44.

“John A. Hansen, Bureau of Labor Statistics Methodolo~,

for Occupational Forecasts, a contractor report for the Office

of Technology Assessment, April 1984. p. 13.
that there is a single production process that

must be used in the production of each good.

No substitutions are permitted between the

various inputs to the production process . . .

(U)nless a new input/output table is constructed

for each time period, technological change cannot be incorporated into analyses based on input/output tables. The use of input) output

tables therefore naturally makes it difficult

to incorporate technological change into occupational forecasting.

BLS analysts are acutely aware of this problem. Adjustments to take into account technological change are made at several points

in the BLS process. Technological change will

effect the forecast output of the economy as

a whole, and the allocation of final demand

into the 156 categories used in the model. A

technological development that affected the

distribution of demand for transport of freight

between the trucking and air transport industries would require changing coefficients at

many points in the model, for example, those

governing the relationships between demand

for transportation, energy, and perhaps steel

and rubber.

Industry outputs must then be translated

into demand for labor—and number of jobs.

The econometric model that does this is based

on a constant elasticity of substitution production function, that is, a basic formula that

interprets the substitutability of one input for

another, for example, capital for labor. It includes a technology variable that governs the

total output-to-capital ratio for the economy

as a whole. This variable is given a different

weight for each industry. When the outputto-capital ratio is changing significantly (as

it has been in office-oriented industries) this

weight must obviously be adjusted. Some adjustments are also made in translating labor

demand into number of jobs, to accommodate

trends in length of workweek and work year.

Such adjustments are made, in the BLS procedures, by the analysts using their own knowledge of and assumptions about current and

anticipated technological developments. They

are, in other words, made on the basis of judgment and can only be evaluated in that light.

Ch. 2—Productivity and Employment ● 3 9

However, the rationale for making these adjustments, and the precise changes that are

made, are difficult for outsiders to track and

examine. 7 BLS is, however, notably conservative in making such adjustments, relying heavily on past trends.

In a recent General Accounting Office (GAO)

publication, R BLS stated its assumptions for

some “growth occupations. They were very

simple, brief, and generalized. For example,

for accountants and auditors, the only technological assumption was:

It was assumed that there will be no technological changes or developments that will

affect employment in this occupation.

For bookkeepers (hand), the relevant assumptions were as follows:

Computerization has had a significant effect

on employment in this occupation by slowing

down the rate of growth. This trend will continue, causing the employment of bookkeepers

to grow more slowly than average.

Computerization will continue to develop,

but its adverse effect will be offset by the rapid

increase in the volume of business.

Computerization will continue to spread between 1982 and 1995. There will be further

evolution of labor-saving technologies and continued diffusion throughout the economy, resulting in higher productivity and a slowerIbid., See also ‘1’imothy I,. I lunt and H, Allen Ilunt. of the

W’.PJ. Upjohn Institute for l;mplq’ment Research. “.$n :\ssessment of Data Sources to Stud}’ the F; mplo~. merit l’; ffects of

Technological Change, a paper submitted to the National A cadem~” of Sciences Committee on Wrornen Flmplol’ment and Related Social 1 ssues, october 1984. They comment:

Technological change actual]> enters into the (f31.S) sy<(tln) in

at least three plactls [rl’)t’cl]nolo~ical” change will ha~e speclflc

effects on some occupations. it will ha~re an overall impact on t hr

product i~it} of workers, and it will affect the demand for good\

anci ser~]ces generally

I t IS worthy of note th~it t h]s system in~ {)l~,t~s a con>ld[,rat)l~,

amount of judgment, cspeclall~’ in anticipating the effects of t ec~v

rmlogxal change. There are no sm~ple equations that pr(’diet changt~<

in staffing pat tt,rns w’ it hin an lndustr}. I n fa{t, t he 111 ,S ~t tiff }~;]~

found that trends ]n industr} ~ln~plo~n]{,nt It’1 (,1~ (’an I)(I pr(dict<)(i

more accuratel~’ than the changes in occup; it ion.il (In)pl(J~ mt, nt

This 1~ due in large part to the difficult} of pro it[t]ng spwiflc (Ncupat ional impacts of tec.hnolo~i[al chan~~,

‘~l,s, ( ;~~ncral :~~c~unt~ng office, specific 7’ec.hnolo@(>:d ..\.ssumptions A fftwtin~~ the l{ureau of I.abor Statistics 1995 b;m -

pio~’ment l’roje(tions, Report tot he Hon. Flerkle~’ Mdell, (1, S.

Ilouse of Represent ati\’es, (;, A() OCE-85-2, hla~ 20, 1985.
4~ Automation of America’s offices

—

than-average rate of growth for this occupation,

The occupational forecast is made by disaggregating the labor demand further; that is,

the 156 industry sectors used in the other

models is spread apart into 360 industries and

the total number of jobs is allocated between

them. For each of the 360 industries, BLS considers the historical staffing pattern—obtained

from the Occupational Employment Survey

and carried out by State Departments of Employment Security.g The jobs that it is assumed

the industry will provide are distributed among

the occupations according to the ratios that

have been obtained in the past, with some

qualitative adjustment. In preparing the occupational projections for 1995, the BLS procedure assumes that all workers will be in occupations that not only exist now, but have

existed long enough that employers begin listing them as separate categories.10

BLS uses several kinds of sensitivity analyses in preparing its forecasts; the analysts

lay out three different scenarios or trend lines

for economic growth, and also make varying

assumptions about labor productivity. These,

however, would not capture fundamental

changes in production processes and capitalto-output ratios. No sensitivity analyses are

performed to test the effect on staffing patterns of technological change.

In summary, the strong link in BLS forecast methodology between industry growth

and projected occupational growth, together

with reliance on traditional industry staffing

patterns and occupational distributions, tends

to greatly underestimate the effects of fundamental technological change. This forecast

cannot be assumed to capture reliably the potential effects of office automation.

The Leontief-Duchin Forecast, “The Impacts

of Automation on Employment, 1963-2000,’’”

‘The survey covers 500,000 businesses, one-third of which

are covered each year, and 1,500 occupations found within those

businesses,

“Hansen, op. cit., p. 18.

“Prepared by the Institute for Economic Analysis, New

York University, for the National Science Foundation, April

1984, Wassily I.eontief and Faye Duchin, Principal Investifzators.

.

also used input-output analysis. To deal with

the problem of incorporating the effects of

technological change into the model, however,

Leontief and Duchin allowed the coefficients

in the matrix to change over time, adjusting

these coefficients on the basis of qualitative

judgments.

Four scenarios were developed. Scenario 1

assumed no further automation or any other

technological change after 1980; it is clearly

a highly unlikely scenario and is used as a reference or benchmark for the others. Scenarios

2 and 3 project an increasing use of computers

in all sectors for specific information processing and machine control tasks and their integration. Of these two, Scenario 3 assumes

faster technological progress and more rapid

adoption of available technologies, including

more powerful software. Scenario 4 is identical to Scenario 3 except that it uses different

final demand assumptions. The study concluded that the intensive use of automation:

. . . will make it possible to achieve over the

next 20 years significant economies in labor

relative to the production of the same bills of

goods with the mix of technologies currently

in use. Over 11 million fewer workers are required in 1990 and over 20 million fewer in

2000, under Scenario 3 as compared to Scenario 1: this represents a saving of 8.5 percent and 11.7 percent respectively of the reference scenario labor requirements.12 (Emphasis

added. )

The differences by 1990 between Scenario

1 (no further automation) and Scenario 3 for

major categories of workers are: 13

● 5.5 percent more professionals,

● 13.9 percent fewer managers,

 32.4 percent fewer clerical workers, and

● 8.4 percent fewer jobs in all categories in

the national economy.

—.—.—— .—

‘I,eontief and Duchin, op. cit., p. 1.15. There is a slight discrepancy between the percentages given in the authors’ text

quoted here and those given below and computed from their

tables (p. 1.16 of the report cited); the difference is minor and

perhaps was caused by rounding errors.

“This includes all private sector employment plus public

education and health, but does not include public administration, the armed forces, or household employees.
By 2000, the changes are greater:

● 21.5 percent more professionals,

 41 percent fewer managers,

 45 percent fewer clerical workers, and

● 11.4 percent fewer jobs in all categories

in the national economy.

Note, however, that “fewer” here means only

fewer than there would be without any further automation—not fewer workers than there

are now. As compared to the real figures in

1978 (the base year), total employment will

grow by 49 percent under Scenario 3 as compared to 53 percent growth under Scenario l—

no further automation. By 2000, it will increase

76 percent over 1978 employment in Scenario

3, as compared to 98 percent increase in Scenario 1.

Under Scenario 3, the proportion of professional jobs to all jobs rises from 15.6 percent

in 1978 to 19.8 percent in 2000; managers’ jobs

decline from 9.5 to 7.2 percent, and clerical

jobs from 17.8 to 11.4 percent. Sales workers

decline slightly relative to total employment,

while the proportion of craftsmen, operatives,

service workers, laborers, and farmers each increases. The increases in professional jobs, under Scenario 3, are mainly in demand for computer specialists and engineers.

The good news in the Leontief-Duchin forecast is that if their projections were correct,

the labor requirements for Scenario 3, in 2000,

would exceed the projected available labor

force of 157.4 million (after allowance is made

for public administration, household workers,

and some multiple job holders). This means,

however, that the rate of growth in final demand that they assumed could not be achieved

without still greater technological change.

This problem reveals a serious weakness in

the model; it ignores the importing of both

capital goods and services. Since imports are

a major, and growing factor in the economy,

the Leontief-Duchin model does not reflect economic reality.

Leontief and Duchin developed a fourth scenario to assess the growth in demand that

could actually be attained under their technoCh. 2—Productivity and Employment ● 4 1

logical assumptions. Growth in demand was

progressively reduced until the labor force

needed fell within the range of the projected

labor force available for the years 1990 and

2000, This scenario does not correct the defect of ignoring imports; all demand is again

assumed to be supplied by domestic labor.

This required a reduction of their projected

output demand of 4.4 percent for 1990 and

17.8 percent in 2000, Because overall economic

activity is lower in Scenario 4, capital investment is also lower, and the number of jobs

related to production of capital goods falls,

especially craftsmen’s jobs. The occupational

composition of the work force otherwise remains much the same. The percentage reduction in demand for labor is, however, greater

than the reduction in final demand.

Scenario 4 therefore represents an estimate

of the extent to which real per capita consumption can increase if the entire projected labor

force is employed, using computer-based technologies, and demand is met by domestic production. It is important to note that the

Leontief-Duchin team did not generate its own

projection of consumption (final demand, or

delivery of goods and services), but used that

generated by BLS for its moderate growth scenario, discussed above.

Leontief and Duchin, as noted, incorporated

the potential effects of technology into their

forecast by changing the input-output coefficients over time. These changes are exogenous

to the model; the direction and magnitude of

the changes were arrived at by the team of

analysts on the basis of extensive review of

research results and scholarly and trade literature, and their assumptions are set out within

their project report. The factors explicitly

taken into consideration were estimates of the

rate and extent of capital investment, the

amount of time in 1977 that a worker spends

performing particular tasks, the amount of

automatic equipment that will be applied to

those tasks, the amount of time that can be

saved per task by using automated equipment,

the percent of workers in particular occupations and industry sectors that will use the
42 ● Automation of America's offices

new technology in a given year, and the possible increase in demand for certain office occupations (i.e., the effects of increased demand

for information-handling). Coefficients were

modified accordingly; for example, in Scenario

3, the labor coefficient for “stenographers,

typists, and secretaries” for 1990 was set at

0.65 of the 1977 coefficient, and for 2000 it

was set at 0.45 of the 1977 coefficient, meaning that for a given unit of work done by these

workers in 1977, only 65 percent as much labor will be needed in 1990 and only 45 percent

as much by the year 2000. To look more closely

at the narrower category “secretaries,” the

team assumed that by the year ‘2000 in comparison to 1977:

●

●

●

●

●

●

30 percent of secretaries will not be affected by word processing,

20 percent of a secretary’s time is spent

in tasks not affected by word processing,

word processing saves 80 percent of the

time required for conventional typing,

35 percent of secretaries are also affected

by other office technologies,

45 percent of their time is affected by

other office technologies, and

75 percent of secretaries’ time is saved

by new technology relative to old technology.

While other analysts may quarrel with one

or all of these estimates or assumptions, and

may question whether they have foreseen

likely technological breakthroughs, their assumptions in general do not appear to be overly

conservative. There is no obviously better way

available as yet to arrive at such estimates

than the one the project used–expert judgment. The far larger problem has to do with

the assumptions about future economic growth.

This brings one back to a broader version

of the question proposed at the beginning of

this chapter: will the demand for information

(which is to a large extent a function of the

level of economic activity in this country) really

grow to an extent that it will more than balance the labor-saving effects of information

technology? Both the BLS and Leontief-Duchin forecasts of employment growth depend on

an assumption that it will do so. The model

formulated by Leontief and Duchin is dynamic

in that investment is a function of changes

in output in industry sectors. They project significant gains in employment in most sectors

because the model projects nearly unlimited

increases in the production of capital goods

(output). But the model ignores the strong

trend toward import of capital goods (and of

services); in reality, the income generated by

production of capital goods outside of this

country does not directly translate into increased consumer demand within this country and can translate instead into a loss of employment.

Leontief and Duchin, recognizing this uncertainty, conclude that “it is not yet possible to pass a final verdict on the question of

technological unemployment by the year 2000. ”

Another reason is, as they acknowledge, that

to do so they would have to incorporate into

their forecast other kinds of technological

change, which will change the nature and level

of final demand for goods and services.

Leontief and Duchin also postulate on the

basis of their model that “labor requirements

to satisfy a continually but moderately increasing standard of living will number 124 million

jobs in 1990 with the required occupational

composition reflecting the technologies that

will be in place . . . but because of very slow

change in the orientation of education, training, guidance, and so on, these individuals’

skills and occupational expectations will reflect the mix of jobs that corresponded to the

technologies that were in place in 1978 . . . “

Under those conditions, they point out, 744,000

managers and over 5 million clerical workers

could be potentially unemployed while there

would be about the same number of unfilled

jobs in other occupational categories, for which

they lacked the necessary skills. The problem

for public policy, in other words, could be very

serious even if demand for labor is equal to

or greater than the supply.

A major difficulty with this forecast is doubt

about the assumption of great and increasing

demand for information-handling, which is ulti-
Ch. 2—Productivity and Employment ● 4 3

—

mately derived from the assumption of steadily increasing production of capital goods.

A Georgia Institute of Technology Forecast

prepared for the U.S. Department of Labor14

dealt with clerical employment in the banking and insurance industries only. It concluded

that by the year 2000 there would be an absolute reduction in clerical employment of 22 percent (over 1980 levels) in the insurance industry and 10 percent in the banking industry,

which together employed in 1980 more than

20 percent of all clerical workers (the clerical

employees in these two industries alone constitute nearly 4 percent of the entire U.S. work

force).

The Georgia Tech research began from the

premise that there are “weaknesses in techniques used to incorporate technological change

in employment forecasts, ‘*5 including the unsystematic and qualitative consideration of

emerging technological capabilities, the use

of existing occupational descriptions based on

fixed technologies, the inability to generate

estimates of how particular technologies change

the amount of time spent on basic tasks, and

the use of an overly short time horizon (usually 10 years).

The study began with a technological forecast of office automation hardware and software, organized in terms of information processing functions (descriptions of the content

of tasks related to information processing in

the two industries). The forecast was designed

to identify breakthrough technologies that

would have major consequences for clerical employment. Industry officials participated in a

Delphi (a forecasting technique that generates

by consensus opinion quantified estimates of

specific variables). This produced assumptions

about different paths that penetration of office automation technology might take in each

industry and the different employment/occupational mixes that might result. The analysts

Georgia Institute of l’echnolo~r, Impact of office A uto -

mation orI office II “orkers, final repor~, April 1984, prepared

for the ~~mplo~’ment and Training .4dministration, U.S. Department of I.abor; J. I)avid Roessner, Project Director.

(;eorgia Institute of Technolog~, op. cit., Iol. 1 I, Technical Report p. 2.

then used the technological assumptions to

estimate the reduction in clerical time needed

to perform specific functions in 1985, 1990,

1995, and 2000. Tying these estimates to 1980

clerical employment, an analytical model calculated the changes in the task/function work

distribution over the period 1985-2000 for specific clusters of clerical jobs in each industry.

For sensitivity analysis and validation, the results generated by the model were compared

with those generated by the industry Delphi

to determine the sensitivity of results to different estimates of the extent to which and rapidity with which specific technological changes

will affect particular clerical functions.

The Georgia Tech team concluded that breakthrough technologies have the potential to displace or otherwise reshape clerical employment

in at least two functional areas-data input

and data processing. These include technologies such as optical scan, speech recognition,

software languages and programs, and artificial intelligence, most of which the OTA Assessment also identifies as critical elements

in the employment outlook.

There were several strengths in the Georgia Tech approach which lent credibility to the

results. First, it went beyond conventional occupational categories to consider what it is

that clerical workers actually do, in these two

industries, in their daily and hourly work. Secondly, it attempted to estimate the relative

amounts of time spent in these tasks, and to

relate this to the time-saving potential of

existing and emerging office technologies. Thirdly, it considered a number of potential organizational adjustments to the changing nature of the tasks in terms of organizational

structural patterns. Finally, this approach permitted examination of future clerical work at

several disaggregate levels, e.g., functions,

tasks, and job clusters, rather than in terms

of formal occupational categories.

There are also a number of weaknesses in

the approach. The analytical model lacked feedback loops–for example, it did not account

for the way in which the level of clerical employment affects the number of clerical supervisors needed, and did not account for rela-
44 ● Automation of America Offices

tionships between clerical and nonclerical

work. It did not consider creation of entirely

new jobs and had little to say about the conversion of professional work to clerical tasks.

It did not consider the possibility of significant restructuring of the industries themselves, and their products and services. More

importantly, the forecast does not explicitly

deal with growth in workload, except through

very broadly stated, arbitrary macroeconomic

assumptions, i.e., growth within the two industries of about 3 percent annually.” There

was not explicit consideration of expansion of

the role of information within the two industries, which are of course already highly information intensive.

Finally, the methodology used depends on

judgmental data—estimates by industry experts and team analysts-even though it is

treated quantitatively. In this of course, all

employment forecasts are alike insofar as they

go beyond mechanical extrapolation of timeseries data. To do otherwise would defeat the

purpose of anticipating change brought about

by technological or economic trends.

All of the above forecasts thus are highly

dependent on the assumptions made about the

increasing volume of information handling (independently of the credibility of the models

used) and the continuation of long established

trends in the growth of occupations and their

association with specific industries. The BLS

projection anticipates increases in office employment in the neighborhood of 25 percent

over the next decade but is probably much too

conservative in its attention to technological

change. The Leontief-Duchin forecast points

to continued growth, although highly constrained by the effects of automation, but

bases this forecast on flawed economic assumptions. The Georgia Tech forecast, which points

to a decline at least in clerical employment,

gives more attention to likely technological

breakthroughs (in this field more credible than

“The most important of these were (op. cit., p. 18): 1)

periods of growth and recession, but no major depression; 2)

modest overall economic growth averaging 3 percent annually;

and 3) growth in insurance and banking industries paralleling

growth in the general economy.

an expectation of smooth technological evolution) but is narrowly limited to two industries.

Agreement or disagreement with these forecasts does not turn primarily on the models

and methodology used, but on the complex

assumptions, estimates, and judgment that

generated the numbers fed into those models.

All such models address the question of “what

will happen if. . .”; if for example, technology

changes in certain ways, is adopted at certain

expected rates, produces in practice the productivity benefits that in theory should result,

and leads to the changes in organizational behavior that can be rationally anticipated.

In spite of the fact that vendors and advertisers are often accused of overstating the benefits to be gained by automation, forecasts

such as these may underestimate them. Technology and employment forecasts often misfire in this way, for two reasons. First, forecasters have no reliable way of estimating how

pervasive a technological change will be–the

ultimate rate of penetration. Some technologies are likely to be widely adopted only in

a few industry sectors or in certain parts of

a given industry, or only by organizations in

a certain size range. Other technologies affect

a broad range of economic and social sectors

or become so pervasive that they fundamentally change social and economic activities—

for example, the internal combustion engine

and electric communications (the telephone

and telegraph). Office automation, in particular, computers, are in the latter and more fundamental category of technology; and likely

to become as pervasive in office activities as

the telephone and the typewriter have become

in the last few decades.

Secondly, technology forecasts often go wrong

either because they assume technological or

scientific breakthroughs that fail to come

about, or because they assume a smooth evolutionary development of technology rather than

breakthroughs that suddenly occur. In computer technology, the latter mistake is more

common. Recent employment forecasts appear

to assume that computer-based technologies

of the next 5 to 15 years will not be signifi-
Ch. 2—Productivity and Employment ● 4 5

cantly better than or different from today ’s.

On the contrary, there is no reason to believe

that their rapid development has come to an

end. For example, input technologies, specifically optical character recognition and speech

recognition, are likely to have a significant impact within 15 to 20 years. The rapid development and spread of end-use computing was

not anticipated in many technology forecasts

of the 1960s and early 1970s. In the field of

microelectronics, it appears safer to anticipate

quantum leaps in capability than to ignore the

probability of their occurring.

The chief value in these and other such forecasts is that they force attention to the many

and complex uncertainties that will affect future levels of white-collar employment. OTA’s

analysis differs from those above primarily in

suggesting that there are impending technological developments that will have a particularly significant effect on some large categories of office employment; that adoption of

office automation will proceed at an increasing rate and be much more widespread than

most other kinds of technological change have

been; that productivity gains have been and

will be for a few years masked by transition

problems but will soon become apparent; that

economic growth rates could be lower than

they have been for most of our history; and

that competitive pressures will lead organizations to take full advantage of the labor-saving

characteristics of the technology. These conclusions, like those of the forecasts described

above, are certainly arguable but merit prudent consideration.

PRODUCTIVITY AND THE NATURE OF

WHITE-COLLAR WORK

Productivity is defined in economic terms

as a ratio between quantity of output and quantity of input; increased productivity is achieved

by producing the same amount of product or

service with fewer resources (technological

change), or producing more product or service with the same resources (resource reallocation). Sometimes organizations automate

their office work in order to do the same

amount of work with less labor cost (which

could mean either fewer workers, or the same

number of workers doing less skilled work for

lower pay). Sometimes organizations foresee

or seek an expanding workload and hope to

accomplish it without increasing their work

force (or their total expenditure for labor).

Applied to white-collar work, however, the

concept of productivity becomes complicated

and troublesome. It is least complicated in the

context of routine processing of large amounts

of standardized, easily quantified data—number of units sold, dollars paid or received, ticket

stubs returned, keystrokes made. It is most

complicated when applied to work where quality is more important than quantity-analysis,

decisions, staff support, and policy formulation.

If the final output of the organization’s activity is an information product or service (an

advertisement, a document or research report,

a legal brief, an advisory memorandum or set

of guidelines), then the number of units processed per hour is often less important than

the quality, the timeliness, the fit to a client

needs, or the degree of customer satisfaction.

Effectiveness is more important than efficiency. But effectiveness is much more difficult to measure, since it refers to the characteristics of the output rather than to a ratio

between countable units of input and output.

If the organization’s final product is a material good such as automobiles, the contribution of office work to overall productivity is

difficult to determine because much of it is

concerned with the coordination of intermediate steps in the conversion of resources into

products. Both effectiveness and efficiency are

important and impossible to separate.
46 . Automation of America’s offices

—

There are other general problems in discussing the productivity of service industries. Service outputs are different from material products. They can usually not be stockpiled.

Customer behavior intrinsically affects the delivery mechanism. For example, a study of increased productivity in British accounting

firms found that most of the productivity gains

came not so much from anything the accountants did but rather from the clients’ computerization of their own accounts, which allowed the accountant to save vast numbers

of person-hours in auditing.17

In fact, the concepts of “input” and “output” both become blurred in many kinds of

whitecollar work. “Hours logged in” or “hours

paid for” are often not the same as “hours

worked. ” This is true in both blue-collar and

white-collar work, but perhaps most obvious

for professional and managerial workers who

may be ‘processing information’ or “formulating decisions’ while they read the newspaper

or fall asleep at night. The quality of work is

often more important than the quantity of

work for both blue- and white-collar workers,

but for white-collar workers quality is more

difficult to measure in terms of error rates.

The skill that a receptionist uses in soothing

irate clients, or that a secretary uses in locating an elusive file, shows up in the company’s

records only indirectly as an addition to a

salesperson’s accounts or a lawyer’s clients.

Contributions to corporate reputation or employee morale are difficult to measure.

In terms of outputs, a good decision or the

elimination of erroneous information from a

data bank may not be counted, or even be possible to identify as a discrete output. There

is a tendency to use worker activity, an input,

as surrogate for an output in measuring productivity, with the unwarranted assumption

that more is better. Thus, computers and word

processors sometimes lead to a proliferation

of reports that may or may not be useful and

may or may not represent increased productivity.

‘ ‘Irving H. Siegal, Productivity Measurement: An Evolving

Art, Work in America Institute Studies in Productivity, No.

16 (New York: 1980).

It is therefore difficult to measure, to define, and even to discuss the amount of increased productivity that could be gained by

office automation even if it is widely adopted

by organizations of all kinds and all sizes. Some

organizations have been slow to adopt office

automation for this reason.

However, an organization will usually not

decide to automate a specific task or set of

tasks if it expects that over the long run the

task will therefore require more labor, or will

take longer to perform per unit of workload

than without automation. Automation usually

implies some transference of work from humans to machines, and thus a substitution of

capital for labor.

If office automation only allowed those organizations that automate (assumed for the present to be more efficient) to take over markets

previously served by nonautomating organizations, the result would be a reduction in the

total amount of labor used. On the other hand,

if office automation only stimulated the creation and sale of products and services that

could not previously be offered—that is, created new markets-the total amount of output and labor used would increase. But office

automation will both create new information

markets and reduce the amount of labor required for existing and new products and services. The difference-net labor demand-could

be either positive or negative.

The factor of time is crucially important. For

some period of transition, longer for some organizations than for others, there is little or no

gain in productivity and often some loss. On

the other hand, the new technologies are so

powerful that some organizations settle for the

short-run labor savings and limited cost reductions that are possible from limited use of

automated devices, rather than run the risk

of temporarily disruptive restructuring of the

work to systematically capture all the potential benefits. Across the economy as a whole,

with sectors and industries and organizations

at all stages of this transition, it is difficult

to anticipate how long this transition will take.

Over time–measured in decades–more efficient organizations should tend to replace less
.

Ch. 2—Productivity and Ernp/oyment ● 4 7

efficient ones, and newly created organizations economy, be automated in the next 15 years?

should tend to be automated, and more effi- Will the demand for information processing

cient, from the beginning. create more than enough new jobs to compenThis is the dynamic shift which needs evalu- sate for the labor reduction effects of office

ation in terms of the net labor demand. How automation?

thoroughly will office work, throughout the

HOW OFFICE AUTOMATION AFFECTS EMPLOYMENT

Office automation can substitute for labor,

supplement labor, or reorganize work and thereby make labor more efficient. It can allow

highly technical, knowledge-intensive work to

be done by relatively untrained and unskilled,

lower paid workers. (Skill enhancing and job

enhancing features of the technology are also

important, but are discussed elsewhere. ) It can

change the characteristics and skills associated with occupations and alter their role and

relative importance to an industry. It can allow office work to be done away from the office and outside of conventional office hours,

even outside of the country.

The most dramatic potential substitution

of technology for labor, in the future, could

be the elimination of a large proportion of today’s data-entry work (either numeric or text)

interorganizational transfer of data, directly from computer to computer;

direct input of data by optical scanning

technologies, and possibly by speech recognition technology; and

capture of data at the point of origin, in

a variety of ways ranging from bar code

readers to consumer use of terminals, e.g.,

bank automated teller machines (ATM s).

In short, second-time keyboarding of the

same data may eventually disappear almost

completely (i.e., once data exists in machine

readable form it will be endlessly changeable

and exchangeable). First-time keyboarding

may also be sharply reduced. This may not

happen within the next decade, and yet optical scanning technology and computer exchange of data is already reducing data entry

in some areas, and all of these trends could

develop very quickly.

I

I

I

— L

Cred/f Communications Workers of A~erlca

“We ‘ve decided to call it the neutron chip. It eliminates jobs

but /eaves the work-p/ace intact”.

Direct substitution for labor is only one possibility. Automation reduces the time required

for many tasks. The measured time-saving for

specific tasks, in numerous pilot projects and

implementation case studies, varies from minutes to days. There is no way to validate, compare, and aggregate such figures across organizations. The estimate of “15 percent time

saving” for complex procedures and task clusters recurs with great frequency in both private and public sector office automation plans,

cost justifications, and cost-benefit studies surveyed by OTA, but again it is difficult to document or generalize this measure. The most

that can be concluded is that time-saving is

real but its magnitude and overall effect on

productivity cannot yet be stated. ’s

‘App. 13 summarizes se~reral case studies done for this

OTA assessment; others from scholarl~ and trade literature

are referenced throughout the report,.
48 Automation of America Offices

Automation also can reduce the time that

people have unavoidably spent between productive tasks, or in sequencing tasks. One example is the way voice mail and electronic mail

can reduce the time spent in communicating

by eliminating “telephone tag” or frequent callbacks, searching for telephone numbers, and

getting wrong numbers or busy signals. Electronic filing can eliminate walking to a file cabinet and searching for a particular file; word

processing eliminates cutting and pasting or

retyping documents to eliminate errors.

In some applications a long series of tasks

that required several workers is combined into

one task. For example, in mail processing, a

many-step function that involved several

clerks (mail openers, sorters, typists) can be

redesigned to require only a mail opening machine and a clerk entering information into a

computer terminal.19 Professional case workers in a New York City Municipal agency formerly sorted mail from clients and selected

and typed one of four form letters in response.

Now lower paid clerical workers call up the

client file and push one computer key to send

the appropriate form.20

These are examples of process change, or

reorganization of work and workflow to take

advantage of office automation. Some insurance companies have been phasing out jobs

that involve responding by individual letters

to mail inquiries about claims, policy changes,

or policy applications. Policy holders or applicants have a toll free number to call. The employees who answer such calls use terminals

to retrieve the information required to answer

most queries. By telephone the employee can

elicit all the necessary information, some of

which is often absent from mail communication, thus requiring more than one exchange

of letters. The cost per inquiry is reported to

be one-third the cost per mail inquiry. 21

As the conceptual model described in chapter 1 suggests, even if an organization adopts

office automation to reduce unit labor costs

in standard tasks, managers will subsequently

recognize that it also has other capabilities,

and will adapt the workflow or production process to take better advantage of those possibilities. This may take considerable time, since

problems arising from the initial substitution

and from the interface of new technology with

old procedures usually get first attention. Initial transaction costs of adapting the production process to new technology are high. Training and system support costs in particular

often outweigh hardware and software expenditures. The risks associated with trying new

ways to get the work done appear very large

and potentially disruptive to many firms. For

this reason the full effects on employment are

likely to appear only after considerable time

and experience.

Office automation can also complement and

augment labor, making new tasks possible.

Computers made it feasible for insurance companies to move from annual billings to quarterly or monthly billings (thus encouraging

lower wage earners to buy insurance), and the

increased availability of information also led

States to impose increased reporting require

ments on the industry. In other financial service industries, automation allowed the creation of new consumer services that would not

have been cost-effective otherwise. In large law

firms, some evidence suggests that the introduction of word processing resulted in support staff employment growing several times

faster than legal staff.22 Some people suggest

that once word processing is substituted for

typing, a great deal of “hidden work” appears-work that there was no time to get done

before. This is one aspect that leads to an increase in the demand for information processing, and often therefore to a net increase in

demand for labor.

——— -- —

“’Matthew P. Drennan, “Implications of Computer and

Communications Technology for Less Skilled Service Employment Opportunities, ” Final Report to the U.S. Department of “Mary C. Murphree, “Brave New Offices: The Changing

I.abor, grant No. USDL 21-36-31, Jan. 21, 1983, p. 2. World of the Legal Secretary, ‘Y ~romen To~ls and Triumphs

Wee ch. 10. at the Workplace, Karen Sacks and Dorothy Remy (eds. ) (New

‘Matthew P. Drennan, op. cit., p. 64. 13runswick, NJ: Rutgers University Press, 1984).
The net effect of other, equally important,

effects of office automation on work and workflow is even more difficult to assess. Chapter

4 considers these changes in considerable detail. Automation clearly leads to reallocation

of tasks, for example, professionals and managers drafting their own letters and documents

on the word processor. Analytical work that

formerly required specialists with long training can be incorporated in software that can

be used by people without extensive professional training. Reason suggests that in the

interest of cost-saving organizations will tend

to professionalize clerical work–i.e., push tasks

downward in the hierarchy-and reduce the

number of middle-level professionals and managers rather than the number of clerical workers, since the former are paid more. This is

the argument for the so-called “disappearing

middle management or “flattened hierarchy’

phenomenon that some experts anticipate.23

The “clericalization of professional work”

appeals to many professionals, because it gives

them more autonomy and more control over

the quality and pacing of their work; they can

alter and revise as they go, they need not queue

up or compete with others for the typists’ time.

There is some evidence from case studies and

general observation that the ratio of support

staff to professional staff is tending to decrease

in many offices—that is, the pattern of one

secretary to one boss has already commonly

hlan~’ office automation experts and industry planners expect that \arious computer applications will allow managers

to extend their scope of supervision and planning, and will

thereb~. allow organizations to reduce the number of super\’ isory managers required, and flatten the management hierarch~’. This thesis has sometimes been addressed, in popular literature, in terms of a related issue, that of the “disappearing

middle (income class ).” Saskia Sassen-Koob and others have

put forward an argument that there is, or will be, a growth

in emplo~’ment in both high- and low-income categories in the

fastest g-rowing industries {ad\’ anced ser~’ices), with a decline

in middle-income categories, and thus income polarization. See

Saskia Sassen-Koob, “The New I.abor Demand in I.ocal Cities, ” Cities in Transformation, Michael Smith (cd. ) (E3e\erly

Hills, CA: Sage Publications, 1984), pp. 137-171. The income

statistics put forward by Sassen-Koob as e~’idence that the ‘ ‘disappearing middle’ is occurring are effecti~’el~’ challenged b?’

Neal Ii. Rosenthal, ‘ ‘The Shrinking hliddle Class: hlyth or Realit~’?’ Alonthl~’ I.abor I/e\’iew, Nlarch 1985, pp. 3-10, However the possibilit~~ of a reduced management hierarch~r need

not stand or fall on the terms of this controy’ersjr at the macroeconomic le}el,

Ch.

changed to one

2—Productivity and Employment ● 4 9

secretary serving three to five

professionals, or a cluster of support staff

working for a large group of professionals and

managers.

Office automation may result in a more varied occupational structure, because of the diverse choices among applications and because

automation allows production process and

staffing to vary widely with the type of product. For example, three staffing patterns have

been observed among insurance carriers.” In

highly automated personal lines underwriting

departments of large property/casualty carriers, rating and risk assessment may be computerized and the functions formerly divided

among many clerks, raters, and underwriting

assistants, may be consolidated and delegated

to highly skilled clericals. Unskilled clerical

work is then largely eliminated. Underwriters

become “exceptions handlers, ” doing more

complex work, and their work may shift to

planning and marketing. Skilled clericals become the bulk of the work force. In other

insurance firms, where products are standardized and high volume, almost all of the semiskilled tasks are computerized and a bipolar

work force is created, with a large number of

routine-data entry clerks and a few highly

skilled, professional exceptions handlers. In

still other cases where product lines are low

in volume, specialized or complex, there is

likely to be less extensive, more discrete automation. Data entry will be done by operators

using dumb terminals, and underwriters review all policy.

Thus, a view of office automation’s effects

on employment must take into account not

only substitution of capital equipment for labor in specific tasks, and the expansion of

workload, but many additional and intervening variables including (see figure 2-2) recombination of tasks, reassignment of tasks

across jobs and occupations, changing skills

-’Barbara Baran, ‘“Technology Innovation and Deregulation: The Transformation of the Labor Process in the Insurance Industry, ” Berkeley Roundtable on International Economy, contract No. 433-3610.0, prepared for Technology and

~~conomic Transition Project, Office of Technology Assessment,

Januar~ 1985.
50 “ Automation of America offices

.-

Figure 2“2.—Framework for Analyzing Long”Range Effects of Office Automation on White”Collar Employment

Iemployment and unemployment Ievelsl

SOURCE Office of Technology Assessment

requirements and corresponding job definitions, changes in the definition of occupations,

and shifts in the number of jobs per occupation. The way in which these changes occur

is further discussed in chapter 4.

Emerging Occupational Shifts

Other things being equal, the introduction

of labor-saving technology is most likely to

cause displacement where the task that is auto

mated has constituted all, or nearly all, of the

responsibilities of a given job. In other words,

the more narrow and specialized the job, the

more likely the job-holder is to be displaced

by automation. This applies, at least potentially, to professional specialists as well as to

clerical workers. Highly specialized knowledge

is potentially most appropriate for incorporation into an expert system (a special software

for decisionmaking) while broad, general knowledge is difficult to incorporate.25

When word processing is introduced, assuming that the workload does not increase, fewer

dedicated typists (keyboarders) will be needed.

A general secretary who spends only a part

of her time typing, is not likely to be displaced

by a word processor; more likely she will have

more time for other responsibilities and may

take on new ones. Secretarial positions have

been increasing throughout the two decades

of office automation, while “typist” jobs are

decreasing.

-“Science, “Artificial Experts, ” Mar. 23, 1984, p. 1281.
At the most general level, table 2-2 shows

the relative shares of major occupational categories in the economy. Clerical workers are

the largest employment category, followed

closely by professional and technical.26

In the first stage of automation (large computers), the tendency was to make affected jobs

more narrowly defined—in other words, to rationalize work. Batch data processors did not

learn or do other work. Word processors were

set apart in word processing centers. New specialties were created, ranging from computer

operators to programmers, and the holders of

those jobs typically did nothing else. If dataentry work is completely automated (e.g., by

optical scanning technology) those who do only

data entry are most likely to be displaced and

secretaries are unlikely to be displaced by that

development.

As discussed in chapter 4, second phase

automation—end-user computing—appears

less likely to rationalize tasks or to narrow

— —

‘ A major problem in assessing occupational change is a set

of difficulties and deficiencies encountered in working with occupational data as it is now collected and aggregated. Occupational data are deri~ed from sur~’eys, and the more specific and

narrow the occupational category used, ~he smaller the sur~’e~

sample is, and therefore the less reliable the estimate of the

total. A more important problem is the lack of consistent timeseries data because of frequent changes in occupational classifications, especially between the 1970 and 1980 censuses. hluch

of the data used in this chapter is drawn from the occupational

industry employment matrix prepared by the Bureau of I.abor

Statistics from occupational ~~mployment Surve~’ data, modified by 131.S use of a statistical model. Both the survey and

the model have some methodological problems; for example,

there are \“ariations o}’er time in the way that sur~’ey data was

collected, and matrix data for 1980 and 1982 are not fully comparable. For more information on emplo~ment statistics consult the 111.S Iiandbook of Afethods, vol. 1, Bulletin 2134-1,

December 1982.

Ch. 2—Productivity and Employment ● 51

jobs. Personal computers can be used to integrate tasks and broaden jobs. Moreover, organizations that rationalized work during their

early office automation are in some cases using

further automation to reverse that process.

Many firms have decided that computer and

communication technologies are often most effective in reducing costs when control, communication, and decisionmaking are decentralized and when hierarchic organization and

functional specialization of tasks are reduced.

They are experimenting with the elimination

of both low-skill clerical jobs and routine technical/professional jobs, and with the creation

of new multiactivity, skilled clerical positions.27

In some insurance firms, the result of task reintegration has been a significant reduction in

unit labor requirements and an increase in the

average skill levels of the remaining clerical,

sales, and professional work force.28

It is important to note that reduction of unit

labor requirements has been achieved in both

work rationalization and work integration,

with office automation being used for both,

The networking of computers is likely to

eliminate some jobs that have until now provided the link between automated tasks—for

example, those concerned with reorganizing

-“In the insurance industry, management first tended to follow the logic of scientific factory management, rationalizing

and fragmenting tasks. Some insurance firms are now using

integrated systems to reintegrate tasks, iillowing one person

to handle multiple service transactions so that the individual

master record for each policy is a complete database.

-“Eileen Appelbaum, “Technolog~ and the Redesign of

M’ork in the Insurance Industr~’, ” Stanford Uni\’ersitJ’, I nstitute for Research on Educational Finance and Go\’ernance,

Project Report No. 84-A22, No\rember 1984, p, 10,

Table 2-2.– Percent of Total Work Force in Occupational Groups by Selected Industry Sectors, 1982

Industry Sector

All All Health

Occupations industry manufacture ng Fir e

a Services TCUb

services Trade

Professional, technical, and related

occupations . . . . . . . . . 16.39°\0 10.270/o 9.46°\o 33.65 0/0 7,86 0/, 34.47 0/0 3,78

Managers. officials, and proprietors . . . . . . 8.37 6.69 17.06 6.82 8.99 4.38 9.34

Clerical ... . . . . . . . . ... 20,36 11,75 63,40 19,11 33.29 17,02 20.68

Total . . . . ... 45,12 28.71 89.92 59.58 50.14 55.87 33.80

aFIRE F!nanclal Insurance real estate

b

TCU Transportation commuqlcatlons ut(lltles

SOURCE U S Department of Labor Bureau of Labor Statlstlcs Ernp/oymenf and Earn/ngs, VOI 30, No 1 January 1983
52 Automation of America’s Oftices

or resorting data generated by computers in

one department for entering into another system, or the rekeyboarding that has been necessary when one organization’s data was passed

on to another.

Office occupations must be considered in the

context of industries and industrial sectors,

all of which have some component of office

work. In office-oriented industries such as finance, insurance, and real estate (FIRE industries), a very high proportion of the work force

in clerical and professional occupations is likely

to be directly affected by office automation.

In other industries, such as machine tools production, a much smaller proportion of the work

force is in office occupations, and these tend

to be in less specialized jobs (i.e., general secretary).

Some occupations are more or less standard across industries. Typists and payroll

clerks do much the same work with only minor variations in whatever industry they find

themselves. The same is true of many professional categories— tax lawyers, auditors, or

certain types of engineers work for many industries that require the same general skills.

Other occupations are characteristically found

in one industry or a cluster of highly related

industries.

Both generic and industry-specific occupations may perform narrowly defined tasks and

thus be potentially subject to displacement.

If office automation is broadly adopted across

industries for tasks performed by generic occupational groups, then the people who are displaced will find it difficult to find similar jobs

in a different industry. On the other hand, if

industry-specific occupations find their work

being automated, they may move to smaller

firms or less rapidly automated firms within

the same industry—unless those applications

are insensitive to the size of the firm.

Labor force adjustment to office automation

may require major shifts in employment levels

across occupations. Industry sectors differ in

the proportion of workers in major occupational categories (see table 2-2).

Professional Occupations

Professionals here are defined as workers

doing cognitive tasks that require specialized

knowledge gained through lengthy education,

often with a graduate degree, or special certification or licensing.29 They make up more

than 16 percent of the work force and are found

in all industry sectors, but there are relatively

few in some sectors such as agriculture and

trade, whereas in some service industries

(health services, business services) they make

up more than a third of the work force. Some

professional categories are generic; lawyers,

accountants, and computer scientists for example are found in every industry. Others are

industry-specific, such as insurance investigators, title examiners, and broker’s floor representatives; or are heavily concentrated—more

than 82 percent of financial analysts, for example, are in the FIRE industries.30

In an information-driven economy, in which

services—with high concentrations of professionals-is the most rapidly growing sector, it is likely that the demand for professional

workers will increase. This category has indeed been increasing much more rapidly than

any other occupational category. Its growth

is not, however, unaffected by office automation.

Many professionals are not primarily office

workers; for example, teachers, medical doctors and laboratory scientists may have or use

offices, but the core of their activity is not office work and is not directly susceptible to office automation. However, it usually requires

supporting clerical and administrative work

that will be affected. Professionals may themselves use office automation in peripheral

tasks, and their professional tasks may be

‘<’The term “professional” has undergone a subtle change in

meaning in this century: historically, most professionals practiced their calling on an independent or free-lance basis and

in common parlance professionals tended to be distinguished

from salaried workers. Now most professionals are probably

employees of organizations.

‘“To some extent, however, this distinction is an artifact of

the way jobs are titled in various industries. People with different job designations in different industries may still do much

the same work, or have much the same training and basic skills.
Ch, 2—Productivity and Employment ● 5 3

automated by other kinds of computer applications (e.g., diagnostic technology) beyond

the scope of this assessment.

About half of all professionals are in officeoriented occupations; for example, lawyers,

accountants, analysts, and consultants. As already noted, some highly specialized professional tasks are potentially subject to computerization through expert systems. More

commonly, information systems and data

banks allow part of the professional’s responsibilities to be taken over by paraprofessionals

with less extensive graduate education and less

stringent credentialization and certification requirements. For example, paralegals, engineering technicians, and library assistants do some

of the work formerly done by professionals,

and are paid less than professionals. Thus,

there is strong economic motivation to constrain the increase in professional jobs by combining automation and paraprofessional workers, and the number of paraprofessionals is

growing rapidly.

Office automation also typically decreases

the amount of time that a professional spends

in accomplishing a given amount of work, for

example, in telephone communications, locating and aggregating information from scattered libraries, or reformatting tables and drawing graphics. Some tasks incidental to, and

preparatory to, generating or analyzing information can be eliminated or shortened.

From this perspective, it can be argued that

the amount of information-handling might increase a great deal before requiring a significant increase in the number of professionals.

Once organizations have gained experience in

successfully automating basic clerical tasks,

office automation for professionals and managers will look increasingly attractive, since

their higher wages will increase the cost-saving

possible from automation.

out this decade, and the National Science Foundation has forecast a shortage between 1982

and 1987. 3] This is however growth from a

small base; there were just over half a million

computer specialists in 1982, 0.56 percent of

total employment. Moreover, computer technology itself may dampen the expected demand; as computers and their software become

more usable by nonspecialists, the need for

programmers is shifting from user organizations to producers of computer goods and services, and should grow at a slower rate. Software engineering systems will automate some

of the work of both programmers and systems

analysts. Thus, there is likely to be some leveling off of the need for computer specialists

in spite of the growth in number of computers

in use.

Demand for information scientists may continue to grow, especially with the spread of

the relatively new industry of information service, which provides and manages databases,

on-line search services, and customized searching and abstracting.32 It is not clear from occupational statistics how many information

scientists there are or how rapidly their number is increasing, since many different job titles are used in this new professional area.

There are other specialized professional occupations that are growing because of computers. For example, personal financial advisors and tax advisors were once used only by

the very rich, but small computers made it

possible for them to offer their services more

cheaply to middle-income people who have

money to invest but are confused by complicated choices among financial services and investment and tax-sheltering schemes.

The ultimate effect of office automation on

professional employment is hotly debated.

Some argue that there will be a peaking and

eventual decline in information-handling jobs,

Office automation stimulates the growth of ‘

] National Science Foundation, Projected Response of the some professional categories. Between 1970 Science, Engineering, and Technical Labor Market to Defense

and 1978, the number of computer specialist and Nondefense Needs: 1982-1987 (Special report NSF 84-304),

jobs grew by 58 percent (compared to 20 per- January 1984.

‘-U.S. Department of Commerce, International Trade Ad- cent growth in all jobs). BLS expects growth ministration, Competiti\’e .4ssessment of the U.S. Information

in computer specialists employment through- Services Industrj’, May 1984.
54 Automation of America Offices

including professional jobs.33 Others argue that

the role of professionals within organizations

will change, as the information component of

products and services increases, and they will

become “generalists who include many traditional managerial functions in their everyday

work. 34 Possibly the meaning of the term

“professional” will become progressively blurred

as specialized knowledge becomes more widely

accessible through information technology.

Clerical Occupations

The great growth in clerical occupations mirrors the broad shift from a manufacturingbased economy to a service-based economy.

In manufacturing, clerical jobs are only a small

proportion of employment, although that proportion has been increasing. In those service

industries that collect and use large volumes

of standardized data, such as legal firms, insurance, banking, and credit, more than half

of all employees are clerical workers.

A large number of clerical occupations are

generic, and the work is similar across industries. For example, bookkeepers, accounting

clerks, file clerks, general clerks, office machine

operators, payroll and timekeeping clerks, personnel clerks, receptionists, telephone operators, order clerks, and shipping and receiving

clerks can be found in nearly all industries.

There are more than 100,000 workers in each

of those categories. Official occupational statistics treat other occupations as industryspecific; thus, according to BLS, all insurance

clerks (medical) are employed in health services, all train ticket clerks and freight rate

clerks are in transportation, communications,

and utilities industries, and all credit authorizers are in wholesale and retail trade. However, the basic office skills used in those industry-specific occupations are in large part

transferable to other clerical occupations.”

“For ex~mple, Charles Jonscher, “Information Resources

and Economic Productivity, Information Economics and Policy 1 (North Holland: Elsevier Science Publishers, 1983).

‘Paul A. Strassman, Information Pa.\’off: The Transformation of Il”ork in the f;lectronic Age (New York: The Free Press,

1 985).

There are of course exceptions to this general rule; general

secretaries could probabl~’ not become legal secretaries without

additional training. although legal secretaries might become

~eneral (or execut i~’e) secretaries in another industry,

To the extent that office automation reduced

employment in one or a few industries, clerical workers should be able to move to similar

jobs in other industries. Their mobility might

be greater than that of professionals in industry-specific occupations. This rationale

sometimes appeared in the 1970s, for example, in explaining why more attention was paid

to the displacement of aerospace engineers

than to displacement of clerical workers from

the same firms. But office automation appears

likely to be adopted across industry boundaries

in a relatively short time. Thus, if computers

sharply reduced the demand for bookkeepers,

bookkeeping jobs would be increasingly difficult to find in most industries or locations.

Potentially the most dramatic and widespread impacts of office automation on clerical employment are related to data entry, as

already discussed. The strong trend toward

capture of data at the point of origin, and further development of optical character recognition (OCR) technology and speech recognition technology are likely to greatly reduce

the need for primary keyboarding. OCR is already being used to this end. More and more

information will be in machine-readable form

from the beginning, and computers and telecommunication technologies will increasingly

exchange information between organizations

without the necessity of rekey boarding. This

trend alone will have a strong impact on clerical employment.

Advanced communications strongly affect

clerical jobs that provide the interface between

people, organizations, and activities, for example, messengers, mail clerks, and telephone

and switchboard operators. Such displacement

has been going on for a long time. It also affects clerical workers not usually considered

communications workers. A chain of hotels

may have a centralized, computerized worldwide reservation system with local-area networks and microcomputers. When a reservation is made through a toll-free phone number,

all appropriate information, including credit

references, will be automatically loaded into

the central mainframe database. Information

about next-day guests will be transferred to

the hotels’ microcomputers in the middle of

the night and a reservation clerk will have only
—

Ch 2—Productivity and Employment ● 55

to key in information on last minute walk-in

guests. 36

Not all clerical jobs are equally vulnerable.

of the ten fastest growth clerical occupations

between 1970 and 1978, all but one (computer

operator) were occupations that require direct

contact with people outside an office—e.g.,

cashiers and receptionists. These jobs are

sometimes considered relatively impervious

to office automation. However, when the personal transactions can be standardized the job

can be automated; again the bank’s automated

teller machine is one example. Supermarket

cashier stations are another.

Some clerical jobs include both informationprocessing and manual tasks. Shipping and

weighing clerks, packing clerks, etc., may be

only indirectly affected by office automation,

but are also vulnerable to the effects of automated materials handling and storage systems. Many organizations are also beginning

to electronically print forms as needed, eliminating the need to buy, handle, and warehouse

preprinted forms. In this case, the cost-saving

sought is primarily in the costs of space and

materials, but labor-reduction is an added

benefit.

Ten occupations with declining employment

from 1970 to 1978 were tabulating, bookkeeping, calculating, keypunching, stenography,

postal clerk, telephone operators, mail carriers,

and meter readers. Most of these are occupations directly affected by the early phase of

office automation and the effects are now showing up in statistics. They are also occupations

that are relatively narrowly defined in terms

of tasks, again illustrating that the most narrowly defined jobs are those likely to be first

eliminated.

In a later section of this chapter, the use

of part-time and temporary office workers is

discussed, and other chapters examine in detail the phenomena of home-based work and

off-shore work. Part-time and temporary work

distribute employment among more workers,

(’(~n]r]]unic’ati(jns Ti’wk, ‘‘ Iiolida~ 1 nns to (Jse SN .+1 (;atew’a?r to I,ink 1,600 P(’s Writ h hl ainframe, N 01’. 5, 1984, p, 49.

but they tend to depress the number of fulltime-equivalent jobs. They allow employers to

hire the minimum number of people necessary

for their base workload, relying on part-timers

and temporaries to handle short-duration increases or peak loads. Home-based work programs have the same benefit of load-leveling

since most of the home-based workers are used

on the basis of “when work is available. Offshore data entry, on the other hand, simply

eliminates jobs in the United States.

In short, while office automation will likely

lead to a great deal of shifting between clerical occupations, it is also highly likely to result in an absolute reduction. across the board.

Managers and Supervisors

Table 2-2 showed that managers comprise

a relatively small proportion of total employment; the proportion varies considerably

across industries. BLS data identify a principal group of managers, officials, and proprietors, and also identify supervisory occupations within the clerical and other personnel

categories. within most industries, firms vary

considerably in the proportion of managers to

other employees, with small firms tending to

have proportionately fewer managers—i.e., a

flatter structure.

Organizations are generally using more data,

in more systematic ways, in coordinating their

operations. As management becomes more

information-intensive, it is possible that more

managers may be needed. There is some relationship between the information intensiveness

of an industry and the industry proportion of

employees who are managers. Manufacturing

firms have relatively low levels of managerial

staffing, while insurance carriers, securities,

computer and data processing services, and

mailing and reproduction services have relatively high levels. Managerial employment is

also above average in accounting and auditing services; engineering, architectural, and

surveying services; wholesale and retail trade;

transportation, communications, and utilities;

and printing and publishing. It is relatively

low in health services and legal services, but
56 ● Automation of America’s Offices —

these industries have large numbers of professionals who also act as managers.

There are large numbers of managers whose

work is only partly and secondarily office work;

for example, bar and cafe managers or automobile repair shop managers. Office automation

technology, if adopted, may help them to focus on supervisory responsibilities by reducing the time spent on “office” chores.

In offices, some managers are primarily concerned with the direction and supervision of

clerical or production operations and personnel. If fewer clerical personnel are needed with

office automation, proportionately fewer supervisory managers should also be needed. In

addition, as discussed in chapter 4, office automation can be used to increase the scope of

supervision; that is, one manager or supervisor can monitor the performance of more workers or an increased volume of production.

The tasks of many lower and middle-level

managers largely center on: 1) information collection, processing, and reporting, tasks that

office automation either facilitates and enhances,

reduces the necessary expenditure of time, or

takes over completely; and 2) communication

and coordination, where office automation can

be very time-saving. Higher level managers

concentrate more on decisionmaking. Here

computers can be used in many ways. Some

decisionmaking can be, and is being, built into

computer programs, reducing the need for

lower level managers. Management information systems and other kinds of computer programs are designed to help managers make

decisions, by integrating and displaying the

information they need. In some situations this

saves a great amount of time for the manager;

in other situations, it takes more time to make

a decision because more information is available to be considered.

In some organizations, information that was

once collected, integrated, and laid out by lower

level managers for review by higher level executives, is now aggregated and formatted by

computers and accessed directly by the decisionmaker. This points toward a reduced number of lower level managers, and some corporations are reported to have adopted office

automation with the explicit objective of flattening the management hierarchy. Heightened

competition and pressure to cut labor costs

can lead firms to try to keep a lean management staff, since their salaries are high compared to other workers. At present, the job

market for managers is strong because of overcutting of managerial ranks during recent

recession years.37

Thus, there are conflicting trends to be considered in the outlook for managerial jobs, but

they are not immune to the effects of office

automation.

Technology and Recent Trends

in White-Collar Employment

White-collar employment has grown rapidly

in recent decades. (See figure 2-3. ) The narrower category of clerical jobs, about 16 percent of all employment, has also grown rapidly even through the first phases of office

automation. Table 2-3 appears to indicate, however, that this growth may already have slowed

or stopped.38

‘-Dun Business Month, “Executive .Job Market: Filling

the Talent Gap, ” November 1984.

‘“Does not include cashiers (of whom there were about

230,000 in 1950 and 2.2 million in 1984). Beginning in January

1983 BLS reclassified some occupations; cashiers and real estate appraisers were removed from the clerical occupations category. These reclassifications are one of the continuing pitfalls

of working with occupational data time-series.

Figure 2-3.—Changing Percentage of Work Force

From 1900-80 White-Collar Compared to Blue-Collar

a)~m

: 50 —

White collar

z

~ 40 “

E Blue collar

: 20

&

n lo

o~

-

1900 1910 1920 1930 1940 1950 1960 1970 1980

Year

SOURCE U S Department of Commerce, S(at/st/ca/ Absfracfs of the Urr/fed

Sfafes— 1981, No 673
● 5 7

Table 2-3.—The Growth in the Number of

Clerical Jobs, 1950.84

Number of clerlcal Growth In the Total employ-merit

Year jobs4 (mllllonj number of jobs (percent )

1950 - - - 66 11 3V

1960 88 33’1 134

1970 129 46 164

1980 169 31 169

1982 168 –O 6 168

1984 167 –O 6 159

a

The difference between the 1982 figure for clerical jobs on tables 22 and 23

Ill ustrates the dlff(culty of analyzlng deta!led employment trends because of

am blgultles In data sets

SOURCES U S Department of Commerce Bureau of the Census Census of

Popu/at/on f950 1980 1970 1980 and U S Department of Labor

Bureau of Labor Statlstlcs Current fopulaffo~ Suwej Annual Aver

ages 1982 and 198 4

If the automation of office work is laborsaving, why did clerical employment increase

so rapidly during the 1960s and 1970s? The

capital-output ratio, which has traditionally

been very low in white-collar work,” increased

steadily (see figure 2-4), but from these figures

would seem to have had little effect on labor

demand. A closer look at the financial service

industries, which have been at the forefront

of office automation, tends to counter this impression. They were expanding rapidly during this period in part because of the new products and services made possible by their office

‘1.eontief and Duchin, citing man~ sources, accept that

white-collar workers at the beginning of the 1980s worked with

an a~’erage of $2,000 in equipment compared to the factcq’

workers ;$25,000 in equipment; op. cit., p. ,5.7.

Figure 2-4. —Capital Investment Per Production

Worker, 1970-80

“. 3 2 6

30 —

25 —

20 “

19.5

15 “

10.4

10 — 91

5 —

4.8

0

1970 1975

.

168

III

7.0

1980

Year

c1 ‘anufac’”ring clT””e m“”’”c’

aThe ratio IS net eaul~ment stock (In bill Ions of dollars) to number of Droduc

tlon employees In coristant dollars

SOURCE David Roessner Market Penetration of Off Ice Automat Ion Equipment Trends and Forecasts (working paperl School of Social

Sciences Georgia Instlfute of Technology 1985

Ch. 2—Productivity and Ernp/oyrnent

automation. Life insurance carriers, for example saw sales increase over 49 percent from

1970 to 1980. Yet their labor force increased

only 9.8 percent. During the 1970s the average annual real value added per full-time employee equivalent (a measure of productivity)

for all industries was 1.1 percent; in the insurance industry it was 2.7 percent. From 1975

to 1979 it was 1.3 percent for all industries

but 6.7 percent for insurance carriers.’”

Social, economic, and political conditions favored the expansion of the FIRE industries

during this period. High levels of employment

growth during the 1960s and 1970s and the

rapid increase in the number of two-income

small families drove the proliferation of checking accounts. The rising level of disposable personal income during much of that period, and

the fact that more women were earning income

and insuring themselves for the first time, increased insurance expenditures. Fringe benefits also expanded, and workers compensation

coverage was extended. A flood insurance program was established. New insurance and financial service products responded to, as well

as contributed to, the growth in the market. ’l

Because these industries were growing rapidly, office automation in the 1970s constrained

growth of their work force but did not reverse

it. The labor-saving effects are nevertheless

apparent; between 1970 and 1978, insurance

industry professional and technical workers

increased by 24 percent and managers by over

21 percent, but clerical workers increased by

only 8 percent. During this first phase of automation, technology most directly affected clerical work. In the occupations where automation directly substituted for labor the effect

was greater. Key operators declined by 22 percent, bookkeepers by 7 percent, file clerks by

20 percent, mail clerks by 11 percent, and typists by 12 percent (but secretaries increased

—.

“’Baran, op. cit., pp. 100 ff.

“Inflation and higher interest rates had a mixed effect; insurance carriers, for example, derive more income from investments than from policies but were sometimes locked into older

low-interest in~estments and needed new investments to balance these. Inflation left life insurers more vulnerable to disintermediation and made forecasting of future cash flows for investment difficult. Liability settlements were also growing.
58 ● Automation of America's Offices

by 8 percent and computer operators by 119

percent).”

In some parts of the insurance industry,

there were also dramatic labor reductions in

some areas of professional work; for example,

among underwriters in the life and health insurance fields, there was a dramatic decrease

in numbers during the 1970s.

As a result of the interaction between market growth and office automation, labor displacement in FIRE industries as a whole clearly occurred but resulted in depressed growth,

rather than decline, in employment.4~ In financial services, employment increased by about

2o percent, but growth was lowest in sales and

clerical jobs, and highest for managers and

professionals.”

The labor-saving effects of office automation are likely to become more apparent in the

near future. The first phase of automation was

a more direct substitution of machine for labor than is later office automation, but in the

first decade of use, organizational goals placed

higher priority on better data collection and

reporting and news services. The mass data

handling industries were automating pre-existing functions, such as payroll, inventory control, and other basic procedures. But they were

dealing with anew technology, with no experience and precedents to guide them; reorganization of the organizations’ workflow and labor force took time. In the FIRE industries

there are strong indicators that the emphasis

has more recently shifted to cost-reduction,

and much reorganization and labor force reduction is now occurring. Unit labor costs have

in fact been dropping since 1969 and the drop

began accelerating about 1975.4

’

Market conditions can either offset or reinforce employment effects. In the case of the

——

‘Baran, op. cit.

“Valerie Personick, “The Job Outlook Through 1995: Industry Output and Employ merit,” ~lonthl~’ Labor lie~iew, No-

\rember 1983, p. 34; U.S. Department of I.abor, Bureau of I,abor Statistics, ‘f’echnolo~’ and Laborin Fitw Industries, Bulletin

2033, 1979.

“Baran, op. cit., p. 105.

‘ 13aran, op. cit.; also P:ileen Appelbaum, op. cit.

insurance industry, one group of analysts concludes that:

. . . some of the present job losses occurring

in the industry are directly attributable to

computer technology, though more often than

not these are the delayed effects of an earlier

stage of innovation rather than the latest

developments: some of the losses are best regarded as the indirect consequences of technology, which for example might allow reorganization and rationalizations to be made;

and some losses are attributable to separate

factors such as declining market conditions

or out-moded management structures. On the

whole one might sum up by saying that computer technology has provided the vehicle

which makes it possible to respond efficiently

to market conditions, whether this be by expansion of business or by contraction of operating costs. 46

This analysis agrees with other evidence that

white-collar employment is becoming more sensitive to cyclical economic conditions.

In both future and past shifts in employment, it is difficult to separate the role of technology from the effects of market change and

other broad economic factors. But analysts at

Bell Canada have studied the effects of technological change on their work force from 1952

to 1972, and concluded that “technological

change resulted in substitution of capital for

low-skill labor, overwhelming any price complementarily with capital.’’”

In 1952, Bell Canada was using an average

of 48 to 52 million person hours yearly, 23,000

to 25,000 jobs. Over the next two decades output steadily increased by 7 to nearly 10 percent per year, or over 500 percent, but labor

demand at the end of the 20 years was less

than 15 percent higher than in 1952.

The econometric model used in the Bell Canada study was designed to separate technological effects (i.e., automation) from price and

“ Richard 13arras and Julia Swarm, The Adoption and impact of Information Technolo~’ in the UK Insurance Industr~r

(1.ondon: The Technical Change Centre, No\ember 1983), p. 21.

‘-Michael Denny and Melvyn Fuss, “The Effects of Factor

Prices and Technological Change on the Occupational Demand

for I,abor: Evidence From Canadian Telecommunications, ” The

Jourmd of Human Resources, XVII, 2, spring 1983, pp.”161-l 76.
market effects. The study concluded that technological change out weighed wage/capital and

wage/material ratios in affecting overall employment levels, and in the case of demand

for telephone operators, whose jobs were the

primary focus of technological change, far outweighed the effect of output growth.

Small computers and word processors allow

the standard office functions to be automated

in small organizations, and incrementally, with

relatively low capital investment at one time.

Office automation need not involve construction of new facilities or extensive alteration

of facilities. Where it replaces existing equipment—typewriters, calculators, bookkeeping

machines, and old telephone systems—that

stock does not represent large amounts of

embedded capital. Most such equipment is

more than 5 years old and has already been

amortized. Office computers and equipment

also enjoy a rapid tax write off. For all of these

reasons, office automation may proceed more

evenly, more widely, and more rapidly than

other kinds of automation did in the past.

The speed with which a technological change

occurs, and its breadth, are both important

in assessing the impact. A slower pace allows

both individuals and the labor market to make

whatever adjustments are possible. In this regard the potential office automation of small

businesses is particularly important. Small

firms, in many parts of the country, account

for the preponderance of office jobs. A reduction in the number of office jobs available relative to the total work force would therefore

be felt in all areas of the country as well as

in all industrial sectors, although not with the

same force in all sections and sectors.

Part-Time and Temporary Employment

The proportion of part-time and temporary

workers has been increasing since the early

1950s. The number of voluntary part-time

workers has remained between 13 and 14 percent since 1970 but the proportion of involuntary part-time workers has continued to

increase (see table 2-4 and figure 2-5), indicating that the strongest factor in the growth

Ch 2— Productivity and Employment ● 59

Table 2-4.—Changes in the Percent of Total

Employmenta for Involuntary and Voluntary Part-Time

Workers as Percent of Total Employment, 1968-84

Part-time work

Involuntary

Year Total workers

1968 ........, ., 14 9“ 0 2.5 ‘ r,

1969, . . 155 2 6

1970 164 31

1971 ... ., 16.8 3 4

197 2 16.8 3 3

1973 .., ... . 166 31

1974 . . . . . : 171 3 5

1975. , ., 184 4,6

1976, . . . . 180 4 2

1977 ..., . . 180 4 0

1978 .., . . 177 3 8

1979 .., ., . . 17.6 3 8

1980 ......, 184 4.5

1981 . . . . . 186 4 9

1982. . . ... 202 6 4

1983, ., 200 6.5

1984, ... . . . . . 189 5 7

force

Voluntary

workers

12.400

129

133

134

135

135

13,6

13,8

13,8

140

139

138

13,9

13.7

13.8

13,5

13.9

aThese cal rula! I rjns are for nonagr!cul ! u ~al workers agec 16 anc over

SOURCES 1968.81 — Labor ‘orce stat!st IWS derived from the Cur,en( Popu/afjor~

Survey A Dafa BOOA Vo/ume f (Washington DC U S Depar(meot

of Labor B u reau of Labor Stat I st I cs Septern ber 1982 Bu I let I n 2096)

D 682 1982– Emploumenf and Earn/ngs VOI 30 N o 1 (Wash I nqtm

DC U S Department of Labor Bureau of Ldhor Statlsttcs Janu~, y

1983) p 169 1983—Employment and Earnings VOI 31 N,) 1 (Washlnq

ton, DC U S Department of Labor, B u reau of Labor Stat I st cs Jan u

ary 1984) p 194 1984— Ernp/o) rnt?n( an{f Earn I ngs VOI 32 N c, 1

(Washington DC U S Department of Labor Bureau of Labor Statls

IICS January 19851 p 192

Figure 2.5–Changes in the Percent of Total

Employment a for Involuntary and Voluntary

Part-Time Workers, 1968-84

20

I

15 --

.* ..****

10

. ● ● ● ● ● O* ● * ● ● * ● ● 8 ● * ● ● ● . . ● ● ●

U Voluntary

R

Involuntary

t- 5 —

0 I I I I I I I I

1968 1970 1972 1974 1976 1978 1980 1982 1984

Years

SOURCES 1968.81 — Labor fore e stat tst ICS der!ved from the Current Popu/a/IcI,I

Survey A Data Book Vo/urne 7 (Washington DC U S Department

of Labor Bureau of Labor Stat I st ICS September 1982 Bu I let I n 2096)

p 682 1982—Ernp/oyrnenf and Earn/frgs VOI 30 No 1 (Washington

DC U S Department of Laho! Bureau of Labor Statlstlcs January

19831 p 169 1983—Employment and Earnings VOI 31 No 1 (Washing

ton DC U S Department of Labor Bureau of Labor S(at{st!cs Janu

ary 19841 p 194 1984—Emp/oyment and Earn(ngs VOI 32 No 1

(Washington DC U S De~artmerrt of Labor Bureau of Labor Stat/s

tics January 1985) p 192
60 ● Automation of America’s Offices —

is not workers’ choice of a more flexible lifestyle, but employers’ response to economic

pressures. In some industries and some organizations, slack workloads lead employers to

convert workers to part-time in preference to

a layoff. Other employers, however, are adopting a policy of keeping a minimum-size work

force, which can be temporarily augmented

when necessary .48

There are reports that in other industrialized countries automation has greatly increased

part-time work; for example in Japan, “introduction of part-time workers and subcontraction has grown massively.’’” Office automation and creation of a part-time work force are

in some situations alternative or competing

strategies for cost-cutting but they may also

be complementary. Part-time workers (considered by BLS as an employee working less than

35 hours a week) are cheaper than a proportionately smaller number of full-time employees because they often are paid lower wages

and do not qualify for benefits packages, regular yearly wage increases, or job security agreements based on seniority. There have been

many anecdotal and press reports of companies reducing work hours to one or two hours

fewer per week than would qualify workers

as full-time employees, but few companies are

willing to admit formally to this practice. The

biggest advantage of part-time workers for employers however is that of load-leveling; that

is, they can be used during parts of the day

or week when the workload is heaviest.50 To

the extent that office automation allows the

work force to be reduced and workflow made

more efficient, it may obviate some interest

in moving toward a part-time work force.

‘“See, for example, a recent article in Business Week, “PartTime Workers: Rising Numbers, Rising Discord, ” Apr. 1, 1985,

p. 62, reporting explicit statements by several company

spokespersons about reluctance to staff to full capacity.

‘“Katsus Nishiyama, “Introduction and Spread of VDT Work

and Their Occupational Health Problem in Japan, ” to be presented at the 5th UOEH International Symposium in Japan,

Sept. 19, 1985.

“’’Business W~k, op. cit. Another strong factor has been

the growth in demand for part-time employees by fast-food

restaurants, shopping centers and shopping malls, and neighborhood banking locations, many of which are open long hours,

at night, or on Sundays.

But in other situations, office automation

encourages the creation of a part-time work

force. Where it is used to standardize and deskill work many employers have found it profitable to use part-time, low-paid workers. Some

have reportedly moved to suburban locations

to take advantage of the availability of housewives willing and eager to work part-time at

low wages because there is another primary

wage-earner, with a full benefits package, in

the family. As discussed in chapter 7, office

automation also makes it feasible to use homebased workers, on a part-time and piece-rate

basis. In the long run, office automation may

stimulate a stronger trend toward use of parttime or temporary workers by allowing employees to maintain a minimum work force that

will need supplementing during hours or seasons of work overload; and by standardizing

the basic skills needed by clerical workers and

some kinds of professional and technical workers.

In 1955, only 8 percent of American workers were part-time;51 this rose fairly steadily

to about 15 percent in the late 1960s and continued to rise to 20 percent by the 1980s. (See

table 2-4.) Thus, about one-fifth of American

workers are working part-time. Women are

much more likely to work part time, often in

order to combine paid employment with child

care. About 29 percent of working women work

part time, compared to 12 percent of working

men. About 21 percent of teenagers aged 16-

19 and employed, are working part time.

In 1983, in the FIRE industries—leaders in

office automation—only 11 percent of employees were part-time. This sector ranked fourth

among major industry sectors, after the wholesale and retail trade (32 percent), service industries (27 percent), and construction (14

percent). In the service industries, a large proportion of the part-timers were probably also

office workers.

In the office-oriented sectors of banking and

insurance of other industrialized countries,

however, part-time work is expected to increase,

“

]New Work Schedules for a Changing Society (Elmsford

NY: Pergamon Press, 1981), p. 45.
Ch. 2—Productivity and Employment . 61

According to the International Labor Organization, part-time employment in the banking and insurance industries is rising in its

member countries, and in Sweden over 26 percent of banking and insurance employees are

part-time. 52

ATMs have probably reduced the need for

part-time tellers and clerks in the United

States. But other forces are now at work. Four

of the biggest eight accounting firms, and

many financial service firms including Citibank, Traveler’s Insurance Company, and other

major employers of clerical workers such as

Control Data Corporation (CDC) are now emphasizing part-time employment.53 Travelers

Insurance Company has developed a job bank

of retired professionals for temporary market

research and product development, and plans

to train them for use as programmers, parttime. CDC has a formal program of using parttimers, which has been in effect for 2 years.

The goal is to have 15 percent of their work

force (chiefly clerical and production workers)

on part-time or temporary status and another

15 percent as independent contractors. This

goal has been partly realized; by 1984 CDC

was reported to have 4,500 part-time workers, or 10 percent of their work force.

Closely related to part-time work is temporary work, which for employers is another

strategy for workload leveling. Many clerical

workers are temporaries, but there is a growing trend toward using temporary programmers, systems analysts, computer engineers,

and data communications specialists.54 Temporary workers can be called in on short notice when work is briefly or seasonally heavy,

and can be dismissed almost instantly and

without penalty. From the employer’s viewpoint temporaries are part-time workers for

“International Labor Organization, Advisory Committee

on Salaried Employees and Professional Workers, The Effects

of Technological and Structured Changes on the Employment

and Working Conditions of Non-Manual Workers, Eighth Session, Geneva, 1981, pp. 50-51.

“Joann Lublin, “Shorter Hours: More Managers Are Working Part Time; Some Like It But Others Have No Choice, ”

Wall Street Journal, June 2, 1982, p. 50.

“John J. Davis, President of Worldwide Computer Services, Inc., “Is There a High-Tech Pro in Your Future?” Management Information Systems Week, May 22, 1985, p. 64.

Pholo cred(t ” Kelly Serwes, lnc

This simulator exactly duplicates several major word

processing systems and is used for testing in an

employment services firm.

whom the organization has no responsibility

for long-range job security. The worker who

is individually hired on a temporary basis generally suffers the disadvantages of apart-time

worker—i.e., not qualifying for benefits and

relatively little chance of promotion, and by

definition has no job security. Many temporary

office workers, however, are employed by firms

within the new temporary employment service industry; that firm provides them with assignments to client firms. The worker may be

available to the employment service firm fulltime or nearly full-time, or may wish to work

only occasionally or sporadically. Some employment service firms are now providing their

regular workers with prorated benefits similar to those that they might receive as permanent employees of a large firm. More generally, however, temporary workers do not have

such benefits.

The temporary service industry is growing

rapidly, nearly twice as fast as GNP over the

last 14 years; and faster than the computer

equipment industry, to a payroll of $5.5 billion in 1984.55 At first, it appeared that auto-

“The National Association of Temporary Services reported

a payroll of $431 million in 1971 and $5.50 billion in 1984, an

average of nearly 20 percent growth per year. (Figures sup-

(continued)
mation would be a barrier, since temporary

workers would be unfamiliar with equipment,

which varies widely between offices, but the

larger temporary agencies provide training in

a broad spectrum of office automation equipment and applications, particularly word processing. Also, automation has standardized and

de-skilled some tasks for which temporary

workers can be used. Clerical occupations accounted for over 60 percent of temporary assignments made by the industry in 1980, although it accounted for only 49 percent of the

revenue since clerical wages are generally lower

than those in technical, medical, and industrial assignments made by the temporaries industry.

Temporary computer and data communication specialists, and other professionals, are

in growing demand. They can offer up-to-date

knowledge of current systems, languages, and

protocols, because of recent schooling and varied experience, and may choose to work as temporaries for fear of becoming trapped in a narrow specialty or job where their knowledge

will gradually become obsolete.5G A computer

services official attributes the trend toward

use of temporary professionals in computerrelated work to “the triangle brought about

by mounting costs in corporate and government-mandated fringe benefits, the inability

of many companies to meet peak workloads

with their permanent staff, and finally the

growing number of professionals who desire

to change their work patterns.’’”

Closely related to temporary employment

are employee leasing and use of independent

contractors. Employee leasing may be used

by employers as a still longer term strategy

for workload leveling (by month, year, or project-duration), but it is more generally used by

very small firms or professional offices (doc-

(continued from p. 61)

plied by the National Association of Temporary Services and

also based on the Census Bureau’s Count~~ Business Patterns,

“Vital Statistics of the Temporary Help Industry, ” Contemporary Times, vol. 2, issue 6, fall 1983.)

‘ I]a\’i:’, op. cit., says “In practical terms, the! do not want

to spend the next 5 ~rears of their careers learning how to appl~:

Unix or C into an insurance conlpan-v microcomputer system.

Da\is, op. cit.

tors, lawyers, dentists) to shift the administrative costs and benefits costs associated with

employees to a contracting firm, which can

benefit by economies of scale. 58 The leased

worker usually enjoys a full benefits package,

although he or she is not guaranteed permanent employment (in practice, the job security may be about the same as in conventional

forms of employment).

Office automation appears to have given a

large boost to the growth of independent contractors offering business services such as

word processing, data entry, and computer programming. Independent contractors are selfemployed, with all the risks and benefits this

entails; he or she assumes the costs associated with slack work periods and loss of worker’s benefits in return for autonomy. The work

may be done in the employer’s facility, with

the contractor/worker effectively indistinguishable to observers or coworkers from employees. The work may however be done in the contractor/worker’s home, using the communication

capabilities of office automation.

Some clerical and professional independent

contractors are entrepreneurs, or small business men and women, seeking multiple clients

either at one time or in sequence. They may

or may not plan to expand their activities and

take on employees of their own. Many contractors on the other hand work for only one

firm and are in effect employees without the

benefits otherwise associated with employment. The unresolved tax and legal issues associated with independent contractor status are

discussed at greater length in chapter 7 in connection with home-based clerical workers, many

of whom are former employees converted to

the status of independent contractor.

Part-time and temporary employment and

independent contracting are likely to increase

as automated offices move toward a lean work

force with need for occasional supplementary

business services, and as more workers are familiar with the equipment. There are strong

.

%om-e” service contracting companies make their profits

from the interest on advance deposit of the monthly fees paid

I]y the client to cover wages plus associated costs.
Ch. 2—Productivity and Employment ● 6 3

benefits in it for workers as well as for employers. Many people prefer and actively seek

part-time work. Students, mothers, and retired

people often want to work less than a standard workweek; others want more time for families, education, or recreation. They choose to

trade income for leisure time, and are willing

to pay the additional costs in terms of loss

of benefits such as health insurance, lack of

job security, and diminished likelihood of promotion and advancement. The standard 40

hour workweek has not changed since the

1930s, and part-time work is the way some

people create their own shorter workweek,

Many ‘temporaries” choose this form of employment because they want or need the flexibility it gives them.. Some use it as a form of

job-hunting, or trying out potential employers.

However, some temporaries are unable to get

assignments as regularly as they wish, and

find the unpredictability y of their income a severe disadvantage, but have been unable to

find permanent employment.

At a minimum, part-time work is preferable

to unemployment, Employers sometimes convert full-time employees to part-time status

during a recession, in preference to laying them

off and losing a valuable worker. 59

If part-time work is beneficial to many employers and is sought by many employees,

under what conditions is it a public policy

concern? First, if enough full-time jobs are

eliminated–-i.e., converted to part-time jobs,

opportunities will be diminished for those who

must have full-time work to make enough

money to support themselves and their dependents. Second, in the United States, many

social services and income protection mechanisms are provided not directly by tax payers

but through employee benefits packages–e.g.,

health insurance, life insurance, income during illness or childbirth, pension plans, and

to some extent training and higher education.

These protections are much more costly, if they

are available at all, on an individual basis. If

conversion to part-time work means that a sizable proportion of the population no longer

has these protections through employment,

then the taxpayer is in the long run likely to

bear more of the burden of the illness, old age,

and death for these people, and the average

level of health and well-being of the population is likely to decline.

Society may be willing to bear this risk, if

that is the price of allowing people to choose

part-time work. If part-time work is not a

choice, but the only alternative available to

them, and especially if this limitation on choice

is the result of employers’ decisions, then the

public policy issue becomes one of whether this

shifting of responsibility for basic protections

from employer to employee is acceptable to

the society at large. Historically, the choice

of full-time or part-time work has been regarded as the individual’s prerogative. We

must then ask: is this still a free choice, and

will it be so in the future? To what extent is

involuntary part-time work increasing?

The official part-time employment figures

based on annual aver-ages do not tell the whole

story. The number of people who work part

time at some time during a year is often double the annual average. For example, in 1978,

a recession year. the annual average was 21.4

million part-time workers, but a retrospective

survey indicated that 40.9 million people, at

some time during 1978, had only part-time

work. ’() While the annual average showed 3.4

million of the part-timers as working part-time

involuntarily (that is, because they could not

find full-time work)” the retrospectiv’e survey

counted 10.1 million. The number of involun -

tary part-timers has been increasing, as shown

in table 2-4, to more than a quarter of all parttimers (and about 5 percent of all employed)
64 ● Automation of America’s Offices

at present. Recent increases in involuntary

part-time employment and multiple-job holding for women suggest that there may not be

enough full-time jobs for those that seek

them.62 Thus the number of people who “want”

to work part-time may be smaller than assumed, and the change in attitudes and lifestyles cited above as a factor in the trend may

not play as strong a role as is often assumed.

Public interest in part-time and temporary

work is therefore twofold:

1.

2.

that the number of involuntary part-time

workers not increase to undesirable levels,

causing a deterioration in income levels,

because full-time jobs have been converted

to part-time jobs; and

that the costs of worker protection not

be shifted from employer to worker to a

degree that ultimately causes them to be

borne by the taxpayer.

These unanswered questions again point to

the need for more careful and systematic monitoring of trends in employment, since a significant increase in the number of long term

involuntary part-time workers would challenge

the adequacy of existing mechanisms for income security and other employee protection

mechanisms.

Analogies From Past Waves

of Automation

Throughout modern history, mechanization

and automation of work have brought dire

warnings of unemployment.63 But employment

has continued to expand. Mechanization and

automation have contributed to, or driven, this

expansion by reducing the costs of food and

“A~cordi~g to Professor Eileen Appelbaum in a talk prepared for presentation to the Panel on Technology and Women’s

Employment of the National Academy of Sciences, Washington, DC, Feb. 17, 1985.

‘

] Mechanization is the use of machinery as a substitute for

human or animaJ labor. Automation is a narrower term, meaning the use of machinery that “makes decisions” about the

work without human intervention; that is, machinery with control systems that incorporate the principle of feedback to finetune or correct the machinery’s operations. Computerization

carries this internal decisionmaking a great deal further, with

the use of information stored in memory and by the sensing

of external conditions.

material goods, stimulating the market for

them, providing paychecks for workers to buy

those goods, and creating capital to be invested

in production of more and still cheaper goods,

further stimulating the market.

In general, workers displaced by mechanization have taken other jobs in the same industry as it expanded, or moved into new or

expanding economic sectors.

The argument from history is powerful; in

general, technology creates rather than destroys jobs. That is why developing nations,

with exploding populations, struggle to industrialize. There are however several important

considerations to be noted. The great waves

of mechanization and automation in the past

were still part of the continuing industrial revolution. The United States was, in the 19th

century, a developing nation—an agricultural

nation becoming an industrial nation, with an

expanding national market based on plentiful

resources, in which the consumers who bought

goods were also the workers that produced

them. From World War II through the 1950s,

at least, U.S. technology enjoyed worldwide

preeminence across the board. But this is now

a mature economy, strong but with increasing competition for both domestic and world

markets. Imports are a major factor in the

economy. It is therefore not clear that the

American economy will grow, in the future,

at the vigorous rate of the past. In an economy that is growing more slowly, new jobs

are created at a slower rate, and workers do

not enjoy the mobility they have in a rapidly

growing economy.

Secondly, past waves of automation have

been concentrated in one or a few industries,

for example, at one time agriculture, at another

period commodity manufacturing or industries

that could use assembly line techniques. Automation proceeded unevenly across economic

sectors, crafts and occupations, industries,

organizations according to size, and geographical regions. Jobs were increasing in some industries and occupations, when jobs at approximately the same skill level were decreasing

in other industries. Large companies automated well before small companies. Many
Ch. 2—Productjvjty and Employment . 65

kinds of manufacturing automation, for example, have never been adapted to batch manufacturing or for small machine shops. This contrasts with office automation, which can be

used in basic office functions across all industries, and especially with small computers and

stand-alone word processors, which allow even

small offices to automate.

Although total employment has grown

through and after historical waves of automation, each has left behind some structural unemployment. In many cases, older workers

failed to make the adjustment and new jobs

went to new workers with more recent training, new skills, or more flexibility. In other

cases, new jobs and new industries more than

compensated for lost jobs in number, but were

located in other regions, leaving displaced

workers behind. (The coal miners of Appalachia

are a pertinent example.)

Agricultural employment declined steadily

from 27 percent of all employment in 1920 to

2.7 percent in 1980 (an absolute loss of 8.7 million jobs) as agriculture was mechanized. See

table 2-5. However, employment was created

in food processing (1.6 million jobs in 1982),

in agricultural research, and in transport and

sales of food. As population and the economy

grew, blue-collar employment stabilized. There

were only 3 percent more blue-collar jobs in

1980 than there were in 1950, while the work

force grew by 69 percent in those decades. The

30.5 million blue-collar jobs in 1950 were over

half of total U.S. employment, while the 31.5

million blue-collar jobs in 1980 were less than

32 percent of total employment. Now the number is decreasing. BLS reports that 2 million

manufacturing jobs have been lost since 1979.64

Had white-collar employment not been expanding rapidly, new workers could not have been

absorbed into the economy.

At the beginning of the 20th century, there

were only 5.1 million white-collar jobs, accounting for under 18 percent of all employment.

By 1950 these jobs had quadrupled to nearly

22 million, but still accounted for less than

37 percent of employment. In 30 years-less

than the working lifetime of an office worker—

the number of white-collar jobs has more than

doubled to nearly 52 million jobs, accounting

for at least 55 percent of all American workers.

Structural change in the economy has created jobs in some sectors while it displaced

jobs in others. The result is a net increase in

employment, and there is also a more equitable distribution of employment opportunities (e.g., better status jobs for more people,

and more jobs open to women). Creation of

jobs has by and large kept up with both population growth and growing participation in the

labor force. In 1950,57 percent of the population was in the labor

had grown to nearly

force, but by 1980 this

64 percent.

“BLS originally reported to the Joint Economic Committee

that 8 million jobs had been lost, but issued a correction after

this was reported in the press. See “BLS Corrects Figures on

Factory Job Losses, ” Washington Post, June 18, 1985.

Table 2-5.—Shifts In Employment by Industry Sectors, 1900-80

1900 1910 1920 1930 1940 1950 1960 1970 1980

Total labor force (000). .29,030 37,291 42,206 48,686 51,742 58,992 67,990 79,802 104,058

White collar:

Growth . . . . . . . . . . . . 560/o 320/o 36?40 12%0 3470 260/o 39”!0 420/o

Labor force . . . . . . . . . 18°/0 21 “/0 250/o 290/o 31 0/0 37 ”/0 400/0 47 ”/0 51 “/0

Blue collara:

Growth . . . . . . . . . . . . 370/0 140/0 190/0 11%0 14 ”/0 9“/0 190/0 21 “/0

Labor force . . . . . . . . . 45°/0 480/o 480/o 490/0 520/o 520/o 490/0 490/0 450/0

Farm:

Growth . . . . . . . . . . . . 60/0 –10/0 –90/0 – 130/0 –230/o –41 0/0 –400/0 –60/0

Labor force . . . . . . . . . 380/. 31 “/0 270/. 21%0 17“/0 12 ”/0 60/0 30/0 30/0

%!s ~flc)udes rrrarrua/ and serwce Workers

SOURCES” U S Department of Labor, Bureau of Labor Statlstlcs, H/stor/ca/ Abstracts, Co/onla/ Times to 1970, Series D, Nos

182.232, p 139, and U S Department of Commerce, Statfstica/ Abstracts of the Urr/ted States— 7985, p 400
66 ● Automation of America’s Offices

But it is not clear that the creation of new

jobs has completely compensated for the long

range labor-saving effects of mechanization

and automation. High unemployment rates

(7.5 to 7.1 percent) have persisted in spite of

the highest employment ever achieved in this

country. In 1984, after recovery from a recession, 3.5 million new jobs were created (the

second highest growth rate in our history) but

unemployment did not significantly decrease

and stood at 7.2 percent at year end. 65 If those

workers are counted who have dropped out

of the labor market because of discouragement,

or have accepted part-time work because they

can not find full-time work, the unemployment

rate would be several points higher than it officially is; for example, in early 1985, about 10.8

percent rather than 7.3 percent. The number

of jobs in manufacturing declined by 1.6 million from 1979 to 1984, and in the goods-producing sector very few industries employ more

workers now than before the recession began.66

During a recession, some markets maybe lost

to international competitors, and some organizations do not recover. Also, organizations

tend to adjust slowly to labor-saving technology, preferring normal attrition to layoffs;

but when layoffs are forced for other reasons,

they are likely to take advantage of this to

eliminate redundant jobs permanently.

The “normal” level of unemployment has

in fact been rising for at least half a century.

Several kinds of unemployment are usually

distinguished. One kind is “frictional” unemployment–that which is normally attributed

to the demise of individual firms and the mobility of workers moving between schools, jobs,

and occupations. Another kind results from

relatively discontinuous or sudden expansions

of labor supply, for example, disbanding of a

military force, a wave of immigration, or—

less precipitous but still unprecedented–the

increased participation of women in the labor

force in recent years. Third, there is cyclic un-

‘ U.S. Depa,tnwnt of I,abor, Bureau of I.abor Statistics,

The ~jn]plo~’n~ent Situation (monthly) and l~mplqJrment and

Earnings. Januar~’ 1984: I,inda LeGrande ‘‘Employment Status

of the N at,ion: Data and Trends, Congressional Research Ser\’-

ice. 1 \sLIe Brief 11182097, updated Ma~ 6, 1985.

“ I.e(;rande, op. cit., p. 3.

employment resulting from fluctuations in aggregate demand, which can be an acute and

serious problem during recessions but declines

when the economy recovers. The fourth kind

of unemployment and the most serious in longterm considerations is structural unemployment, often defined as a mismatch between

the supply of jobs and the supply of workers

with the skills needed for those jobs, but in

theory also possible when there are not enough

jobs, at any skill level, to engage all would

be workers.

Until about 1970 it was generally assumed

in this country that an “acceptable’ level of

total unemployment was about 3 to 4 percent.67

But the rate has not been that low, even in

periods of expansion, since 1969. As shown

in table 2-6, unemployment rates have been

rising for about two decades, not falling back

even in “boom” years to previous lows.

This long-term rise in unemployment has

been attributed to many causes. One is demographic-the flow of young people and women

into the labor market during the 1970s. Others

are shifting industry patterns (e.g., involuntary job loss in the automobile industry as a

result of foreign competition), changing life

styles (willingness of people to take temporary

or part-time jobs for the sake of leisure time,

or greater mobility), and slackening of aggregate demand. But as shown in table 2-6, the

increase can be seen through both the troughs

‘ ‘In fact, unemployment rates frequcntl~’ exceeded this figure in recession years throughout th<~ centur}’ and from 1931

to 1910 was higher than 14 percent, with mt)rf’ than 20 percent

of thtj l~h~i. forc~’ unernplo~wd in 1932. 1 ~~~ ~;. 19;\4, itnd 1 !);l~),

During the t~’ar ~em-s unemplo~rnent Jf :IS \ lndc,r ? perc(>r-. t, :1 nd

}Ias heen on an upwnrd ~lope since then.

Table 2-6. —National Unemployment Rates Dt.lring

Recession Troughs and Recovery Peaks, 1961-84

I+ecesslon troughs Recovery peaks

1969 -70... ..5 80/0

1973 -75., . . ., . . . .8.3

1980, . . ... .75

1981 -82.., . ..........10.6

1961-69, ., . . 3,6°/0

1973, ... . . ... .4,8

1979. , ., . . . . .6.0

1981 ., . . . . . .7,4

—.

1984. . . . . . . . 7,1

SOURCE Bureau of Labor S[attstlcs data compllecl by Michael Podgursky

Sources of Cecular Increases In the Unem@oymenl Rate 1969-1982

Afonth/y Labor Rev/ew July 1984 p 20
Ch. Z—Productivity and Emp/oyrnent . 67

and high points of business cycles. Economist

Michael Podgursky notes that there has been

a long-term rise in involuntary job loss and

argues that:

. . . rising structural unemployment in traditional segments of the labor force may also

have played a significant role . . . the secular

rise in the unemployment rate since 1969

seems to have been generated by more than

just labor market adjustment problems associated with a rapidly growing labor force.68

It is worth noting at this point that Podgursky’s analysis suggests that structural unemployment so far may have affected primarily blue-collar jobs. This would argue that both

automation and rising imports of capital goods

have played a role. Both will also increasingly

affect white-collar work in the future (see chapter 8 for a discussion of off-shore sourcing of

data entry work).

In summary, the number of jobs has continued to increase through waves of mechanization and automation in the past; the U.S.

economy was growing strongly, and an assumed major driver in this growth was technological advancement. But there are disturbing signals that structural unemployment has

also grown.

The Future White-Collar Labor Supply

The number of office jobs is likely to grow

more slowly at best, and at worst to decline,

with a possible precipitous decline in lower

level clerical jobs such as data entry if certain

technological developments proceed as anticipated. The effect on employment levels must

be considered in terms of the supply of labor–

or the demand for jobs.

‘“hl ichae] ~)(d~wrsk: “Sources of S(,(ular 1 ncr(’[lses in the

I nenlpio}nlent lia Ce, j ~jog. I fj~~,”’ ,IIOn/h)l I.;~lJor Ret’ieu’. ,Jul}’

19(W, p. 2 }.

During the coming decade, from 1985 to

1995, the population will grow by about 10

percent. But the work force will grow about

16 percent, from 113.5 million to well over 131

million; nearly 18 million more jobs will be

needed. 69 There will be fewer young workers

entering the work force each year; the number of people in the work force who are under

24 will in fact decline as will the number of

workers 55 and over, while the number of ‘prime

age” workers, age 25-54 is growing. These

changes of course reflect wide variations in

the birth rate in past decades; the average age

of workers will increase.

About 65 percent of the workers added to

the work force will be women (by 1995, they

will make up at least 47 percent of the work

force). The number of working women between

the ages of 35 and 44 is expected to more than

double, and the number between 45 and 55

should increase by nearly 60 percent. Women

in these age groups who are already working

are heavily concentrated in clerical occupations. This is a demographic group that will

be strongly affected by the outlook for office

jobs over the next 15 years. The proportion

of nonwhite workers will also be growing; now

12.5 percent, they will be 14.5 percent of the

work force by 1995. The number of black women

in the work force, for example, will increase

by over 50 percent. Since minority women are

disproportionately represented in lower level

clerical jobs, this is another group that will

be differentially affected by office automation.

A further discussion of the effects on these

groups is in chapter 12.

‘ ‘This is the middle grow’~h scenario used I}s H 1.S; SWJ f;mpfo,}ment IJro.lectjons for 1995, Bulletin 2 19’7, I?l :+rch 19HI.
68 . Automation of America’s Offices

—

CONCLUSIONS

The most likely outlook appears to be slowing growth in office employment over the next

decade; some decline in office employment could

begin by 2000. Slowing employment growth,

or even decline, is most likely to occur in clerical occupations but may also affect lower and

middle management positions.

This outcome is not certain or inevitable.

Strong growth in the U.S. economy and continuing growth in demand for information, and

information-based products and services may

outweigh the labor-saving achieved through

office automation. Nor would slow growth in

office employment necessarily result in lower

overall employment levels. Growth in other

occupations could more than compensate for

a decrease in office jobs, especially if higher

office productivity contributes significantly

to the productivity of U.S. industry and its

competitiveness in world markets.

The possibility of slow growth or decline in

office employment, which now occupies about

45 percent of all employed Americans, is nevertheless something which Congress should watch

closely, in order to take preventative or corrective actions in a timely fashion. The further possibility of a significant increase in parttime and temporary work, at the expense of

full-time employment, should also be watched

carefully, lest it leave a growing proportion

of American workers without essential benefits, income security, and other social protections.

As has been noted throughout this chapter,

however, the ability of Federal policy makers

to monitor technological change and its effects

on employment and the structure of the economy is weak. It is limited both by inadequate

data and by lack of capability in technological and economic forecasting. The latter limitation in turn, reflects in part the state of development of these disciplines themselves;

however, in the civilian agencies little resources

are being allocated to improving these capabilities and recent budget cuts, may have further eroded government capability for foresight and planning, at least in the important

area of information and communication technology development.

POLICY CONSIDERATIONS:

LABOR MARKET ADJUSTMENT OPTIONS

The Need for Monitoring of Structural

Economic Change Related to

Information Technologies

While the possible long-range effects of office automation can be foreseen, they are subject to many and complex uncertainties related

to broader changes in the national economy

and the global economy, as well as to natural

social adjustments and accommodations and

to specific policy interventions. Nevertheless,

the potentiality is troublesome enough to merit

both careful monitoring and systematic contingency planning by responsible agencies of

the Government.

That kind of serious monitoring and planning is not being adequately done. Executive

agencies have few incentives to warn of possible long-range problems when such warnings,

or the preparatory actions they imply, may

call into question immediate administration

policies or the assumptions around which they

are framed.

Congress may, therefore, wish to consider

now how such monitoring and long-range planning may be set in motion.

There are serious institutional barriers to

such analysis within the executive branch of

Government. The first necessity for analysis
of emerging and potential employment problems related to structural change in the economy is the availability of time-series data organized in appropriate categories. There are at

present troublesome deficiencies in the way

in which labor data is collected and organized

for use by government analysts. A second necessity is the continuing development of capability for monitoring and forecasting technological change. To analyze the employment

implications of technological change, there

must be a close link between technical, economic, and social science knowledge and analytical expertise. There is no institutional locus in the executive branch of the Government

developing excellence in the technical monitoring and forecasting of information and communication technology and studying the economic, social, and political implications, despite

the central role that information and communication technology now plays in the economy

and in the Government itself. On the contrary,

some of the relevant but partial and fragmented

functions and capabilities that have been developed along those lines have recently been

curtailed or weakened by budget cuts (e.g., the

planning and forecasting elements within the

Institute for Computer Science and Technology in the National Bureau of Standards).

Congress should therefore consider means

of mandating and implementing a mechanism

or governmental unit within the executive

branch with the capability for systematic monitoring, analysis, and reporting of changes in

the structure of the economy related to fundamental changes in the technologies of communications, computers, and information management.

Longer Range Policy Options

If, as it appears possible, office automation

will over the long run lead to inadequate growth

in demand for office work or outright decline

in the number of office jobs, or in the narrower

but still large category of clerical jobs, what

could be done about it? The policy options discussed below are long-range options, interventions to be considered if and when it appears

Ch. 2—Productivity and Employment ● 6 9

that white-collar unemployment is becoming

a serious problem.

Discouraging the spread of office automation in the United States is clearly undesirable, because of the benefits it promises in

terms of productivity and in terms of the quality of work life; and discouraging it is also virtually impossible under the U.S. economic and

constitutional framework.

Some of the marginal effects of office automation on employment could be controlled

directly. For example, Congress may wish to

consider options to discourage the off-shore

sourcing of office work, or of the narrower category of data entry, should this increase to

the point of significantly affecting clerical jobs

in the United States.

Conventional kinds of policy intervention

would aim at improving labor market adjustment—that is, helping displaced workers get

new jobs. These mechanisms might include a

broadening of the applicability of labor market

adjustment support to white-collar workers,

and an increase in the level of that support.

In the matrix of 1982 dollars, the money

spent by the Federal Government on general

employment and training programs and for

the Federal Employment Service per labor

force participant has fallen from $46.35 in 1970

to $30.30 in 1982, a 35 percent decrease. This

is about one-quarter of the expenditures in

some other industrial nations, for example,

Sweden. As pointed out by an expert in labor

adjustment policy:70

Current policy takes a passive orientation

toward the labor market and services only the

most disadvantaged workers. What is required

is a more activist policy in which structural

change is anticipated and a broad segment of

the labor force is assisted in adjustment. With-

‘Mi~hael-P~d~rsk~’, IJni\ersit~ of hl[lss:iclll]s[~tts, “ I,atx)r

hlarket Policy and Structural Adjustment, ” a paper prepared

for the Conference on U.S. Industrial Polic?r and International

I)e\’elopment, held b~ the Overseas 13e\’elopnwnt Council, J$’ash -

ington, 1 )C, hl ar, 4, 1983, l)odg-ursk~ made this argument in

the context of displacement of manufacturing workers and o\erall structural changes in the econornf’ and was not specifically

referring to white-collar displacemc’nt.
70 ● Automation 0f America Offices

out such a change existing employment and

training programs will continue to play only

a marginal role in assisting workers in the

mainstream of the industrial labor force who

face economic hardship as a result of ongoing

structural changes in the economy. (Emphasis added. )

An alternative or complementary strategy

is to focus Federal programs on those office

workers apt to be most directly and strongly

affected, and also relatively disadvantaged in

terms of current employment status. This

group includes: 1 ) those in specific clerical occupations generally at lower levels of the wage

scale, most of whom are women; 2) minority

workers; and/or 3) all women office workers,

since even in managerial and professional occupations women as a group have less seniority

than men and are concentrated at the lower

levels of the occupational hierarchy most likely

to be affected by automation.

Existing job training programs and labor

exchange or employment service systems that

provide labor market information are primarily’ framed around blue-collar employment.;71 

programs available to displaced workers in the

automobile and steel industries, for example,

have given relatively little attention to office

workers in those industries. There may be ways

to improve the quality and availability of labor market information and counseling services for office workers, with an emphasis on

forecasting changes in occupational demand.

working hours by taking second (part-time)

jobs, which would tend to make the strategy

ineffective.

In effect, the standard workweek may be

shortened without policy intervention if the

use of part-time workers increases. This has

disadvantages from a public interest viewpoint, because as discussed above it would result in a deterioration of income security, and

very likely a long-range increase in the costs

of necessary social services and/or an increase

in the share of that burden borne directly by

taxpayers.

To some extent that problem might be alleviated by laws requiring the prorating of all

workers benefits packages, stronger controls

over conversion of employees to independent

contractor status (or more stringent definition

and clarification of that status), and nationwide eligibility of involuntary part-time workers for prorated unemployment benefits. This

would lead to a more rational allocation of labor resources by eliminating the advantages

that accrue to employers who substitute parttime workers for full-time workers not tO level

the workload but to save the cost of fringe

benefits. Rigorous cost-benefit studies would

be necessary, however, to assesss the desirability” of such policy action~: they should include cost-effectiveness studies to determine

the relative advantages to employer sponsored

fringe benefits publicly provided social

services.
What Action Is Needed NO W?
Chapter 3

Training and Education for

Office Automation
Contents

Page

Technology and Training. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

The Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Basic Skills Required for Office Automation. . . . . . . . . . . . . . . . . 78

Determining Training Requirements . . . . . . . . . . . . . . . . . . 79

Methods for Delivery of Training . . . . . . . . . . . . . . . . . . 79

How Is Training Obtained? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

The Adequacy of Office Automation Training . . . . . . . . . . 83

Education for Office Automation Technologies . . . 85

Teachers and Computers . . . . . . 87

Curriculum Development . . . . . . . . . . . . . . ‘ . . . . . .“. 87

Access coeducation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

Policy Considerations. . . . . . . . . . . . . . . . . . . . . . . 89

Policies in Foreign Countries . . . . . . . . . . . 89

Existing Legislation . . . . . . . . . . . . . 89

State and local Practices . . . 91

Policy Options . . . . . . . . . g~

Tables

7’ahle No. [~~g~

3-1. Average Costs for Training Among Selected Office-Rela~ed Occupations 77

3-2. Sources of Training Needed for Obtaining Current Job Among Representative

Selected Office-Related Occupations . . . 84

3-3. Sources of Training for Skills lmpro~’ement Among Re[*rcsentative

Office-Related Occupations .

85

Figur e

Figut-e NO. P2ge

3-1, The IJse of Computers in Elementary and Secondary School Education 86
Chapter 3

Training and Education for

Office Automation

schools, private schools, commercial schools,

and employers. hluch of this training is recreational, such as crafts, photography, and travel

classes. However, much of it is also job related:

for example, computer courses.

There are signs that a large part of the population does not, have access to training, which

creates inequities in opportunities for available jobs, The lack of coordination on a national

level of information on training and education

for work and on job opportunities hampers t he

ability of individuals to plan careers and tO

adju st to changing job markets. The benefirs

for the individual changing new skills are

notonly higher income and greater imcome security,

but also an increase in self- esteem and confidence. which promotes the ability to learn

additional new ski11s.

Training and continuous education and opportunities for acquiring office automation skills
76 ● Automation of America Offices —

TECHNOLOGY

New technologies and the accompanying

training needs seem to operate in cycles. The

training cycle for a technology has been described as follows:l

new technology introduced—employers

provide extensive training and upgrading

of employees because of lack of available

expertise in the work force;

technology becomes widely adopted and

equipment is standardized-specific skills

become general skills; employers lose employees to other firms;

employers cease to provide general training; training is shifted out of the workplace and into the schools, and firms focus on firm-specific skills;

increased demand makes it feasible for

public and private schools to standardize

and formalize training; and

the industry using the technology, or the

technology itself, declines; demand for

skills contracts—training focused on replacement needs of the firm and on retraining of displaced workers.

Office technologies are in the early stages

of this cycle. Some employers are continuing

and even increasing their expenditures on

training, but with the largest proportion spent

on management skills training. Some are beginning to require skills in using automated

equipment as a condition for employment, as

they find a more plentiful supply of already

trained workers.

Public and private educational systems are

now offering training in office automation as

well as providing the genelal education needed

by office workers. U.S. companies spend $40

billion per year on further education and training of workers. z Over 21 million people participated in adult education (part-time, nondegree studies) in 1981.3 Fifty-seven percent

‘Patricia Flynn, The Impact of Technological Change on

Jobs and Workers (Waltham, MA: Bentley College, March 1985).

-Manpower Comments (Washington, DC: Scientific Manpower Commission, July-August 1985), p. 7.

‘Digest of Education Statistics, 1983-84 (Washington, DC:

U.S. Department of Education, National Center for Education

Statistics, December 1983), p. 157.

—-

AND TRAINING

of these courses were in formal educational

institutions such as universities, vocational

and trade schools, community colleges, or

elementary and high schools. Twenty-seven

percent of the courses were provided by business, labor, and professional organizations or

government agencies. Sixty-one percent of the

courses taken were job related, that is, were

taken to improve skills for a current job or

to get a new job.4

The Stakeholders

According to the Bureau of Labor Statistics (BLS) the work force is expected to grow

by 23 percent by 1995. BLS projected growth

of 1.6 percent per year between 1982 and 1990.

This would slow to 1.0 percent per year between 1990 and 1995.5 This is based on a projected population increase of 12.5 percent by

1995. 6

About 75 percent of the U.S. labor force for

2000 is already in the labor market, creating

a great need for adult learning opportunities.

As the “baby boom” generation ages, the need

for teaching new skills to an adult work force

has been termed an “adult learning crisis.’”

The term “crisis” refers to the wide gap in

future skill requirements for work in automated offices and the current capacity to train

adults, and was identified for example in the

Leontief-Duchin employment forecast described

in chapter 2. Changes in elementary and secondary education will have little immediate

impact on these adult learning needs in the

next two decades, since the formal educational

system may reach only 25 percent of that work

force that are new entrants.

‘Tra”ning, October 1983, pp. 54-68.

Randolph Brown, “Demographics of the Current and Future American Work Force, ” Profit Sharing, vol. 32, November 1985, pp. 5-17.

“The BLS projected population for 1985 was 237.5 million,

The population, according to the Bureau of the Census, actually reached 238 million in May of 1985 that indicates that

the total for 1985 will be somewhat higher than was projected.

“Lewis J. Perelman. The Learning Enterprise: Adu)t Learning, Human Capital and Economic De\’elopment, The Council

of State Planning Agencies, 1984, p. xv.
Because of continuing technological change,

office workers will have to train and retrain

over a lifetime. This will have a heavy impact

on the resources of both providers of training

and of those who are trained. In 1981, when

the average annual earnings in private industry were just over $13,000, 42 percent of the

participants in adult education had incomes

of over $25,000, 42 percent had incomes of

$10,000 to $25,000, and 12 percent had incomes

of under $10,000 (the remainder were unreported).”

Average costs for training in some officerelated occupations are illustrated in table 3-

1. Additional costs to the trainees are reduced

leisure, family, and personal time. These costs

can be a substantial barrier, especially for those

with child care and other family responsibilities.

Women, who are heavily employed in clerical work and increasingly striving to move up

in organizational hierarchies, have a large stake

in the changes in jobs and training. Women

have constituted a large proportion of the increase in the labor force in the past 15 years.

Blacks have also been moving into office jobs

in the past three decades, increasing their participation rate in clerical jobs from 2.7 percent in 1950 to 10.2 percent in 1984. They,

too, have a strong interest in the changes

occurring. Black and other groups will enter

the work force at a faster rate than whites,

and will account for about one-fourth of the

projected increase in the labor force to the year

1995.

9 Hispanics will also make up a larger

‘Digest of Education Statistics, 1983-84, op. cit., p. 157.

‘Monthlev I.abor Retiew (Washington, DC: U.S. Department of Labor, Bureau of Labor Statistics, November 1983), p. 3.

Table 3-1 .—Average Costs for Training Among

Selected Office-Related Occupations

Costs (dollars) Hours

Occupation Public Private Public Private

Ch. 3—Training and Education for Office Automation . 77

part of the office work force because of a higher

birthrate than whites and because of high immigration rates.

The group most effected in the past by discrepancies between skills required for available jobs and their own education and skills,

are young workers, and especially those from

inner-city minorities. More than 40 percent of

the unemployed in January 1983 were under

25 years old.10The rate was 50 percent for black

teenagers. This situation may be somewhat

alleviated by the decrease in number of young

workers, but the problem of lack of needed

skills will continue to limit the opportunities

in office work for many young minority workers.

The 35 to 50 year olds who will constitute

the largest group in the work force until after

2000 have completed their basic formal education. Their additional training and education will be achieved through on-the-job training or through their own efforts outside the

workplace.

Older workers also have a stake in changing skill requirements. There is no evidence

to prove that age is directly and linearly related to performance,” or to learning, but there

is less incentive for organizations to offer continuing education and training to older workers as they approach early retirement age. Attitudes on the part of managers that reflect their

own perceptions of a worker’s capabilities play

a large part in determining what training is

offered. While there is no evidence that intelligence, learning ability, memory, or motivation decline with age until very late in life,12

this perception can seriously affect the kind

and amount of training and retraining that

is offered to older workers.

Accounting . ... . . . . . . $488 $2,893 1,238 1,019

Business administration 395 3,913 1,148 1,198

Secretary, . . . . . . . . . . . . 541 2,903 998 1,043

Computer programmer . . . . 551 3,473 1,276 704

Clerk . . . . . . . . . 507 1,870 924 785

SOURCE U S Department of Ed;catlon National Cen!er for Educa!lon Stat[stlcs Dfgest of Educ~fIon Stat6t/cs, 79831984, Washington, DC table

139

. . —.—

“’The Emplo.vment Situation: December 1982 (Washington,

DC: U.S. Department of Labor, Bureau of Labor Statistics,

Jan. 7, 1983).

“U.S. Senate, Special Committee on Aging, The Costs of

Emplo.ving Older Workers ( Washington, DC: U.S. Government

Printing Office, September 1984), p. 4.

-Ibid., p. 59.
Basic Skills Required

Office Automation

for

Whether skills required to work in automated offices are at a‘ ‘higher’ or ‘lower’ level

than those they are replacing, and whether

more or less training and education will be

needed by future employees, has been the subject of much debate.

The basic skill requirements for all office

work can be obtained through the traditional

educational system. These include reading,

writing, spelling, and some math proficiency.

Problem solving, abstract thinking, communications, and interpersonal skills are increasingly important. But studies have concluded

that one-fifth of the Nation’s adults do not

have adequate reading and writing skills to

function competently in the labor force. ”

Some office automation equipment will foster jobs that require less skill than do manual

operations, but many jobs found in an automated office require a higher degree of discretion, initiative, understanding, and creativity. A few specific skills become redundant,

but many workers must cover a wider span

of work activity than before, often in a shorter

time span.

The degree of automation achieved may determine the skill levels required. In the factory, levels of automation vary from a power

tool that is hand controlled to a robot that

identifies and selects appropriate actions and

corrects its own performance while operating.

The skills required can increase as tasks are

automated but only to a certain level. 14 When

the automation reaches higher levels the required skill levels can decrease, as the worker

is required only to monitor the machine and

respond when the machine warns that something is wrong.

——.

‘See Norvell Northcutt, Adult Functional Cornpetenc~’,

Adult Performance Levels Project, Industrial and Business

Training Bureau, University of Texas, Austin, 1975.

“James Bright, “The Relationship of Increasing Automation and Skill Requirements, Employment Impact of Technological Change, Appen&”x Volume II: Technology and the American Econom.v, National Commission on Technology,

Automation, and Economic Progress (cd.), Washington, DC,

1966, pp. 11-209.

Most offices are now at the lower to middle

levels of automation; it is likely that the skills

required are more complex at this time because

of the many sets of rules that need to be learned

to operate the new equipment, and because

of the changes in the work process and in relationships between work groups.

Among clerical workers surveyed by Kelly

Services, Inc., 88 percent of the 613 respondents believed that their skills were increased

by automation and that this would help them

obtain salary increases, even though only 30

percent of them had achieved such increases

since acquiring new skills.

Some experts15 challenge the popular belief

that computer training should be basic in

schools in order to prepare students for the

workplace, on the grounds that the “higher”

the technology, the lower the skill level required. A BLS analysis indicates that only a

small percentage of new jobs in the future will

require computer literacy beyond what can be

learned on the job in a few hours or days. ”

Others challenge the assumption that jobs requiring use of a computer are automatically

transformed into “knowledge work. ”

Researchers seem to be in agreement that

the number of jobs available in the future requiring in-depth knowledge of computers are

not a large proportion of projected new jobs.

However there is also general agreement that

skills will change for many jobs (particularly

office jobs) and that training and retraining,

probably throughout the lifetime, will be required for many workers. As lower level clerical jobs are automated and eliminated, the remaining jobs will require higher level skills.

To what extent employers are willing to provide this training on the job will depend on

the availability of workers who have obtained

the required skills elsewhere. From the workers’ point of view, achieving these skills will

be critically important in obtaining employ-

‘

r

’For example, Douglas Noble, “Computer Literacy and

ideology, ” Teachers College Record, vol. 85, No. 4, summer

1984, pp. 602-614.

“Henry Levin, “Jobs: A Changing W’orkforce, A Changing

Education’?” Change, vol. 16, october 1984, pp. 32-37.
ment and in making job changes throughout to be reasonably competent. However, there

their lives; 81 percent of adult Americans feel are man-y jobs in insurance, banking, and elsethat additional training will be required of where, in which the automated system is an

them because of changes in the workplace.); integral part of the work process. Weeks or

even months of training and practice may be

Determining Training Requirements needed before an employee is fully competent.

The major factors to consider in determining training requirements are the needs of the

users (their current skill level and learning

needs level), the nature of the technological

applications and products in a specific office,

and the characteristics of the job.

Users of automated office technologies include: 1 ) those currently unfamiliar with computers; 2) those who currently use computers

as tools to perform specific tasks but are

unaware of “how the computer works”; and

3) those who program, perform systems analyses, and do other work that requires understanding of how computer systems work.

OTA case studies indicate that an increasing

number of computer users fall between divisions 2 and 3; they are not computer professionals and they usually employ software

packages developed by others; but they may

occasionally write small programs to improve

the computer’s effectiveness as a tool.

The tasks to which office automation can

be applied include: 1) tasks that require only

a well-defined, step-by-step procedure; 2) tasks

that require a limited amount of problem solving; and 3) tasks that involve analyzing and

manipulating data to achieve some goal. ‘g

For some tasks in the first category, training may be brief—as little as a few hours. Even

for tasks in the third category, learning to use

a computer as an effective tool may take relatively little time when the worker already has

other expertise. For example, an economist

learning to use a statistical package may require only a few days’ training and practice,

“America at M’ork: The E\’olving Role of Proprietary

t’ocational I+; duration, ITT Educational Ser\’ices, Inc., Indianapolis, I h’, 1982. Summary of a survej of a representatikre

national cross-section of more than 1,000 adults.

“Paul liarmon, “Training: Psychology Meets Technolo~’, ”

Computer Jl”orld, ~lay 2, 1983, p. 9.

‘Ibid., p. 12.

The organizational structure and environment also has a bearing on training requirements and success. Skill needs change as an

employee moves up in the hierarchy of the

organization. Training managers to supervise

workers in an automated office environment

is a different process from training workers

to use the equipment. The immediate working environment depends largely on the philosophy of the organization’s management.

Management may or may not, for example,

consult employees about the implementation

of office automation, the redesign of the workflow, and training methods.

Methods for Delivery of Training

Research has demonstrated the importance

of hands-on experience in learning office automation skills; how well people learn a new skill

depends heavily on how much “engaged time”’

they spend on the learning,’n although experts

differ as to whether this applies to less motivated trainees to the same degree as it does

to the highly motivated. Hands-on and on-thejob training assure that the trainee is “engaged” during the learning session.

Self-teaching (and mutual learning) appears

to be the most common mode of training, followed by home study. But there are some problems with self-teaching. The lack of formal,

guided instruction for all employees creates

an unequal knowledge base, leaving some employees at a disadvantage. For example, many

workers are not allowed training time on the

job, and have responsibilities that take up their

time off the job, and so are prevented from

learning even when they want to do so,

-“Raymond Nickerson, “Information Technology and Ps?,-

chology, ” Third Annual Houston S~mposium (New York: Praeger Publishers, 1982), p. 203.
Generally, when office automation equipment is purchased, the vendor provides a

limited amount of orientation training, often

in a classroom setting or through computerbased training. The users must then experiment independently to determine what applications are best for their own specific tasks.

Coworkers supply additional knowledge.

Key workers are often used to train others

in an office and assist them in acquiring office

automation skills. These “internal trainers”

may receive formal training from the vendor

or may develop expertise on their own. Then

they must “interpret” the skills and tutor

other staff members. Other office workers benefit by learning from someone who knows both

the business operations and the system.

Beneficial as this short cut to formal training may seem, it may not be as productive

as it first appears. The internal trainers are

often volunteers whose formal job descriptions

do not take this role into account and no allowance is made for it in their official work

schedules. 21 They must balance the importance

of their training activities against the possible loss of productivity in their own assigned

duties. While the key workers often enjoy their

teaching role, they may or may not be good

teachers and may or may not treat coworkers

fairly in sharing their time and attention

among them.

User groups are formed by users of a technology to share information and to assist each

other. Such groups are usually formed by

employees and are most often managed and

maintained by the users themselves. User

groups are also encouraged by equipment vendors. Outside help or intervention is rare.

During meetings, users take on the role of

teacher, translator, trainer, problem solver,

and student.

Centers for learning, testing, and exchanging information (often called user or technical

information centers) have been established in

“Tora 13ikson, Don Mankin, and Cathleen Stasz, “Individual and Organizational Impact of Computer-Mediated Work:

A Case Study, ” The Rand Corp., OTA contract report, March

1985, p. 42.

many organizations, as a place that employees may go to learn about automated technologies. These “user information centers” may

offer a variety of services including—instructional classes, computer-based training, hardware and software testing, rating guidelines

for applications and prepurchases, and educational and informational publications. The

training is most often self-initiated by the

worker seeking basic skills or further applications knowledge. These forms of in-house,

group learning are beneficial because people

feel rewarded when they meet new challenges

on their own.

Computer-based training (CBT) for learning

office automation skills is increasingly available. There are multiple choices of off-the-shelf

equipment and systems, standard sets of equipment and software programs that can quickly

and easily be adjusted to a variety of requirements. Some include optical disk and video

text. As more manufacturers and vendors have

entered the field, the cost of CBT hardware

has decreased; it is no longer a prohibitive

factor in most cases. In its 1984 industry survey, Training magazine reports that 46.4 percent of all responding organizations use computers for training.22

Computer-based training is popular because

it reduces the two most commonly cited problems of training-cost and time. One expert

reports that the use of CBT reduced course

length and that students trained on such techniques achieved the same or a better level of

performance than was achieved by those trained

in the longer conventional instruction courses.

A review of the literature found no evidence

that the use of computer-managed instruction

(CMI) or computer-assisted instruction (CAI)

caused students to do less well than control

groups receiving other forms of instruction

within the classroom.23 Two matters cause concern when CBT is used—the fidelity of the

training system in simulating the work envi-

“Training, October 1984, p. 56.

“S* Mildred D. Jarvis, “Computer Based Training: Lessons Learned, ’ Proceedings of the Human Factors Society—

28th Annual Meeting, 1984, pp. 515-519, also her reference to

Orlansky and String’s report on the cost-effectiveness of CBT

in military training, 1979.
Ch. 3— Training and Education for Office Automation ● 8 1

Phofo cred(t D~gfta/ fqu~~rnen( CorP

Computer-based training

ronment, and the quality of the written documentation used in the training. The closer the

learning situation follows the work setting, as

opposed to merely presenting drill and practice exercises, the greater the applied learning that is acquired. Poorly written documentation prevents trainees from advancing

through the stages of learning or achieving

the highest level of learning possible.

Home study is a growing alternative to formal classroom-based training. CAI and CM I

packages are offered, for example, by the National Radio Institute (NRI), which provides

technical correspondence courses. Cost is the

restricting factor for home study because it

is expensive to convert courses to technologyoriented modes of delivery and because the

students must often purchase their own hardware and software to study at home. However,

for basic education, TV-presented courses are

very cost effective. While sending employees

to a training seminar or conference can cost

approximately $40 per hour, and a university

course can cost $7.50 per hour, a TV course

costs only pennies per hour.

How Is Training Obtained?

A survey of Fortune 1500 firms” indicated

that companies, when automating offices, are ——.—

-“ ‘America at ~’ork: The Management Perspecti\7e on

Training for Business, ” I’IT Educational Senices, Indianapolis,

IN, 1983, p. 44.
most likely to hire new employees with the

required skills (44 percent), switch employees

into positions requiring no additional skills (40

percent), or reduce the number of employees

(40 percent). Thirty-six percent switched employees into positions that required additional

training.

In addition to formal education institutions,

many public and private sector organizations,

including unions, are involved in providing

training and/or education, but demand so far

outstrips supply. Some experts have questioned whether the capacity exists to respond

to all training and retraining needs. Many business organizations are increasing their budgets

for training. A 1983 survey of 1,821 private

and government employers” showed that 1984

training budget increases were predicted by

47.4 percent of the companies surveyed, but

53.5 percent actually did increase those expenditures in 1984.

Although it varies considerably by industry, the dollars spent on nontechnical training such as sales and supervisory skills, outweigh the dollars spent on technical training

such as word processing, programming, and

electronic testing. Also, according to this

survey 26 managers were much more likely to

receive training than lower level employees.

Midlevel managers and first line supervisors

received an average of 32.5 hours of training,

executives received 28.3 hours, and professionals, 27.2 hours, while administrative and

secretarial employees received approximately

11 hours. Most of the companies surveyed

offered both in-house and outside training with

executives most likely to receive outside training and lower level employees most likely to

receive in-house training. Only 31 percent of

these companies engage in retraining of employees, usually lower level employees.

In a survey of selected clients in Chicago,

Price Waterhouse27 found that 42 percent of

.- -.—-

“Training Budgets ’84: In the Pink—and the Green, ”

Training, october 1984, pp. 16-31.

“’’’Training Magazine’s Industry Report, ” !ll-aining, October 1984.

“Price Waterhouse Office Automation Survey, ” Chicago,

1],, 1984,

these firms provide on-the-job training, most

often with vendor prepared documentation.

The figure went up to 64 percent for the smaller

firms surveyed. This agrees with the BLS survey showing that 50 to 60 percent of workers

gained qualifying skills on the job.

Temporary agencies anxious to increase

their supply of trained workers are offering

word processing training to potential employees, often by means of computer-aided instruction and simulation. A standard for basic,

intermediate, and advanced skills has been developed by one agency .28 This standard requires that an operator with basic skills be

able to—set up the system, keyboard, create

documents, make minor corrections and proof,

store and file text, recall/retrieve text, and

print text. Advanced operators should also be

able to execute special software packages, develop graphics, write special programs, and

supervise other operators.

The Kelly surveys29 found in 1982 that 52

percent of the companies surveyed developed

their own training programs and 51 percent

—.. — .-——

-“’Manpower-The Temp Agency–-Launches New Approach to WP Training & Placement, ” Inside 14rord Processing, vol. 4, No. 6, June 1983.

“’The Kelly Report on People in the Electronic Office (Troy,

MI: Kelly Services, Inc., 1982); The Kelly Report on People

in the h’lectronic Office 11: How Office 1$’orkers Triew A utomation (Troy, MI: Kelly Services, Inc., 1983); and The Ke]l.v Report on Peop)e in the Electronic Offke /11 (Troy, M 1: Kell~

Services, Inc., 1984).

&

phofo Credl( ManPower /nc
trained their own personnel. Fifty-one percent

used a manufacturer-developed training program and 32 percent used the manufacturer’s

trainers. A 1983 survey showed that 34 percent of the nonmanagerial employees surveyed

received their training from a vendor representative, 28 percent from a supervisor, 26 percent from a manual (self-trained), and 11 percent from an outside consultant or a class off

the premises.

Professionals and managers in offices are

not neglected in the market for office automation training. Courses focusing on the upper

level employees’ need for training are becoming common. Many professionals and managers learn such skills on the job, through their

own efforts, by means of a manual or by ‘‘just

fooling around” with the machine. The availability of simplified software in specific professional fields is making it easier for the professional to be self-taught, and new ways to get

work done are finding their way into management training curricula,

Data on the sources of training for current

jobs were developed by Carey and Eck at the

Bureau of Labor Statistics.’” Table 3-2 shows

that in 1983, 70 percent of computer systems

analysts and scientists received training for

their current jobs in a school, mostly 4-year

colleges. Fifty-seven percent of secretaries,

stenographers, and typists and 22 percent of

records clerks received school training. Seventeen percent of all workers received qualifying training in 4-year (or more) college programs. Professionals working in offices, such

as economists, statisticians, engineers, etc.,

usually obtain their qualifying training in a

4-year college. Business administrators and

managers are also increasingly qualifying for

their jobs through college education. Employers

seem to be requiring higher qualifications for

many jobs as a more highly educated work

force becomes available. This reduces opportunities for less educated employees to be

promoted to higher level positions.

hlax Care} and Alan F;ck, “HOW M’orkers (jet Their Training. ” occupational outlook Quarter?’. t’ol, 28. wint,er 1984,

pp. 3-21.

Ch 3— Training and Education for Office Automation ● 8 3

Formal company training programs reached

27 percent of computer systems analysts and

scientists, 30 percent of operations and systems researchers and analysts, 17 percent of

general office supervisors, 25 percent of insurance adjusters, examiners, and investigators,

but only 4 percent of secretaries. Informal onthe-job training was received by considerably

larger proportions of the occupations shown

in table 3-1.

About 55 percent of a sample of all workers

employed in January 1983 indicated that, according to their own perceptions, they needed

specific training to qualify for their current

jobs. One-third of all workers had undertaken

skill improvement (see table 3-3 for some typical office-related occupations) since obtaining

their current jobs.

Although only about 5 percent of all workers obtain training from high school vocational

programs, a large proportion of these are office workers. Thirty-five percent of secretaries

have received vocational training as have a

large proportion of computer systems programmers and computer systems operators.

Thirty-five percent of the 5.9 million enrolled

in public vocational education in 1981 -8231

studied office trades, and 23 percent of adult

education participants studied business-related

courses.” Business/office school enrollment increased 38.1 percent between 1975 and 1981,

while vocational and technical schools and institutes suffered decreasing enrollments during that time.

The Adequacy of

Office Automation Training

A recent study” found that in the last 20

years, the post-secondary education field was

able to accommodate quite well to changes in

demand for its services. However, secondary

‘Occupational Projections and Training Data (~~’ashington.

DC: U.S. Department of I,abor. Bureau of I.al)or Statistics,

19X4). table c-l .

Digest of L’ducation Statistics, 198.3-84, op. cit.

Sue Berr~’n~an, The .4djustn]ent of l’outh and l“.’duc:]-

tional Institutions to Tec’hn(jlogi(>till\ Generated (’hangps in

.Skilf Requirements {J$-ashington, I)C: National (’omission for

l~;mplo~’ment Polic?, Ala? 19851, p, 66.
84 Automation of America Offices —

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I=mcNeml 

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. .

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. .

. .

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. .

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.- .

E l :

a ) .

$ ;

.—

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r d .
C/r, 3— Training and Education for Office Automatlon ● 8 5

Table 3-3.—Sources of Training for Skills Improvement Among

Representative Office-Related Occupations

Sources of trainlng (percent

of occupatlonal employment)

vocational education in comprehensive schools

was relatively unresponsive to changes in skill

requirements. This problem may be exacerbated by declining enrollments and the need

to delegate scarce resources to the academic

studies, for that there is greater demand in

these comprehensive schools. By contrast, private and public schools that focused on vocational education are more adaptable to changes

in skill requirements in the labor market.

Although the adequacy of any training or

retraining depends on the office, the job, and

the individual’s needs,

pability, it is possible

h

c

37

38

16

9

26

26

16

7

13

6

25

13

15

25

22

16

12

16

11

25

11

19

12

23

23

26

&

8

7

8

2

7

1

2

3

3

2

6

5

4

terms other factors influencing the quality of

training. The quality is dependent on the quality of the instructional materials and design,

the quality and availability of instructors, and

the range of courses that are offered.

There is currently no legislation to regulate,

assess, or accredit the content or the quality

of the courses offered in the private and commercial sectors. Those who invest in such training are at the mercy of the market. This lack

of quality control can be expensive and can

drain the resources of individuals and organicommitment, and ca- zations.

to discuss in general

EDUCATION FOR OFFICE AUTOMATION TECHNOLOGIES

Computers have assumed such an important find themselves pressed for expanding the curfunction in the contemporary practice of busi- riculum:

ness, industry, science, and scholarship that

almost no student can expect to remain iso- ●

Iated from these tools. This imposes on education the additional task of preparing students for jobs in which they will use the

computer as a partner.34 Schools and colleges

●

‘C-harles ‘~lossman, ,4ssociate Vice President, Academic

Resource I]lanning, California State [Jni\ersit~. Fullerton, in

joint hearings hefore the L]. S. C’ongr-ess, I louse, Information

Technology in F;ducation, Apr. 2-3, 1980, p. 145

by students– many of whom expect

schools to provide them with access to

computing and instruction in computerrelated subjects, and

by the job market-because employers expect applicants to have some basic computer literacy before they arrive on the

job.
86 ● Automation of America’s Offices —

According to a recent national study, computers in high schools are used two-thirds of

the time to teach children how to use a computer (“computer literacy”), and 18 percent

of the time for drills and practice in various

subject matter. Results of a survey of 1,082

elementary and secondary schools, conducted

by the Center for the Social Organization of

Schools, the Johns Hopkins University, are

shown in figure 3-1. It appears that relatively

little is being done to exploit the computer’s

potential for teaching traditional subject matter in a more efficient, interesting, or effective manner. Also, time is not spent on the

computer to teach and develop office automation skills for future jobs.

Computer-assisted instruction (CAI)–the

computer as teacher—has been introduced to

improve the delivery and productivity of general education. CAI has been found to reduce

by 10 to 30 percent the amount of time students need to master a subject.35 CAI supplements the teachers’ efforts in the traditional

classroom setting and provides specialized individual instruction.

“’Education Turnkey Systems, Inc., “Uses of Computers in

Education, ” prepared for the National Commission for Employment Policy, April 1985, p. 42

Figure 3-1 .—The Use of Computers in Elementary

and Secondary School Education

70 r 6A

60

50

40

30

20

10

0

L

Literacy

40

[

Drill

18

L

24

—

Game s Other

Functions

❑ Elementary = Secondary

SOURCE Flqure derived from School Uses of Microcomputers ReDorts

Fr~m a National Survey (working paper) Center for Social Organl

zatlon of Schools The Johns Hopktns Unlverslty No 2, June 1983

The effectiveness of CA I is hindered by the

lack of high-quality software. The Educational

Products Information Exchange Institute, in

cooperation with the Consumer Union, evaluated 600 pieces of educational software in 1984

and rated only 5 percent of what was examined, or 30 programs, as “first-rate.”36

It takes about 200 person-hours to create

1 hour of conventional CAI. Work is being done

at the Advanced Computer Tutoring Project,

Carnegie-Mellon University, Pittsburgh, Pennsylvania, to reduce the time required to develop CAI.37 Attempts are also being made

to develop intelligent CAI, or ICAI, which allows for conceptual modeling and interactive

instruction.

Computer-managed instruction (CMI) is an

automated technology used for the management of the school system and for managing

the instructional flow in the classroom. It aids

both the teacher and student by providing preand post-tests to evaluate advances in learning levels, offering diagnostics, helping students with assignments, and keeping student

records. The teacher need not be present for

all testing, assigning, and recordkeeping. Cognitive diagnostics for learners can also be provided by computer programs.

The hardware available for educational uses

and teaching office automation skills has focused on using microcomputers. Video disks

in the future may play an important role because they allow for greater interaction in instruction by simulating actual situations. Although information on educational software,

evaluations, and availability is published, the

price of these analyses limits access to this

information for many educators. Most school

districts lack the means to identify better software, and in most schools only a handful of

teachers have the training to make effective

use of computers.38

‘

h

Edward B. Fiske, “Computers, In Most Schools, Have

Brought No Revolution, ” /Vew York Times, Dec. 9, 1984, p. 80.

‘“John R. Anderson, C. Franklin Boyle, and Brian J. Reiser,

“Intelligent Tutoring Systems, ” Science, Apr. 26, 1985, p. 228.

‘“Fiske, op. cit., p. 1.
Ch. 3—Training and Education for Office Automation ● 8 7

Teachers and Computers

The proportion of college freshmen choosing education as a major has declined from

22 percent in 1966 to 4.7 percent in 1982,39

because of the job disincentives common to

the teaching profession (low status, low pay,

low-advancement opportunity, and diminished

psychic income). Teachers are being pursued

by industry to fill training positions and they

are finding these jobs more rewarding than

teaching.

The difficulties of competing for manpower

and other resources in a rapidly growing hightechnology market are acutely felt by educators at the university level. Over the decade

from 1970-71 to 1981-82, B.A. degrees in the

computer sciences increased from 2,388 to

20,267, nearly 750 percent. Yet a large portion of faculty positions are unfilled and the

number of Ph. D.s graduating each year has

dropped substantially. The shortage of faculty

in the field of engineering and computer science

has been attributed to the fact that industry,

by offering higher salaries and other incentives, has been able to draw academics and

students away from universities.40 The percentage of computer science faculty leaving for industry is twice that of any other field of engineering.

Curriculum Development

Efforts have begun to update curricula and

include more courses in the use of computers,

but office automation and other technologyrelated subjects are caught in the lag between

need, development, and implementation of new

curricula. This is especially obvious at the secondary and post-secondary levels of education,

where these skills are most often learned.

The rapid pace of technological change has

complicated the delivery of appropriate courses.

In a report on office automation productiv-

“Center for Strategic and international Studies, 7’ec/mical

Excellence in America: Incentives for Investment in Human

Capital, Debra van Opstal (cd. ) (Washington, DC: Georgetown

University, October 1984), p, 1.

“’U.S. Department of Education, National Center for Educational Statistics, Condition of Education, 1984, table 2-12.

ity,4’ Russell Aldrich of Apple Computer, who

teaches at Golden Gate University in San

Francisco, says that:

Many times, a particular course was a good

course, and a required course 5 to 10 years

ago. But because technology is progressing

rapidly, we are seeing so large a revolution in

certain areas of office productivity, communications process, and management roles, that

what was on the frontier 2 years ago is no

longer relevant today. What is lacking is a

mechanism for higher education institutions

to quickly and accurately evaluate the information industry pulse so that it can design

and plan curriculum that anticipates educatiomd needs and fills to them.42 (Emphasis added.)

The Office Systems Research Association

(OSRA), in a cooperative effort between educators and business sector representatives, is

working to develop a model curriculum in office

systems for universities and colleges. “Office

systems’ is defined as the business function

related to the coordination and management

of the information resources of an organization. Generally, this includes responsibilities

for automated and manual office equipment,

human factors, and office procedures. According to OSRA, managers in the office systems

area are responsible for a business unit too

complex to rely strictly on a computer background or management techniques applicable

to the traditional office environment. The Office Systems Model Curriculum Project was

begun in 1984 and is aimed at providing a

framework, and possible standardization, of

office systems curricula for all schools. OSRA

plans to have a draft of their model ready in

mid-1 985.43

————.

“Frank Freudberg, Office Automation Producti\’it~r: Lost

En Route to the Promised Land (V1’illow Gro\’e, PA: Association of Information Systems Professionals, 1984), p. 14.

‘-Freudberg, op. cit., p. 15.

‘{This information is based on correspondence and conversations with Bridget O’Connor, OSRA Vice President, Professional Studies, Business Education Program, New York Uni\’ersity, March 1985.
88 ● Automation of America Offices

Access to Education

To the extent that computer literacy and

computer expertise are needed for success in

getting and keeping jobs, inequities in receiving computer experiences in school are especially serious for low-income, female, and rural students. They translate into social and

economic inequities by giving some people

more effective tools for working and living in

an age of information technologies than others.

acy associated with wealth of the school, community size, region, gender, and race.

Student enrollment in computer programming is much lower in schools that qualify for

Title I assistance (by having a large percentage of the parents with income below the poverty line) than in schools that do not qualify.

After a survey of schools in 1983, Quality Education Data, Inc., reports that the 12,000 wealthiest schools are four times as likely to have

microcomputers as are the 12,000 poorest

schools. Rural and disadvantaged urban communities provide computer learning opportunities at a much lower rate than other communities.

45 Among students at age 13, less

than 17 percent of the rural/ghetto students,

but 32 percent of those living in “urban/rich”

areas, reported use of computers in schools.

Eighteen percent of junior high school students in small towns report school computer

use, compared with 26 percent in large cities.

Each year the National Assessment of Educational Progress (NAEP) surveys44 a stratified random sample of students aged 9, 13,

and 17 in approximately 700 schools in the

United States. Data from the 1982 survey

show inequities in access to computer literStudents living in the South are much less

likely to have used computers in schools than

students living in other parts of the country.

Those in the Western States are twice as likely

as southern students to receive such experience.

Young women in secondary schools are less

likely than young men to spend time with computers and to enroll in computer classes.46 Females are less likely to take computer programming classes than males; one study in 1983

showed that 8 percent of the females and 14

percent of the males have enrolled in programming courses for at least one semester. The

Women’s Action Alliance of New York City

has devised several school-based strategies to

overcome this problem, working with parents

and teachers to increase girls’ use of computers. The results after a year of trial at a

“

i

These and the following figures are based on the work of

Ronald E. Anderson, Wayne W. Welch, and I.inda J. Harris,

Computer Inequities in Opportunities for Computer Literacov,

University of Minnesota, based on work supported by the National Science Foundation under grant SED 8022125Ao I, 1983,

p. 4.

“As shown in studies by Anderson, Welch, and Harris, op.

cit., 1983.
Ch 3—Training and Educat/on for Office AutomatIon ● 8 9

middle school in Wisconsin, showed a 42-percent increase in computer usage by girls.4T

While the NAEP data showed some racial

inequity in computer exposure in 1978, more

recent results reveal no significant difference

between black and white students when income differences are equated. Apparent inequity between black and white students in use

of computers in schools and for enrollment in

computer programming courses is derivative

of income and rural/urban differences.

Inequities in computer access identified here

point to the need for attention at all levels of

the educational system: National, State, community, district, school, and the classroom.

POLICY CONSIDERATIONS

Policies in Foreign Countries

In some countries, training and retraining

programs are used as a basic instrument to

deal with specific labor market problems. The

successes and failures of foreign experiences

are rich in lessons for shaping U.S. policy.

The European and Japanese emphasis is on

strong vocational education as a basis for work

life and on periodic training to keep skills up

to date. Their philosophy is that these programs serve not only low-wage workers, but

a broad segment of the primary labor force.48

However, the degree of government involvement differs among these countries.

In France, the Law for Continuous Training, implemented in 1971, committed the government to provide training opportunities to

adults and youth. In Sweden, where workers

are considered to have a right to training, the

government plays a strong role in adult training and retraining. A close coordination among

government, employers, and unions helps ensure that government programs mesh well

with national needs. The flexibility of the system in identifying new jobs and in retraining

workers has reportedly added to the success

in Sweden.

Union involvement and training vouchers

encourage wide participation in West Germany;

the government and private industry both play

‘“hlichael l)odgursk~’, I,ahor Jlarket l’olic~’ and Structural

Adjustment, paper prepared for the conference on [1. S, Industrial l’olic~’ and International Development, ()~rerseas I)e\’elopment (’ouncil, \f’ashington, 1)(2, NI ar. 4, 19/+3, p. 17.

major roles. In Japan almost all efforts are

by private companies. Japan continually retrains

selected workers in the “lifetime employment

system. Increasing “labor-market transparency” or skill transferability, providing job

referral, counseling, testing, training, and relocation assistance to workers, are regarded as

a matter of high public interest and the public

employment service plays a major role in labormarket adjustment policy in Europe and Japan,”

Existing Legislation

This section will present a summary of legislation and regulations related to education

and training for automated office work and

some options for congressional consideration.

The potential for successful delivery of education for office automation skills and knowledge already exists in the traditional education

system, most often addressed at the secondary

and post-secondary level, where much of the

Federal legislation is focused. Educational policies and legislation set the framework for addressing new and changing education needs.

The higher education delivery system in the

United States is a complex matrix of private

and public institutions that function with varying degrees of independence and dependence

on State agencies. The Federal Government

direct role in institutional control has been

limited to setting criteria for an institution

to participate in Federal programs or receive

‘Ibid. p. 26.
90 ● Automation of America’s Offices

Federal contracts. Various congressional actions have been taken to draw attention to

selected national problems, to provide the fiscal resources needed to address these problems, to support research activities that have

national and international implications, and

to complement and supplement the role of parents and State and local governments in supporting individuals and institutions.

Although there is no existing Federal legislation specifically addressing office automation education, there are related laws that

could provide a vehicle for delivery of office

automation education.

Direct Federal involvement in training and

employment programs is considered to have

begun with the Area Redevelopment Act (ARA)

of 1961, although indirect Federal involvement

in training through vocational education programs began with the Smith-Hughes Act of

1917. The Manpower Development and Training Act (MDTA), enacted in 1962, focused

training efforts on workers displaced due to

automation. The Johnson Administration’s

war on poverty brought about a wide range

of work experience and training programs targeted on the poor, minorities, and youth. The

Comprehensive Employment and Training Act

(CETA), passed in 1973, absorbed many existing work and training programs and was

designed to operate primarily at the local level.50 CETA underwent amendments during its

history that expanded its purpose and reach.

The Trade Adjustment Assistance (TAA) program reauthorized in 1981, also authorized

funds for training. The Job Training Partnership Act (JTPA) replaced all portions of CETA

on September 30, 1982. This new program

shifted the focus away from direct Federal involvement in training programs and established a business-government partnership in

the provision of training for job skills. Training programs are operated by the States in

combination with local-area governments and

Private Industry Councils (PICS) and provide

“’U.S. Congress, Library of Congress, Congressional Research Service, Job Training Programs: Reauthorization and

Funding Issues, by Karen Spar, Issue Brief No. IB82005, Feb.

8, 1982.

for the training of unemployed displaced workers in skills relevant to real employment opportunities in the area. These programs were

not primarily aimed at office workers or at office automation training.

Target groups for legislated training programs have traditionally included about 8 percent of the population. These groups include—

low-skilled adults (especially women and minorities), disadvantaged youth, and residents

of economically depressed areas. The gaps in

public policy left by JTPA and similar programs relate to: 1) the retraining needs of the

large-middle tier of employed but at-risk workers; and 2) the basic skill needs of the 20 million or so functionally illiterate adults in the

work force who will not be touched by reforms

in elementary/secondary education, and whose

learning handicaps prevent them from benefiting from job-specific training.”

The Vocational Education Act (Perkins Act),

as revised in 1984, provides focus on educational needs at the secondary and post-secondary school level. The Perkins Act grants

funds to States to make vocational education

programs accessible to all persons, but follows

the current trend of placing greater control

and responsibility at the State and local levels.

Targeted groups include:

● handicapped and disadvantaged persons,

● single parents and homemakers,

● adults in need of training and retraining,

 persons in programs designed to eliminate

sex bias and stereotyping in vocational

education, and

● persons incarcerated.

The act is designed to improve the quality

of vocational education programs in order to

give the Nation’s work force the marketable

skills needed to improve productivity and promote economic growth. Under this act, the acquisition of office automation skills may be

included in State programs for general vocational opportunities. Part E of Title III, “Industry-Education Partnership for Training in

High-Technology Occupations, ” allows for

—.—.—

“’Perelman, op cit., p. 27.
Ch. 3— Training and Education for Office Automation ● 91

grants to States to provide incentives for business and industry and the vocational education community to develop training programs

for high-technology equipment, systems, and

processes. These programs are intended to be

closely tied to the local labor market and skill

needs.

The act states that to the maximum extent

practicable, funds will be utilized in coordination with JTPA to avoid duplication of effort

and to ensure maximum effective utilization

of funds under both acts. While the goals of

the two acts are similar, the manner of achievement is different. The focus of the Perkins Act

is public vocational training and education,

while the focus of JTPA is on industry-sponsored training. The two acts overlap where

there is the greatest need for assistance.

Funding for these programs is the key to

their success. However, the level of Federal

funding for employment and training decreased

by 49.7 percent between 1981 and 1984. Funding for elementary, secondary, and vocational

education decreased by 8.9 percent during that

period. There were some increases for fiscal

year 1985— 17.5 percent for elementary, secondary, and vocational education; and 14 percent for training and employment; but decreases

are again projected for fiscal years 1986 through

1990 in training and employment functions.52

Federal aid to State and local governments

for vocational and adult education decreased

by less than one-half percent between 1981 and

1984, but is projected to increase by 23.7 percent in 1986. Federal aid to State and local

governments for employment and training

services was decreased by nearly 57 percent

between 1981 and 1984, and is projected to

increase by only about 13 percent by 1990,

with some fluctuations. If this trend continues,

State implementation of this act will not be

effective. 53

The Employee Education Act amends the

Internal Revenue Code to extend for 2 years

~:xecutive office of the President, Office of hlanagement

and Budget, Historical Tables. Budget of the U..!. (;o~rernment,

Fiscal Year 1986, tahle 3-3 (19) and (20), 1985.

I bid., table 12-3 (431 and (52).

the income tax exclusion for amounts received

by an employee under a qualified employer provided assistance program. Unless extended by

Congress, this act will expire at the end of 1985.

The act limits the exclusion to $5,000 of educational assistance furnished to an individual

during a calendar year.

State and Local Practices

Typically, State funding and support of education has been related to economic development. Several private sector industries and research and development firms have recently

moved toward more direct involvement with

higher education institutions by starting joint

education ventures. While joint ventures are

encouraged by some Federal laws, many businesses have traditionally contracted locally for

training and education programs for their employees.

States have assumed a greater role during

the past few years, as they enact student assistance programs to supplement declining Federal support and shoulder the responsibility

of Federal programs. As State policy makers

have been confronted simultaneously with revenue declines and requests for additional funds

for higher education as well as for other human resource investments, some have taken

the unpopular course of raising taxes to provide additional support. Others have reduced

real levels of support for higher education in

general and for research universities in particular. The funding pattern has been unique

to each State.

Some States are making strong efforts to

keep up with the new teacher and curriculum

needs. For example, the State of Minnesota

has made new office automation skills and computer knowledge a high priority for vocational

education programs. Efforts are being made

first to increase the competency of teachers

through conferences and workshops on hightechnology equipment, office systems, telecommunications, and curricula design. An integrated office system has been installed for

teachers’ hands-on experience. The system provides administrative assistance for teachers.
92 ● Automation of America’s Offices

The State’s vocational program will also include more opportunities for the adult and

part-time student communities.

Another example of State activity is in

Texas, where “House Bill 246” will be implemented in all school districts in the 1985-86

school year. This law mandates computer literacy courses for middle school (seventh and

eighth grade) students and computer science

classes for all high school students, as requirements for graduation. The computer literacy

course includes history, terminology, basic programming skills, and issues of computer use

in the society. Computer-related course credits

are not required at the elementary school level,

but many school districts are providing some

type of computer awareness at that level.

Policy Options

Federal actions that could encourage education and training opportunities related to

office automation might include:

●

●

●

●

●

●

●

designate funds specifically for office automation education programs through

new legislation or existing vocational education legislation that provides aid to

schools;

increase funds for programs through existing legislation (e.g., the Perkins Act);

promote access for students in low-income

families and in rural areas, and for women,

through direct funding and establishment

of service programs;

increase Federal attention to maintaining

the capacity and quality of research in the

Nation’s universities and the flow of new

talent into academia;

provide career counseling, job guidance

programs, job search assistance and training programs that do not penalize those

receiving unemployment insurance;

encourage ties with the private sector

through cooperative educational efforts,

curriculum development, and industrybased activities for office automation

skills;

establish support programs or tax credits

for small businesses to ensure that the education of employees is adequate to maintain current levels of employment and

productivity;

provide training grants and tax credits

to businesses that incur expenses for office automation training. Also provide incentives to establish training programs

in office automation skills, including employment tax credits for employers who

train and educate workers. Employers

could be given the same kind of tax writeoffs for training that they get for plant

modernization;

establish a program of Individual Training Accounts (ITAs), similar to the Individual Retirement Accounts. The ITA

may require employers and employees to

make equal contributions to a bank account; this money would not be taxed until withdrawn. The account could be drawn

by employees to pay for retraining when

needed. This would direct resources toward

retraining needs of mainstream workers

now being neglected. A key objection to

this proposal is that workers may not be

able to choose and direct their own retraining in the best way, or appropriate programs may not be available;

expand the tax deductibility of training

for current and new occupations related

to office automation;

change unemployment regulations to permit receiving unemployment benefits during training. Encourage States to consider

those in training programs as still available for work, and to reserve parts of their

State funds to establish permanent funds

for retraining; and

encourage union involvement in negotiations for skill training opportunities. Include requirements that firms give notice

of plant closings in advance and aid in

the retraining of displaced workers.

Congress may determine to take none of the

above actions, making the conscious choice to

preserve the status quo. Since there is no existing regulation of office automation training, the training available commercially is

likely to grow, but with existing inequities in

access and quality unchecked.
Chapter 4

The Changing Nature

of Office Work
Contents

Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Individual and the Work Process . . . . . . . . . . . . . . . . . . . . . . . ........ . . . . . . . . .

The Nature of Office Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Work Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Information Age Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Task Change and Computer-Mediated Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Job Changes With Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Management and Professional Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Clerical Jobs..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Job Ladders and Mobility . . . . . . . + . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......+.

Organizational Structure and relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Power and Access to Information.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

End-User Computing Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........+ . . .....4...

Dispersion of Work Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reason for Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Key Actors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Adaptive Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Users in the Implementation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figures

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Figure No. Page

4-1. Possible Variations of Work Process for Word Processing . . . . . . . . . . . . . . . . . . . . 98

4-2. Model of an Integrated Customer Service System . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Chapter 4

The Changing Nature of Office Work

Translating the capabilities of office automation technology into tangible operating benefits for an organization illustrates effects at

many levels—individual tasks, the work process, organizational structure and culture, and

quality of working life. These effects are at

the core of the most interesting and pressing

issues related to office automation. Yet, they

are difficult to address because it is not possible to give a simple or universal description

of the effects of automation on workers, jobs,

or organizations.

This chapter looks primarily at the effects

of office automation on the nature of office

work, on job content, and on organizations.

It examines the effects of office automation

on the work process; on specific tasks, skills,

and jobs; and on promotional opportunities.

Next it discusses the possibility of structural

or cultural change in organizations that adopt

office automation. Finally, it reviews some of

the major factors that contribute to successful implementation of office automation.

One point to be emphasized throughout this

chapter is that the technology itself is not the

only factor—and may not be the most important factor—in bringing about these changes.

Managerial strategies-decisions about the

organization’s goals and the role of people and

technology in achieving them—are of major

importance in determining how the technology is used. In many cases, it can be seen that

outcomes are more dependent on how the technology is used rather than on what specific

equipment is employed.

CASE STUDIES

Many of the examples used in this chapter

were taken from case studies of offices using

automated equipment. In addition to the case

studies in the literature, OTA commissioned

a number of small case studies, discussed in

more detail in appendix B.

Case studies provide a rich source of detailed

information about the process of implementing office automation and the possible changes

in tasks, jobs, work processes, and organizations. They allow one to view the intended and

unintended consequences at many levels, and

in a variety of contexts. In this chapter, case

studies are used to provide illustrative details

about the effects of technology in a wide variety of organizations. These observations form

the basis of some cautious generalizations about

the effects of office automation on organizations.

Caution is needed in making use of case material for a number of reasons. First, the methodology and level of detail of published case

studies vary widely. Some are highly quantitative, others depend largely on qualitative,

participant-observer, or anecdotal information.

Second, the organizations studied are all

unique. Authority structure, corporate culture,

management philosophy, internal dynamics,

financial health, and operating environment

are different. To the extent that these factors

of themselves cause certain outcomes, or moderate the effects of technological change, it is

difficult to state authoritatively that the result observed at one study site can be expected

at other locations.

Third, the technology itself is defined differently from one organization to another and

from one study to another. Office automation

in one organization may be word processing

capability used almost as a direct substitution for typewriters; in another it may be an

extensive multiuser, multifunction operational

system governing the production of the organization’s primary product. Many possible

systems and combinations of functions, includ95
96 ● Automation of America’s Offices

ing text processing, messaging and communication, decision-support software, graphics,

and numerous special purpose applications

may have a separate effect on the individual,

the job, or the organization. The choice of features, the way the work process is organized

to use them, and the order and timing of system introduction, often make each case of office automation unique.

Finally, the time factor must be considered.

User reactions and use of technology in a

“honeymoon” phase shortly after the equipment is up and running may be different from

what happens at a later date when new capabilities or limitations are fully understood.

Some changes in the work process may take

place immediately after implementation, while

others may not become evident for some time.

Thus, the findings of a case study may depend

on where the organization was in the system

life cycle when the study was carried out. There

are few longitudinal studies that follow the

same set of organizations over time. Even

within one study it can be difficult to compare ‘before’ with ‘after’ in an environment

where new technology is introduced gradually

over a period of months or years, and where

systems are continually being upgraded or expanded.

Despite these difficulties, case studies are

often the only information available, and they

capture the detail necessary for understanding dynamic change within the organizations.

THE INDIVIDUAL AND THE WORK PROCESS

The Nature of Office Work

Office automation has transformed office

work. Many offices are now semiautomated

environments where people and computers interact. An “office, ‘‘ in the sense of a working

unit of people doing information processing

work, is seldom a totally automated environment. A fully automated procedure is one that

does not require human intervention in order

to produce its final output. Automatic data

processing falls into this category; all transformation of information is internal to the computer. But such fully automated procedures

usually make up only part of the work. Office

work usually involves a series of steps, some

are fully automated, some are manual, and

some require interaction between people and

computers.

For the purpose of this chapter, a task will

be considered any clearly definable activity

that forms a step in producing the final product of the office. Tasks may be performed by

people or by machines. The work process is

the social and technical organization of work.

It is the way people and machines are organized to produce a result—the way information or materials flow from one to another until the final product is completed. Jobs are

organizationally defined positions that are usually associated with a bundle of tasks and a

particular role with a defined set of responsibilities in the work process. The work unit or

office is a group of people of any size, with

responsibility for producing some identifiable

final product. The work unit has a skill and

task mix, that is, its members are at different

levels, have different roles, and perform a range

of functions to produce their product. Skills

are the attributes and knowledge that workers need to perform useful activities.

The impact of office automation on office

work goes beyond changes in tasks. It can introduce new tasks, change the nature of the

skills required, modify the work process, and

ultimately can cause or be associated with

changes in jobs and in organizational culture

and structure. This is at least in part because

computer-based technology bundles tasks in

a way that is different from the way they would

be done manually. When part of a process becomes automated, the tasks that remain to

be done by people may be different kinds of

tasks. A new process is necessary for integrating the work done by people and the work

done by machines to accommodate those differ-
— —

ences. When the work process changes, the

organizational structure, which defines the

roles and responsibilities of the members, can

also change.

Take, for example, an office where a professional researcher writes reports and a secretary types them. Introducing a word processor can change the work process in a number

of ways. First, the nature of some tasks will

change, and the new tasks will require different skills. If the professional decides to use

the word processor, then composing on a keyboard will require skills quite different from

those of writing by hand. Some skills needed

for old tasks–like the secretary’s ability to

neatly paste up final copies—may seldom be

used.

Further, a change may take place in the process that governs the interactions of author,

secretary, and other people needed to produce

the report. Partially completed drafts may no

longer pass between the author and the secretary. The secretary may be left out of the revision procedure entirely, or at least the secretary’s responsibilities may no longer include

the task of typing the author’s reports.

There are also some points where the technology does not dictate a change, but allows

an opportunity for choice. The word processor could be given to the secretary instead of

to the author. The author might still hand write

drafts, with the secretary keying in the document and making corrections on the word processor. In this case, the word processor is more

like a simple substitute for the secretary’s

typewriter. The relationship of author and secretary, and the flow of work between them,

might have been altered only a little, although

the secretary will have to learn new skills. In

another scenario, that relationship might be

severed completely. The secretary might be

reclassified as a word processing operator and

moved to a newly created pool to key and correct drafts for many authors, as part of a

change in the structure of the organization.

The use of new technology also introduces

new steps and new tasks. For example, use

of an automated system introduces the need

Ch, 4— The Changing Nature of OffIce Work ● 97

to make backup copies, design and use an electronic filing system, and manage disk space

or diskette storage. Decisions about whether

these tasks will be handled by all users, by

secretaries, by a system administrator, or by

some combination will affect the work process.

There is also the possibility that the availability of the technology will catalyze its own

use. In the experience of many authors, the

ease of editing a document on a word processor sometimes leads to additional rewriting,

so that this step can sometimes seem to be

repeated almost indefinitely.

Thus, even with this simple example it is

possible to see how changes at the level of the

task, job, work process, and organization could

take place as a result of office automation.

The Work Process

The bundle of tasks an individual performs

describes the job, but the job is more than

merely the set of tasks. The job is an organizationally defined position. In many organizations it is characterized by a job description

that legitimizes the position. People identify

with their jobs. The job defines a role within

the work process and within the social structure; it is the point of articulation between the

individual, the technology, and the organization. Thus it is not sufficient to talk about how

office automation affects individual tasks.

Jobs also change-the bundle of tasks, the role

in the work process, the position in the organization, and the self perception.

Division of labor is necessary when there

is too much work for one person to handle.

Once a division of labor is made, the work process governs the relationship of the various

workers to the partially completed product.

One way of looking at work process is as

a continuum that runs from the most integrated to the most differentiated. Figure 4- I

shows five possible steps along this continuum

for a word processing office. The most integrated is the one where authors do their own

word processing and have complete responsibility for all steps in the process and control
98 . Automation ot America Offices

Figure 4.1 .— Possible Variations of Work Process for Word Processing

Integration of work process

. Group of authors, one operator ~ . Team of authors, team of operators

. Many authors, centralized WP pool with

task specialization

Differentiation of work process

SOURCE Adapted from S M Pomfret, C W Olphert, and K D Eason, “Work Organ tzatlon Impllcatlons of Word Process ing, ” Proceed/rigs of the Ist /F/P Con/ererrce

on f-/urnan-Corn~uter /n/eract/on (/N TERACT ’84A VOI 2, 1984, pp. 357-363
Ch. 4—The Changing Nature of Office Work ● 9 9

over the end product. The most differentiated

is one where authors send work to a centralized word processing pool where operators

have specialized tasks–some key in text, some

proofread, some do corrections, etc. Between

these extremes might be one-on-one relationships between author and operator, or situations where one operator or a team of operators focus on all stages of work for a particular

group of authors.

The basic concept of work integration or

differentiation can apply to a large extent

regardless of the level of technology employed.

The example above works equally well if the

technology used is typewriters or quill pens.

There is a popular perception that advancing

technology is associated with increasing differentiation and fragmentation of work. The

manufacturing assembly line, with workers

performing repetitive tasks, is a product of

the industrial revolution, not of earlier craft

manufacturing. Many people’s only image of

office automation is a picture of the centralized word processing or data-entry pool. Although there has been a connection between

computerization and fragmentation of work

in the past, other forces are also at work. Office automation technology offers the possibility of reintegrating the work process in some

cases.

Another way of looking at the work process

and the way it changes with automation is in

terms of the three generic types of work processes in offices identified by Giuliano—preindustrial, industrial, and information age. ]

The preindustrial form of organization is

used by many small and medium sized offices,

for example, a real estate brokerage or professional office. These work units may have a

number of workers with different jobs, or roles,

in the work process. However, each worker is

to some extent a craftsman. Each works with

some independence and performs a variety of

tasks. There has been little effort to completely

standardize or systemize the work process. A

variety of individual work styles is tolerated.

‘l’in~>~nt l;. (li~llimt), “The ~le~h~niz~ti~n of office W’ork, ”

Scientific ,4merican, September 1982, pp. 149-164.

There may be some fuzziness or overlap in

responsibilities and workers may be sufficiently familiar with the work of others to

switch tasks occasionally, or take over in an

emergency.

While the preindustrial style of organization

works well in many contexts, it is often inefficient in handling large numbers of transactions. Thus, in the insurance industry, banking, or the billing departments of large firms,

where high transaction volume is handled,

industrial-style offices evolved. They are designed to organize people to serve the needs

of a large, rigid production system. The industrial office is a production line. Workers

are differentiated into functional groups, for

example-typists, log-in clerks, validation clerks,

and signature control clerks. Each group has

its own supervisor, and is responsible for some

step in the processing of a transaction. Documents related to customer transactions flow

from one functional area to the next, from one

“out’ box to the next “in’ box, receiving some

incremental processing at each stop.

The flow of work in an industrial office is

consciously designed according to principles

of “scientific management” first articulated

for manufacturing by Fredrick W. Taylor in

the early 1900s. With Taylorization, a complex production process is analyzed and divided

into a series of simple tasks that can each be

performed quickly and efficiently. workers are

assigned to perform a single task, or a narrow

range of tasks, in a routine and repetitive way.

The industrial form of work organization is

a deliberate attempt to increase efficiency by

rationalizing the work process, and by reducing individual discretion and variation.

Because industrial-style offices were ones

in which the work process had been consciously

analyzed and the individual tasks identified,

isolated, and standardized, they were ideal candidates for the early introduction of computers.

Certain tasks could be automated completely,

making use of the computer’s ability to do

large batches of calculations quickly. However,

many manual tasks remained in preparing data

for the computer or making use of computer

output.
100 ● Automation of America Offices

Some have argued that computerization allows managers to speed the process of Taylorizing and routinizing office work in order

to reduce costs and increase management control.’ Certainly, as automation began to be used

in offices, it appeared that Taylorization and

computerization were mutually complementary and interdependent processes, as computers were first introduced in those areas

where manual processes had already been ‘industrialized.”3

Indeed, computerization seems to have intensified the factory-like nature of industrialstyle offices. “Pools” of functionally similar

workers existed before, but the trend toward

specialization increased with computerization,

especially in routine data-entry tasks:

Routine keyboarding was separated more

sharply from other clerical functions and was

often spatially isolated . . . As a result of the

heightened fragmentation of work, processing

personnel (both data processing and word

processing) typically worked at machines all

day. . . both the technical and social relations

of work in these centralized word processing

and data processing centers were factory-like.

The work process was machine paced and often

machine supervised; autonomy of the operator was minimal; competence measured by

manual dexterity and speed.4

Taylorization is not limited to clerical processing functions. It isolates predictable tasks.

Professional or managerial jobs can be analyzed and the more routine functions stripped

away. Baran and Teegarden note that underwriting, the main professional occupation in

the insurance industry, has been increasingly

rationalized. At one firm, this was done by

splitting off the lower level functions and creating a new clerical position called underwriting technical assistant to perform them. Remaining professional positions were divided

into specialty categorieso

5

For example, see Harry 13raverman, Labor and Monopolv

Capital: The Degradation of Work in the Twentieth Centur~’

(New York: Monthly Review Press, 1974), pp. 293-358.

‘Barbara Baran and Suzanne Teegarden, “Women’s Labor

in the Office of the Future: Changes in the Occupational Structure of the Insurance Industry, ” Department of City and Regional Planning, University of California, Berkeley, 1983, p. 11.

II bid.

Ibid.

Some offices are in factories. Note that some of these

clerical workers are protecting their ears

from excess noise.

Photo credit M/chae/ Srmth

Some offices where large numbers of transactions are

handled resemble factor~es,

The industrial style of office organization

works well for highly routine processes. It has

some disadvantages, in dealing with ‘ ‘exceptions” or nonroutine situations, and is usually not efficient for customized services. Some

experts also note that it is susceptible to possible long-term growth of overhead costs. For

example, in order to deal with error detection

and correction it maybe necessary to add more

steps, thus making the process longer and

more unwieldy. Generally, no one employee

has all the information needed to correct an

error, so mistakes may persist or build on one

another; papers might cycle through the system several times before they are corrected.
Ch. 4– The Changing Nature 0f Office Work 101

It can become difficult to provide quick, accurate customer service when work is processed in a production line fashion. The process of issuing an international letter of credit

at one bank required 23 steps performed by

14 workers over a 3-day period, and generated

stubs and carbon copies to be stored in a number of locations.’ A customer with a question

had a difficult time finding the one worker with

the right bit of information to answer it, and

if a customer wanted a transaction to be modified, the whole process had to start over again.

Finally, for many workers, the endless repetition of a limited range of tasks is boring. Yet

information-handling tasks, even boring ones,

usually require a high degree of focused attention. The result can often be a high error

rate in the work, and a high turnover rate

among the employees. These problems will be

discussed at greater length in the next chapter.

The Information Age Office

For some businesses, office automation offers the possibility of restructuring the work

process in a way that reduces some of the problems of the industrial style of work organization. This new approach has been called “post

industrial’ or ‘‘information age’ and is characterized by an electronic reintegration of the

steps involved in producing a product.

Electronic reintegration of work represents

a new approach to rationalization of work. Instead of attempting to make the work process

efficient by rationalizing each task and function separately, this approach seeks to rationalize a whole procedure, perhaps along product or market lines. This is possible because

the technology allows: 1) the integration of information from many sources, and Z) the distribution of information to many locations.

A general example can be seen in the case

of the bank mentioned above. Under the old

system, each worker performed one or two

steps in the processing of all letters of credit.

Under the revised work process, each worker,

with the aid of a computer workstation and

a client database, performs all the necessary

steps in processing letters of credit for a particular set of clients. The database contains

all information related to the customer’s account. The customer service worker is the single point of contact between the customer and

the bank for corrections or inquiries.

An illustration of the capabilities of an integrated customer service system at American Express is shown in figure 4-2. customer

service representatives have the ability to deal

with a wide variety of activities related to their

cases. Working from the on-line database they

can answer telephone inquires, send written

replies to mail inquires, make credit adjustments, stop automatic duns, or issue a special

statement. In addition to the on-line database,

the customer service workers have access to

historical records stored on computer output

microfilm.

Electronic reintegration allows a worker a

view of the whole operation and gives a variety of tasks to perform. Roth factors are indicative of a “de-Taylorization” of work, and

probably contribute to greater job satisfaction, and in many cases, greater autonomy and

responsibility. However, electronic reintegration does not necessarily lead to greater autonomy, responsibility, or discretion. Because

the work is dependent on the use of the computer, it can be subject to machine monitoring and pacing.

When a whole process cannot be handled by

one kind of worker, electronic integration can

still be used to accommodate a decentralized

team approach to the division of labor. Some

insurance firms have created small teams of

raters, underwriters, and clerical support workers to work on specific product lines. Workers

that were formerly separated by function are

now integrated into a team that serves a specific market. Organizing the workers in teams

rather than isolating them in functional groups

allows them greater understanding of the

whole production process and facilitates com

munication.
102 ● Automation of America Offices

Figure 4-2.— Model of an Integrated Customer Service System

Case 3.. ,

1. Open a case

[

o

2. Post an action -

3. Create an adjustment ~

4. Close a case

i I L 1

SOURCE Jay W Spechler D[rector Performance Englneerlng American Express Co , personal communication 1985
——.—.

Ch. 4— The Changing Nature of OffIce Work 103

Baran and Teegarden suggest that in the

insurance business, firms will tend to continue

to use the industrial-style work process to produce and distribute standardized products.

Much of the work will be highly routine, and

the work force will consist of a shrinking number of low-skilled clericals and a few highly

skilled professionals. With these products the

goal is to reduce unit costs as far as possible

and to minimize labor costs. For more specialized products, those that require customizing or responsiveness to individual client

needs, there may be more use of the team approach along with integrated office automation systems.7

‘Baran and Teegarden, op. cit., p. 21.

TASK CHANGE AND COMPUTER-MEDIATED WORK

One commonly noted characteristic of work

with computers is that they make work more

abstract and alter the worker’s relationship

to the task. This is sometimes called a “computer mediated” relationship, in that the individual must now do the task through the

medium of the computer system rather than

through direct contact with the objects of the

tasks Using any sort of tool can, of course,

distance a worker from direct tactile contact

with an object. But most manual or power tools

still allow the worker to remain cIose enough

to the object to get direct feedback about the

condition of the object, the status of the process, or the need for adjustments. When a computer is used, feedback is indirect, in the form

of symbols generated by the information system.

Office work is already abstract. What is actually being processed is information. Yet from

the point of view of the worker, this information becomes concrete because it is carried on

physical objects–signature cards, account

ledgers, invoices, letters, reports, and checks.

Most manual or mechanically aided office

tasks involve transforming the information by

manipulating the object—copying, typing, updating, or signing it. When computers are introduced, many of these objects disappear

completely. The worker is left to deal with intangible information, which is transformed in

invisible ways inside the computer.

—— —

“See, for example, Shoshanah Zuboff, “New L$’orlds of Computer-hlediated W’ork,” Har\”ard Business I?et’iew, SeptemberOctober 1982, pp. 142-152.

The rules by which information is prepared

or transformed also change with computer mediation. Quantitative comparisons are easy for

computers to handle, qualitative judgments

are not. Thus, in the process of restructuring

work to be done by computers, qualitative aspects of information are either quantified or

lost. Correctness of data or procedures must

be redefined to fit the formal logic of the computer, and formal correctness can become more

important than the relevance of information

content. g Human judgments are often replaced

with computer-based decisions and human error detection or correction become difficult.

The language of the human-computer interface is different from human language, as well.

Although computers are becoming easier to

use, they still require human operators to learn

specific codes and procedural commands. Further, even when these commands are similar

to plain English, the formalized process by

which the computer works may be quite different from human thought patterns. The human

operator must learn to think and to perform

actions in a precise order that reflects the logical sequence built into the software.

The ability to think in a way that parallels

computer logic is not a trivial intellectual discipline, and represents a new way of working

for many people. For example, retrieving information from a computerized database re-

—- ...—

‘Further discussion is in Gunnar Aronsson, ‘‘Changed

Work Qualification Structure in Computer-hlediated M’ork, ”

National Board of occupational Safet~’ and Health, Solna,

Sweden, 1984.
104 ● Automation of America Offices

quires different modes of thought than finding a folder in a filing cabinet. Physical search

is aided by physical aids to memory—thickness

of the file, color, a coffee stain on the corner.

These do not exist in a computer-based file.

There is only a name, constructed according

to rules inherent in the computer logic. A

search through a database requires use of the

right key words, in the proper relationship;

otherwise the search may yield fault y results.

An example of how tasks change when computers take over part of the process may be

seen in banks. With computerization, the process of fabricating accounts, the principal activity of a bank, was made internal to the computer. These procedures had previously been

done manually, or with the assistance of mechanical accounting machines. The role of

human operators then changed from one of

doing banking to one of surveillance of the

computer as it does banking. Adler points out

that:

. . . a series of tasks formerly considered the

very essence of bank work have been eliminated, including accounting imputation and

adjustment, classification of documents, multiple entries of data, manual data search, and

supervision by signature.10

He also notes that new tasks were introduced. For example, “Accountants now diagnose and rectify residues and anomalies listed

by the computer system. New types of errors–

and fraud—appear. 11

‘ ‘Paul Adler. “Rethinking the Skill Requirements of New

Technologies, ” Working Paper 9-784-027, Graduate School of

Business Administration, Ilarvw-d University, Boston, October

1983, p. 17,

‘‘ Ibid.

Some observers note that the increased abstraction can affect people’s understanding of

the work. Some managers in banking have

noted, for example, that new employees—those

who have only worked on the automated systems—understand the system, but don’t necessarily understand banking. They think like

computer programmers instead of like bankers.

As one manager said:

Now you make an input and it’s gone. People become more technical and sophisticated,

but they have an inferior understanding of the

banking business. New people have no idea

of the manual procedures so they never see

or understand the process, People start creating programs that don’t necessarily reflect the

spirit of the operation.lz

Clearly employees acquire new skills, they

learn to interact with the computer, they may

never learn certain old skills. To the extent

that processes are automated and these skills

are not needed any more, this may not be a

problem. But, if the skills are still needed, either at that job level or at another, there may

be costs to individuals or the organization for

allowing them to be lost. To continue the example above, an understanding of basic banking practice probably is necessary for promotion above the lowest operational levels. To

the extent that employees do not gain it by

doing bank work, it may be necessary to acquire it through formal training.

—.—

-Shosh&ih Zuboff, “Problems of Symbolic Toil: How People Fare M’ith Computer-Mediated W’ork, ” Dissent. winter 1982,

pp. 51-61.

JOB CHANGES WITH AUTOMATION

Office automation can change jobs in many esses might be eliminated. This does not necways. The automated system may completely essarily mean that the people are eliminated

take over certain tasks. To the extent that cer- from the organization-they may be retrained

tain processes become completely automated, and transferred—but particular positions no

jobs that consist solely of those tasks or prol- onger exist.
On the other hand, office automation creates new tasks, either supporting the system

or related to new products made possible by

the system. These tasks may be incorporated

into existing jobs or new jobs may be created,

as in cases where a trainer or systems specialist position is created after introduction of office automation.

Finally, very commonly, a change in the

work process modifies jobs through the addition or deletion of tasks. This can also result

in a change in the boundaries between jobs,

transferring a task from one job to another.

Any of these changes may or may not be accompanied by a formal change in job titles,

descriptions, or compensation.

The boundaries between clerical and professional and between clerical and managerial are

showing interesting changes with office automation. Some researchers have referred to this

redistribution of labor as the “clericalization

of professional work’ and the ‘ ‘professionalization of clerical work. IS Most clear is the shift

of keyboarding tasks when professionals and

managers acquire terminals or personal computers. Individuals who would never have

typed their own memos and reports now routinely draft them on their personal computers.

Clerical workers have not stopped doing keyboard work completely, however. Secretaries

may work on documents at a later stage to

revise, format, or print them, or they may still

key documents that professionals and managers choose not to key themselves. ~evertheless, many organizations have seen a decrease in the amount of time secretaries and

other clerical workers spend in keyboarding

or revising original material when professionals and managers begin using the system.

By the same token, secretaries and some

other clerical workers have taken over tasks

formerly defined as professional. In case

studies of two different banking organizations,

for example, secretaries began using on-line

‘See, for emmple, tJ~an (lr~enk]aum, C>’dncl’ Pullman, and

Sharon szymanski. “F;ffects of office i4utomation cm the Pul)-

lic Sector W’orkforce: A Case Study, ” OTA contract No. 433-

7990.0, ~lpril 19/!5.

Ch 4—The Changing Nature of Office Work ● 105

databases and statistical software available

on their terminals to collect data and do analyses formerly done by economists. ” Clearly,

new technology is not the only factor in clerical workers’ being able to take on new and

interesting tasks; there must be management

support for these job changes.

The question of whether changes related to

automation lead to an increase or a decrease

in skill is a hotly debated one. Often the terms

job “de-skilling” and “enrichment” are used

to describe the changes. Enrichment usually

implies an increase in task variety, autonomy,

skills acquisition, and other factors that are

considered to contribute to job satisfaction.

De-skilling usually means the removal of these

features, usually through simplifying the work

and narrowing the number of tasks performed,

and is usually associated with rationalizing

or Taylorizing the work. Both de-skilling and

enrichment could be accompanied by job “enlargement, that is, an increase in workload.

It is clear that the impacts of office automation will vary from one job to another. The

following is a brief summary of some generic

changes that have been seen to affect different categories of workers.

Management and Professional Jobs

Increasingly, computers are helping professionals get more work done by providing more

and better information, by providing tools to

aid in formulating professional opinions, and

by taking over some routine decisions. Traditionally, professionals and managers have high

levels of autonomy in their work. ” Use of new

technology can give managers and professionals better control over their time and even

greater autonomy in their jobs. For example,

electronic messaging may reduce telephone

..— .

‘13.C. Amick and J. Damron, “Considerations in Defining

Office Automation: A Case Study in the Eastern Africa Region of the M’orld J3ank, ” Human Computer Interaction:

Proceedings of the Fimt USA-Japan Conference cm IIuman Cmnputer Interaction. Gavrie] Sal\rend} (cd. ) (Amsterdam: ~jlse~rier

Science Publishers, 1984), pp. 439-445. See also app. B, “Computer hlediated \t’ork in Commercial Banking.”

B. Kaplan, et al., Job Demands and Workers Health

(}$’ashington, DC: U.S. Go\rernment Printing Office, 1975),
106 ● Automation of America’s Offices

call-backs, or in some cases, the number of

meetings. Managers can get up-to-date information on factory operations or business activity by accessing on-line databases within their

companies. They may be able to manipulate

these data, to do “what if” studies to determine the probable outcomes of their decisions

before actually making them. Managers and

professionals can avoid the need for outside

data processing or other expert help by using

spread-sheet software or information databases at their own terminals. They can produce polished reports on their own printers

without a secretary or a graphics artist. 16

Along with these advantages, there can be

some drawbacks as well.

Greater autonomy, for example, can have

its disadvantages. When managers and professionals demonstrate less need for a secretary

to do their typing, they may lose the secretary entirely, even if they still want one for

other duties—or for a status symbol.

In another example, a manager who is

pleased to get up-to-date information about

factory operations through the office automation system, may be dismayed to find that the

same information is available to a senior executive, who is therefore capable of more closely monitoring or second-guessing decisions. In

this case, the use of the technology might lead

to a reduction in autonomy for the lower level

manager.

“Knowledge engineers” have been attempting to identify the skills, information, and expertise that go into managerial and professional judgments and to incorporate these into

software. The results are a variety of computerbased models, expert systems, and decisionsupport systems.

Some analysts have expressed fears that

computer-based models are making professional and managerial work more routine.

There are also fears that some people are going too far in allowing them to replace human

judgment. Human judgment is not perfect, but

its imperfection is generally recognized and

expected. Many people have higher expectations of computers, and sometimes a misplaced

faith in their accuracy. A computer-based

model, no matter how good, is only a partial

representation of complex relationships, and

its internal assumptions, theoretical biases,

and mathematical quirks can produce results

that are not consistent with the real world.

Overconfidence in the effectiveness of computer-based models, some believe, can lead to

neglect of other forms of research that were,

before computerization, the basis of expertise.

Skill in these areas is still important as long

as the model is incomplete.17

The ability of computers to give the wrong

answer to six significant figures is sometimes

called “the tyranny of illusory precision. ” Its

danger to professionals and managers has

probably been exacerbated by the growing use

of computer graphics. Advertisements by computer companies rightly tout the greater per-

“’Alexia, Martin, Office Automation: Catalyst for Change,

SRI, International, 1983, p. 9.

‘“Linda Sandier, “Securities Risk: Wall Street Is Finding

Its Trusty Computers Have Their Dark Side, ” Wall Street Journal, Dec. 4, 1984, p. 1.
Ch. 4— The Changing Nature of Office Work . 107

suasiveness of good graphics (the CEO adopts

the proposal illustrated by manager A’s colorful pie charts, but he throws manager B’s

laboriously typed tables into the trash). However, slickness of presentation and effectiveness of results are not necessarily related.

Some professionals have expressed fears

that too much use of computer-based information or decision-support software is limiting creative problem solving. Much of the value

of a professional judgment is that it weighs

many factors, many of which are unquantifiable, or even ambiguous or fuzzy. Someone who

formulates a professional opinion gives weight

to the nonquantifiable information in a “gut

feeling” based on experience. Information

available through a computer database may

be more complete than information accumulated through other means, but it is also

‘‘perfect “-ambiguity has been removed. Some

writers have suggested that ambiguous situations provide a “free space” for creative thinking that is fundamental to professional work.18

The problem may be short term. Continued

research and development along with practical use will further demonstrate both the potential and the limitations of computer-based

tools in aiding decisionmaking. If professionals

and managers who put too much reliance on

computer systems make more mistakes than

those who rely more on traditional skills, they

will presumably prove less effective over time.

Clerical Jobs

It is in the area of clerical jobs that most

studies of the effects of office automation have

focused, and it is here that many of the impacts seem apparent. 19 Nevertheless, it is hard

to generalize, because so many impacts depend

“Zuboff, op. cit.

Exam les include: Mary C. Murphree, “Rationalization

and Satis action in Clerical F W’ork: A Case Stud~’ of W’all Street

I,egal Secretaries, ” Ph.11. dissertation, Department of Sociology, Columbia University, 1981: Evelyn N. Glenn and Rosalyn

1,, Feldberg. “Proletarianizing Clerical L$’ork: Technolo~r ond

organizational Control in the Office, ” Case Studies in the Z.abor Process, Andrew Zimbalist [cd. ) {New York: hlonthly Re-

~’iew Press, 1978), pp. 51 -72; and Robert A. Arndt, and 1,arr~

Chapman, “ Potential Office Iiazards and Controls,” OTA Case

Stud?, 1984.

on how the technology is implemented in a particular organization, rather than on the technology itself.

For many clerical workers, both quantitative and qualitative data show that workload

has changed following the introduction of office automation. The work pressure scale from

the NIOSH study shows that the introduction of a computer terminal has led workers

to report greater work pressure. In most cases

this is because management choice has been

to redesign work according to the “industrial”

or production-line model. The most common

scenarios are those of the secretarial worker,

the data-entry clerk,20 or the directory assistance operator.21 In each case, rationalization

of the job fragments it into its component

parts. A secretary, for example, who previously

did filing, typing, answering phones, and a

number of nonroutine tasks may end up only

doing word processing.

Work pressure may also increase when the

work is less paced by the person and more by

the computer terminal. In the extreme case,

the directory assistance operator may be expected to take a call every 30 seconds, with

calls continually forwarded to the operator by

the computer. It is this combination of pacing

and specialization that leads to increased workload. 22

Whether the worker’s autonomy and control are increased or decreased on the job can

depend on how the automated system is designed. This can be seen, for example, in some

of the automated collection systems being used

-“Michael J. Smith, B.G. F. Cohen, and 1,.\t’. Stammerjohn,

“An Investigation of Health Complaints and Job Stress in Video

Display Operations, ” I{uman Factors 24:4, 1981, pp. 387-400;

Gunn Johansson and Gunnar Aronsson, “Stress Reactions in

Computerized Administrative Work” Reports for the Department of Psychology, University of Stockholm, Supplement 50,

1980.

“Note the example cited in B.C. Amick and D.D. Celentano, “Human Factors Epidemiology: An Integrated Approach

to the Study of E{ealth Issues in the Off ice,” Human Aspects

in Offi”& A uhxnation, B,G. F. Cohen (cd. ) (Amsterdam: I+; lse\’ier

Science Publishers, 1984), pp. 153-166.

-R. Feldberg and E. Glenn, “Technology and L%’ork Deg-radation: Effects of Office Automation on M’omen Clerical kf’orkers, ‘Illachina J,’.Y. Lkw: Feminist Perspectit’es on 7’echnolog~.

(New York: Pergamon Press, 1984).
108 ● Automation of America Offices

both by private firms and government agencies. Often these are implemented in a way

that reduces autonomy. Under a manual system, the individual worker had some discretion about which account to pursue, when to

start a new file, or how often to call. Many

automated systems make all those decisions.

The system makes other decisions as the worker keys new information into the files during

telephone calls with the delinquent accounts.

The worker’s individual assessment of priorities or intuitive judgments of which people are

most likely to respond to extra cajoling become less important. The automated system

determines when, how often, and how long each

call should be. Sometimes the worker has no

understanding of the whole case, except through

the notes provided by the system. Under a

manual system, a worker ends each day with

a big pile of completed work and a sense of

accomplishment; a machinepaced system may

continue to send new work at the same rate,

no matter how much is accomplished.

On the other hand, if designed differently,

the same sort of system can maintain worker

autonomy and control while providing the advantages of a computer-based information system. For example, work can be bundled so that

one worker, or a team of workers, follows a

certain set of accounts from beginning to end,

and has the satisfaction of seeing the big picture in each case. If the system is modifiable

by the user, so as to give some discretion about

timing and duration of tasks or to allow use

of individual expertise, it can offer the best

features of both the manual and automated

systems. Autonomy is not directly tied to the

technology and is related to characteristics of

the organization and the work process prior

to automation.

Changes in the work process can lead to a

redistribution of tasks, which may either reduce or increase workload for clerical workers. Where professionals and managers have

begun to do most of their own keyboard work,

or where keyboarding is sent to a word processing pool, secretaries may find their typing

load considerably reduced. How this change

is handled depends on managerial and individual decisions. In one OTA case study site,

a New York City office, secretaries organized

themselves to solicit overflow typing from

other departments.

In the case of one Wall Street law firm, legal secretaries found they were losing their

keyboard work to the word processing pool

and their lawyering’ tasks to paralegals. As

a result, their work is generally now limited

to performing “primarily those nonroutine

tasks that involve social skills, time emergencies, and multiple contingencies, ” such as fielding phone calls, gatekeeping, coaxing rush jobs

through the bureaucracy, etc. The firm has

made a deliberate effort to reduce the number

of secretaries and to eliminate the one-secretary-one-attorney relationship. Increasingly,

secretaries work for more than one attorney

or as members of small clusters in teams with

other secretaries. 23

The allocation of tasks is a management decision. In the case of the law firm, business

and economic factors moved management to

allocate tasks in a new way. A centralized word

processing pool appeared to minimize capital

costs and ensure maximum use of equipment.

Technology helped make the reallocation of

tasks possible, but did not guarantee it. The

other change in the legal secretaries’ work had

more to do with accounting procedures than

with technology; “lawyering’” work done by

paraprofessionals is billable to clients, but the

same work done by legal secretaries is considered an overhead expense. Economic factors

motivate both the acquisition of new technology and the assignment of work.

For secretaries at one major bank the increase in workload relates not to fragmentation, but to the addition of new and interesting tasks. When personal computers were

introduced into their work unit their keyboarding duties did not decline; the unit withdrew

from the typing pool it had used previously,

making secretaries responsible for more key-

-’Mary C. Murphree, “Brave New Oifice: The Changing

World of the Legal %cretary, ‘‘ Jf.y Trouble,s Are Going To Have

Trouble With Me: Everyday Trials and Triumphs of 14romen

14’orkers, K. Sacks and D, Remy, (eds.) (New Brunswick, N,J:

Rutgers University Press, Douglas Series, 1984).
Ch 4—The Changing Nature of Office Work ● 109

boarding. At the same time, the secretaries

discovered that the statistical packages and

databases available on their terminals allowed

them to do some types of work previously done

by professionals. They found this work an enjoyable challenge and do not wish to give it

up, even though it increases their workload. 24

Job Ladders and Mobility

Changes in job content may affect career

mobility within organizations (internal labor

markets) as well as mobility within the economy at large (external labor markets). In many

firms employees have the possibility of moving up job ladders within the organization—

acquiring new skills, assuming greater responsibility, and receiving higher compensation.

The development of these opportunities and

the cultivation of this internal labor market

has been very important to some firms. Some

indeed consider the experience of working up

through the ranks, with its concomitant understanding of internal operations and demonstrated loyalty to the firm, to be more important than any amount of outside training.

These firms may have a policy of filling certain positions only through promotions rather

than from outside.

Both company policy and the shape of the

job ladders may change over time due to any

number of factors, including technological

change. What will be the impact of those

changes directly related to office automation,

or to the changes in work process or job definition permitted by technological change?

On the one hand, the fragmentation of work

into a multiplicity of narrowly defined jobs

has traditionally aroused concern about the

availability of “good” jobs. On the other hand,

the prospect that office automation may lead

to more standardized jobs raises concern about

potential polarization of job opportunities into

low skill, low wage and high skill, high wage

jobs with breaks in the job ladder between

them.

The import of diminished mobility must be

judged relative to the context, which includes

‘f~.{’. .lmick and J. I)ammn. op. cit., pp. 1:~$.1 45.

both internal and external labor market conditions. In many industries, internal job ladders have been significant factors in the past.

Capable and ambitious workers could learn the

industry from the ground up, coming in as clerical workers and working their way up through

lower level supervisory (or paraprofessional)

jobs into management levels. In the insurance

industry, for example, clerical workers might

become raters and later underwriters.”

Some technologies provided a natural learning sequence so that workers learned on the

job how to carry out more complex tasks and

operations. Firms that anticipated future

growth wisely saw to it that there were pools

of workers at the various intermediate skill

levels available for promotion so that expansion could be smooth and free of external labor market constraints. ”

The insurance industry traditionally selected

and trained managers from within the industry, usually from within the firm. In other industries too, such as retail trade, the internal

job market was the most significant and employers provided much formal and informal

training for lower level employees. Although

the messenger-to-manager or clerk-to-CEO

paths were trod to the end by very few, the

possibility that a combination of diligence,

striving, and luck could take one to the top

was a powerful motivating factor.

Some researchers have suggested a growing trend in recent decades to externalize both

training and recruitment. In other words, employers are depending more on lateral recruitment of managers and skilled workers trained

in colleges and business schools. 27 This also

‘ It has been pointed out b~T se~’eral researchers that this

job ladder worked well only for male clerical workers before

the earl~’ 1970s; women clerical workers seldom made the climb.

Under pressure of equal opportunity initiatives this became

a significant job ladder for women in the 1970s, but is now

said to be truncated by the automation of rating and mu tint’

underwriting.

-*Eileen .Appelbaum, School of Husin(lss tldnlinistrati(~n,

Department of Economics, Temple Universit?r, personal communication, Feb. 5, 198,5.

See for example, ‘rhierr~’ ,J, No~’elle, “Plmplo~n~ent an d

Career opportunities for W’omen Minorities in a Changing I~conom~’: The F: xperience of I.arge and Nlediurn Sized Firms, ” Conser~ at ion of I IU man Resources, (’oIu mbia I Ini\’ersi t?’, ,J anu ar}.

19N3,
110 ● Automation of America’s Offices

—

applies to lower level workers, because of the

longer years of schooling for the general population and the growing availability of vocational schools and community colleges, employers can rely on the public sector for training

once provided within the firm. For those who

cannot or do not get that training and education—for reasons related to socioeconomic conditions, culture, talents, or the driving necessity of earning a living early in life—a critical

alternative path to better jobs is being eroded.

Office automation could further weaken and

truncate internal job ladders by completely

automating some of the jobs that provided the

intermediate rungs, and by encouraging employers to rationalize, simplify, and narrow

tasks so that workers learn about only smaller

and smaller fragments of the total work of the

organization. This also makes the individual

worker less and less valuable to the employer

since he or she can be readily replaced by others

who require only the briefest training, or have

already learned the same simple procedures

in other firms or other industries. Their skills

are, in other words, fully standardized.

This tendency from one perspective increases the mobility of workers, who can move

relatively easily from one firm to another or

from one industry to another with fully transferable skills. But it does not increase their

upward mobility at the same time. If the supply of lower level jobs shrinks and the supply

of higher level jobs increases, such workers

may not benefit because the higher level jobs

are likely to be filled laterally, with people who

have had the benefit of higher education–or

more recent education.

Some researchers believe these trends are

leading to a polarization of the labor force into

low skill, low paid jobs and high skilled, high

paid jobs, with few opportunities in between.

Empirical evidence regarding any economywide trend toward job polarization within organizations gives conflicting signals. Polarization of jobs has occurred in such office-oriented

industries as banking and insurance; examples are provided in previously cited research

by Baran and Appelbaum. Conditions in those

industries are not necessarily generalizable to

general office circumstances, where initial

staffing patterns are different and motivations

regarding job design are also different. In

many general office environments with lower

levels of clerical employment (the extreme being the one-secretary office) office automation

is not driven as strongly by the objective of

immediate reductions in force. In many such

offices, there is perhaps a stronger need for

quality improvement, greater timeliness, and

workload leveling. The result could be a greater

tendency for job enhancement and possibly

improved internal job ladders.

Many people advance their careers by moving from one organization to another. Thus,

the external labor market is also a source of

opportunity. In professional, technical, and

managerial occupations, advancement by moving between organizations, as well as by moving within them is relatively common. A study

of occupational mobility noted that most job

changes during the study period occurred

within the same major occupational group,

especially for both male and female professionals. 24 Indeed, mobility of these personnel

seems to be the foundation for the employment agency and placement business.

Although some people can advance readily

via the external labor market, some groups

find that more difficult. In many cases, a

change in jobs does not reflect advancement.

It was noted in the previously cited occupational mobility study that a relatively high

percentage of women who had recently moved

into manager or sales positions had previously

been clerical workers. However, the largest

group of women changing jobs were those who

moved from one clerical occupation to another.29

For lower level clerical workers, advancement

through job changes is likely to require formal, external training, if on-the-job acquisition of skills needed for higher level positions

is diminished. A reduction in intraorganiza-

‘KEllen Sehgal, “occupational Mobilitj’ and Job Tenure in

1983, ” A40nthly Labor Retiew, October 1984, pp. 18-23.

‘

q

Ibid.
—

Ch. 4—The Changing Nature of Office Work 111

tional career ladders is a shift in training bur- cation and training is uneven; job opportuniden from employer to employee. That burden ties may be increasingly tied to social class

is aggravated inasmuch as access to good edu- or economic means.

ORGANIZATIONAL STRUCTURE AND RELATIONSHIPS

Changes in the structure of organizations

related to introduction of office automation

can be influenced by economic, environmental,

or cultural considerations, in addition to technology. Managerial strategies-upper level decisions about the organization’s goals and the

role of technology and of people in achieving

them—are probably the major considerations.

Formal structural changes (i.e., something

that would be noticed on the organization

chart) might take place during implementation

of office automation or shortly afterwards, perhaps reflecting a change in the work process.

For instance, in some firms, the creation of

administrative centers and the aggregation of

all support personnel in word processing pools

accompanied the decision to adopt office automation technology. On the other hand, change

may not be reflected formally at all, but may

only be seen as changes in communication patterns or in power relationships between groups

or departments.

Organizational effects often take place over

a period of time, as part of an evolutionary

process. As familiarity with technology and

its capability grows, structural changes may

be introduced that allow the organization to

take better advantage of those capabilities.

New product lines made possible by the technology may emerge, which in turn give rise

to new work groups or departments.

Power and Access to Information

Early research on the computerization of

organizations suggested that introduction of

computing appeared to change power relationships, and a central preoccupation of research

in the 1970s, was whether computers led to

growing centralization of power among upper

level managers. The sources of organizational

power include such things as control over resources, information, critical technical skills,

or coping capability .30 As control over the computer offered senior management many of

these things, some researchers predicted that

computerization would increase the centralization of decisionmaking power.

These studies were done for the most part

in the era of mainframe computers. However,

even in the age of personal computing and distributed processing, there may be reason to

believe that integrated information systems

can aid in the centralization of organizational

power. Possible routinization of middle management work, through dependence on computer-based information systems and decisionsupport models, was discussed earlier. Some

researchers have pointed out that any worker

whose job becomes more routine becomes less

powerful, less able to offer a unique contribution to the organization. While middle managers may retain responsibility y for making certain decisions, their range of choices could

become more rigidly circumscribed by the assumptions inherent in their decision-support

system. Their authority could be accompanied

by increased supervision and control, as higher

level management will have access to the same

information and decision aids.31 Another expert has suggested that “paradoxically, [centralization] may be manifested by locating decisions at lower levels but controlling decision

outcomes through the provision of performance records. “32

It has been suggested that

the widespread use of integrated office auto-

“’Jeffrey Pfeffer, Power in Organizations (Nlarshfield, MA:

Pitman Publishing Inc., 1981), p. 274.

“M. Lynne Markus, S-vstems in Organizations: Bugs and

Features (Boston, MA: Pitman Publishing Inc., 1984), pp. 52-53.

‘&Daniel Robey, “Computer Information Systems and Organizational Structure, ” Communications of the .4CAI, October

1981, pp. 619687.
mation systems reduces the need for middle

management and could ultimately lead to a

flattening of some organizational pyramids .33

The concept of centralization is too simple

to describe all the possible changes in power

relationships that might result from the introduction of office automation. Organizations

are not monolithic; different departments,

work groups, or factions may be affected differentially.

A set of case studies found that introduction of automated production scheduling systems into Danish plants altered the power relationships among management groups because

of differential access to information. The plants

had a matrix organization, with major decisions being made by interdepartmental teams

of production planners, production managers,

and plant managers.34 The new computer-based

production planning system was ‘owned’ and

mainly used by production planners. It seems

to have concentrated up-to-date knowledge in

their hands, thus giving them greater power

over production decisions and higher status

as compared to production managers and plant

mangers. These shifts of influence were evidently unintended by the designers of the system. One expert35 in interpreting the same

study, points out that this concentration of

power caused the matrix arrangement to lose

some of its anticipated effectiveness, although

it was still retained, largely for symbolic or

ideological reasons.

In one of the OTA case studies, Aircraft Instruments Plant, the introduction of the MRP

II planning and scheduling system seems to

have given greater power to production-support office workers while taking some discretion away from the supervisors on the factory

‘ R~~f ‘T Vv’~and, “Integrated Communications and Wrork

h~fficiency: Impacts on organizational Structure and Power, ”

paper presented at the International Communication .Association ,4nnual Con\rention, Honolulu, Hawaii, hlay 22-27, 1985,

p. 16.

‘IN. Bjorn-Anderson and P. Pederson, “Computer Systems

as a Vehicle for Changes in the Management Structure, I nformation Systems Research C~roup, University of Copenhagen,

1$’orking Paper 77-3, 1977. Cited in Rob Kling, “Social Analyses of Computing: Theoretical Perspectives in Recent Empirical Research, ” CoI]]p~ltingSLlr\re\r 12 (March 1980), pp. 61-110.

llobey, op. cit.

floor. (See appendix B.) While access to up-todate information is partly responsible for this

shift, even more important is the ability to

act on information. Under the new system,

only production-support staff have the authority to override the system when the automatic

response would be inappropriate. Because of

the complexity of the work and also because

of some conceptual problems in the system’s

design, such conditions arise frequently. Previously, factory supervisors might have dealt

with exception conditions on their own authority, but now they must request permission

from production support.

On the other hand, where shifts in relative

power are inappropriate to the “corporate culture” of any organization, management has

the option of reinforcing existing lines of authority and modifying the automated system

to ensure that change does not take place.

One example is that of a military organization that replaced its manual logistics system

with a computerized one. Under the old system, senior officers received requests for equipment transfers and had junior officers to

compile a detailed report on which to base a

decision. The junior officers gathered information for these reports through written documents and through telephone contacts with

a network of supply officers at other installations. With the new system, the junior officers

worked at computer terminals with on-line access to information about the location and status of equipment, a decision-support system

to calculate least-cost routing, and the means

to implement transfers. Because the junior

officers had timely and complete information,

people began making requests for equipment

directly to them rather than going through

proper channels, and the junior officers sometimes could not resist the temptation to respond, even though they did not have authority to do so. Senior officers attempted to have

the new system removed. In the end it was

retained, but it was redesigned so that junior

officers were unable to take action based on

their decisions.36

“Markus, op. cit., p. 74.
Ch 4— The Changing Nature of Office Work 113

.

Pho [o cred(f E?(// Ke//ey Commu n~cat(on Workers ()+ 4 me, IL a

Advances in microelectronic technology have made telephone operators more productive
114 ● Automation of Arnenca’s Offices

—

Many firms are using integrated databases,

and employees at various levels need access

to it in order to do their jobs. However, access

to different parts of the database can be stratified so that existing organizational lines of authority are not threatened.

End-User Computing Power

Since one source of power is control over resources and since the computer itself (or what

it can do) is a resource, there has been some

dispersal or shifting of power in many organizations. Only a few years ago computers were

a scarce resource; data processing professionals usually acted as gatekeepers between

all other departments and the computer, and

thus were in a position of power. Over the past

5 to 10 years, with the declining cost of electronic hardware, computer power has become

much more widely dispersed throughout many

organizations.

High costs of computer equipment used to

make centralization more attractive. Lower

prices, increased capabilities, and the ability

to link workstations in networks now make

it possible for firms to disperse data processing and word processing capabilities. This does

not necessarily mean that the word processing pools have disappeared (although they

have in many firms) but that word processing

capability is now available to private secretaries, receptionists, professionals, and others.

Nor are centralized data processing departments likely to disappear, as many organizations continue to need the power of mainframe

computers and the expertise of computer

professionals. However, the ability to do a

growing variety of data processing activities

can now be brought directly to every professional and manager.

In some organizations there maybe an overall strategy to keep centralized control over

computer resources, to maintain compatibility between systems, to make sure that personal computer users can access databases,

etc. This function may be performed by the

data processing department or by some other

office automation group. Where some other

group is designated, turf difficulties with the

data processing department have often arisen

with the continuing convergence of word processing, data processing and communication.

In one Fortune 500 company, conflict between

the data processing department and ad hoc

office automation group was finally resolved

when the office automation group was assigned

responsibility for managing all resources for

data and word processing within the firm. The

data processing department was limited to providing data processing services for external

clients .37

In many cases, organizations have acquired

office automation, especially personal computers, without a grand plan, in response to

grass roots decisions at the individual or departmental level. Later attempts to standardize or to centralize control of the organization’s

information resources inevitably result in battles when different kinds of equipment or different philosophies of operation have already

become entrenched. No system is perfect for

everyone’s needs, and many groups may want

to influence the development of office automation systems to make them most suitable

to their own needs or most acceptable from

their own bias.

Communication

Additional organizational implications of office automation are related to their effects on

communication within organizations. An interesting sidelight on the case involving the

military logistics office is the way in which

the new system changed communication patterns. The senior officers were “left out of the

loop, ” when supply officers began contacting

junior officers directly for equipment transfers. In addition, however, the flow of information reversed along the junior officers network of telephone contacts. The junior officers

had created these networks to call out for information. However, once the on-line system

came into place, the junior officers became a

source of systemwide information. Their form-

—

“Ginger Levin, “Excellence in Information Resource Management, ” GHL Inc., Washington, DC, 1984.
er informants made use of the same telephone

network, with its established informal working relationships, past favors, friendships, etc.,

to call in for information or for emergency

equipment transfers.

Changes in communication patterns maybe

at the base of many of the organizational

changes associated with office automation,

simply because communication is such a major part of white-collar workers’ jobs. Managers, especially, spend a large portion of their

time communicating. It is estimated that from

46 to 77 percent of their day is spent in oral

communication, including both telephone conversations and face-to-face meetings.38

The introduction of new pathways of communication may bypass traditional gatekeepers

and make profound changes in ‘‘who talks to

whom. ” Although some researchers have predicted that full access by many workers to a

linked electronic system could lead to a complete reshuffling of power relationships, giving most power to those with access to the

system, 39 there is little evidence that formal

hierarchies are greatly affected by innovations

like electronic mail and messaging. In fact,

these systems are often constructed in such

a way as to reinforce the existing hierarchy,

e.g., automatically sending information copies

to managers of all their subordinate’s messages, but not the other way around. There

are some anecdotes of superiors using the system to intensify pressure on subordinates (“I

requested that information an hour ago! Don’t

you check your messages?”). In addition, even

in a completely wide open system, where everyone theoretically has access to everyone else,

it is doubtful that everyone has something useful to say to everyone else.

However, there are cases where use of an

electronic mail system has lead to the undermining of an organization’s traditional hier-

‘~largarethe 11. Olson, “ New Information Technology and

Organizational Culture,” .$11S Quarter-l> Special Issue 198,2,

pp. 71-92.

“See for example, Carol T. Gaffney, “The Impact of office

Automation on Power in organizations, ” Proceedings of AFI PS

Office Automation Conference, Philadelphia, February 1983,

pp. 216-21 ’7.

Ch. 4—The Changing Nature of Office

archy and authority structure. In one example, members of a disbanded project team used

their firm’s electronic mail system to continue

work on an abandoned project, eventually convincing management to revive it. At the same

firm, the electronic mail system became a

means of exchanging complaints and criticisms about management. 40 More recently

there have been other reports of electronic messaging systems being used for “flaming, or

emotional outbursts related to organizational

or other problems .41 Such “subversive” use of

electronic mail probably depends a good deal

both on corporate culture and on the configuration and capabilities of the system. Anecdotes from other firms suggest that their electronic mail is never used for complaints or any

communication with implications for internal

politics because electronic messages are more

easily traced than paper ones.

It is not yet clear how effectively electronic

messaging will replace face-to-face or telephone

communication. Early evaluations have not

shown consistent patterns of replacement of

telephone, face-to-face, or written messages

with electronic messages across organizations.

At some organizations, as at OTA case study

site Company XYZ, electronic mail has been

consciously rejected because personal communication is considered important to the corporate culture. In another OTA case study,

Office of the Special Trade Representative, internal electronic mail is used extensively for

circulation of documents for comment and it

would be used externally if other agencies were

equipped.

Many managers do not use electronic mail

extensively to replace face-to-face meetings or

telephone calls. This may be attributable to

two factors. First, use of the technology may

interfere with the personal management style.

Second, there may be dissonance between the

electronic system and the type of information

being transferred. In one study, over one-third

of the messages exchanged in face-to-face or

‘‘Tlarkus, ‘p. 60, citing Ralph filmmett, “T’NET or Gripenet? Datamation, .Not’ember 1981, pp. 48-58.

1 “Con\ ’ersations by Computer, ” ~~lectronic .Ser}ices Unlimited, october 1984.
116 ● Automation of America’s Offices

telephone meetings contained ‘soft information, that is, they conveyed opinion or conjecture. It is possible that messages of this sort

cannot be effectively communicated through

electronic mail.42 Another researcher has noted

that teleconferencing also is more successfully

used for giving or receiving factual information, and less so for complex tasks like bargaining and persuasion.43 These factors make

it likely that these technologies are more likely

to reinforce existing trends in the organization rather than to bring about radical changes.

Major changes in the way people communicate at work may come, not from electronic

mail, but from common access to databases

and to computer operations that control the

work process. If office automation offers employees new access to information, it can also

change their informal patterns of communication. For example, where coordination between work groups is taken care of in informal ‘hallway conferences’ among work group

members, there is opportunity for social interaction as well as the exchange of work-related information. The introduction of an office automation system with a shared database

may allow these groups to accomplish coordination through the system, and the people may

no longer need to see one another for that

purpose.

At Aircraft Instruments Plant, an OTA case

study site, coordination through the system,

and the elimination of informal conferences

and negotiations, were clearly goals of the new

MRP II system. Although these goals have

not yet been achieved, the new system has

clearly changed patterns of communication

within the plant and its offices. Informal conferences continue, but now a major purpose

of negotiation is to get permission to override

the system. (See appendix B for further information. )

This integrative quality of computer systems, which when successful allows coordination without physical proximity, leads directly

to the subject of the next section.

—

‘-Olson, op. cit.

“Thomas hlancie~rille, “The Spatial I+~ffects of Information

Technology, Some I~terature, Futures, February 1983, p, 67.

Dispersion of Work Activity

Perhaps the most powerful effect of the communication features of office systems is the

ability to change the location and geographic

distribution of work activity. Once words,

data, or pictures have been converted to electronic form they can be sent to a device across

the room, across town, or halfway around the

world with almost equal ease. As a result, people do not have to be aggregated in one place

in order to work in the same ‘‘office.

Traditionally, information-intensive services

have located in large cities where they have

the advantage of proximity to other organizations and people. To the extent that telecommunication can substitute for proximity, organizations will have many more choices in where

to locate. Many see this as leading to a more

geographically dispersed style of functioning

because:

. . . the increasing spread (and cheapness) of

telecommunication reduces the former external economies of physical proximity, we see

the dispersal of corporate headquarters and

major white-collar operators like the insurance

industry from the decaying central cities to

the suburbs.44

Firms might minimize use of expensive big

city office space not only by locating in the

suburbs, but by moving to or establishing

branches in small cities or towns, or even in

foreign countries so long as a suitable work

force and an adequate telecommunications system are available. The departments most likely

to be located in remote locations are those that

need little outside contact or that primarily

engage in routine communications.45 So long

as coordination and integration of work can

take place electronically, there is no longer

much need for spatial proximity.

In a study of automation in the insurance

industry, it was pointed out that the centralizing and dispersing tendencies of automation

are complementary.46 Procedures for insurance

“Ibid.

‘ Ibid.

“ Barbara 13aran, ‘*Technological Innovation and Regulation: ‘1’he Transformation of the Labor Process in the Insurance Industry, prepared for Technology- and Economic Transition Project, Office of Technology .Assessment, OTA contract

No. 3433 -3610.0 Washington, DC, ,Januar~r 1985, p, 95.
Ch 4— The Changing Nature of Office Work . 117

rating, underwriting, and claims handling are

increasingly being standardized and automated. A recent trend has been to centralize

physically the databases on which these activities depend. Many insurance companies are

now consolidating their regional offices into

two or three highly automated regional centers. At the same time, these firms are disbanding some of their large centralized dataentry pools. Data-entry work is being dispersed

to functional departments located in agencies

or field offices, connected by on-line terminals

to computers at the regional centers. Functional units within the company can be integrated electronically through the computer

even if they are geographically distant. At the

same time, “because in all cases information

is being increasingly consolidated in central

master files, although access to it is proliferating and decentralizing spatially, decentralized production is fully compatible with centralized direction and control.47

Spatial dispersion of office work could have

major effects on the labor force of the future

and could have differential impacts based on

race and class. Large data processing pools

often employ high proportions of minority

women in low-skilled clerical jobs. These are

the jobs that are increasingly being automated

away. The more highly skilled clerical jobs that

—

1 hici.

remain will increasingly be located outside of

cities as organizations search for lower cost,

nonunionized or more highly educated labor.

In one insurance company relocation, labor

force characteristics were explicitly important

in the location decision—the company sought

to place its offices in communities where

women were “well educated, of German descent, with unemployed husbands ‘—as these

were considered the most likely to put in a

good days’ work.4

’

There is probably a limit to how far spatial

dispersion can go. Most organizations are unlikely to scatter branch offices across the country simply because office automation makes

it possible. Certain activities may not lend

themselves easily to dispersion. Because of the

unsuitability of telecommunications for activities like negotiating, persuading, or exchanging soft information, qg it is likely that some

critical mass of employees would have to remain near each other for face-to-face meetings.

In addition, other cultural, logistical, and cost

factors unrelated to the features of office automation may limit the number of separate installations.

—.

“Baran and ‘Ikegarden, op. cit., pp. :]0-31.

‘“olson notes that this ma~’ he one reason wII}’ man}’

managers hay’e not started using electronic mail to replace faceto-face meetings. See Olson, op. cit.

IMPLEMENTATION

While advertisements are full of the promised benefits of office automation, there are

a vast number of horror stories about unsuccessful attempts. The technological and organizational barriers to be overcome, the internal political battles that often must be

fought, the planning and redesign of work to

be done, are daunting. After hearing and seeing some of the things that can go wrong, those

responsible for bringing office automation to

their own organizations may consider an implementation to be successful if it is not completely botched—if productivity does not plummet or employee turnover does not rise to the

ceiling.

Paul Strassman, formerly Vice President of

Xerox, noted that many organizations greatly

underestimate the organizational costs (as opposed to technological costs) of automation.

Organizational costs, for example, inefficiency

while learning new procedures, time lost for

training, time spent negotiating with peers

about new work processes, can add up to several thousand dollars per employee in the first

year if properly noted and accounted for. 50

Where organizational issues like job redesign

and workflow restructuring have not been
118 Automation of America’s Offices

properly managed, organizational costs can

more than offset productivity gains expected

from new technology. A number of firms are

demonstrably worse off with automation than

they were without it, at least in the short run.

However, these new tools are becoming increasingly available and increasingly necessary for doing business in the present era. It

is possible to learn something from successful implementations to avoid the problems experienced in horror stories.

The success of the introduction of office systems into an existing organization has been

found to depend on a number of circumstances

that surround the implementation. Although

various researchers disagree on the relative

strength of their influence, there seems to be

some general agreement on their importance

and direction.51 These variables include the reason for adoption, the involvement of key actors, the use of adaptive planning procedures,

level of user participation in planning and decisionmaking, and training and incentives for

users, and training.

Reason for Adoption

In most discussions of successful installations of office systems, there was a clearly identified organizational objective. Organizational

goals involving improved outputs have been

associated with success more often than organizational goals defined only by cost reduction. Cases where a technological opportunity

was seized, without demonstrated organizational need were those where there was least

evidence of success.52

These findings are in line with admonitions

to tie system planning closely to the office’s

business function.53 Where there is a clear understanding of the output to be produced and

—-

“Tora Bikson, Barbara Gutek, and Don A. Mankin. “Implementation of Information Technology in Office Settings: Review of Relevant Literature, ” Rand Corp., Santa Monica, CA,

November 1981.

‘

)

’ Ibid.

“Michael Hammer and Michael Zisman, “Design and Implementation of Office Information Systems, ” I.aboratory for

Computer Science, Massachusetts Institute of Technology,

OAM-005, May 1979.

the role of automation in improving that output, there is a greater likelihood of selecting

and designing a system which achieves that

objective.

Although cost reduction can be an important objective, a narrow focus on cost reduction alone may not have the desired results

if the organization’s goals and the work process leading to the achievement of those goals

have not been thoroughly analyzed.

In the case of Company XYZ, an OTA case

study site, use of information technology was

seen as a competitive weapon, a means of both

cutting costs and increasing market share.

However, cost cutting was placed in context

of the type of work done at XYZ and the corporate philosophy.

The goal was to replace old, rigid, batchoriented information systems and manual

technology with flexible cutting-edge electronic tools, and concurrently to give users

a renewed sense of power, insight and enthusiasm about their tasks, so as to improve

organizational performance.54

This focus on user needs led to the criterion

that any system selected should be manipulable by users and should:

. . . augment the worker rather than automate

the work. Being able to ask good questions,

do insightful analyses, take the initiative, and

make a decision are emphasized as distinctly

human skills that computers can assist but

not replace.

While other firms will have different goals

and a different philosophy about the role of

their workers, analysis of organizational goals

and the role of computers in achieving them

is still important.

Key Actors

Another important element in successful implementation is the “key actor. ” This can

sometimes be a top management official who

“Tora Bikson, Don Manken, and Cathleen Statz, “Individual and Organizational Impacts of Computer-Mediated Work:

A Case Study,’” prepared for Office of Technology Assessment,

1985, p. 21.
—

Ch 4—The Changing Nature of Office Work 119

clearly supports innovation, but in many cases

a “technological entrepreneur” somewhere below the top level of the firm maybe the prime

motivating force in a successful introduction

of new technology. In some studies it has been

found that the role of the unit manager is essential in successful implementation. 55

Support and understanding of top management are also crucial. In the case of XYZ, the

CEO was the inspiration behind the move to

automation, although actual responsibility was

delegated. Having management support guaranteed needed resources and also provided

guidance in developing a system that matched

corporate philosophy.

On the other hand, lack of top management

support seems to have aggravated some of the

problems in the Aircraft Instruments Plant

case study. For example, insufficient funds and

time for training, both of which undercut the

success of the implementation, were probably

related to lack of senior management understanding of the need. Senior management did

not ease production quotas when the new system was first introduced, even though it would

be reasonable to expect some decline in productivity as people learned to use the system. Further, ongoing performance measures were not

modified to fit the scheduling process inherent in the system. Thus, toward the end of

each month managers all scrambled to bypass

the system and manually schedule projects

with high dollar value but low priority, in order to meet dollar quotas. This is likely to continue as long as management priorities and

system priorities are in conflict.

Adaptive Planning

A planning process that is flexible and continuous, both before and during introduction,

also seems to be associated with successful

implementation. It is inevitable that both the

organization and the system will change somewhat in the process of implementation. A plan

‘‘set in concrete, which cannot be modified

to accommodate changed user needs or new

Ibid,; and ~ikson, ~utek, and h!ankin, op. cit.

information, can seldom be successful. In some

cases, with sufficient flexibility on the part

of the planners and the users, even a ‘‘drop

it in their laps’ approach to implementation—

one where users have minimal involvement in

planning—can work. A generic system can be

modified to fit an organization needs during

the early days of operational use. However,

users may not be sufficiently flexible, and

adaptability may not be the only requisite for

success.” In general, research in t he literature

as well as “how to’ articles in the computer

and management trade press agree that involving users in the planning process is highly

desirable.

Users in’ the Implementation Process

There are at least three areas where users

must be taken into account—design and implementation, training, and incentives for

users. Before the user can be adequately involved in the process, however, it is necessary

to ask “who is the user?”

Although the term “user-driven” is often

used in designing office automation equipment, there are several conceptions of who the

user is, and it is not always clear which ‘user’

is being addressed or represented. Wynn points

out at least three levels of ‘user. ’57 One is the

organization or department that intends to develop an automated system. Another is the

person or group of people within the organization with the authority to make decisions about

the purchase of equipment. This is often the

“user” that the vendor is trying hardest to

please. The third is the “end user, ” that is,

the person who actually operates a computer

or terminal. The needs, opinions, and level of

knowledge about office practices of these different types of user are not necessarily identical; they may not even be in harmony in some

cases.

“)Ron H. Epstein, “An Approach to Inb-educing and Evaluating Automated Office Systems, Electronic Office: Management and Technology (Pennsauken, NJ: Auerbach Publishers.

1980).

‘Eleanor 11. J$’ynn, “The User as a Representation Issue, ”

Proceedings of the Hawaii International Conference on SJTstem Sciences, 1983.
120 ● Automation of America Offices

User Involvement in Design

and Implementation

Successful implementations of office automation technology tend to include users of all

types in the process. While there maybe some

difficulties in involving future end users in system selection when they are not yet familiar

with computers, there are benefits to be derived from the investment of time and effort

necessary to bring them up to speed. No one

knows better than the actual end user exactly

what he or she does and how it might be done

better. User needs may not be well understood

by system designers or vendors, or even by

managers in the same firm. Attempts to divine needs without asking can too often lead

to the use of social stereotypes (clerical workers do not make decisions, managers will not

type) instead of fact. Getting the user perspective early in the planning process can save

costly retrofitting or other problems later.

Methods for involving the users in the design

process can include interaction with the entire user community by collecting design data

through surveys and polls, or by having user

representatives on the design task force or

committee.

Finally, involving users in the design process can help to overcome some of the resistance to use of new systems often classified

as “fear of computers, ” “technophobia,” or

simply “fear of change. While some have assumed that certain types of people “naturally’

resist new technology (e.g., older workers, less

educated workers, etc. ) Wynn notes that:

The hidden assumption in these notions is

that the reason people may not rush to be new

users of technology is a) psychological rather

than rational in nature; b) the fault of the user

not of the equipment. Both of these assumptions, if acted upon, cause development organizations to do nothing at all to solve the problem, to go ahead and design as they see fit

and see if people can be forced to use the resulting system, or to go to great lengths to

cater to the users’ supposed psychological and

cognitive incapacity, mostly by trying to “advertise away” the problem.58

‘“Eleanor H. Wynn, “Linking User Responses to the Design Chain, AFIPS Office Automation Conference, San Francisco, Apr, 5-7, 1982.

Several studies have shown that what managers or system designers sometimes perceive

as clerical workers’ irrational fears of technology are actually very rational concerns. Wynn

found in open-ended interviews at several firms

that clerical workers were concerned, for example, that they might not be able to learn

the system, that the equipment chosen was

wrong for the job, that new measures of job

performance were wrong for the job, that they

might lose their jobs and be unemployed. She

concluded that “people can be seen to resist

not change itself, but change for the worse. ’59

Managers often do not perceive these specific concerns, but view them as generalized

irrational fear. In one survey of Fortune 500

firms, over half (57 percent) of the managers

attributed employees’ apprehension about new

systems to general, unfocused fear, while only

8 percent attributed it to fear of computers

and 4 percent to skepticism about management’s ability to manage the change. On the

other hand, only 20 percent of clerical workers attributed other workers’ apprehension to

general fears. Most (30 percent) identified concern about computers—presumably fear of being unable to learn to use the new system.

About 25 percent cited skepticism about management choices, and 22 percent cited job security as the major worry.60

Training

Training employees to use automated equipment is essential to making most effective use

of it, and most researchers agree that the importance of training to a successful implementation cannot be overemphasized. As Strassman notes, “Training, training, training: these

are the top three priorities to changing work

in the automated office. 61 A training plan is

a necessary part of the implementation plan

when an organization begins using office automation system. In addition, continuing efforts

———.—

‘Ibid.

‘

)(’ Research and Forecasts, Inc., !lhe Kelly Report on People

in the Electronic Office 11: E?ow Office Workers View Automation (Troy, MI: Kelly Services, Inc., 1983), p. 10.

‘ ‘Paul A. Strassman, Information Pa~’ofi} The Transformation of U’ork in the Electronic Age (New York: The Free Press,

1985), p. 81.
Ch. 4— The Changing Nature of Office Work 121

are necessary–for training new employees and

for upgrading the skills of current ones.

An adequate training program may often

constitute one of the major costs involved in

introducing automated office equipment. Unfortunately, many firms grossly underestimate

the need. In a number of surveys, workers and

managers in automated offices have cited lack

of adequate training as one of the major problems related to the implementation of office

automation equipment.62 Training is discussed

in more detail in chapter 3.

Incentives for Users

The introduction of new technology can

cause, or at least be associated with, changes

in the way people do their jobs; in the way

they interact with other people; and in the

amount of power, authority, and self-determination, they have at work. To the extent

—————

‘ -See ~~r ‘~xample, Iioney.well Technalysis, Office Automation and the 11’orkplace, Ilone~rwell, Inc., No\renlher 1984; and

Kelly Ser\’ices, Inc., The KelIJ Iieport cm People in the I;lectronic Office, results of sur~e~w performed h~ Research and

Forecasts, Inc.. three \olumes, 1984.

that people perceive the changes associated

with a new system as changes for the worse,

“disimplementation’ or damaging resistance

can result. Many successful implementations

have featured incentives to encourage users

to accept the new system, acquire new skills,

or accept changes in the social or organizational context. While benefits for the firm, such

as increased productivity, may be important

to some workers, more personally relevant rewards are also important, for example higher

wages, opportunity for other training or advancement. However intangibles such as protecting the worker’s self-esteem are also extremely important. In this regard, involving

workers in the change process can in itself be

an incentive.

[The employee] should see himself as the

master of the machine, not its servant; not

as a victim of the office design, but as a participant in it . . . When invited as collaborators, many office workers will respond with

enthusiasm to office system automation. 63

‘ Hammer and Zisman, op. cit., pp. 34-3,5.
Chapter 5

Office Automation and the

Quality of Worklife
Contents

Page

Section I: Stess and the Quality of Worklife . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ~ 126

Sources of Stress. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

Strategies for Alleviating Adverse Stress Responses. . . . . . . . . . . . . . . . . . . . . . . . . . . 136

Section II: Office Automation and Health, Illness and Disease. . . . . . . . . . . . . . . . . . . . 137

Visual System Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

Musculoskeletal System Outcomes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

Reproductive System Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144

Stress-Related Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148

Section III: Interventions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

Office Design and Workstation Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

Public Policy and Quality of Worklife . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

Research Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162

Labor-Management Relations and Office Automation . . . . . . . . . . . . . . . . . . . . . . . . . . 163

Tables

Table No. Page

5-l. Working Conditions Likely to Produce Stress Responses in Offices . . . . . . . . . . . 127

5-2. Exposures in the Office Other Than the Video Display Terminal . . . . . . . . . . . . . 138

5-3. Epidemiological Criteria for Assessing Causality . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

5-4. individual and Work Environment Factors Associated With

Visual System Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

5-5. Visual System Outcomes: Known Acute or Potentially Chronic. . . . . . . . . . . . . . . 140

5-6. individual and Work Environment Factors Associated With

Musculoskeletal Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

5-7. Musculoskeletal System Outcomes: Acute or Potentially Chronic . . . . . . . . . . . . . 142

5-8. Reported Cases of Reproductive System Outcomes in Computer-Mediated

Workplaces by Work Site and Job . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145

5-9. U.S. Occupational Exposure Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

5-10. international Radiation Protection Association Occupational Exposure

Limits to Radiofrequency Electromagnetic Fields . . . . . . . . . . . . . . . . . . . . . . . . . . 147

5-n. Workers’ Compensation Claims for Employees Working at

Video Display Terminals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156

5-12. Examples of Mental Stress-Mental Disability Claims for

White-Collar Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

5-13. Union Membership by Industry and Occupation . . . . . . . . . . . . . . . . . . . . . . . . . . . 166

Figures

Figure No. Page

5-1. Characteristics of the Office Setting That Can Contribute to an

Individual’s Quality of Worklife . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

5-2. The Proportion of VDTs Installed in New Office Space Compared

to Existing Space, 1984-90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

5-3. A Comparison of Workers’ Compensation Claims for Mental Stress

and Other Occupational Diseases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

5-4. Employed Wage and Salary Workers Covered by a Union or Employee

Association Contract in 1983-84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
Chapter 5

Office Automation and the

Quality of Worklife

This chapter is concerned with the individual in the office and the way in which office

automation affects the individual’s quality of

worklife. A traditional definition of the quality of worklife is “the degree to which members of a work organization are able to satisfy

important personal needs through their experiences in the organization.’” The relationship

of the worker to the office environment affects

health, well-being, and productivity. Office

automation changes the physical and psychosocial dimensions of the workplace and the

work process.

Of the many characteristics of the office, no

one factor is the sole determinant of quality

of worklife, especially not technology; but technology can change the social processes involved in producing an output or the way a

person does a set of tasks. ‘This chapter considers stress, office and workstation design,

the human-computer interface and the way

these relate to an individual’s health, wellbeing, and productivity.

The discussion is two-pronged; one emphasis is on how new office technologies affect

the quality of work life; the second is on public policy. It focuses on factors that contribute to organizational effectiveness by improving work quality and quantity, reducing turnover

and absenteeism, and ultimately indirect labor costs. ’

<J. l{jchar~ 1 iackrnan and J. l.lo~rd Suttle, lmpro~.ing Z,ife

at t! ‘ork: lleha ~ioral .5’cien<”e .,\pproaches to organizational

Change (Santa tloni~a. (’I\: (;ood~’em- Publishing C(l.. 1977),

p, 4.

- Supporting arguments for these contentions are found in

Franklin D. Becker J1’orkspace: Creating En\ironmentsin (h-ganizations ( N“ew York: Praeger Publishers, 1981); Thomas Cz.

Cummings and Edmond S, Molloy (eds. ), Improving Producti~’it.v and the Qualit.}r of Work Life (New York: Praeger Publishers, 1977): Arthur Rubin, The .4utomated Office–,4n Environment for Producti\’e J1’ork, or an Information Factorbl’?: A

Report on the State-of-the-Art (Washington, DC: U.S. Department of Commerce, INational Bureau of Standards, 1983). The

obsrvations in these materials are based on studies in both

blue-collar and white-collar settings and organizations of many

sizes.

An emerging policy debate concerns the risk

of illness and disease in office environments.

The evidence for the potential risks associated

with new office technologies is inconclusive.

However, heightened public concern and recent

workers compensation awards for VDT-related

illnesses indicate that a comprehensive and systematic examination of all office environment

exposures 3 should be carried out to determine

whether new office technologies are indeed increasing a worker’s risk for illness or disease.

A systems approach to examining the applications of office technologies indicates that

there are many ways in which office automation is related to the quality of a person’s worklife. Figure 5-1 shows the general framework

used in the analysis. The core relationships

are between the organization, the technology,

and the individual. The VDT is part of the

human-computer interface. The individual’s

personality or characteristics can mitigate the

effects of office automation. For example, some

workers enjoy and are more productive in a

highly controlled office environment, while others seek to maximize their own control over

the environment.

The arrows in the figure do not represent

causal relationships, but rather indicate patterns of association. Ultimately, these patterns

may be found to be causal, but at present the

scientific evidence is not sufficient to determine causality. In some cases, the effect of

office automation may be contingent on another

factor, for example, the workers’ response to

some other characteristic of the office.

—— — -—

‘The concept of exposure in public health refers to the conditions of the (work) environment that lead to the development

of illness or disease. For example, a person who smokes cigarettes exposes his her hod~ to cigarette smoke. This can lead

to the development of lung cancer. In this chapter. exposures

to be discussed are the working conditions created b~” office

automation.

125
126 ● Automation of America Offices

Figure 5.1 .—Characteristics of the Office Setting That

Can Contribute to an Individual’s Quality of Worklife

Fundamental elements

Work process

Organization I

Technology I

Physical envionment

Huma-computer

interaction

Individual

Building design

Office design

Workstation design

The subjects discussed in this chapter are:

station design and labor-management relations.

A discussion of labor-management relations

ends this chapter because many of the problems cited in chapters 4 and 5 can potentially

be solved or alleviated through some form of

worker involvement in the decisionmaking

process, such as collective bargaining.

SECTION I: STRESS AND THE QUALITY OF WORKLIFE

Stress is a term often used in both conversation and scientific debate to describe troublesome experiences in daily life, ranging from

the illness of one’s child to an acrimonious session with the boss. Some stress is routine, the

daily hassles of work. But, typically, events

that precipitate stress responses alter or intensify daily routines and roles of worklife.’

Characteristics of office automation that lead

to changes in the work role can thereby produce stress responses in the worker.’

Work-related stress is the psychological or

biological response to conditions in the work

environment. Stressors are the conditions that

cause stress.6 Stress can be either good or bad,

but “good” stress is usually called “challenge.”

——. .——

‘1.eonard 1. Pearlin, “Role Strains and Personal Stress, ”

Psychosocitd Stress: Trends in Theory and Research (New York:

Academic Press, 1984).

A worker’s role is defined organizationally by the job

heshe occupies.

‘This model of stressor and stress response is a common

model used and was originally developed by Hans Seyle and

Walter Cannon in the 1920s and 1930s. For a good overview

of this model of stress see, Hans Seyle, The Stress of Life (New

York: McGraw-Hill Publishing Co., 1956).

Office automation, by changing the conditions

of work, can elicit psychological and biological responses; i.e., produce stress.

Psychological stress responses to working

conditions include challenge, boredom, anxiety, mental fatigue, depression, satisfaction

or dissatisfaction, and feelings of security or

insecurity. Biological responses can include

chronic or periodic arousal,7 muscle fatigue,

headaches, and psychosomatic symptoms.

This list is not exclusive. Any of these can occur among office workers. Office automation

offers the organization a unique opportunity

to create working conditions that challenge

the individual worker and at the same time

decrease the frequency of adverse stress responses. a

—-——-—-

Chroni~ arousal refers to neural, hormonal, and immunological responses to external stimuli. In many instances the

term neurohormonal arousal is used to refer to these distinct

stress responses to indicate the controlling role played by the

brain in initiating them.

“Traditional stress models emphasize that stress responses

follow a U-shaped curve. Too little environmental stimulation

leads to underload and stress responses such as boredom. Too
A stress response sometimes comes from anticipation of an event as much as from the

event itself. The anticipation of a computer

going “down,’ for example, can produce stress

responses. New technologies often lead to new

and conflicting expectations.

The term “technostress” has been used to

describe consequences of office automation:

Technostress is a modern disease of adap -

tation caused by an inability’ tO cope with new’

computer technologies in a healthy’ manner-.

It manifests itself in two distinct but related

ways: in the struggle to accept computer technology, and in the more specialized form of

overidentification with the computer.’ )

The stress response is not technologically

determined, although the word “technostress”

conveys that impression. Many conditions that

produce a stress response in the automated

office are not the result of the new technology, and solutions to the problems can not

often be achievecl through modifications in the

technology. The consequences are contingent

on how an organization implements new office technologies. Most office workers look forward to working on computer systems that

automate manual tasks they would rather not

do. 10

Table 5-1 shows a list of conditions that produce stress. These stressors are not unique to

office work: they are also found, for example,

in factory work. In fact, some people talk about

the office becoming the factory of the future.

Table 5-1 .—Working Conditions Likely to Produce

Stress Responses in Offices

Working conditions in all offices:

Increased workload coupled w!th. a) IImlted job

control, expanded job control

Repetltlve task(s} In the job

Machine pacing of work

Lack of tIme for training to acqulre new skills

Competing roles at work

Lack of career o p po rt LI n I t Ies I n t hc organ I i7at 10 rl

Working conditions in automated offices:

Electronic mon Itoring as a form of su pervlslc)n and

employee monltorl ng

Electronic monitoring as a form of task feedback

Higher expectations for speed of work coupled ~lth

computer system response delays

Off Ice work dependence on computer system an(~

system delays

The computer med I at Ion of work and/or the pro blerms

with the human computer d~alog

Social Isolatlon with the primary I nteractlon the

computer

Increased soc I al contact and soc [al part IC i pat 10 n VI;)

computer networks

‘ {~~)Ff,~ Off e $ 11 Ill I fq} ii.. I L ~ IT . t

These conditions have always been felt in offices; new technologies can intensify them.

They can also ameliorate them. Typically, the

adverse conditions occur together and especially affect lower level jobs. Most have been

associated with low job satisfaction or with

illness, Each can be alleviated with work redesign strategies, contributing to better employee health and attitudes toward work.

Table 5-1 also shows a list of office conditions characteristic of office automation that

produce stress that may permeate all levels

of the organization.

Sources of Stress

Factors that bring about stress include increased workload, decreased control over work,

repetitive work, machine pacing, inadequate

training, ambiguity in role, consciousness of

limited career opportunities, computer monitoring of work, unattainable expectations for

speed, the abstraction inherent in computermediated work, and increased social isolation.

Workload and Control

Office automation can increase the number

of tasks a person has to complete; increase the
128 ● Automation of America Offices

complexity of the tasks; speed up the pace; lems, attempts are typically made to exert

or increase the amount of information needed greater organizational control over what the

to complete a task.’] Even the change to an worker does. This can be achieved more easily

on-line system from a batch processing sys- through office automation. Greater organizatem can increase workload.12 tional control tends to increase the problems

These increases may or may not be transient. of repetitive or machine paced jobs; offering

The ability to modify work strategies is a co-- workers even less control and resulting in a

ponent of the worker’s control over the job. ]3 vicious circle. The productivity of the worker

If the worker has the ability to modify his/her is stabilized below optimal performance level.

work strategies, the adverse stress responses Two patterns appear to be developing. The

can be buffered and transient. When the worker key difference is the level of control. When conhas little control, the adverse stress responses trol is decreased, either through embedding

tend to persist. Workload and job control in decisions in the system, electronic monitorconjunction affect attitudes about the job, the

organization, and the worker’s health.

Computer-based communication networks

have been shown to lead to increased workload by making the transmittal of documents

easier and thus more frequent. This leads to

the professional having to sift through many

memos to find the relevant one; the case of

information overload. This also may be a transient effect that will disappear as the organization learns to utilize the system effectively.

A primary motive for office automation is

increased productivity, but many stress responses lead instead to increased absenteeism

and turnover (especially under good economic

conditions when jobs are plentiful). These responses have also been associated with decreases in performance and even with some

instances of sabotage. 14 To alleviate these prob-

— ---

‘‘W’orklo~d is the level of demands the job places on the

worker. Technological change can lead to decreases in the

amount of time spent at a particular task. However, many

studies have documented that workload more often increases

with office automation: Jon Turner, Computers in Bank Cierical Functions: Implications for Producti\’it~’ and the Qualit~’

of Life, Ph.D. dissertation, Columbia University, 1980; Michael

J. Smith, et al., “’An In\’estimation of Health Complaints and

Job Stress in Video Display Operations, ” Human Factors, vol.

23, No. 4, 1981, pp. 387-400; Rob Kling, The Zmpacts of Computing on the W’ork of Jfanagers, Data Anal~’sts, and Clerks,

J$’orking Paper, Public Policy Research Organization, University of California, Irvine, 1978.

-Jon A. Turner, Computer illediated Wrork: The Interpla.v

Between Technolog~r and Structured Jobs–Claims Representati~’es in the Social Securit&v Administration, W’orking Paper,

Department of Computer Applications and Information Systems, New York University, 1985.

‘Control is the ability of the employee to arrange work in

terms of speed, task priority, and ways of performing the task.

‘‘Ilrod, op. cit.; SEW also Gavriel Salvendy and M.J. Smith

(eds. ), hfachine Pacing and Occupational Stress (I,ondon: Taylor & Francis, I,td., 1981).

ing, social isolation, or change in the job (e.g.,

the development of a single repetitive task),

the interaction between increased workload

and decreased control leads to adverse stress

responses. Alternatively, when the increase in

workload is associated with better opportunities to arrange the work, this can produce positive stress responses, or challenge, for employees.

Repetitive Tasks

Office automation can result in repetitive

tasks, which lead to increased anxiety, boredom, and dissatisfaction with work. The

introduction of a word processor or microcomputer can, however, also reduce the repetitiveness of tasks—for example, the secretary

makes a few corrections rather than retyping

a page.

Taking breaks from the monotonous repetition provides psychological relief, but sometimes a need for breaks is overridden by the

pressure of work. ”

Machine Pacing

When control over when to do a task is determined by the computer system, tasks are

said to be machine paced.16 When data entry

or other tasks are machine paced, the office

begins to mimic the factory assembly line. Machine pacing both increases the workload and

decreases control. It can lead to anxiety, de-

—.—.—— ] F3rod, op. cit., p. 43.

“A task is said to be machine paced when the worker has

no control over the initiation of the work c~’cle or the duration

of the work cycle. Typically machine pacing is associated with

short-cycle repetitive tasks.
Ch. 5—Office Automation and the Quality of Worklife 129

pression, boredom, dissatisfaction, frequent

health complaints and, decreased productivity

with increases in error rates. 17 It also can allow higher pay because of an increased rate

of production.

Training

The employee is sometimes expected to learn

how to use new equipment with very little time

allocated for training. Management expectations about productivity gains rise quickly,

so the worker is faced with simultaneously

maintaining the prior level of productivity, acquiring and mastering the new skills, and demonstrating productivity increases. He/she can

be caught in a circle of expectations and increased workload demands, and may never

learn to use the system effectively. Without

the time to develop skills, the worker has

limited opportunities for moves up the career

ladder. The daily frustration over lack of time

to learn may lead to psychosomatic complaints,

as well as anxiety, depression, and dissatisfaction.

Competing Roles

Formal recognition of the responsibilities of

managers, technicians, professionals, and clerical staff serves to differentiate their work

roles, also recognizing interdependencies among

members of the office group. 18 Role ambiguity

results from the rebundling of tasks through

office automation. The professional can do

word processing and the secretary can do statistical analysis. Who does what is a key management decision. Without role differentiation

it is unclear who is responsible for particular

problems.

.—

Sal\wndj’ and Smith op. cit. .%x also: h]. N. (_k)rlett an d

J. Richardson (C>dS. ), .$tress. \i-OI_k ~~S&, ~~d Productilritj’

( New I’m-k: tJohn if’ile~r & Sons, 1981); and Robert Caplan, et

al., (lot) Den?and.s and \lrorkers l{ealth. LJSDI 1 EJ$’ ( N 10S11 ]

75-160 ( t$’ashin~ton, I )(’: {J. S. ( ;oternnwnt ]]rintin~ office,

197>1.

‘Ij. (i, [>. (’ohen, ‘ ‘organizational F-actors Affecting Stress

in the Clerical \l’orker, ” human ,lspects in office .4 uton]ation, 13,(;. 1’. Cohen (cd. ) ( /\nlsterdanl: l“~lset’ier Science Publishers, 19H I), pp. 33-42.

Conflicting roles can develop when employees are expected to perform tasks that are not

part of their job description or are not recognized or given social, monetary, or organizational rewards. With computer-based messaging systems, managers and professionals have

to answer the phone, a task that the secretary

may have done in the past. 19 One major source

of role conflict for women is conflict between

home and work roles.

Either ambiguous or conflicting work roles

lead to uncertainty in responsibility and performance and to anxiety, dissatisfaction, and

insecurity.

Lack of Career Opportunities

Lack of career opportunities can create feelings of job insecurity and belief that one will

be replaced by the computer. These feelings

are exacerbated by the impression of limited

job mobility. Traditionally a worker came into

an organization, learned skills, and moved up

the job ladder. Today companies more often

hire people from outside with the skills needed.

As career opportunities become less apparent

the employee can become frustrated.

Electronic Monitoring

Electronic monitoring can take two forms—

supervision and feedback. This can be illustrated by the example of an information system that stores data on keystrokes and errors.

One form of supervision has the computer system examine the worker’s performance and

send the supervisor a message about her performance compared with prior records and organizational standards. The worker has no

responsibility for when the monitoring occurs

or how the information is used.20 Another form,

job feedback, lets the employee use the infor-

‘H. C. Amick and J. Damron, “Considerations in I~efining

office Automation: .4 Case Stud~’ of the Eastern Africa Region of the M’orld Bank, ” Proceedings of the First i) S.4-,Japan

Conference on Human-Computer Interaction, Honolulu, ii:~-

u’aii, CJavriel SaJ\rendy (cd. ) (Amsterdam: Else\’ier Science Publishers, 1984), pp. 439-.! 45,

‘This example also points out the problem of separating

these factors from other stress factors. In this situation. the

worker is not onls’ being monitored but also ma~: be machine

paced and has no control ok’er the task or the Job.
130 ● Automation of America “s Offices

I

I

Photo credit Cornmunlcattons Workers of Arner(ca

In the communications industry, workers can be continuously monitored. These charts show the monitoring of employees

by the Average Work Time System. Every call is timed and the total volume of calls handled per day by all workers

is then used to calculate an average number of calls for a given period of time. An AWT figure of 100 means that the

operator’s performance was average

mation to find out, for example, how many

files were completed in a given period of time,

and modify her performance accordingly. The

first often produces adverse stress response

and the latter positive challenge.

With electronic monitoring for supervision,

maximum consistency and reliability in performance are sought. One distinction between

traditional work monitoring and electronic

monitoring is that the former is intermittent

and the latter continual. Continual monitoring places added pressure on the employee to

produce at the pace and level established by

the machine. This leads to increased anxiety,

fatigue, psychosomatic complaints, and job

dissatisfaction. 21 The employee, knowing he/

she will be expected to perform at a specified

-’13ecause the terminal provides the worker with all the necessary information to complete any task, there is no need for

the employee to Iea\’e the workstation. This constrained posture for extended periods of time is a key element in \isual

and musculoskeletal problems.
Ch. 5—Office Automation and the Quality of Worklife ● 137

level throughout the day, feels chronic arousal

and job dissatisfaction. 22

Electronic monitoring can also offer challenge and job satisfaction, if it is designed and

used as a form of task feedback. Traditionally

feedback on performance and product quality

is usually notice that an error has been made.

Or it is received infrequently (in quarterly or

even yearly evaluations by the supervisor), and

the worker begins to believe that quality is

not a major concern. Quality checks through

an on-line work monitoring system can improve the reliability of performance, and increase the responsibility for the product; this

can lead to greater job satisfaction and greater

commitment of the worker to the organization. 27

Typically, electronic monitoring has been

carried out among support staff and supervisory staff, but as microcomputers and minicomputers are linked with larger mainframe

systems, any person can be monitored. One

example of productivity y monitoring of professionals is from a loan administrator using a

Management Information System (MIS):

Each employee is watched by the system,

, .. To be tracked on the system is to be monitored by it on a daily basis with regard to

every conceivable item of work which could

be performed on the job. The MIS does perform some essential functions in helping to

manage the enormous work load, hut often

it was looked upon as an excuse for increasing the work load even more. Preparing the

daily MIS input sheets at the end of the day

is a dreaded duty, done hurriedly before leaving the office. The MIS theoretically tracks

everything which the loan administrator performs during the course of the day. The entire job of the loan administrator is dissected

into every minute function which might be

performed. Each function is assigned a certain time standard for how long it should take

to be performed. The system calculates each

— — ——

E’or an example {)f how prior knf)wlcd~c of an e~’ent can

produce a stress response we the work of hlm-ianne Frankenhauser, “(’oping J\’ith Stress at t$rork. Znfernal iOn:Jl ,Jotlrna)

of l?wft h Swv’jces, ~ol. 11, No. 4, 1 W 1. pp. 491 -h 10.

Richard l+;. R’alton, “ From (’ontrol to Commitment in t h(’

Workplace, Iiar\-~ird llusinets.~ Ret’iew. Jo]. 35, No. 23 1985,

pp. 76-~ i.

worker’s daily productivity as a percentage

figure based on what the employee reported

as having done that day. z

’

If a professional, manager, or secretary is

making entries into a calendar, then the person’s schedule can be examined through access to the files. In one large American company, the Chief Executive Officer plans to use

the computer system for just this purpose. ”

Employees in the networked system can also

get more immediate feedback about a project

to which they have contributed. This provides

them with a broader picture of what the organization is doing, and so leads to increased

satisfaction and commitment.

Higher Expectations of Speed

A subtle effect of office automation is the

generation of higher expectations of speed.

This can lead to a distorted sense of time and

distorted expectations about behavior. One

characteristic of the computer system is the

ability to respond quickly to commands. The

manager and the clerical worker alike can develop a new time reference.

Days, hours, and minutes take on new meaning as time is compressed and accelerated. . . .

Jobs that took days before computerization

are expected to be done in hours. . . . Software that was once appreciated for its speed,

such as VisiCalc, is suddenly viewed as

clumsy and S10 W.

26

The worker begins to notice response delays

in the microcomputer or larger computer system. As he/she becomes more proficient, he/she

develops a high expectation of speedy responses

from the computer at known intervals. When

delays occur, the pattern of work is interrupted

as the worker is forced to ‘‘waste time waiting for the system to respond. This leads to

anxiety and dissatisfaction. When the delays

persist above a certain time there is an increase

in the error rate for keystrokes.

‘Alan Mrestin, Pn’Itic>’ issue.~ in the .filonitorin~~ of F.’mplo-~’ee 11’(xk m 1‘lIT”s in the (lffice ~;n~’ironnwnt, contractor

r(’port prepared for the office of Tm’hnolo~q’ Assessment, 19H5,

Nlark I)[~tt~, *’G]? JI’elch l)owering Firm Into (;lohal

(?ornpetitor: Part [, ““ The T!-a.shington l’o,st, .Sept. Y;3, 19tiI,

‘ Jlrod, op. cit.
132 ● Automation of America offices

This new time reference results in higher expectations of oneself and others. A worker may

seek to discover ways of circumventing organizational procedures to get work completed

more quickly. Going through channels or doing excessive paperwork becomes a barrier.

This also can lead to increased anxiety and

tension and feelings of work pressure, or to

a desire for social isolation because one would

rather work with the computer than with a

person–only the terminal can respond quickly

enough. This tension requires some form of

stress management.

Like the individual, the office can become

dependent on the computer system and vulnerable to system delays. This is perhaps largely

a transient problem associated with the implementation of a new system, although changes

in both software and hardware will continue,

and the work process will become more and

more dependent on the computer. When the

system breaks down the worker looses control over the work and it piles up. Messages

cannot be sent to coworkers in other buildings, memos cannot be printed or distributed.

A sense of anticipation develops in the worker–

when will the system be back up and running?

One study in a Swedish insurance company

found that when the computer system went

down workers responded with increased arousal,

higher blood pressure, fatigue, and feelings of

being rushed (work pressure).”

Computer Mediation of Work

The computer mediation of work is likely

to produce stress responses that vary from

boredom and job dissatisfaction to challenge

and increased productivity. Three characteristics of computer-mediated work that are

likely to produce stress responses are: 1) human judgments being built into the system,

—

- Gunn Johansson, “Computer Technology: Stress and

Health Relevant Transformations of Psychosocial Work Environments, ” Proceedings of the First USA-Japan Conference

on Human-Computer Interaction, Honolulu, Hawm”i, Gavriel

Salvendy (cd.) (Amsterdam: Elsevier Science Publishers, 1984),

pp. 347-354. In this study, VDT operators performed data-entry

tasks and were compared to non-VDT operators performing

similar tasks.

2) the abstraction

computer dialog.

of work, and 3) the humanJudgment is fundamental to work, yet a principal goal of automated work can be to reduce

judgment and therefore error. Alternatively,

automation can be used to create more opportunities for exercising human judgment. The

key to the former approach is the substitution of computer algorithms or decision rules

for judgment. This necessitates a formalization of skills traditionally obtained through

experience. Problems arise when the worker

is not provided with new opportunities to exercise judgment.

For example, automated systems may assign priorities to tasks or refer accounts to

employees as they complete previous assignments, decisions previously made by supervisors. This is usually done when automating

tasks that in any case are very standardized.

The computer mediation of work extends to

professionals and management. Attempts have

been made to define decisionmaking so that

a level of reliability and predictability in judgments can be maintained. The shifting of partial control from the individual to the computer system also is a defense against data

contamination that could result from unlimited

access to an on-line system.28 Risk-taking behavior and creativity, especially of professionals and managers, can be constrained when

decisions are embedded in the computer system. The meaning and challenge of work disappears and boredom and job dissatisfaction

ensue. A constant state of chronic arousal

places a biological burden on the worker. The

airline pilot or the nurse who monitors a control panel instead of the plane or the patient,

can become bored and dissatisfied, feeling that

their training is useless if the computer is going to make the decision. ’g Although uncertainty may lead to errors, freedom of choice

leads to creative and inspired decisions, which

— —

%hoshanah Zuboff, “New Worlds of Computer-Mediated

Work, ” Harvard Business Review, vol. 60, 1982, pp. 142-152,

(hereafter referred to as “New Worlds, ” 1982).

“Shoshanah Zuboff, “Problems of Symbolic Toil: How People Fare With Computer-Mediated Work, ” Dissent, winter 1982,

PP. 51-61 (hereafter referred to as “Symbolic Toil, ” 1982).
sometimes go against the grain of organizational logic, and it is this logic that is typically programmed into the computer. so

Nowhere is the use of computers to approximate human judgments potentially so dramatic as in the area of expert systems. 31 The

goal of developing an expert system is to place

in the computer the knowledge and decisionmaking processes of the best workers at a

particular job. This can enhance a job by providing large amounts of information in a manageable form, allowing a person to ask questions that were difficult to ask before. Expert

systems can evaluate decisions and suggest

alternative solutions to problems. The system

can serve as a learning tool for new workers,

who by asking questions and giving answers

can simulate experience that may otherwise

have taken years to encounter.

Expert systems for use in offices are still

in an early phase, but one area already impacted is insurance underwriting.” (See box

A for an example of the human-computer dia-

—..

llistori~~ll?, researchers ha~’e argued about whether tht’

bureaucratic structure of the organization constrains human

beha~ior by increasing centralized control and explicitlsr defining the rules by which the tasks should be performed and the

job elaluated. These trends can reduce the effectiveness of the

organization as well as the emploj’ee. The implementation of

office automation can allow man~ of the rules to he embedded

in the s~stenl. For discussions of this idea see, ill ax 14’eber,

The Theor\ c)f Social and l<mnomic Organization, translated

t)~ ~l. hl. Anderson and Talcott I’arsons (New York: ‘1’he Free

I)ress. ]947); Richard 11, Hall, (

‘The Concept of Bureaucracy:

:\n kjmpirical Assessment, ” Anlerican Journal of Sociolog)r,

~c)l. 69, No. 1, 1963, pp. 32-40. For a discussion of the impact

of office automation on the bureaucracy see hlichel Crozier,

“ I replications for the organization,”’ ,’Vew office Techno)og~:

}iuman and organizational Aspects. 11.J. OtwaS and h!. Peltu

(eds. ) {(ireat Britain: Ablex Puhtishing, 1 W3), pp. 86-101.

‘ “An expert system consists of a set of ‘if-then’ rules that

express the knowledge and experience of an expert, and the

actions one would take when faced with a set of conditions in

the domain of [his her] expertise. It also generally has a separate knowledge base that states facts about the domain, to which

the program can refer to make inferences and deductions about

situations and conditions. For a full description of expert systems and their development see, Information Technology R&D:

Critical Trends and Issues, U.S. Congress, Office of Technology Assessment, OTA-C IT-268 (Washington, DC: U.S. CIovernment Printing Office, 1985).

Sherrie Shamoon, “AIG ‘S Smar~ Software: The ‘Ejxpert’

That Thinks I.ike an Underwriter. ’ Alanagernent Technolog.1,

Februar3 19X5, pp. 54-59. hluch of the information used in this

paragraph was based on inter~iews with I)ennis }$’hite, S~rntelligencei 1 nc., Sunn~’\’ale, CA, and, 130b Pulka of American

International (Jroups, Inc., New }’ork, NY,

Ch. 5—Off/cc Automation and the

log.)33 A dilemma the organization faces is that

the expert underwriter is expert because of

knowledge gained through field experience,

and the dynamic nature of the insurance market will demand continual adjustments in the

expert system to reflect current patterns.

Therefore, the industry will be required to

maintain and encourage the traditional pathways for the development of expertise. The

extent to which the transfer of human judgment to a computer system produces a stress

response in the worker is contingent on how

the new job is defined and how the worker uses

the system—as a tool to assist in decisionmaking or as the decisionmaker.

In office automation, a key movement is

from physical to mental activities; or the abstraction of work.34 Instead of manipulating

physical objects, creating, storing, and distributing forms and documents, in automated

offices, one moves symbols with the push of

a button. Messages appear on the screen instead of on paper. For the person who is accustomed to being able to see and take part in

the process of manipulation, this change can

lead to a sense of removal from the work process. 3

’ As the worker becomes accustomed to

the new form of work, this sense of abstraction can diminish.

One characteristic of the abstraction of work

may not be as transient; it appears to demand

more mental effort, but may not necessarily

lead to a more challenging job. The worker may

have to give undivided attention to the screen

The goal in underwriting is to decide whether a particular

case should be insured and the costs of doing it, There’ nla~’

be over 100 factors to be considered, An expert can cull out

the handful of ~’ariables that will be of importance in this decision and, based on the set of facts in a particular case. make

a decision. I n theory, the expert s~”stenl makes this expertise

available to an~ underwriter. pro~’iding him her with another

tool in the decisionmaking process.

“Zuboff, “Symbolic Toil, ” 1982.

“One interesting consequence of the abstraction of work

may be an increase in the amount of paper used to store information at all stages of the production process. F:ven in a task

like typing that is very similar when done on the screen and

on the typewriter, the lack of an}’ ph~wical feedback about what

has been done in word processing can lead to the printing of

man~ more \’ersions of a document. These physical objects allow the indi~idual to ha~re a sense of accomplishment not otherwise con~’e~.ed b~’ seeing that 30,789 b}’tes of storage are remaining.
734 ● Automation of America Offices — — . — —

Box A.–Expert System Used in Insurance Underwriting:

An Example of the Decisionmaking Process

A publishing company in California has decided to insure their data processing facility. They

hire insurance agent Smith to find the best possible policy for them. Mr. Smith approaches Ms.

Jones of Insurance Company West to develop a policy for the data processing facility housed

in a 25-year old brick building.

Ms. Jones goes to the computer terminal and starts a file called Publishing Company Account. She then accesses the expert system to get assistance in defining the parameters of the

policy. First, she must enter information about Mr. Smith, the agent. The computer system has

a large database of agents the company works with, describing the type of work they do, their

reliability and the quality of the information they provide. (This database is updated quarterly

by the company to enter information on new agents and update the information on old agents.)

The system evaluates Mr. Smith. Uncertainty coefficients are then estimated by the computer

system based on information about Mr. Smith. The expert system uses this coefficient to determine the most appropriate questions (prompts) to Ms. Jones. Any equations used in final recommendations by the system take into account the agent’s uncertainty coefficient.

Then Ms. Jones enters the basic information about the facility. The computer responds that

in California, 20 years ago, reinforcing bars were not mandatory in brick buildings. Therefore,

earthquake damage must be excluded from the policy. The system may then prompt Ms. Jones

for information about smoking-is it permitted in the data processing facility, and in what rooms?

The system prompts Ms. Jones about whether flammable solvents are stored in the room. A

value may be assigned to designate the importance of this information. The system then combines this information with other information. It prompts Ms. Jones when necessary, and comes

to a decision about the policy just as an expert underwriter would.

SOURCE: Baeed on an interview with Steve Weyl of Syntelligence,

to perform the same task over and over within

the rules defined by the computer system. In

the extreme case, the worker monitors information as it comes to the screen, but all judgments are made in the system or by some other

person at another location. For workers whose

job involved interaction with people, this

change can mean a loss of the sense of the

meaning of the work.

Computer-mediated work is characterized by

a human-computer dialog. The quality of the

dialog is important to the quality of working

life. The user gets from the software information about the current state of the system, the

work, how to proceed or return to an earlier

part of the process, the future stages of the

production process, and the consequences of

further command sequences. If the software

does not provide the needed information, there

is decreased control over the work, bringing

Inc., Santa Monica, CA, 198S.

anxiety, and job dissatisfaction.36 The worker

may use the system less and less, or not attempt to fully use the system capabilities; a

circle develops leading to further anxiety and

less productive use of the new office technologies. A satisfactory human-computer dialog

can counter the sense of abstraction, giving

the operator a greater sense of control. Thus,

transitory problems with office automation

may be alleviated with appropriate attention

to the human-computer dialog.

When the dialog uses concepts and phrases

that match the operator’s task vocabulary, 37

this encourages the use of the system and increases the likelihood of greater productivity y.

.——

“’Jon Turner and Robert A. Ka-asek, ‘* Stjftware ~rgc)nOrnks: Effects of Computer Application Design Parameters on

operator Tasks Performance and Health,’’”llrg~~~~lj~’s, ~’o].

ZT, No. 6, 19S4, PP. 663-6!30.

Turner and Karasek, op. cit.
Ch 5—Off/cc Autormtion and the Quality of Worklife ● 1 3 5

However, as users become more advanced they

begin to prefer more formal dialog. 38 Menu

driven systems guide the novice user; as the

user becomes more knowledgeable, this may

become tedious; the user feels held back by

the system. This can also produce anxiety,

boredom. and job dissatisfaction. More “transitionality in the way that people and computers interact or interface will alleviate this

source of stress. 39 In a dialog based on transitionality, the user can designate changes in

the human-computer dialog as he/she becomes

more proficient.

Social Participation or Isolation

The office is a social environment, and as

the technology changes, the social relationships of work may also change. This is important because the social group can be a buffer

between the worker and other characteristics

of the work environment .4” Communication

and social participation in the work process

is central to the productivity of the work unit

and the maintenance of the organizational

culture.

This social network can be particularly important in a dynamic work environment. At

times of heavy workload, when peak worker

performance is required, the resulting adverse

stress responses affect the employees capability to perform. A social environment capable of ameliorating these conditions for the

worker is often not considered in evaluating

the affects of office automation on the quality

of working life. Yet, new office technologies

can either create more opportunities for communication and supportive interaction or close

off channels.

There is a tendency for workers to spend

more and more of the day interacting with a

computer terminal. In Japan, researchers have

recognized this potential:

There will be more need for lounges and discussion rooms and the like, to break the routine of stress from the machines. As tasks become more mechanical and isolating, more

group activities and worker clubs and incentive systems need to be developed t o keep up

team spirit and morale.”

The worker may spend so much time at the

terminal because he/she is electronically monitored and paced or because there is no need

or opportunity to interact with others, resulting in social isolation, which has been shown

to be associated with depression, anxiety, job

dissatisfaction, muscular fatigue, and psychosomatic symptoms. 42

When the computer becomes the primary

source of interaction in the office, coordination of the work process is transferred from

the social to the technological milieu. .4 technological form of communication develops and

both work and communication tend to become

more formalized. Whether this will adversely

impact the quality of worklife is unknown at

the present. One of the primarly reasons for

social interaction is to communicate value

judgments via both verbal and nonverbal means.

The content of the communication may be important although not directly pertinent to the

work process. For example, the employee may

be performing poorly because of circumstances

at home, or an illness; when evaluation is based

primarily on computer monitoring, supervisors

may not recognize these circumstances 43

Alternatively, increased social contact can

be provided via the computer system or via

user groups, because computer-based communication can remove both time and distance
136 Automation of America Offices —

constraints on communication.44 This can lead

to greater employee involvement and commitment to an organization along with increased

job satisfaction.

Strategies for Alleviating Adverse

Stress Responses

The strategies for alleviating adverse stress

responses simultaneously encourage challenge,

or positive stress responses. Three different

approaches concentrate on different parts of

the model that was shown in figure 5-1 and

have different goals. Stress management programs focus on the individual, job redesign

programs focus on the job, and sociotechnical

programs focus on the work process. No single approach is always adequate. A participatory style of management in the implementation of new office technologies will help to

identify the methods appropriate for a successful implementation.

Stress Management

Stress Management refers to stress reduction programs tailored to the needs of the

individual, 45 providing training to deal with

conditions either at work or home.4G These programs can include meditation, progressive

muscle relaxation and biofeedback, and cognitive/behavioral skills. The advantages of

these approaches are that they do not require

any changes in the work process, organization,

or the physical environment. They assume no

fault for the stress responses on the part of

either management or the worker, but place

on the worker the responsibility of coping with

adverse stress responses.

“In one Swedish study, it was found that 50 percent of the

system messages would not have taken place without the system. Cited in Alexia Martin, Office Automation: Catalyst for

Change–Managing the Transition to the Automated Office,

SRI Research Report No. 694 (Stanford, CA: SRI International,

1984).

‘ I,awrence R. Murphy, “A Comparison of Worksite Relaxation Methods, Human Aspects in Office Automation, 13. G.F,

Cohen (cd. ) (Amsterdam: Elsevier Science Publishers, 1984),

pp. 257-265.

“ Recently, new software has entered the market that assists the worker in managing stress. One such program is Relax,

which uses biofeedback techniques along with muscle relaxation methods for managing stress. See Joseph Hager, “The

Stress Manager, ,, ~>cjr ~ror]d, September 1984, PP. 22~-232

Data have not shown conclusively that these

programs are cost effective. Their disadvantage is that working conditions are not modified to remove the source of the adverse stress

response. In fact, research has shown that to

realize the benefits of stress management typically requires extensive and costly training of

the worker, not the typical market offering of

a two-day seminar. There is no credentialing

of the trainers and there are vast differences

in the quality of the training. Therefore, although stress management programs are

popular, the employer is often faced with having to make a decision about them without

sufficient information about the quality of the

training and the likely results.

Job Redesign

Job redesign or task redesign are both ways

to modify the working conditions to change

stress responses. Office automation presents

an opportunist y to develop job or task redesign

strategies. The central thesis of job design is

that through changes in characteristics of a

job such as feedback, autonomy, task identity, and skill variety, the internal motivation

and thus the performance of a worker is enhanced.

Task redesign focuses specifically on task(s)

rather than on a job. The scientific management philosophy is a method of task redesign,

which in office automation primarily involves

changes at the human-computer interface and

the allocation of tasks between the worker and

the computer system.

Unlike stress management, job redesign

changes the conditions of work. When jobs are

designed with little meaning and little responsibility, and the worker has no information

about how well he/she is performing, there can

be motivational problems.47 For example, the

overrationalization of clerical work results in

repetitive jobs, lacking responsibility and offering little scope for personal development. 4g

——— —

‘

-Richard J. Hackman and Greg Oldham, ltrork liedesign

(Reading, MA Addison-Wesley Publishing. 1981).

‘“These types of jobs may lead to high labor turno~rer, absenteeism, and recruitment problems. This leads to inefficiencies through lost time, recruiting and training, and costs asso-

(continud)
Ch. 5—Office Automation and the Quality of Work/i/e 137

Many job redesign programs seek to expand

these jobs.49

Job redesign, unlike stress management, requires that management recognize a problem,

and change working conditions. This could involve relatively high initial costs. Another disadvantage is that job redesign efforts tend to

focus on a single class of jobs rather than on

the work process; and on internal motivators

such as self-esteem rather than external motivators such as career ladders and pay. 50) There

may be few opportunities for successful job

redesign if an organization has only a limited

set of tasks to be done.

Sociotechnical Systems

Sociotechnical systems developed as a counter

strategy to the traditionally structured organization. Instead of each worker doing a single task or set of tasks with no clear connecciated with o~’errnanning to deal with absenteeism. For an

example of how to measure the impact of beha~ior on organizations see, Jl”a}’ne 1:. {’ascio, Costing liuman Resources: 7’he

f+’inancial Impact of lleha~ior in organizations (Boston, N1:4:

Kent I)ublishing C()., 19H2}.

‘‘Iror an example of a job redesign program in white-collar

work see, Rodgyr \tr, (; ri ffeth, ‘‘ \loderation of the hlffects of

Job F;nrichment b~ I)articipation: .4 I,ongitudina] Field F~xpediment, ” organizational Beha\’ior and human l)ecision l’ro(’-

PSS, \’ol, 35, 1985, pp. 73-9;1, I n this experiment, desk receptionist jobs were increased in terms of task identity, skill ~’ariet~,

autonom~’. and j oh feedback, resulting in increased j oh sat isfaction and self-esteem.

In re~iews of job-redesign experiments conducted o~er the

past 20 years, it has been found that a key predictor of n~aintaining the changes in producti~it}’, quality of work, abw’nteeism, and turno~’er was an organizational recognition of t he new

tasks and skills a person was using in his her work. HasicallJ,

the workers wanted changes in the reward s~’stem to reflect

the new job. I f these changes did not de~’elop, then man~” of

the problem~ the jot>redesign strateg~’ was intended to resol~re

returned. tJohn P;, Kell~’, Scientific ,Ifanagement, ,Job Redesign

and It ”ork I’erformancr { Yew }’ork: Academic I)ress, 19821.

tion to an end product, workers collaborate

to produce a product. Many offices already

have small working groups such as the secretary and the manager. However, office automation sometimes changes this, and may dissolve familiar interdependencies.

In sociotechnical work systems, members

can share decisionmaking about who is to do

what tasks and how they will be executed, with

each person capable of doing a variet y of tasks.

The pay/reward system can be tied to the skills

in order to encourage skills acquisition and

career development. There are very few examples of such semiautonomous work groups in

white-collar organizations; and those few typically involve lower level staff .5]

The advantage of this approach to stress

reduction is that it requires changes not just

in the job but in the work process. The principle disadvantage is that changes required at

the organizational level and training of workers in group processes such as decisionmaking may be costly. But in addition to reduction of stress there maybe additional benefits

such as changes in pay structure to reflect the

new skills demanded by computer-mediated

work, with the incentive to continue learning,

increased sense of job security, and reconfigured job ladders. Continuous electronic

monitoring may no longer be needed if the

group makes its own decisions about the speed

and pace of work, monitoring each other.5z

— —

Recently, there has been a growth in the use of sociotechnical system programs in all le~’e]s of the organization. F’or

examples, see Cal\’in Pa~ra. Itlanaging .Veu’ Office 7’echnolo~~?’:

,4n organizational Strate~ { New” }’ork: Free Press, 198:31.

-There also can be problems with autonomous groups such

as exclusii’ity and excessi~.e pressure to conform.

SECTION II: OFFICE AUTOMATION AND HEALTH,

ILLNESS AND DISEASE

The video display terminal (VDT) is the de- was depicted in figure 5-1, the VDT is only

vice most often discussed in relating illness one part of the work environment. Much of

and disease patterns to office automation. It this section will focus on the VDT, since most

has become a symbol or a scapegoat. But as of the research has done so; but the VDT must
738 ● Automation of America Offices

be considered in the context of workstation

design, office design, and the task and job.”

Occupational health research has traditionally focused on blue-collar work; office work

has been considered the least hazardous of occupations. The growth of the white-collar labor force and the ubiquitous applications of

the new office technologies demand that this

assumption be reexamined. By the year 2000,

it is estimated that most white-collar workers

will use a terminal. Therefore, office automation requires the attention of public health officials because of the magnitude of the work force

at potential risk for any potential illness and

disease outcomes.54

The list of potential exposures in the office

is large and diverse. Table 5-2 showed the list

of exposures for workers in all workplaces,

many difficult to measure because they occur

1 Iealth has been defined b~’ the W’orld Health Organization as the state of complete social, psscho]ogical, and ph?wical well-being and not the absence of disease. Illness is a subjective state where the indi~ridual is aware of dysfunction.

Disease is generall~’ a pathological process that creates and

ends in an altered physiological or ps~’chological state.

“’Risk is the probabilit~ of a disease or an illness free individual developing a speclflc illness or disease over a specified

period of time. It is conditional on that individual not developing an other illness or disease during that period of time.

The VDT IS sometimes placed alongside other

technologies (such as the microfiche reader). Some of

the symptoms workers report can be traced to the

different lighting requirements of different

technologies In the workplace

Table 5-2. —Exposures in the Office Other Than

the Video Display Terminal

Indoor air pollutants:

Micro-organisms

Cigarette smoke

Dust and particulate

Chemical emissions from machines:

Ozone from photocopiers

Methyl alcohol from mimeographs

Ammonia from blueprint machines

Chemicals in paper/office supplles:

Formaldehyde from carbonless copy paper

Noise from office machines, ventilation systems, and

conversation

Static electricity

Low humidity

Inappropriate lighting design:

Excess lighting

Insufficient Iightlng

Glare

Overcrowding and lack of privacy

Poor ventilation

Awkward and static work postures

NOTE This IISI does not Include any factors relate J 10 either the lask job or

organ !zatlon wh!ch may be associated with stress responses These arP

(j I scussed I n another sect Ion

SOURCE Jeanne M Stellmarl Of f!ce Automation A Publ(c Health Pe~>pectlve

on the Potential Acute and Chrontc Effect: paper presenle[l at the

Of flee of Technology Assessment Symposium or) f he Impacts uf Off !ce

Autornat!on and Computef Mediated Work on the oudht y of V~ork I Iff!

Dec 1012 1984

at low levels. ss New office technologies must

be considered in conjunction with these exposures to understand their full impact. A major problem is the lack of long-term statistics

on the illness and disease of office workers.

The most comprehensive and thoroughly analyzed national statistics are 25 years old, from

the 1960 Health Examination survey.” An examination of the medical literature indicates

that little valid data exists even on absenteeism and sick leave rates beyond specific industry studies. This makes it impossible to

compare historical trends of the morbidity and

mortality of office workers with present rates.57

Jeanne \l, Stellman, “office Automation: A Public Iiealth

l)erspecti~e on the Potential Acute and Chronic Effect s,” paper presented at the office of Technolo~ Assessment S~mposium on the Impacts of office Automation and ComputerMediated Work on the Quality of W’ork]ife, Dec. 10-12, 1984.

‘ National Center for health Statistics, Selected l{ealth

(’characteristics b~’ Occupation: United States–Jul~. 1961 -June

1963, Vital and Health Statistics, Series 10, No. 21 (14’ashington, DC: U.S. Got’ernment Printing office, 1965).

‘The problem with using industry studies to establish national trends is exemplified by work conducted in the late 1960s

on the relationship between social class and coronar~ heart disease. 1 ndustr?’ studies showed a positi~’e relationship between

(continued)
The four major categories of outcomes to

be discussed are visual system outcomes, musculoskeletal system outcomes, stress-related

outcomes and reproductive outcomes.58 Causal

relationships between some characteristic of

the office environment and the outcome are

assessed using the standard epidemiological

criteria for determining causality, listed in

table 5-3. ’9 The risk of these outcomes can be

reduced by job and task redesign, office design, and workstation design. The question remains open as to whether new office technologies lead to an increased risk of illness and

disease.

Visual System Outcomes

Fifteen years of research has shown that

VDT workers report a high prevalence of visual

social class and coronary heart disease, The higher ~he social

class the higher the incidenw of coronary heart disease (Cl 11)).

I n communit~ and national studies, the relationship found was

ne~ati}w the lower the social class the higher the incidence

of C 11 D. one reason for this inconsistenc~ is selection hias,

J$’hite-collar workers are likel~’ to be kep~ longer bJ’ the organization, and maJ’ be more likel~ to return after serious illness.

Thus blue-collar workers aro no longer in the industry to he

counted, but they, are still found in the comrnunit~., and arc

counted in community studies. This phenomenon is the 4

‘health~’

worker effect that over time leads to underestimates of the

pre~ralence of an outcome in industrs’.

‘A nether health outcome whose appearance is associated

with office work is dermatitis, There ha~.e heen too few cases

to reliahl~. identify a singl(’ cause. Some researchers ha~’e h~’-

pothesizeci that this is due t~) an elect ros~atic field that huilds

up between the terminal and the operator, The unanswered question is wh~ the dermatitis onl~ appears on the face. I t maJ

be that when one cleans off the screen and then touches ones

face the dust and fib[lrs collected on the screen are transmitted

to the face. I n a recent stud~., it was found that setreral dermatological problems occurred in a greater frequenc~. among

1’ 1)’1’ operators The researchers were unable to determine

whether this was due to phj’sical factors such as the electrostatic

field, ps~chological factors, or pure chance. Thej concluded that

Working at the t’ 1)’1’ ma~r not create but exacw-hate dermatological prot)lems. Carola I.indcn and (Jan P]. W’ahlher-g, JI’or-k

at \ ‘id(v) I)isp]a.b. Terminals. .~\ n Plpidetr]io]ogic”;i] ] lealth [n-

~e.sti~ra t ion of of fi[v I<nlplqv.ees. l’. I)ermatoiogi(’ l’;xan]in:3-

tion, National Iloarci of occupational Saf[’t J and 1 lealth. Solna,

Stieden, 1985,

‘I’; pidenliolog~ is a comparati~e discipline concerned with

stud~’ing and comparing diseases and related phenomena at

differ(nt tim(’ periods, in different places, and among different

t~rpes of pefJp]e. h!. +} braharn and I)at”ki ]<:. ].i]ienfeid, ~’mInd,?-

t ions ~jf l..’~~id~~r?]i{~lc~gj’ ( New }’ork: () x ford [J nit.ersitj I)r~~ss,

] gH()), ~-or :1 nlor[, conlpl[,tt~ discussion of the role of epidemiology i n as S(>S \ ing workplace exposu rt~s SLYI the ( )TA report, l’r[>-

~ (’n(inAr lflnt’.s.s ;]nd Injurj’ in the ll”orkpi;]~v, ()’1’.+1-1 1-256 (Jfrash -

ington. 1)(’: (‘ S. (io~crnm(’nt I%in( ing office, 19851.

Ch. 5—Office Automation and the Quality of Worklife 139

Table 5-3.—Epidemiological Criteria for

Assessing Causality

1, Strong association of factor to outcome

2. A dose-response relations i p between the factor

and the outcome

3. Clear temporal relationship between the factor

and outcome

4. A consistency of findings across studies

5, A biologically plausible explanation for the

observed association

NOTE These crlterla do not al I have to he satlsfled at one t (me and In one st ud~

to suggest a rel at Ion sh I p or Iac k of a rel at I on sh I p between the ne A off Ir- e

technology application and a worker s health For example (f rICI

biologically plauslble ex planatlon car be offered for the obser, ed

assoc! at I on that may be due to Inadequate kn owl edge or measu rer~l vr~ t

techn I q ues Thls makes It very dI f+ c u I t to refute a rel at I onsh I D bet w ee r,

a factor and an ou I come based 01 a I ac k of blolog~cal or blom PC har] I r al

evidence

SOURCE A M Llllenfeld and D E Llllen$eld Founcfaf~ons of Ep/demlo/oqk( Ne A

York Oxford Unlverslty Press, 198(II

strain, ranging in various studies between 47

and 91 percent of all operators. Comparison

to other workers suggests that VDT work is

associated with an increase in visual symptoms across most occupations, but especially

in those with heavy visual demands. Table 5-

4 shows many of the factors that have been

associated with asthenopia (visual fatigue) and

perception problems in automated offices.

Visual symptoms are associated with specific

characteristics of the individual, the physical

environment and the work process. But based

on the current evidence, causal relationships

cannot be established between office automation and visual pathologies.

Asthenopia and other acute60) visual system

outcomes reported by VDT workers are listed

in table 5-5. A major problem is the lack of

correlation between reported visual symptoms

and clinically observable signs. Furthermore,

there are no national data with which the prevalence rates can be compared. In those studies

where visual functions (eye movement, visual

acuity, pupil size, blinking, accommodation

and vergence) have been objectively measured,

no significant differences have been observed

between non-VDT and VDT work, or over

periods of time at VDT work. Yet some studies

have shown that the amount of time spent at

‘ ‘i+\c.utt’ outcomes arc transi(’nt and closel?” associated in

time with th~, (~xposure, (’hronic outcomes are persisttint and

~’ndu ring an(i distant 1}” or i nd i r[’ct lJ’ associated vit h the exposure.
140 Automation of America’s Offices — .

Table 5.4.—individual and Work Environment Factors

Associated With Visual System Outcomes

Individual:

Age

Uncorrected refractive errors

Work environment:

Glare on the screen

Flicker and jitter

Resolution of characters

High contrasts between source document and screen

Tasks requiring long continuous looks at the screen

without a break

Air humidity

High visually demanding task, like data entry and data

acquisition

Low control jobs where the worker is unable to take a

break to relieve the load on the visual system

NOT = A~though the professional who wo~ks-at the VDT IS not as llke~y to report

as many vtsual problems as people doing data entry acqulsltlon or dialog

tasks It IS important to recognize they tend to report more symptoms than

workers not us I ng [he V DT For a comprehensive revl ew of the I I terat u re

see Ulf Bergqvlst, ‘Video Display Terminals and Health A Technical and

Medical Appraisal of the State of the Art Scancffnavfarr Jouma/ of Wor k

Errv/ronrnenf and Hea/th VOI 10 SupP 2 1984

SOURCE Off Ice of Technology Assessment

Table 5-5.—Visual System Outcomes:

Known Acute or Potentially Chronica

Known acute outcomes:

Asthenopia: b

Burning eyes

Itching eyes

Irritated eyes

Perception problems:

Double vision

Blurred vision

No existing data shows that working at a VDT

can lead to the development of cataracts,61 but

neither has the VDT been thoroughly absolved.

While in some industries people have worked

at VDTS for years, no study has examined the

prevalence of cataracts in such groups of workers. No long-term study has yet shown either

clinically observable changes in the eye functions or pathological changes in the eye.

There is evidence that work at a VDT leads

to more frequent changes in eye glasses.62 This

has been attributed both to the aging of the

workers, and to a greater tendency for VDT

workers, as compared to others, to identify

minor visual problems. A possible alternative

explanation is the development of acquired myopia (nearsightedness), which is characteristic of close visual work such as reading. If

working at the VDT is found to increase the

chance for acquired myopia, the visual health

of a large sector of the population will be affected. As the debate about the effects of VDTs

on the visual system of workers continues,

there is a growing need for a well-designed longitudinal study to determine whether the acute

conditions persist. Since little is known about

potential biological or biomechanical mechanisms for the initiation of pathological changes

in the visual system attributable to new ofPotential chronic outcomes: fice technologies, research should also focus

Acquired myopia here.

a

There are no c-h ron IC outcomes that have been observed I n any c I In Ical Invest I

gallons of VDT operators

bAStheflOpla IS a term used to describe vtsual fatigue or weakness NO clear defl Eye exams are recommended by the Nan It Ion of visual fatl gue IS employed In the research and it Is sometl mes referred tional Institute for Occupational Safety and

to as visual strain

SOURCE Off Ice of Technology Assessment Health (N IOSH) before beginning VDT work

and periodically thereafter. G3 In many ina terminal is directly proportional to the number of workers reporting symptoms and to the

extent of their complaints. That complaints

cannot be tied to organic change does not, in

other words, mean that they are not “real.”

There is also evidence that visual problems

can influence the development of musculoskeletal symptoms. The acute outcomes in table

5-5 can be reduced with changes in the workplace, such as appropriate lighting levels, computer terminal design, workstation and job redesign, and prescriptions to correct refractive

errors.

“’National Research Council, Video Displays, Work and Vision: Panel on the Impact of Video Viewing on Vision of Workers (Washington, DC: National Academy Press, 1983). However, in a recent workers’ compensation case, the worker received

an award for incipient cataracts. The workers compensation

board found there was a recognizable link between the employee’s occupation and disability-see, Legal Rights for VDT Users

(Cleveland, OH: Working Women Educational Fund, 1985).

“Wlf Bergqvist, “Video Display Terminals and Health: A

Technical and Medical Appraisal of the State of the Art, Scandinavian Journal of Work, Environment, and Health, vol. 10,

SUpp. 2, 1984.

‘ ‘J. Donald Millar, Assistant Surgeon General and Director

of N IOSH, Statement before the Subcommittee on Health and

Safety, Committee on Education and labor, U.S. House of Representatives, May 15, 1984.
stances, visual complaints are in part due to

uncorrected refractive errors. Eye examinations would identify and allow correction of

this problem. There is no evidence as to how

often eye exams should be given for good visual

health. They are particularly important for people over 40 years of age, when the visual system begins to change with the onset of presbyopia (farsightedness).

Musculoskeletal System Outcomes

Musculoskeletal disorders rank very high

among health problems in the frequency with

which they limit activity.64 Over 10 million people report limitation of activity due to musculoskeletal disorders as compared for example with about 7 million reporting limitation

of activity because of circulatory problems.

Musculoskeletal disorders are the leading

cause of disability of people in their working

years. From 1973 to 1983, industry data

sources report low back pain as the primary

cause in 20 to 25 percent of the yearly workers compensation cases. 65 As the working

population ages, the prevalence of musculoskeletal disorders and the potential costs to

individuals and society increase.

No recent data are available to provide more

accurate estimates of the extent of musculoskeletal disorders in the aging U.S. population, and there is no breakdown of the older

data by occupation. Therefore it is difficult

to estimate the impact office automation has

had on the prevalence of musculoskeletal disorders. A national data collection system is

needed to determine the contribution of the workplace to the prevalence of musculoskeletal system outcomes.

NIOSH has identified musculoskeletal disorders of an occupational origin as one of the

top ten health problems affecting workers

today. Over the past 15 years, they have been

— —

‘‘,Jennifer Ii. Kelsey, Epidemiology?’ of ,}lusculoskeletal I)isorders, Llonographs in ~;piden~iolog~’ and Hiostatist i~.s, YTO1.

l] ~ New York: oxford Uni\ersit~ Press, 1982).

Cited in Charles F. Spakell and ~$’illiam F. N1cKeon, “ Pre-

\’enting I,ow f] ack f)ain in I ndustr~, Bu.w’ne.s.s and }Iealth.

Jo], 2, No. 6, 19x5, pp. 16-19. This is supported h~’ unpublished

anal~’ses of H 1..S data.

one of the major categories of self-reported

complaints by VDT workers, a high percentage of whom report pains, stiffness, cramps,

and numbness in the back, neck, shoulder,

arms, and hands. Comparison with other office workers reveals an association between

VDT work and increase in self-reported symptoms in specific types of office work.66

Table 5-6 shows factors that have been found

to be associated with musculoskeletal system

outcomes among VDT operators. Few studies

have weighed the relative contribution of each

factor.

67 Characteristics of the individual,

workstation design, and the work process are

associated with the reported symptoms. There

is a suggested association between length of

time at the VDT and an increased levels of

reported musculoskeletal symptoms,68 but the

current scientific evidence is inadequate to

demonstrate a causal relationship between any

‘‘ The data usLId to make the ohsertat ion are inadequat~~ t{)

make an}. strong asscr-tion across all j ohs where the worker

uses the computer terminal.

‘ I’Tor example, stx’ S, 1,. Sauter, et al., “tJoh and ] ]ealth I nlplicaLions of \’I)rI’ (Ise: Initial ltesults of the \$’isconsin-N 10S1 f

Stud~’, (’(jrllr~][lni(’:iticjns of t he.4 sscxiat ion of Comput kg .ll:/-

chinar~-, I.ol. 26, pp. 2H 1-2!)4, 19H~l.

‘“Nl ichael .J. Smith, ‘‘ I;rgonomi( and Str~’ss Aspects of ( )f -

fice .,\ut omation, paper presented at t }1(’ of ficv of ‘1’echnolo~?’

SJm~posiunl on the 1 mpacts of office )\uton~ation and (’onlputerNlediated W’ork on the Qualit} of W’orklife. I)ec. 1 ()- 12, 1984.

Table 5.6.— Individual and Work Environment Factors

Associated With Musculoskeletal Outcomes

Individual:

Age

Existing musculoskeletal disorders

Visual system characteristics”

Near-s ightedness

Presbyopla

Bi or trl-focal eyewear use during VDT operation

Work environment:a

VDT/workstation-user interface”

Keyboard and hand

Body and chair

Eyes and screen

Repetitiveness of task(s)

Length of time spent at task(s)

Extent of physical constraints

aT hese factors .+ I I I be d I sc u ssed r more det aI I I n ! he sect Ion on A orh ~ t df [j n

desl q I anrj t h e q u al I t ~ of $, orkl I fe

SOURCE Of f!ce of Technology Assessment
characteristic of the automated office and any

musculoskeletal system outcome. 69

Acute musculoskeletal system outcomes are

listed in table 5-7. Back, neck, and shoulder

problems are reported more frequently (50 to

80 percent of VDT operators) than arm, wrist,

and hand problems (20 to 40 percent of VDT

operators). This ranking of self-reported symptoms by site corresponds to a ranking based

on a national sample of U.S. adults. 70 Furthermore, in the national sample it was found that

“’Although no experiments have been conducted showing a

causal relationship between new office applications and musculoskeletal outcomes, there are biologically plausible explanations; for example, the experience of pain and discomfort

by the worker who sits at the terminal for extended periods

of time in constrained postures. Static loading of muscles results from the efforts of the human body to maintain a fixed

posture for extended periods of time. This keeps the muscle

in a constant state of contraction instead of a dynamic state

of contraction and relaxation. Thus, waste products build up

in the muscle and blood is not circulating in the muscle to provide the needed nutrients. This results in cramping and pains.

Tichauer has shown that the peritendinitus that occurs in the

lower arm of typists is caused by excessive static workload.

(E.R. Tichauer, “Biomechanics Sustains Occupational Safety

and Health, ” Industrial Engineering, vol. 27, 1976), pp. 46-56.

“’I,inda S. Cunningham and Jennifer L, Kelsey, “Epidemiology of Musculoskeletal Impairments and Associated Disability, ” American Journal of Public l{ealth, vol. 74, No. 6, 1984,

pp. 574-579.

Table 5.7.—Musculoskeletal System Outcomes:

Acute or Potentially Chronic

Known acute outcomes: -

Pain in shoulder

Cramps in arms and legs

Pain in back:

Upper

Lower

Cramps in shoulder and neck muscles (stiff neck)

Soreness, tingling or numbness in wrist and fingers

Potential chronic outcomes:a

Cervicobrachial syndromeb

Prolapsed lumbar intervertebral disc

Cumulative trauma disorders’

aThe Cbrofl!c outcomes have not been observed In my Population Of Office

workers They are potential chronic outcomes based on self. reported acute musculoskeletal outcomes and biological and blomechanical plausibility

bcewlcobrachlal syndrome IS a term used to define a cluster of signs In the shoul

der and neck region It IS a functional and organic disorder occupationally

produced on the bas!s of muscular and mental fatigue resultlng from stat!c

and/or repetitive exerilon of the arm and hand muscles Chronic pain can result

from the compression of nerves In the neck radlatlng down the arm

ccumulatlve trauma dtsorders are a class of musculoskeletal outcomes, that are

potentially Important Those In the literature associated with office workers are

tenosynovltls and carpal tunnel syndrome Carpal tunnel syndrome is a disorder

of the wrist In which the median nerve IS compressed against the transverse

carpal Ilgament wlthln the carpal tunnel

SOURCE Off Ice of Technology Assessment

the level of self-reported symptoms corresponded

to physician-observed abnormalities. There is,

however, no evidence from studies of office

workers using VDTs display that self-reported

outcomes predict clinically recognizable changes

in the musculoskeletal system.7l There is a need

for research to clearly identify the relationship between reports of musculoskeletal outcomes by the worker and medically verifiable

outcomes.

Based on the current scientific evidence, it

is impossible to determine whether the acute

outcomes listed in table 5-7 lead to any pathological changes in the musculoskeletal system

or to any disability for workers in automated

offices. The chronic outcomes reflect potential long-term consequences based on evidence

from other occupations and biological and biomechanical evidence. Potential long-term consequences of new applications of office technologies for the musculoskeletal system must

be considered. As Kelsey notes:

[Impairments of the back and spine and arthritis and rheumatism account for the greatest amount of time lost from work. In 1976,

it was reported that a reduction of one day

per year in the average annual absenteeism

rate among the labor force of the United States

would increase the gross national product (GNP)

by $10,000 million. Accordingly, the GNP

would have increased by $19,000 million had

musculoskeletal disorders been prevented.7z

If absenteeism rates can be affected by design of new office technologies, this has far

reaching implications for health care costs.

Therefore, research should be conducted to determine the relative contribution of office automation to the incidence of the chronic outcomes

listed in table 5-7.

‘Studies that have attempted to correlate self-reports with

medical exams have not demonstrated a clear relationship. For

an example see the work of W. Hunting, T. Laubli, and E. Grandjean, “Postural and Visual Loads at VDT Workplace, I, Constrained Postures, ” Ergonomics, vol. 24, No. 12, 1981, pp.

917-931.

“Kelsey, 1981, op. cit., p. 7.
—— —..

Ch. 5—Office Automation and the Quality of Worklife ● 143

- -

Photo credit Communlcat(ofls Wor/ters of America

Workers adjust to their working conditions. Sometimes this can lead to musculoskeletal strain,

The first two, cervicobrachial syndrome and

prolapsed lumbar intervertebral discs, can potentially develop among either professionals

or clerical workers.73 They can be related to

increased time spent sedentary and in constrained postures, which could be blamed on

the job or the design of the office or workstation, but most likely is related to all three.

Cumulative trauma disorders are more likely

to develop among workers doing highly repetitive keying operations at the VDT for extended

periods of time, mostly data-entry clerks who

key as much as 12,000 keystrokes per hour.

—————-——

“A prolapsed intervertebral disc occurs when the nucleus

pulpous of the disc protrudes outside the annulus fibrosis. The

disc tends to protrude onto a nerve root causing pain. In the

lumbar region this pain radiates down the leg. Kelsey estimates

the incidence of prolapsed lumbar intervertebral disc at around

0.1 to 0.5 percent per year (Kelsey, op. cit., 1981, p. 151) in

the population of ages between 24 and 64 years.

These are the wear and tear disorders. Many

of the early warning signs (tingling, numbness,

and pain) of these chronic conditions can be

alleviated with changes in the working conditions. 74

There is a relationship between visual system outcomes and musculoskeletal system outcomes. For example, a person who is nearsighted most likely will get a pair of reading

glasses that typically allow the person to read

clearly at about 33 cm. However for work at

the VDT, a person is on average only as close

as 50 cm from the screen. The worker then

leans forward, and the posture results in mus-

“Much of the research on the prevention of cumulative

trauma disorders is based on redesign of the machines in assembly line operations. See %eventing Illness and Injury in

the M’orkplace (op. cit. ) for several examples of the prevention

projects.
144 ● Automation of America’s Offices

culoskeletal strain. As the pain gets worse is between 10 and 20 percent.78 No site has

through the day, the worker adjusts by mov- enough data to show conclusively any assoing her body back in the chair, increasing the ciation between office automation and any advisual distance, which can lead to visual strain. verse reproductive outcome.79

NIOSH recommends that a worker take peri- A Finnish study looked at the relationship

odic rest breaks every 2 hours when doing work between occupation and spontaneous aborat the VDT to prevent acute asthenopia and tions, and found that industrial and construcmusculoskeletal fatigue.75 This can be enforced tion workers had one of the highest ratios

through organizational rules, through a job (13.01), and clerical and managerial workers

redesign strategy giving the worker a variety one of the lowest estimated ratios for sponof tasks to break up the VDT work, or by al- taneous abortions (9.91);80 the lowest ratio was

lowing the worker the discretion to take breaks in administrative work (8.16).

when she feels the need. The last is especially

advantageous in settings where the work is

unpredictable or there is a high worker-to-VDT

ratio with competition for terminals, but may

demand more flexibility than an organization

would normally provide. Sometimes people will

not take breaks unless they are required.

Reproductive System Outcomes

Many occupational hazards affect the reproductive system.76 The concerns about the reproductive hazards of working in an automated

office focus primarily on the VDT. Most of

the early studies considered only female operators, but both genders should be considered

in discussing reproductive system outcomes.

The concern over working at the VDT developed because of reported clusters of spontaneous abortions and birth defects among

VDT operators. Table 5-8 shows a list of the

work sites where these clusters have been reported. No adequate explanation has been

offered for these observed clusters,77 which include a wide variety of pregnancy outcomes

with the majority being spontaneous abortions. The estimated prevalence rate for spontaneous abortions in the general population

—

‘r’-M-ifiar~_op. cit.; this recommendation has been challenged

in the scientific community.

“bFor a complete listing and a discussion of the potential

control technologies see Reproductive Hazards in the Workplace, Office of Technology Assessment, Washington, DC, 1985.

‘-The argument is made that these clusters are chance

occurrences. The rate of spontaneous abortions is not at odds

with the normal rate that occurred during the time period of

the reported clusters. For a lengthy statistical discussion on

this see Bergqvist, op. cit.

Two studies in Sweden and Japan examined

the relationship between VDT work and reproductive system outcomes. Little information is available on the Japanese study .8’ The

Swedish study infers VDT exposure from occupations; the measure of work at a VDT is

indirect. 82 Nevertheless, this retrospective

7KIn an analysis of the ability of women to recall whether

they had a spontaneous abortion or not; one in four cases of

spontaneous abortion was not reported. Gestational age of the

time of abortion was the major determinant of recall. Allen

J. Wilcox and Louise F. Horney, “Accuracy of Spontaneous

Abortion Recall, ” American Jourmd of Epidemiology, vol. 120,

No. 5, 1984, pp. 727-733.

“’There are several methodological prclblems with examining reproductive hazards in the workplace. First is the problem

of selection bias. It is known that a predictor of an adverse

pregnancy outcome is prior adverse outcomes. Women who have

a full-term pregnancy tend to leave the work force, and therefore women with prior adverse pregnancy outcomes will be over

represented (Gosta Axelsson “Selection Bias in Studies of Spontaneous Abortion Among Occupational Groups, ” Journal of

Occupational Medicine, vol. 26, No. 7, 1984, pp. 525-528).

“’The ratio is calculated as the number of spontaneous abortions times 100 divided by the number of births. K. Hemminki,

M. L. Niemi, I. Saloniemi, H. Vainioh, and E. Hemminki, “Spontaneous Abortion by Occupation and Social Class in Finland, ”

International Journal of Epidemiology, vol. 9, No. 2, pp. 149-

153, 1980.

“’Conducted by the General Council of Trade Unions, it has

only been reported in “Japanese Miscarriages Blamed on Computer Terminals, ” New Scientist, vol. 106, No. 1457, 1985, p.

7. Among 4,500 women, 250 became pregnant or gave birth

after work at the VDT and 91 had problems with pregnancy.

There was a reported association between hours per day, work

at the VDT, and problems with pregnancy or labor: for more

than 6 hours VDT work per day—66 percent had problems;

for 3-4 hours VDT work per day–46 percent had problems;

for less than 1 hour VDT work per day–25 percent had problems. It is impossible to draw any conclusions from this data

since no information on the research design is known.

“JBengt Kallen, An Epidemiologic Study of Work With

Dataterm”nals and Pregnancy (En Epidem”olog”sk Studie over

Arbete med Dataskarm och Graviditet), translated by Anita

Dvorak, research report from the University of Lund, Sweden,

1985. Data reported herein is taken from a second report, Ad

(continued on p. 146)
Ch. 5—Office Automation and the Quality of Worklife 145

.

Table 5-8.—Reported Cases of Reproductive System Outcomes in

Computer-Mediated Workplaces by Work Site and Job

Company

city (date)

Sears-Roebuck/ -

Dallas, TX

(5/79-6/80)

Toronto Star/

Toronto, Ontario

(5/79-5/80)

Air Canada/

Montreal, Quebec

(2/79-4/81)

Defense Department/

Marietta, GA

(10/79-10/80)

Defense Department/

Marietta, GA

(10/80-10/81)

Pacific Northwest

Bell Telephone/

Reston, WA

(7/80-12/81)

Solicitor General

Offices/Ottowa,

Ontario

(4/79-4/82)

Surrey Memorial

HospltallVancouver,

British Columbia

(1978-82)

Non~VDT

i miscarriages

1 premature birth

8 full-term

3 full-term

Outcomes

VDT

2 miscarages

4 full -termb

Job

Financial records

processing clerka

Classified ads

processing clerks

4 birth defects

7 miscarriages

6 full-term

NIAC

Part-t i me

ticket agents

NIA 3 birth defects

7 miscarriages

5 full-term

14 full-term

NIA

NIA NIA

2 birth defects

1 still born

N 1A N 1A

4 miscarriages

1 premature

2 respiratory diseases

NIA 1 full-term

3 miscarriages NIA

1 birth defect

1 premature

1 bronchitislful l-term

1 full-term

10 miscarriages

9 full-term

Accounting

department clerks

Toronto, Old City N 1A

Hall

Ministry of Attorney

General (1980-81)

United Airlines/

San Francisco, CA

(1984)

Southern Bell

Telephone/Atlanta.

GA (3/81-9/83)

General Telephone/

Alma, Ml

(1983-84)

Clerks

Secretaries

23 miscarriages

61 full -termd

Airline NIA

reservation

clerk

Telephone

operators

26 miscarriages

159 full-term

NIA

7 miscarriages

15 full-term

Telephone

operators

12 miscarriages

2 still births

3 premature

15 full-term

Library/

Aarhus, Denmark

Department of Public

Employees/Runcorn,

England

(1974-82)

NIA 8 miscarriages

2 full-term

NIA

8 miscarriages NIA

4 still births

Full-time

VDT operators

12 malformations

a Compares on Iy fu I I.t[ me VDT operators with non-VDT operators who may have worked as much as 6 hours per month at

the terminal

bFul{ term refers t. the healthy dellvery of a newborn after three trimesters These are commonly termed Ilve births

CN 1A means no lnformatton reported

dTh, s excludes 23 Induced abortions and 9 full-term del!venes of wives of employed men

SOURCE Off Ice of Technology Assessment, compiled from several repofts and news sources
146 ● Automation of America Offices

study found that women who worked at the

VDT were 50 percent more likely to have miscarriages (crude risk ratio was 1.5 with 95 percent confidence limits of 1.1-1.9) than other

women of similar age and occupational group.

With adjustment for smoking and stress, confidence in the risk ratio being greater than one

decreased.83 For all types of adverse reproductive outcomes, there was a significantly greater

risk for those who spent over 40 hours per week

at the VDT. This suggests that further investigations are needed that directly measure

VDT work and follow a group of men and nonpregnant women to see whether there is an

excess of adverse reproductive system outcomes. No epidemiological study has provided

reliable data comparing VDT to non-VDT

operators.

Two explanations other than chance have

been offered for the clusters–stress, and radiation emissions. There is no epidemiological evidence linking stress in office work (either

physical or mental) to spontaneous abortions

or still births. But while no evidence exists,

no research has thoroughly explored the issue.

The greatest interest has been in the impact

of radiation84 and whether radiation from the

VDT is the single source exposure. There is

no evidence that ionizing radiation above established safe thresholds is being emitted from

currently sold terminals.85 Ionizing radiation

from the VDT is not a likely explanation, according to NIOSH, the Federal Drug Administration, and the Government of Canada.86 The

possibility of nonionizing radiation must be

considered; but future developments in flat

panel display technologies may eventually

replace cathode ray tubes as the dominant

human-computer interface.

Recent concern has focused on very low frequency radiation, particularly the magnetic

pulse generated from the coil of the cathode

ray tube. This concern developed because

studies in Spain related a magnetic pulse to

morphological abnormalities in chicken embryos. 87 The evidence has not been confirmed

in any other investigation trying to reproduce

the patterns of electromagnetic radiation emitted from a VDT.88 Currently, there are international efforts to study the effects of pulsed

electromagnetic exposure on chick embryo development, but measurement of this and other

forms of nonionizing radiation in the field is

difficult. Further research should be concerned

with the development of reliable instruments

for the monitoring of radiation being emitted

from VDTS.

Based on current evidence, no long-term risk

is associated with very low frequency radiation

emitted from the visual display terminal, but

continuing evaluation is warranted in light of

Hans Malker, Critical Comments on the Report “An Epidemiologica/Study of Work With Video Screens and Pnsg-nancy Outcomes, ” Memorandum, Swedish National Institute of Occupational Safety and Health, Feb. 2, 1985.

“This risk ratio dropped only 10 percent when the effects

of smoking and stress were entered into a logistic regression

analysis (adjusted risk ratio 1.4 with 95-percent confidence limits

of 1.0-1.8). No data was reported on the effects of chemical exposure or heavy lifting on the relationship of work at the VDT

and miscarriages. If the relationships persist after adjusting

for these potential confounders along with other predictors of

miscwriages (e.g., prior spontaneous abortions ~d parity) then

the researchers can make a stronger inference. This will always

be limited by the absence of a direct measure of VDT use.

“Three major types of radiation are associated with biological effects. They differ by the energies involved. Ionizing radiation has the most energy and is known to cause cancer and

birth defects. Microwaves and radiofrequency nonionizing radiation have been associated with fertility problems and blood

abnormalities. Extremely low frequency and electromagnetic

nonionizing radiation is the least energetic of the three categories and has not been associated with any adverse biological

effects.

——

‘

r

’ William E. Murray, “Video Display Terminals: Radiation

Issues, ” IEEE Computer Graphics and Applications, April

1984.

“’Millar, op. cit.; FDA, Drug Bulletin, vol. 14, No. 1, April

1984; Environmental Health Directorate, Investigation of Radiation Em”sw”ons From Video Display Term”nals, Department

of National Health and Welfare, Ottawa, Canada, 1983.

““This evidence comes from two reports: J.M.R. Delgado, J.

Leal, J.L. Monteagudo, and M.G. Garcia, “Embryological

Changes Induced by Weak, Extremely Low Frequency Electromagnetic Fields, ” Journal of Anatomy, vol. 134, 1982, pp.

533-551; and A. Ubeda, J. Leal, M.A. Jimenez, and J.M. R. Delgado, “Pulse Shape of Magnetic Fields Influences Chick Embryogenesis, ” Journal of Anatomy, vol. 137, 1983, pp. 513-536.

*“Arthur W. Guy, Health Hazards Assessment of Radio

Frequency Electromagnetic Fields Em”tted By Video Display

Terminals, report prepared for IBM Office of the Director of

Health and Safety, 1984; Kjell Hansson Mild, Personal Communications, Swedish National Board of occupational Safety

and Health, 1985; S. Maffeo, M.W. Miller, and E. L. Carstensen, “Lack of Effect of Weak Low Frequency Electr~Magnetic

Fields on Chick Embryogenesis, ” Journal of Anatomy, vol. 139,

No. 4, 1984, pp. 613-168.
Ch. 5—Office Automation and the Quality of Worklife 147

Table 5-9.—U.S.

Radiation type

X-ray ...

Ultraviolet (near) .,

Visible

Radiofrequency

Occupational Exposure Standards

Occupational exposure

standard Source

2,5 mR/hr OSHA’

1,000 microW/cma

ACG I H “

2.920 fL ACGIHh

electromagnetic fields,

frequency range (MHz)

001- 3 100 mWlcmb ACGIAb

10-100,00 0 10 mWlcmb OSHA’

aCo(j~ of Federal Requ Idt Ions TI tle 29 Chapter XVII Part 191096 Ion!zt ng Rad

dt I o n Occ u pat tonal Safety and Health Ad m I n $1 rat (on Washl ngton DC 1980

hTh rpsho(cj Llrn!t for Cherntcal Substances and phy SICEil Agents lr~ tne ‘@JOrk El

,v!, onment Wlt h I nt ended Changes for 1983 and 1984 American Conference ‘or

Go~ernment Indusl<!al Hyglenlsts Ctnclnnatl OH 198 3

cCode of Federal Requ Iatlons Tl!le 29 Chapter XVII Part 191097 Nonlonl:l n q

Rada?lon Occupdtiooal Safety and HPalth Admo(stratlor) Washington DC

1980

SOURCE Adapted ‘rem VJI I I lam E M urrdy Vl~ual Display Terml ndls Radlatlor

Issues /EEE Ccmpuftir Graph/es and Apo//caff.)ns April 1984

Table 5.10.— International Radiation Protection

Association Occupational Exposure Limits to

Radiofrequency Electromagnetic Fields

Radiofrequency

electromagnetic fields, Occupational exposure

frequency range (MHz) limit (mWlcm2

)

0.1-1 . 10

>1-10. . . . 10/Fa

>10-400 . 1

>400-2,000 . F

a

/400

>2,000-300,000 . . . . . . . 5

aF refers to the frequency tn Mfiz thus 10 calculate the speclflc I Imtt wlthln the

—

range the frequency must be factored In accordinq to the expression

SOURCE International Non Ion!zlnq Radlatlon Commlltee of the International

Radlat[on Protecllon Association Interim Guldelhnes on Llmlts of Ex

pos,ure to Radlofrequency Elect romagnetlc Fields (n the Frequenc Y

From 100 KHZ to 300 GHz Hea/th Phys{cs VOI 46 No 4 1984 pp

975984

the large number of people exposed, to see if

modified or new standards need to be developed.89

Standards shown in table 5-9 reflect the

available evidence on the potential effects of

chronic exposure at low levels. The American

Conference of Government Industrial Hygienists (ACGIH) exposure limit for electromagnetic fields in the frequency range of 0.01-3

““A recent report from the U.S. Environmental Protection

Agency concluded there were no consistent biological effects

at the molecular and subcellular level in laboratory experiments.

The report suggested continued revision of general conclusions

because of limited knowledge about chronic low-level exposures

and the existence of frequency-specific effects and power-density

windows. (U.S. Environmental Protection Agency, Biolo@”cal

Effects of Radiofrequency Radiation, Joe A. Elder and Daniel

F. Cahil (eds. ), EPA-60018 -83-026F (Research Triangle Park,

NC: Health F~ffects Research Laboratory, 1984). )

MHz is 100 mW/cm2. This threshold level is

10 times higher than the VDT emissions in

the 0.01-100 MHz range measured in a study

by the Bureau of Radiological Health of the

Environmental Protection Agency.90 The International Radiation Protection Association

(IRPA) standards are 10 times lower for a similar frequency range than standards set by ACGIH (0.01-3 for ACGIH and 0.01-1 for IRPA).

Because there are differences in the limits of

exposure, the standards should be constantly

reexamined in the light of further research.

NIOSH is currently conducting a retrospective study to ascertain whether working at a

VDT is associated with spontaneous abortions.

Similar studies are being conducted by Dr. Irving Selikoff at Mt. Sinai Hospital (in conjunction with 9 to 5, the Working Women’s Association), by Dr. Kelley Brix at the University

of Michigan and in Sweden, Finland, Canada,

and Denmark.

Again, there is no reliable national registry

for monitoring the prevalence of reproductive

system outcomes as they relate to occupations.

The establishment of such a system could help

prevent the public fear that has arisen about

VDT work.

Metallic shielding has been discussed as one

way to avoid any possibility of radiation being absorbed by the operator, especially shielding the flyback transformer. This shielding is

relatively inexpensive and is usually provided

in newer models to satisfy FCC requirements

for reducing electromagnetic interference.’]

The government of Sweden has recommended

that any pregnant employee have the right to

be moved, at full pay, to a job with no exposure

until the baby is born. The International Labor Organization recommends that a worker

who is considering becoming pregnant be allowed to transfer to another job.92 However,

the risk of reproductive system damage, if it

exists, may be just as great for a man as for

a woman. Most recently, the Service Employees International Union (SEIU) has negotiated

“’’Cited in fieproducti~e Hazards in the 11’orkplace, op. cit.

“’Guy, op. cit.

‘-International I.abor Organization, Guidelines for \’DT’s,

(~ene~’a, Switzerland, 1985.
148 ● Automation of America Offices

in collective bargaining with Equitable Life

Insurance the rights of employees to leave

VDT jobs where the believed risk for an adverse pregnancy outcome is high. These measures would at a minimum alleviate fears.

Stress-Related Outcomes

Work-related stress is not new to offices, but

recent epidemiological evidence has called attention to the potential long-term consequences

of stressful office working conditions. One

study of the health records of 22,000 workers

in 130 occupations found that clerical workers had the second highest rate of stress-related

diseases.” Analysis of the Framingham Heart

Study data showed that women clerical workers developed coronary heart disease (CHD)

at about twice the rate of other women workers and women at home.94 The workplace factors that predicted the development of CHD

among clerical workers were a nonsupportive

boss and low-job mobility. Any conclusions

about the contribution of the new office technologies to the incidence of disease must thus

consider that women clerical workers were already at a greater risk for the development

of certain stress-related diseases. The new technology may or may not intensify those characteristics of the work environment that are

associated with the elevated risk, increasing

one’s chances of developing disease; they could

also improve working conditions, decreasing

the likelihood of disease.

There are no reliable estimates of the costs

to the organization or to society of stress-related illnesses, absenteeism, tardiness, employee turnover, decreased quality and quantity of output, unscheduled machine downtime

(due to employee tampering) and worker’s compensation awards. These outcomes can lead

to increased medical care costs and decreased

organizational effectiveness.

‘

4{ Mich~ei J. Smith, Michael J. Colligan, and J.S. Hurrell,

“A Review of NIOSH Psychological Stress Research–1977, ”

(lccupatiomd Stress: Proceedings of a Conference on Occup,~-

tional Stress (Washington, DC: U.S. Government Printing Office, 1977).

‘

(

’Suzanne G. Haynes and Manning Feinleib, “Women,

Work and Coronary E{eart Disease: Prospective Findings From

the Framingham Heart Study, q American Journal of Pub]IcS

}Iealth, Iol. 70, 1980, pp. 133-141.

Stress-related outcomes can be divided into

those that are acute and transient95 and those

that are persistent and enduring. Anxiety and

depression have been shown to be related to

myocardial infarction, angina pectoris, and

coronary death.96 Therefore, correction of working conditions that produce these stress responses can help to prevent stress-related diseases. 97

As important as are acute conditions, the

potential for chronic diseases is the key public health issue. The population potentially at

risk in offices is large. If conditions that can

lead to chronic illness and disease can be identified, management can use this information

to guide implementations.

The biological plausibility of changed working conditions leading to a pathological change

in the body has been the subject of debate for

decades. Chronic arousal is one currently acceptable biological pathway (see box B for an

example of a plausible link to disease). Chronic

arousal is a biological adaptation to the environment. When one continues to respond daily

to the same stimuli, arousal can become part

of the normal biological adaptation to, for example, work— a method of activating the

body’s resources to meet the demands. This

can lead to a form of ‘healthy maladaptation,

in which the worker completes tasks, but at

some biological costs. The eventual cost can

be illness due to lowered immunological resistance, or chronic illness that lowers the ability to perform, such as cardiovascular disease

or peptic ulcers. The danger is hidden in that

the chronic heightened state of arousal does

‘ Stress can contribute to the development of acute visual

and musculoskeletal system outcomes. For example, muscle

fatigue can be the direct result of a stressful working condition, which can stimulate brain stem activity, which in turn

can cause muscle fatigue.

“C. David Jenkins, “Psychosocial and Behavioral Factors, ”

Prevention of Coronar~’ Heart Disease: Practical Management

of the Risk Factors. Norman M. Kaplan and Jeremiah Stamler

(eds. ) (Philadelphia: W. B. Saunders, 1983), pp. 98-112.

““This type of prevention strategy may be found to be the

most cost-effective, since it has the potential to reduce the longterm development of disease. Also, if the working conditions

that produce stress responses in workers are modified, this may

alter certain behavioral outcomes including smoking, drinking,

and overeating—all considered socially acceptable ways to cope

with the stresses of life, but primary determinants of premature morbidity and mortality.
Box B.—Chronic Arousal: The Link Between

Disease, The Case of

Ch. 5—Office Automation and the Qualify of Worklife 149

Working Conditions and the Natural History of

Cardiovascular Disease*

Early theories of stress and disease held that humans instinctively respond to challenging

conditions from their environment through activation of pituitary and adrenal gland functions.

Walter Cannon in the 1930s showed the importance of the sympathetic adrenal system in the

flight-or-fight syndrome. He showed there were limits to how well the system could adapt to

stimuli; afterwards bodily harm could result. OnIy in the last 20 years have scientists begun

to unravel the complex interrelationship between the brain, immune system, and endocrine system.

There are competing models of this complex system, but several conclusions can be stated.

Sympathetic adrenomedullary (SAM) stimulation is accompanied by evaluated blood pressure

and heart rate, heightened myocardial oxygen requirements, increased levels of circulating

epinephrine (E) and norepinephrine (NE), elevated plasma concentrations of free fatty acids (FFA),

and increased plasma renin activity. These can predispose the individual to cardiovascular disease (CVD). The release of the neuroregulator, catecholamine, as a consequence of SAM activity

is central to the most prominent theories of stress and CVD. In its efforts to mobilize reserve

energy resources, catecholamines hydrolyze triglyceride stores into FFA and glycerol. FFAs

are either utilized in the production of energy or taken up by the liver and adipose tissue then

resynthesized into triglycerides that are secreted as a component of very low-density lipoproteins

(VLDL). VLDLS have been shown to be significant components of the atherosclerotic process.

When catecholamines are chronically secreted in great excess of the body’s energy requirements

to meet the demands of the work environment, the abundance of FFAs can ultimately result

in damage to vascular walls caused by circulating VLDLS. Damage to vascular endothelium

can also occur as a result of increased arterial blood pressure or turbula.nce caused by SAM

hemodynamic responses. Damaged vascular endothelium is more susceptible to atherosclerotic

deposits than healthy vessel walls. These processes suggest several possible pathways between

the challenges created by working conditions and the development of cardiovascular disease.

a’1’hig Sxtion is bas~ on a S1.lrnrnary prepared by Dr. Andrea LaCroix. For a full description see Andrea LaCroix, Occupation Ex~sure

to High Demand/Low Control Work and Coronary Heart Disease Incidence in the Frarm”ngham Cohort, doctoral dissertation, University

of North Carolina, Chapel Hill, 1984. A more complete description of the various biological procesaes can be found in The Institute

of Medicine, Research on Stress and Human Health (Washington, DC: National Academy Fress, 1981).

not necessarily correlate with the worker’s attitudes about work. High motivation and satisfaction does not obviate the possibility that

a person could be at risk.

Three working conditions have been associated with chronic arousal:

● social isolation or lack of social support;

 lack of control over the timing, speed, and

variety of tasks; and

 heavy workload (especially repetitive and

machine-paced tasks).

Each of these conditions has also been postulated as likely to arise from office automation.

No evidence has shown that all three must occur to elicit deleterious biological responses;

however, in some jobs they all occur.

Epidemiological evidence has shown the

most consistent links between heart conditions

and workload and control. In a 6-year prospective analysis, men with jobs characterized by

a heavy workload and limited job control were

found to have 1.4 times the normal risk of CVD

morbidity. 98 In a case-control study of myocardial infarction and occupational exposures,

it was found that hectic work and low control

over work tempo and skill variety were associated with myocardial infarction in men under 55.99 In a study of Swedish workers who

had changed jobs, those whose new job had

greater control had fewer coronary symptoms

“’The CHD morbidity measure was a self-report indicator of

chest pain, dyspnea, hypertension, and heart weakness. R. Karasek, et al., “Job Decision I.atitude, ,Job Demands, and Cardio}’ascular Disease: A Prospective Stud} of Swedish N!en, American Journal of Public l{ealth, \ol. 71, No. 7, 1981, pp. 694-70,5.

‘II. A] fredsson, et a],, “M~.ocardial Infarction and I)s~’chosocial Jt’ork l~nyironment: An Analysis of the Male Swedish

Mrorking Force, ” Social Science and Aledicine. \’ol. 16, 1 W2,

pp. 463-467.
150 ● Automation of America’s Offices

than workers whose new job had less control.l00

In the only American prospective study, women who described their job as having a heavy

workload with limited job control had a threefold greater risk of developing coronary heart

disease (CHD) as women reporting a heavy

workload but having control over their work.

Men did not exhibit the same relationship. At

greatest risk were clerical women, who had a

420 percent greater chance of developing CHD

(relative risk 5.2 with 95 percent confidence

interval of 1.80-15.08). These associations persisted after controlling for the traditional risk

factors for CHD. 101

Based on the available evidence, lower level

staff appear to be at greater risk for the development of stress-related diseases. This however need not be true with office automation

because the changes in the working conditions

can affect all levels of staff. Alternatively, office automation can be implemented so as to

add control and encourage more social interaction.

Currently, the evidence for a relationship between stress-related diseases and VDT work

is still sparse. A principle problem in drawing

conclusions is that the long latency of chronic

diseases prevents early recognition. However,

in the natural history of disease certain early

indicators could be expected such as psychosomatic symptoms (sleeping problems, dizziness,

nausea, and stomachache), high blood pressure

or angina pectoris. 102 Only preliminary evidence

exists for the likelihood of deleterious long.

term health effects on office workers, or specifically on VDT workers. Most studies show

that support staff who work at a VDT report

more psychosomatic symptoms than either

other support staff or professionals who work

at VDTS. These studies, in general, also show

that women report more psychosomatic symptoms, as do people in jobs characterized by

—— .—

““’R. Kar~sek and B. Garden, Managing Job Stress, Work.

ing Paper, Columbia University, Department of Industrial Engi.

neering and Operations Research, 1984,

‘

(

’’ LaCroix, op. cit.

“’’These can also be explained by other factors such as sit

uations outside of work or biological predisposition. Research

efforts should in the future attempt to differentiate between

the risks associated with work and those associated with lei.

sure. Also, physical and psychosocial working conditions can

produce similar adverse stress responses and should be differen

tiated in future research.

little control over pace, a heavy workload, and

lack of social support. This is consistent with

the general literature on stress-related disease.

No study can fully answer the question—what

contribution to the risk of disease can be attributed to office automation?

But two recent studies suggest that there

is a potential for these psychosomatic symptoms to develop into chronic conditions. In

a cross-sectional study of clerical workers in

the communications industry, those who worked

at the VDT were at about a two-fold greater

risk for the development of angina pectoris. 103

This is the first study to demonstrate a relationship between automated office work and

a valid precursor of CVD. A second study of

Finnish workers found that workers in automated offices were at a 106 percent higher risk

(relative risk 2.06, 95 percent confidence interval 1.43-2.69) for one or more chronic illnesses. 104 These projects point to the need to

examine the potential effects of office automation to determine under what conditions

a worker is likely to be at a greater risk for

the development of a chronic disease.

—.

“’’The analysis of angina was restricted to a sample of 650

women. There were no significant differences between respondents and a 10-percent sample of nonrespondents. For a full

description of the results of the study along with the limitations of the study see, Suzanne Haynes and Andrea LaCroix

(University of North Carolina at Chapel Hill), “A Cross-Sectional

Study of the Health of VDT Operators in the Telephone Industry, ” unpublished manuscript, 1985. The measure of angina

used was the Rose Angina Questionnaire. Several studies have

shown that this self-report measure is as valid and reliable a

predictor of angina pectoris as a physical exam by a physician.

(Lawrence M. Friedman, et al., “Assessment of Angina Pectoris After Myocardial Infarction: Comparison of ‘Rose Questionnaire’ With Physician Judgment in the Beta- Blocker Heart

Attack Trial, ” American Journal of Epidemiology, vol. 121,

NO. 4, 1985, pp. 555-563. )

“’”The ratio reported is after adjustment for age, sex, baseline health status, health risk factors and baseline systolic blood

pressure. The risk did not change when ergonomic strain, job

strain and social support from the supervisor were taken into

account. There was a 21-percent increase in the risk when the

control over the pace of work was taken into consideration.

Again, the unanswered question is whether the job was characterized by low control prior to automation or whether working

conditions were exacerbated by the automation of the work

process? The chronic illness measure was composed primarily

of heart disease (70 percent) with cases of cancer, chronic musculoskeletal disorders, and gastrointestinal diseases. These results are preliminary and further analysis is currently being

carried out. For a description of the study see Mary Haan,

“Health Effects of Automated Office Work, ’ paper presented

at the Office of Technology Assessment Symposium on The

Impacts of Office Automation and Computer-Mediated Work

on the Quality of Worklife, December 10-12, 1984.
.—..

Since the evidence relating working conditions in automated offices to stress-related diseases is still limited, it may be thought premature to begin job and organizational redesign

strategies. The major dilemma facing managers is whether it is more cost effective to

wait and make job and organizational changes

later, or to use the new technologies to usher

Ch. 5—Office Automation and the Quality of Worklife ● 151

—

in job and organizational changes. The major

dilemma facing public health officials is that

by the time the population of VDT users has

worked long enough to manifest chronic outcomes there will be few people to use as controls, since most office workers will be working

at the VDT.

SECTION 111: INTERVENTIONS

Office Design and Workstation Design

More and more organizations consider the

design of the office, building, and workstation

as integral parts of the new technology. These

characteristics of office environments can contribute to quality of worklife both directly, and

indirectly by ameliorating stressful working

conditions,

Office Design

The introduction of new office technologies

into a building can affect the way the building performs—the distribution of office space,

heating, ventilation and air conditioning, power and wiring, and acoustics. 105 Running of

cables through offices can be the cause of falls.

Office design can balance the impersonality

of some computerized office tasks. However,

new buildings will only accommodate about

5 percent of the computer terminals installed

between now and 1990 (see figure 5-2). The single greatest area of impact will be the retrofitting of older buildings to accommodate new

technologies. Retrofitting can be as simple as

putting in a new lighting system or as com-

—— -— .—

1t has been estimated that only 2 percent of the costs of

conducting business in an office building over 40 years are

devoted to building design. Six percent goes to operation and

maintenance and 9.2 percent to labor. Therefore, improvements

in the quality of worklife through building design offers a potential cost-effecti~e ie~’er for organizations. This estimate is

based on 1971 dollars, but the differences in scale still exist

today, see Francis T. Ventre, Documentation and Assessment

of the GSA PBS Building Svystems Program: Final Report and

Recommendations, NBSIR 83-2777, General Services Administration, Washington, DC, 1983. This general ratio of costs

has been reproduced in another 7 year study of office design

and its impact on the quality of work (Michael Brill, presentation at Conexion ’85, Atlanta, GA, Nov. 6-9, 1985).

Figure 5-2.—The Proportion of VDTS Installed in New

Office Space Compared to Existing Space, 1984-90

40M

30M

20M

10M

1984 1986 1990

Year

 = New building s

Most video display units will be installed in existing office

space. Even if every person in new office construction in

the United States had a VDU, only about 5 percent of the

VDUS would be in new buildings. Therefore, accommodating them is mainly a retrofit job. (Assuming approximately

200 gross square feet for each workstation with a VDU,

then if the height of each bar represents the total space occupied by workstations with VDUS, the shaded part of each

bar represents the cumulative total of VDUS in new office

space.)

SOURCE Michael Bell, Harbinger Group Inc 1985

plex as complete rebuilding of the internal

structure of the building. When new office technologies are haphazardly introduced without

considering the extra demands placed on the

building, new health and performance problems can develop or old ones can be amplified.

Office Space

Office automation allows the redesign of

workspace to accommodate private and shared
152 ● Automation of America Offices

work. Allocation of space is always a critical

factor in offices; it signifies status and organizational commitment to the worker. It provides some control over interruptions and

privacy and encourages or discourages social

interaction, factors associated with job satis ”

faction and performance.

A personal computer and attachments take

about 12.5 square feet of office space, which

increases individual workspace needs. 106 With

the cost of office real estate rising, new technology is sometimes being crammed into inappropriate spaces that can lead to shifts in

status, and awkward work postures associated

with visual and musculoskeletal strain. Noise

levels can be distracting, especially for workers in an open plan office,107 and devices such

as acoustical printer covers may be needed to

reduce noise levels. Changes in office layout

may be necessary to reduce the isolating effects of computer work.

Air quality is a major problem in modern

offices. Heating and cooling problems can be

exacerbated by office equipment that generates heat, and by changes in lighting that are

made to accommodate VDT users.108 Hot spots

caused by concentrations of office equipment

can change the way the building distributes

———————

“hIn one study, “Office Research Into Buildings and Information Technology (OR13 IT)” it was found that new information

technology only increased the secretaries’ space requirements

by 50 percent (Duffy, Eley, Giffone, and Worthington–Architects, ORBIT Report, 1983).

“’”It has generally been argued that open space offices are

most beneficial to workers doing repetitive and boring tasks;

they provide needed social stimulation. Alternatively, people

doing creative work require private space. However, this has

recently been challenged by researchers who have found that

even workers with boring and repetitive jobs prefer private

spaces to open spaces and giving it to them increased their

job performance (E. Sundstrom, et al., “Privacy at Work: Architectural Correlates of Job Satisfaction and Job Performance,

Academy & Management Journal, vol. 23, 1980, pp. 101-1 17).

“wit is generally estimated that a workstation and operator

can generate 18.0 Btu/square foot of heat throughout a building. For discussion of these problems see American Society

of Heating, Refrigerating, and Air-Conditioning Engineers,

ASHRAE Standard 62-73. Standards for Natural and Mechanical Ventilation (New York, 1973); ASHRAE Standard 55-1981.

Thermal Environmental Con&”tions for Human Occupancy (New

York, 1981); ASHRA Standard 90-75. Energy Conservation

in New Builch”ng Des@ (New York, 1977); and ANS1/ASHRAE

Standard 62-1981. Ventilation for Acceptable Indoor Air Qualit.v (New York, 1981); also Ventre, op. cit.

air, heat, and cooling, and make indoor air pollution and thermal discomfort worse. It is

recommended that in refitting a building for

extensive office automation, the building be

remodeled as a set of microzones composed

of comparable offices with localized control of

the heating, cooling, and ventilation system.

Workstation Design

The workstation includes the table or desk

holding the terminal, the chair, and the equipment that an operator users. In many offices

these have not changed, and the microcomputer merely replaces, or even sits next to, the

typewriter. Yet several characteristics of the

V D T

109 differ from conventional office technologies and impose different physical demands on the worker:

●

●

●

●

The terminal is self-luminous.

There is a transient display on the screen,

whereas the display in printed text is

constant.

VDTs usually have highly specular curved

glass surfaces that reflect light.

Information is presented in a vertical

plane as compared to the horizontal plane

of paper or the angled plane of the typewriter.

In conventional offices the illuminance has

been kept high for reading, with other light

sources, such as windows, contributing to the

illumination. For VDT work, much lower illumination is best.110 But the worker often looks

back and forth from the VDT to printed text

and other equipment, so a compromise is required; task lighting (lamps) can be used for

additional illumination where needed. Tradi-

— — —

“’’The discussion of VDTS usually is about the monochromatic raster scan CRT, which is like a television screen with

some additional electronics. Other kinds of VDTS that may

be much more common in the future are the plasma panel, liquid crystal, and electroluminescent displays. See App. A for

descriptions of the technology.

“(’The American National Standards Institute recommends

a general lighting level of 750-1600 IUX for traditional desktop

reading; other groups recommend no more than 200 IUX for

rooms where VDTS are used. American National Standard Practice for Office Lighting, ANSl A132.1 (1973); AT&T Bell I.aboratories, Video Display Term”nals; Preliminary Guidelines for

selection, Installation, and Use (1983); NIOSH, Potential Health

Hazards of Video Display Term”nals (1981).
Ch. 5—Office Automation and the Quality of Worklife 153

tional office and office furniture design assumes a depressed line of sight, but the vertical position of the VDT brings windows, ceiling

lights, etc., into the line of sight, causing glare.

The reflective surface of the screen can also

contribute to eye strain.

On a VDT the display is transient and there

is a characteristic flicker (assuming that the

VDT is a cathode ray tube) which is often imperceptible to the worker, but can probably

lead to visual fatigue and asthenopia although

it has not been linked to visual performance. 111

The readability of the screen is also related

to the structure of the dot matrix used to create characters, the contrast between the characters and the background, and the viewing

distance of the person from the screen. Increases in the size of the matrix have been

shown to increase reading performance, 112 but

this is not within the control of the user or,

generally, the purchaser. The contrast between

characters and screen can be controlled by the

user, and should be placed for ease of use. The

fonts used in VDTS are chosen by engineers

for convenience in design, and are less easy

to read than print fonts evolved through years

of practical experience and user preference. 113

They assume a set viewing distance between

viewer and screen, but some people lean back

in their chairs and put the keyboard on their

lap or in other unlikely places.’” This is especially likely when the worker has such a small

table or desk that cannot hold documents as

well as the keyboard and screen. Many office

furniture designers have evidently not real-

— —

“If the refresh rate is at least 65 flashes per second, there

is no perceptible flicker; VDT refresh rates are about 30-70 Hz.

Television set flicker has occasionally been associated with photosensitive epileptogenic seizures, but the refresh rates known

to induce such seizures are low, from 8-14 Hz. It is thus highly

unlikely that such seizures would be induced by VDT work.

‘“A 14-percent increase in reaction time and a 10-percent

decrease in errors was shown in a study by Haubner, et al.,

Visual Dispiay Units–Characteristics of Performance, Commission on International Lighting, 20th sess., 1983, as reported

in Bergqvist, op. cit.

‘‘ ‘National Academy of Sciences, op. cit.

“For further discussion see l+;. Grandjean, W’. Hunting,

and M. Pidermann, 4’VDT Workstation Design: Preferred Settings and Their Effects, Human Factors, ~ol. 25, No. 2, 1983,

pp. 161-175,

Photo credl( O~(fca/ Coat/rig Labora(or/es /fJc

One way to control glare and enhance readability is to

use a filter

ized that office workers frequently use both

paper and a terminal in the same task. The

visual and musculoskeletal strain that can result from the wrong viewing distance is best

managed by providing fully adjustable equipment so that each user can adapt the workstation design to fit his/her own needs. A tiltable screen and adjustable desktop can solve

many problems.

The keyboard is likely to remain the dominant input technology for most office workers; 115 keyboard work has been associated with

carpal tunnel syndrome and cervicobrachial

syndrome. The physical characteristics of the

——

‘‘ ‘The usual QL$’ERTY keyboard dates back to the 1870s,

and was recognized as an international standard in 1966 although it has been challenged by the Dvorak ke~board, with

a different arrangement of the keys. Some studies indicate the

Dvorak would improve typing speed by 25 percent and shorten

the time needed to learn to type. It was designed (after W’orld

War II) to avoid excessive wrist movement b~’ locating the

most commonly struck keys in the center row, possibl~’ reducing musculoskeletal strain, There is currentl~. a resurgence of

interest in the Dvorak, but both employers and employees are

seemingly unwilling to undertake the retraining that would be

necessary to make the change. See ,Jan Noyes, ‘ ‘The QWERTY

Keyboard: A Review, International Journal of Alan-illachine

Studies, vol. 18, 1983, pp. 265-281.
154 ● Autornation of America’s Offices — .——— — —

keyboard associated with precursors of these

syndromes, such as its height, can be altered.

Some keyboards are attached to the terminal

and resemble the typing keyboard in height

from the table (generally over 40 mm); others

are detached and built lower, which has many

advantages since a determinant of musculoskeletal symptoms in forearms and wrists is

the ability to intermittently rest the arms or

wrists on the table.116 A detachable keyboard

can also be arranged for comfort and viewing

distance.

Chairs are critical to the comfort of any office worker; and with office automation people tend to spend longer blocks of time in one

place. The chair should allow one to change

the seated posture without adopting an awkward position; 117 and it should be easily adjustable. To prevent lower back problems, office chairs should have an adjustable lumbar

back support and the back rest height should

extend beyond the lumbar region to the thoracic

region and be adjustable for height, angle, and

pressure. The seat should also be adjustable

to allow people of different sizes to get about

a 90-degree angle between upper body and

thighs.

Table height is also important. If used alternately by several workers it should be easily adjustable to accommodate different heights.

Desks should not restrain knee and thigh

movement, and should have enough space for

working documents, screens, and keyboards

to be moved around.

One of the most important elements of office design strategy is to make sure that office workers understand why adjusting lighting, furniture, and temperature controls is

“’’Operators may not prefer suggested optimal keyboard

heights and their preference may not affect performance. Teresa

Burke, “Effects of Keyboard Height on Typist Performance

and Preference, ” Proceedings of the Human Factors Society,

28th Annual Meeting, 1984, pp. 272-276. See also Grandjean,

op. cit.

“ Most keyboard operators maintain an erect posture for

only 2 to 3 minutes at a time. Standards and recommendations

are usually based on this position, even though studies shc~w

that people prefer leaning slightly forward or slightly backward.

When tables andior chairs are not adjustable, the user

sometimes must assume awkward postures. This

woman may eventually develop neck cramps from

continually looking down

Photo credlf M/cbae/ Sm/th

Sometimes the worker finds her own way

to sit comfortably

important, and how to do it.118 A Finnish study

found that if data-entry workers were trained

to recognize ergonomic problems and prevention strategies, the level of clinically recognized

“’This has in fact been mandated in the OSHA Act (Sec.

21c), which says that the Department of Health and Human

Services must provide for “the establishment and supervision

of programs for the education and training of employees and

employers in the recognition, avoidance, and prevention of unsafe or unhealthful working conditions,
Ch. 5—Office Automation and the Quality of Worklife ● 155

— — —— — —— -- .-

neck, shoulder, and elbow problems was sig- In developing standards or guidelines, current

nificantly reduced over a 6 month period.119 tax codes should be examined to ascertain that

they will not act as a barrier to intended

Public Policy and Quality of Worklife change.

Public policy interventions must be considered in light of both the scientific evidence and

the political and economic climate. Many organizations look to new technologies to provide

them with the competitive edge, and some argue that health and safety regulations inhibit

the full use of new technologies and further

innovations. A report issued by the President’s

Commission on Industrial Competitiveness

recommended that no new health and safety

regulations be established; society should not

seek to eliminate risk, and risk below minimum levels should be left unregulated, or to

industry self-regulation.120 Executive Order

12291 (1981) provided that except where expressly required by law, the costs of a regulation should not exceed its benefits. This must

be considered in discussion of the potential

effects of office automation. Cooperative actions by employers and employees, when they

are sought in good faith and are successful,

are in theory a more cost-effective strategy

than regulation because they can be self-enforcing.

Investment tax credits have encouraged the

adoption of capital-intensive technology to improve the efficiency and productivity of the

work process, yet often working conditions

that emerge from this technology adoption produce adverse stress responses.’” Tax policies

can also directly affect the way physical characteristics of the office are designed. For example, some experts suggest that technicalities in the way depreciation is allowed have

encouraged open plan offices so that partitions

separating office spaces can be depreciated.

‘ ‘R. Kukkonen, et al., “Prevention of Fatigue Amongst

Data k;ntry operators,’” unpublished manuscript. Using a quasiexperimental design, the researchers were able to demonstrate

significant decreases in neck and shoulder symptoms, back

symptoms, and clinically defined neck’ shoulder tenderness and

hardening.

- ‘Report of the President’s Commission on Industrial Competitiveness, as cited in The Occupational Health and Safet~’

,Vews]etter, ~ol. 15, No. 5, p. 3, 1985.

‘- hlichael Beer and James W’. Driscoll, “Strategies for

Change, ” Improt’ing Life at I! ”ork, op. cit. 1977, pp. 364-453.

Workers’ Compensation

Under common law, employers have a duty

to exercise reasonable care in protecting their

employees from harm in dangerous situations.

Remedies under the common law of torts have

been proposed for many health and safety

problems.’” But in the United States, the laws

creating workers’ compensation generally make

this system the exclusive remedy for employee

disability, 123 although in many instances this

exclusionary principle has been circumvented

by third-party liability suits in which the employee sues the manufacturer of equipment or

material (e.g., the thousands of suits against

Johns Manville as the producer of asbestos

materials).

Workers’ compensation does not cover spontaneous abortion, miscarriage or birth defects,

since this class of injury does not impair the

-These typically fall into three categories–negligence,

product liability, and strict liability. In negligence actions, the

employee must demonstrate that the employer was negligent

ir. the maintenance or inspection of equipment or did not adequately warn the employee about risks inherent in its use. These

actions must be shown to cause proximate harm to the employee and not to be a part of normal dangers inherent in the

job. Since it is very difficult to demonstrate a causal link between VDT use and any adverse health outcome, this area of

legal action has limited utility. The same analysis can be applied to product liability and strict liability?’. William Presser,

Handbook of the Law of Torts, 4th ed. (St. Paul: Wrest Publishing, 1971).

“Workers compensation is a broad disability>. insurance

program in which awards based on loss of earning power are

paid to workers whenever they are injured on the job, Under

workers’ compensation the employee must establish that the

condition arose from employment. (T?’picall~’ the terms proximate cause, producing cause and contributing cause are used

to refer to the relationship between the working conditions and

the injury or disease. ) lf’here a claim is upheld, a schedule of

payments is set up for the worker based on some formula that

determines the extent that the worker is disabled or suffers

a decrease in wage-earning capacity. The clear intent of the

statute is to compensate all work-related injuries. (This section

draws on the work of the National Council on Compensation

Insurance report, Emotional Stress in the11‘orkplace–,NTeu. I.egal Rights in the Eighties, New York, 1984. ) When an injury

is found to be covered by a workers’ compensation act, it is

usually held that the statutory compensation is the exclusive

remedy and any recovery at common law (tort law) is barred.

(Presser, op. cit.)
156 ● Automation of America’s Offices

worker’s earning power.124 It has allowed for

compensation for stress-related diseases and

disabilities along with visual and musculoskeletal system injuries. Table 5-11 contains

three examples of workers’ compensation claims

for injury in automated workplaces. The worker must show a causal link between work in

an automated office and the injury. Currently,

for the VDT operator there is very little direct causal evidence for visual and musculoskeletal injuries and for stress-related injuries.

Where an organic cause can be found to explain the injury the claim is easier to interpret. Thus, demonstrating that some characteristic of the automated office environment

led to a biological change in the worker is the

clearest vehicle for establishing a compensation case. These conditions while impairing the

worker’s ability to work, may not be medically

detectable, so the primary instrument for identifying illness and injury to the office worker

is through the reporting of symptoms. Thus,

it is difficult to demonstrate proximate cau -

sality.

If the condition predated employment or was

aggravated by conditions outside the job the

claim may be disallowed or the compensation

reduced. For the VDT operator who goes home

and watches television (also a cathode ray tube~

or has personal problems that produce adverse

stress responses, it is difficult to argue that

the work was the source of the injury, although

“’John Parry, Jeanne Dooley, David Rapoport, and Johr

Taylor, “Are VDTS Hazardous to Your I.egal Health?” Men

tal and Physical Disability Law Reporter, vol. 8, No. 4, 1984

pp. 342-360. For a more complete discussion of the workers

compensation system and its evolution see Reproductive Haz

ards in the lt’orkplace, op cit.; or Peter Barth and H. Allan

Hunt, V’orkers’ Compensation and Work-Related Illnesses ana

Diseases (Cambridge: MIT Press, 1980).

workers who spend over 7 hours a day at a

terminal may make such an argument effectively. In addition, many chronic debilitating

visual and musculoskeletal injuries do not occur suddenly and unexpectedly, so that claims

are likely to be awarded only in States that

accept gradual developments of an injury over

time. .

The workers’ compensation system was meant

to also serve as a preventive measure; forcing

employers to pay for injuries and diseases arising from employment should encourage them

to develop preventive strategies. Emerging office problems may develop into compensatable disabilities, but the current work force

would not benefit from the incentives for prevention created by the rise in compensation

claims. Yet today’s employee cannot sue the

employer in most States through the common

law of torts since visual, musculoskeletal, and

stress-related conditions are compensable.

Mental Disability.–There has recently been

an increase in workers’ compensation claims

related to mental stress. The California Worker’s Compensation Institute found that stress

claims doubled from 1980 to 1982, while claims

for other disabling work injuries decreased during the same period.125 Workers’ compensation

for mental disability arising from employment

is greatest among younger workers, as shown

in figure 5-3. Mental stress is significant by

itself, and may also predict future development

of stress-related diseases. If it does, any increase in claims because of office automation

could be costly to society. Table 5-12 provides

several examples of successful workers’ com-

“’California Worker’s Compensation Institute, Bulletin,

Apr. 20, 1983.

Table 5-11. —Workers’ Compensation Claims for Employees Working at Video Display Terminals

Job Probler n-

— .

Word processing Stress of 6 to 8 hours ‘VDT work per day - ‘“

Insurance claims processor Repetitive work al VDT lead to wrist pain

Word processing Severe headaches

Sensitivity to light

Visual pain

aset!led prlo~ to wkwwflt

bClalm awarded

SOURCE Legal Rlgbfs for VDT Users (Cleveland OH Working Womels’ Educational Fund, 1985)

Injury

- Nervous brea~down a

Carpal tunnel syndromeb

Accommodative spasma

-.
Ch. 5—Office Automation and the Quality of Worklife ● 157

Figure 5-3.—A Comparison of Workers’ Compensation Claims for Mental Stress and Other Occupational Diseases

30

25

20

15

10

5

0

1-29 30-39 40-49

Age

50-59 60-99

—

Mental stress Other occupational diseases

I I I I

SOURCE National Council on Cornpensatlon Insurance Ernot~onal Sfre.ss (n the LVorkp/ace– New Lega/ Rights ~n (he .E~ghltes (New York 1985)

Table 5-12.— Examples of Mental Stress— Mental Disability Claims for White-Collar Workers

Alleged Allege d

- ‘“ -

Occupation of clalmant work-related mental stress mental disability

Advertising manager Overworked, supervisor requested–ea-rly retirement Anxiety, depression

Clalms director Job pressures Psychiatric illness

Data analyst/control clerk Inability to perform job duties Psychological disability

Insurance underwriter Increase in job duties Mental breakdown

Secretary Increase in job duties Depressive neurosis

SOURCE Ernot/ona/ SIress ~n the WorkFace– New Lega/ R/ghts /n fhe E/ght/es (New York Nat!onal Council on Compensahon lns~rance 1984)

pensation claims for mental disability, showing the variability in both the alleged cause

and the disability. The workers’ compensation

system can be considered as an early warning

system for the effects of office automation on

the mental health of the worker.

Claims for mental stress and mental disability decrease with increasing age and are greater

among women than men. 126 This could be the

result of a cohort effect; younger workers are

probably more likely to demand rights in the

‘These results are based on a random sampling of claims

from 1980 to 1982 in 13 States representing geographic variability. The study is described in National Council on Compensation Insurance, op. cit.

workplace than are older workers. It also corresponds to the trend of increasing automation of the workplace that affects younger

workers. Since a majority of the claims have

been filed by women (54.2 percent), it may be

logical to infer a relationship with the recent

technological changes; the workers first affected by office automation in the 1960s and

1970s were predominantly women.127

‘-It has been suggested that the highly publicized mental

disability claims associated with stress may lead to a greater

reporting and filing of similar claims. It may be that the legal

recognition of mental disabilit~’ claims has led to an increase

in the number of claims. This is important in mental stress

claims because of the universality of stress across all occupations.
158 ● Automation Of America's Offices

Indemnity costs for gradual mental stress

claims were less than 60 percent as high as

the costs for other occupational diseases per

average claim in 1980, but surpassed these

claims in 1982. Also, the average medical costs

incurred for gradual mental stress claims

passed other occupational diseases in 1981.128

Mental disability awards could become an economic burden for industry.

If workers attribute their adverse stress responses to the VDT and workers compensation

claims become a common avenue for compensation, then the system may become overburdened, with the employer becoming a universal insurer. The workers’ compensation system

is at a crossroads in determining whether a

worker who is unable to work because of mental disability is to be treated differently from

a worker unable to work due to a physical injury arising out of employment.

There have been relatively few compensation claims specifically related to work at a

VDT (about 30), most for physical injury bul:

some for mental injury. In one case a VDT

operator claimed that the VDT contributed

to an already high-pressure atmosphere, leading to three stress reactions during a 7-month

period. Her claim was upheld by the New Jersey workers’ compensation board.

There seem to be three compensable categories of mental stress. The stress response

as a usual condition of the work environment

is perhaps the most liberal and far-reaching

of the categories. The recognition that gradual accumulation of mental stress is a cause

of the mental disability is important since

many stress responses in offices result from

the incremental or chronic conditions of work

rather than from any single acute event. Second, the stress responses can result from a continuing set of unusual conditions in the work

environment, for example, an increase in job

duties because of new office technologies,

Third, the stress reaction can be due to a suds

den and unusual event in the work environment, for example, the witnessing of a cowork-

—

‘

J

’ Nat~onal Council on Compensation Insurance, op. cit., p

6.

er’s heart attack. The only condition under

which this could be associated with office automation is if the technological change itself were

construed as a traumatic event. Perhaps an

acute fear of being exposed to a terminal that

purportedly emits hazardous radiation could

lead a person to an episode of mental disability. 129

Fifteen States have no relevant statutory

limitations. Seven State courts have concluded

that mental disability is to be treated no differently than physical disability if working conditions are the cause of the disability; nine have

ruled mental disability is not compensatable.

Most of the States that have taken the position that mental disability claims are not compensable have strictly interpreted the statutes

defining injury to be of a physical nature. Eight

States have adopted the idea of an acute event

in employment as proximate cause. They allow mental disability claims when there has

been some traumatic event that can be identified as the proximate cause of the disability.

Eleven States have upheld the right of the

worker to claim a mental disability if the stress

exceeds the stress of everyday work. In these

States, there have been cautions about limiting the scope of the compensation system to

avoid the development of a social health insurance program.

The Federal Government acted first (1908,

1916) to establish workers’ compensation for

Federal railroad and then for other employees. 130 Since then, the workers’ compensation

system has evolved at the State level relatively

without Federal interventions, although there

have been proposals from time to time to create

a Federal system. One role the Federal Government might play is to serve as an information clearinghouse for issues of office automa-

‘Z9This is analogous to the idea of a pollutant on the job,

where the effects of the pollutant are unknown. The Montana

Supreme Court has allowed such a compensation to be awarded

to a worker who developed psychological problems on exposure

to pollutants at work (Alcklahon v. The Anaconda Company,

No. 81-34 (Montana Supreme Court, Mar. 29, 1984), 8 MPDLR

291).

‘“’M.B. Kent, A History of Occupational Safety and Health

in the United States, 1983, as cited in Preventing Illness and

Injury in the Workplace, op. cit.
Ch. 5—Office Automation and the Quality of Worklife 159

—

tion and stress responses, to provide States

with the most recent scientific evidence for

making decisions. Clearly, automation is the

dominant change in office work and many mental disability claims in the next two decades

are likely to revolve around the effects of the

new office technologies.

Standards or Guidelines

Since ergonomic factors in office equipment

are important to the health of the American

worker and the productivity of American business, there have been proposals that ergonomic

standards or guidelines be developed, either

by government or other institutions. ’3’ A recent discussion of regulatory policy pointed

out that health and safety regulations should

focus on threshold limit values on exposure

as oppposed to means for reducing exposure

such as design standards. 132 Standards can

only be developed with the appropriate measurement techniques. 133 Working conditions

that produce adverse stress responses can be

measured in many different ways and scientists disagree on which ways are best. Therefore, the development of standards for working conditions that produce psychological and

biological stress responses in individuals may

be an option to consider only when there are

valid and objective measures of the working

conditions. 134

Any standards development process would

have to consider issues raised in the recent

benzene standard case decided by the U.S. Supreme Court and the noise standard case de-

— .——- —

‘ “In 1981, the Science and Technology Committee of the

House of Representatives held hearings, “The Human Factor

in Productivity. These hearings are the most recent attempt

to gather information about the role of human factors in industrial competitiveness (see, The Human Factor in Innovation

and Productivity, U.S. House of Representatives, Committee

on Science and Technology, Subcommittee on Science, Technology, and Research, 97th Cong., 1st sess., 1981).

“

LDouglas Ii. Ginsburg, “Administrative Efforts to Enhance the Opportunities for Self- Regulation,” I,abor Law Journal, vol. 3,5, No. 12, 1984, pp. 731-735.

1‘Becker, op. cit.

‘ “Edward E. I.awler, “Should the Quality of Work Life be

I.egislated?” 7he Personnel Administrator, vol. 21, No. 4, 1976,

pp. 17-21. See also, Edwin A. I.ocke, “The Case Against I.egislating the Quality of Y$’ork I.ife, ” The Personnel ,4drninistrator, vol. 21, No. 4, 1976, pp. 19-21.

cided by the U.S. Circuit Court of Appeals in

Richmond, Virginia, which exemplify the impact judicial decisions may have on occupational health and safety policy. In the noise

case the judges invalidated a standard on the

grounds that it might on the basis of medical

examiniations require employees to take actions concerning hearing loss caused by nonoccupational factors.135 While progressive hearing loss can be identified through medical

exams, the exams can not distinguish between

loss resulting from occupational and nonoccupational sources of noise. The ruling has been

reversed by the same court. If upheld, it would

have probably severely restricted the development of Federal standards for automated

offices where most exposures are chronic and

confounded by nonoccupational factors.

The Supreme Court in 1980 upheld an earlier

lower court decision striking down the 1978

OSHA benzene standard. They found (5 to 4)

that OSHA had not established a threshold

limit for benzene posing a significant risk to

the worker. The Secretary of Labor must demonstrate that a workplace threatens the worker

with a significant risk of harm.136Although

providing limited guidance as to what significant risk means or how it should be calculated,

the Supreme Court decision has demanded a

more rigorous scientific treatment of occupational safety and health standards. 37 The setting of standards designed to improve the

health and well-being of the office workers

would have to take into account this decision.

However, standards can be developed and

adopted voluntarily .There are three general

types of standards; engineering, informational,

and administrative. Engineering standards

(which include design standards) establish alternative means of interfacing with the technology or alternative means of building the

technology to ensure the health and safety of

— . —

‘ “Reported in the Occupational Safet,\’ and Health I.etter,

vol. 15, No. 1, 1985, p. 2.

) “Industrial Union Department, AFL-C1O v. American Petroleum Institute, 448 U.S. 607 (Supreme Court, July 2, 1980).

For a full discussion of the implications of this decision

for OSHA standards setting see, Pre~’enting Illness and Injur.~’ in the Workplace. op. cit.
160 Automation of America’s Offices

the worker. Informational standards include

product labeling, instructions for proper use,

and other means of transferring information

from the employer or manufacturer to the

worker. Administrative standards establish organizational policies such as rest breaks. A

key policy issue is how to ensure that the

standards development process is based on

sound scientific evidence. 138

Design Standards.—The possibility of office

and workstation-design standards has received

much attention, spurred on by bills introduced

into at least 18 State legislatures, and by the

development of standards in other countries.

The Governor of New Mexico has issued an

executive order (No. 85-1 1) mandating ergonomic guidelines for State employees. Such

proposals and actions are based on the assumption that there are definable and measurable

characteristics of both the office and the workstation that, if modified, will improve health

and worker performance. A major issue is

whether standards should be voluntary or

required-self-regulation or governmental regulation. It is argued that self-regulation is more

flexible, and standards can be tailored to meet

the specific office automation application. However, a second question is whether many organizations would voluntarily pay the front-end,

or retrofitting cost that might be entailed. 139

’

Another issue is that of fairness; standards

development committees composed of special

interest groups are often suspect. Especially

in promulgating mandated standards, balanced groups of consumers, producers and

other affected parties may be preferable for

the development and enforcement of standards. 140A major impetus for currently proposed

State bills is a concern over the inadequacy

of voluntary standards for these reasons. One

option at the national level would be to establish a national commission to oversee standards development or to empower the National

Bureau of Standards with such duties. 141

A third problem is that of the appropriate

level of specificity for design standards. The

level of specificity in State bills varies widely,

indicative of the uncertainty as to the most

effective way to modify the work environment

to accommodate new office technologies. 142

International standards reflect differing approaches, different populations, and different

goals. The very specific German standards are

meant to standardize the building and production of office equipment, while Swedish standards are more like guidelines to be used in

negotiation between the unions and management. Japanese guidelines are not binding and

are very general.

Other major issues in standards development are how to define enforcement mechanisms for government standards and how to

ensure that the development of standards

spurs rather than impedes the development

of more protective technology in the future.

Standards can be established at either the Federal, State, or organizational level by the use

of procurement schedules.143 California, New

Mexico, Massachusetts, and Wisconsin have

all developed procurement guidelines for the

purchase of workstation equipment in the public sector.

““An examination of the currently proposed office standards for State bills demonstrates problems in the standards

development process; general lighting levels vary from 500 IUX

or less to greater than 700 IUX. International standards also

do not agree. There is no general national or international consensus on the best way to establish standards for office automation. The lack of consensus may reflect the generally agreed

need to maximize flexibility in current design to accommodate

a variety of future needs. This need for flexibility is clearly

reflected in the mechanisms for controlling glare in proposed

State bills, which range from installing indirect lighting; to

antiglare.filters; to proper placement of the terminals with respect to windows; to task lighting; to screen hoods.

“

q

Francis Ventre, “Transforming Environmental Research

Into Regulatory Policy, ” Responding to Social Change, Basil

Honikman (cd.) (New York: Halstead Press, 1984).

“’’Ginsburg, op. cit.

“Currently, the National Bureau of Standards coordinates

within the Federal Government and assists the private sector

in the procedures and policy for the development and application of standards; however, they have no enforcement powers.

“’Currently, the Human Factors Society in conjunction

with the American National Standards Institute is developing

a set of standards for the physical and perceptual ergonomics

of visual display terminal workstations. These standards contend that ergonomics is highly applications dependent and looks

only at word processing, data-entry, and data-inquiry tasks.

“’0. Ostberg, et al., “Ergonomic Procurement Guidelines

for Visual Display Units as a Tool for Progressive Change, ”

The Procd”ngs of the Eleventh International Symposium on

Human Factors in ‘1’elecornmum”cations, Sept. 9-13, 1985,

Cesson-Sevigne, France.
Ch. 5—Office Automation and the Quality of Worklife . 161

-.

Information Standards.—These might provide the employee and employer with information about, for example, the recommended

lighting levels for using a particular display

terminal. Rhode Island has just passed a law

requiring the State Department of Labor to

develop a brochure on VDT use and to hold

training sessions throughout the State.

Health and Safety Standards.–They are administrative standards. At the Federal level,

an initial policy consideration would be to decide whether they should be developed within

a single agency or by several agencies. The

former would eliminate replication, while the

latter would ensure that all areas are covered.

Currently, OSHA, the Consumer Products

Safety Commission (CPSC), and the Department of Health and Human Services (DHHS)

can develop standards that might be adapted

to address new office technologies. For example, the OSHA Health Hazard Communication standard is intended to disseminate information about chemical health hazards and

only applies to the manufacturing sector. For

OSHA to disseminate information about health

and safety issues in office automation under

the Health Hazard Communication Standard,

that authority might have to be broadened. 144

Alternatively, the recently proposed High Risk

Occupational Disease Notification and Prevention Act of 1985 (H.R. 1309), would establish

within NIOSH the authority to disseminate

information to persons at an elevated risk for

the development of disease. Only workers at

an elevated risk will receive counseling and

medical monitoring. The disadvantage to this

approach is that it requires prior knowledge

about the development of the disease and the

risk to the worker. A broader approach is to

provide information to all employers and employees so that the factors associated with

health and safety can be discussed before the

equipment is installed. This would require input from many sectors of the Federal Government.

-——

‘ ‘“A recent court decision suggested that OSHA expand the

scope of the standard to include nonmanufacturing industries,

~l,s, Court of ,,~ppe~s, ~jrd Circuit, Case No. 83-3554.

Eye examinations, rest breaks, semiannual

equipment inspections, and transfers for pregnant VDT operators could be handled through

administrative standards. Several countries

have standards or guidelines regarding visual

exams. 145 Legislation calling for rest breaks

has been proposed in several States, and several nations have guidelines or standards with

respect to rest breaks.146 Although Sweden’s

practice of 15 minute rest breaks after every

hour or 2 hours (depending on the work) is often

cited, this is not a national standard but results from agreements between labor organizations and management. This will change

with the issuance of the Ordinance Concerning Work With Computer Displays. 147 This ordinance requires that employees who work

more one-half hour consecutively on the VDT

on a daily basis, must receive eye exams. In

Britain, the Health and Safety Executive recognizes that “the most satisfactory length of

pause can only be determined by consideration of the individual operator’s job ... , 148

and recommends that natural breaks be built

into jobs, with a mix of VDT and non-VDT

work; goals are provided to be used in labormanagement bargaining.

Guidelines.–The examples above point to

the problems of standards development, which

is both a scientific and apolitical process. Communications between the scientific and political communities are sometimes lagging and

mechanisms for encouraging more dialog are

needed.

‘ Japanese pro~’isional guidelines for T’II’I’ work calI for a

visual exam as part of the preemplol-ment medical exam, with

regular eye tests thereafter. J1’est German regulations sa}’ that

VDT workers should have eye exams m’er~. 5 years until age

45 and every 3 years thereafter. In France, two regulations

stipulate eye exams and special medical surxwillance for J’D’I’

users. But Great Britain does not recognize the need for ~isual

standards for VDT usage ‘‘which are an~. different from other

clerical work. ”

“TWO Swedish standards call for periodic intermissions

without specifying length or frequency?’: ,J apan pro~’isiona]

guidelines call for at least a 10-15 minute hreak after each hour

of VDT work.

‘‘ Ordinance Concerning 11’ork M?th Computt’r Displa.~’s,

translated b~’ Dr. Olo\’ Ostberg. This ordinance has not gone

into effect yet.

“Great Britain, Iiealth and Safety Executive, I’isual Displa~’ [)nit.s (I,ondon: Her Majest?,’s Stationar?T Office, 1983),

p. 1 :?.
162 ● Automation of America Offices

An alternative to mandated standards is the

development of guidelines articulating goals.

Both Sweden and Japan have established goals

for workstation design. In Japan, these are

wholly voluntary; in Sweden the guidelines are

presented as the government’s position and

are used in collective bargaining. Guidelines

recognize the variability yin the way office technologies can be implemented. They can be

established within the broader context of an

institutionalized change process. In some countries this is environmental legislation; 149 for

example, the Work Environment Act of Norway (1977) says, “An effort shall be made to

avoid monotonous repetitive jobs and jobs

which are determined by a machine . . . to such

an extent that the worker is prevented from

altering his rate of working. ” Such acts give

those involved in the change process a national

policy against which to evaluate their efforts.

Such goals and guidelines are only as effective as the commitment on the part of employers and employees to cooperatively achieve

them, and on the part of government to monitor and actively encourage their progress.

Research Needs

Congressional hearings have addressed the

issue of possible hazards of VDT work,150 and

much has been written on the subject, but

workers still wonder if new technology is dangerous. A possible public policy response is

to encourage research on various illness and

disease outcomes associated with the computer

mediation of work, both to answer the questions

in the minds of the public and to demonstrate

..— ... —-—

“

L

’Federal Republic of Germany: The Works Constitution

Act of 1972; The Netherlands: Working Environment Act of

1980; Norway: Work Environment Act of 1977 (also known

as the Act Respecting Workers’ Protection and the Working

Environment); Sweden: Working Environment Act of 1974; Denmark: Act Respecting the Working Environment; German Democratic Republic: Labour Code as Amended June 1977, Thes{~

acts deal with all working conditions, including office automation.

“’’U.S. Congress, Committee on Science and Technology,

Subcommittee on Investigations and Oversight, Potential

Health Effects of VDT Term”nals and Ra&”ofrequency Heaters

and Sealers, 97th Cong., 2d. sess., May 12-13, 1981. U.S. Congress, Committee on Education and Labor, Subcommittee on

Health and Safety, OSHA Oversight: Video Display Term”-

nals in the Workplace, 98th Cong., 2d sess., 1984.

the feasibility y of using new office technologies

as both a public health and a productivity tool.

The OSHA Act (section 20) mandates continued research and demonstration projects

exploring emerging problems including psychological factors (such as stress) created by

new technologies. Office automation is one

technological change with such a broad exposure that Congress may wish to insist that

the Department of Health and Human Services put high priority on investigating the

health and safety issues, demonstrating practices to reduce any potential effects, and disseminating such information.

There is a need for at least three directions

in the research. The first is to follow office

workers over time to develop risk estimates

of the relative contribution of office automation to the natural history of a disease, focusing on those populations at greatest risk today

(clerical and technical workers), and also considering the changes in the work of managers

and professionals. This field research should

be complemented by lab research to test relationships between working conditions and biological processes.

The second is to define the appropriate measures of the physical conditions of work. Field

evidence that compares objective measures of

the physical environment to subjective measures of the quality of worklife is limited. The

tools for measurement must be sharpened and

refined to assess the many subtle causes and

outcomes characteristic of office work. If it

could be demonstrated that subjective measures are valid indicators of the physical environment and discriminate the various health,

performance and job attitudes, less costly

evaluations of the work environment would

be possible.

Third, intervention and field evaluation studies are needed to verify claims that changes

in ergonomic or other working conditions can

improve worker productivity and reduce health

problems. These efforts should focus on high

risk groups of office workers or identify high

risk working conditions and develop modification strategies.
Ch. 5—Office Automation and the Quality of Worklife ● 163

— . .

The Health Promotion and Disease Prevention Amendments of 1984, which establish research centers for disease prevention and

health promotion across the country, administered by the Centers for Disease Control.

These centers could conduct the research projects mentioned above.

Finally, it is important to know the true extent of the problem. How prevalent are poor

working conditions? Section 20(a)(7) of the

OSHA Act stipulates that the Department of

Health and Human Services conduct industrywide studies of the effects of chronic low-level

exposures on the health of workers. This need

for reliable data also points to a need for a

centralized data collection system for monitoring the emerging problems. There is now

no single source of this data. The current industry and occupational surveillance systems

are disparate and difficult to link together. In

testimony before Congress the Assistant Surgeon General noted:

The activities do not provide a comprehensive epidemiologic surveillance of occupational diseases and injuries in the United

States . . . Unless our efforts are targeted

toward comprehensive data collection and

synthesis, the confusion will only grow worse. 151

The current data collection system at the

Bureau of Labor Statistics (BLS) is not able

to identify the extent of office automation in

white-collar occupations. There is a need to

develop not only reliable indicators of national

trends in morbidity, but also broad national

descriptions of those working conditions likely

to place the worker at highest risk. The Job

Training Partnership Act of 1982, Section

462(b) states: “the Secretary shall maintain

descriptions of job duties, training and education requirements, working conditions, and

characteristics of occupations. There is a need

to further refine the definitions used in the

Dictionary of Occupational Titles to reflect the

current changes in the workplace. An early

r

] Assistant Surgeon General J. Donald Mdlar, cited in Occupational Iflness Data Collection: Fragmented, Unreliable, and

Sevent-y Years Behind Communicable Disease Surveillance, U.S.

Congress, Committee on Government Operations, House Report 98-1144 (Washington, DC: U.S. Government Printing Office, 1984).

warning system could be developed by linking these data sources. 152 This would allow researchers and policy makers to estimate the

relative severity of problems among different

classes of workers.

Legislation recently introduced into the

House of Representatives would establish an

early warning system to identify workers at

an increased risk for occupational disease (H.R.

1309). This bill could be amended to include

language establishing a national morbidity surveillance system for the development of chronic

diseases related to technological changes.

Labor-Management Relations and

Office Automation

As has been pointed out, one strategy for

improving quality of worklife is through standards development, and a second is the setting

of goals or objectives, incorporated in public

or private sector guidelines. Another way to

work toward goal-directed change is through

collective bargaining. In Europe, there is much

emphasis on involving worker representatives

in office automation planning. In some countries there is a national or local work council

to which industry supplies information about

office automation plans. This creates the framework for monitoring how well organizations

are moving toward established goals, minimizing the need for government enforcement. 153

This process of involving workers in technology planning is part of a process called codetermination, a phrase that has gained some

popularity in this country.

While the legal right to be kept informed

about technological change has not been ex-

— — —

‘ “For the importance of linking databases to inform policymakers, and current impediments see, Legal and A dministra -

tive Impediments to the Conduct of Epidemiologic Research,

Task Force on En~ironmental Cancer and Heart and I,ung Disease, 1984.

1 ~ Federal Republic of Germany: Works Constitution Act of

1972; The Netherlands: Works Council Act of 1979; Norwal’:

Work Environment ,4ct of 1977; United Kingdom: Emplo~-

ment Protection Act of 1975; France: Act No. 82-915 of Oct.

28, 1982 and Act No. 82-689 of Aug. 4, 1982; Sweden: Act Representing Co-Determination of W’ork, 1976. For further detail

see Automation, Il”ork Organization, and Occupational Stress

(Geneva: International I.abour organization, ]984).
164 ● Automation of America Offices

tended to American workers, the National Labor-Management Relations Act guarantees the

right to bargain collectively with management.

Thus rather than intervening directly in office automation related quality of worklifc

problems, the Federal government can choose

to leave this to industry self-regulation, judicial decisions, and labor-management relations,

with National Labor Relations Board interventions when they are called for.

Collective bargaining could function as a forum for resolving quality of worklife issues

related to office automation. 154 The National

Labor Relations Act (NLRA) established collective bargaining to reduce the need for government regulation by providing bargaining

power to all parties.’” But the ability to use

collective bargaining as an avenue for discussion of stress, health, and ergonomic problems

surrounding office automation is limited by

the low level of participation of office workers

in collective bargaining units.

Fair representation in this process also depends on judicial decisions and National La-n

—— .

“’’There are other mechanisms through which workers can

participate in organizational decisionrnaking about technologiczd

change, but they are specific to an organization or industry.

There has been, for example, great interest in the Japanese

system of quality control circles. One observer notes: “Predecision joint consultation to solve the problems of manpower

and employment due to drastic technological changes developed around 1960, and . . . built up to become a basic part of

the later Japanese industrial relations. . . . This practice often

takes the place of collective bargaining in Japanese industry.

Akihiro Ishikawa, “Microelectronics and Japanese Industrial

Relations, ” Microprocessors, Manpower, and Society, Malcom

Warner (cd. ) (New York: St. Martin’s Press, 1984).

In Germany, the development of Work Councils at the local

shop-floor level came after World War II. These councils are

separate from unions in Germany and make many decisions

at the local shop-floor level. These alternatives to collective

bargaining never developed in the United States to any signif: -

cant degree.

1“’NLRA gives employees the right to organize and join a

union. At least 30 percent of the employees of an organization

must petition NLRB to have an election, and to win certificz,-

tion as a bargaining representative the union must win the votes

of a majority of the employees. Once the union is certified, the

employer is obligated to enter into collective bargaining over

wages, hours, and other terms and conditions of employment

to develop a contractual agreement, which typically will last

1 to 3 years. NLRB does not oversee specific contract terms,

but can be asked to intervene if either party does not act in

good faith. Any worker has the right to file an unfair labor

practice char= if she believes constraint, coercion, or discrim; -

nation has been used.

bor Relations Board (NLRB) decisions about

the scope of the law and whether a series of

acts and amendments designed to deal primarily with blue-collar occupations applies equally

well to white-collar occupations. A complicating factor is that in white-collar work, distinctions between management and labor tend to

be blurred. In recent cases over whether a

group of workers has the right to organize,

the courts have been confronted with problems of determining whether professionals are

workers or part of management, and who

makes decisions for the employ er.156 As office

automation leads to task bundling, the distinctions between management and workers

will blur further. A recent Supreme Court

decision reemphasized earlier questioning of

the intent of Congress in several sections of

NLRA:

157 was the intent to prohibit certain

types of collective bargaining over technological change? Current laws may require clarification in this regard.

While some labor contracts contain clauses

concerning automation, negotiation about the

decision to automate is not construed as mandatory by either NLRB or the courts. However, it is also not clear that management has

an absolute right to automate. The employer

does have the right to determine equipment

needs and the size of the work force, and can

change the nature and scope of the business,

but only if it does not affect contract terms

and conditions of employment. Technology

bargaining has become a focus of the collective bargaining process and the extent of employee rights and employer prerogatives is

decided on a case-by-case basis by NLRB and

the courts.

—

“’Marina Angel, “Professionals and Unionization, ” Minnesota Law Review, vol. 166, 1982, pp. 383-457.

‘“In NLRA v. International Longshoremen Association,

AFL-CIO, et al. (Case No. 84-861, June 27, 1985), the court

said “The only question thus to be decided . . . is whether Congress meant, in enacting Sec. 8(b)(4)(B) and 8(e) . . . to prevent

this kind of labor-management arrangement designed to forestall possible adverse effects upon workers arising from changing technology. ”
Ch. 5—Office Automation and the Quality of Worklife ● 165

—.—

The strategy of using collective bargaining

for addressing quality of worklife issues related to office automation is limited both by

the relatively small number of office workers

covered by union agreements and by the nature of the process; both topics are addressed

below.

White Collar Unions and

Worker Representation

According to BLS statistics, only 19 percent of all U.S. workers belong to labor unions and among office workers the level of unionization is much lower. About 14 percent of

clerical workers belong to unions and about

17 percent are in bargaining units covered by

union contracts. 158 Professional specialty workers have a higher level of unionization, 23 percent, but this reflects the large number of

teachers belonging to unions or professional

associations. Only 6 percent of executive, administrative, and managerial workers belong

to unions. }59

Unionization of office workers tends to follow industry lines; in industries where manufacturing workers are highly organized (see

table 5-12) they are more likely to belong to

unions than in other industries, such as the

insurance industry, where office automation

has been heavily adopted. The figures show

levels of union membership for broad industry categories; the first two rows include most

office workers. 160 It has traditionally been difficult for unions to organize office workers,

primarily because of their close relationship

with management and identification with the

middle class. In every occupational category,

the number of workers covered by a union or

‘Bargaining units cotrer all workers whether or not the~’

belong to the union.

‘Paul 0, Flaim, ‘‘ l~ew Data on Union Members and Their

I+; arnings, to be published in ?tfonthi.~’ Labor l?e~.iew.

‘ ‘Office workers are represented by a large number of unions including the Communications W’orkers of America, Office and Professional Employees (OPE I U], the Newspaper Guild,

the United Food and Commercial Workers, the Service I+~mployees Internat~onal Union (SEIU), American Federation of

(jovermnent I+; mployees (A FGI?), American Federation of State,

County, and hlunicipal Employees (A FSCME~), and others. District 925 is a new nationwide office workers union formed by

SE IU and Nine to Five: the National Association of Working

Women, in 1981.

employee association contract decreased slightly

from 1983 to 1984 (see figure 5-4).

The influx of women into clerical jobs may

have retarded unionization,’” because they

were a ready supply of low-paid workers, and

have historically been slower to join unions.

It has been suggested however that the changes

in the office workplace brought on by office

automation will increase the level of unionization among clerical workers, in those places

where office work is becoming routinized and

more like factory work. Alternatively, office

automation can improve jobs; if unions can

present themselves as mechanisms for ensuring these improvements, they may have greater

appeal to office workers.

A policy question to be considered then is

whether the Federal Government should take

steps to encourage technology-related bargaining in labor-management negotiations, and also

encourage other mechanisms to improve the opportunity for office workers to be represented

in discussions about office automation.

Technology Bargaining

Traditional subjects for collective bargaining have included wages, fringe benefits, and

hours. Increasingly unions are also dealing

with questions of health and safety, electronic

monitoring, and job security. Technological

change is also a major issue, but technology

is a difficult subject for collective bargaining.

One recent survey found technological change

provisions present in fewer than 20 percent

of current agreements.162 Labor organizations

can seek to deal with technological change issues by trying to influence: 1) the introduction of new technology per se; 2) the changing

nature of the jobs; 3) changes in skills requirements or status; or 4) work force reductions.

The choice of what technology to use (for

manufacturing or for office work) has traditionally belonged to management, and many

“’Roberta Goldberg, Organizing &’omen Office Workers:

Dissatisfaction, Consciousness, and Action (New York: Praeger Publishers, 1983).

“-Cited in Km’in Murphy, Technolo~”cal (’hange Clauses in

Coilectitre Bargaining Agreements, Department for Professional

Employees, AFI.-CI(), Publication #81-2, August 1982, p. 5.
766 Automation of America’s Offices —

Table 5-13.—Union Membership by Industry and Occupation

—

Industry

Transportation, Financial ~

communication, insurance,

Occupation Totala Mining Construction Manufacturing utlities Trade real estate Service Government

All occupations .156 17.9 24.3 26.5 396 82 2,7 - 72 359

Management/professional specialist 52 1.7 86 40 11 1 18 17 67 381

Technicians/ sales/administrative 80 3.3 2,9 10.4 34.8 6.6 22 5.1 302

Service 87 (b) (b) 352 490 44 12,4 86 394

Operator/fabricator/ laborer 33.6 32.9 25,7 392 471 204 (b) 11 3 362

aTb~ totals j“~l”d~ agriculture, fOreSrw, and fishery occupations which are not listed separately. Thts number includes Private sector union membership, excluding

government membership

bThe data do not meet publication standards

SOURCE Larry T Adams, “Changing Employment Patterns of Organized Workers, ” Month/y Labor Rewew, February 1985 pp 25-31, uses data from Current Population

Survey, Bureau of Labor Statistics

Figure 5-4.—Employed Wage and Salary Workers Covered by a Union or Employee Association Contract in 1983.84

Executive, administrative, 1 ,

& manager I

Professional

Technicians

Sales

Administrative &

clerical support

1983 1984

0 5 10 15 20 25 30 35

Percent of work force

1

SOURCE. Paul O Flatm, “New Data on Unton Members and Their Earnings, ” 10 be publlshed In the Month/y Labor Rewew

labor agreements include a “management

rights clause’ that gives management sole authority over “processes and types of machinery and equipment to be used, types of products to be manufactured, quality of material

and workmanship required, selling prices of

products . . . 163

..————— -

‘

h

’ Murphy, op. cit., p. 5.

NLRA does not specifically identify technology as a subject for the bargaining process. There has been no definitive decision on

whether or not management has a duty to bargain about implementation of new technology.

In the past, the NLRB has:

. . . shown a willingness to extend the duty to

bargain over the introduction of technological change to the decision making stage. The
Ch. 5—Office Automation and the Quality of Worklife . 167

courts have tended to restrict the duty, requiring only that the employer bargain with

labor over the effects of its unilateral decisions . . . 164

In recent years, both the NKRB and the Supreme Court have tended to favor management prerogative to effect unilateral change.

Yet, a recent Supreme Court decision has partially countered this trend. In a decision regarding the longshoremen, the Supreme Court

ruled that:

Elimination of work in the sense that it is

made unnecessary by innovation is not of itself a reason to condemn work preservation

agreements . . . ; to the contrary, such elimination provides the very premise for such

agreements. 165

Modified forms of the management rights

clause have given the union or the employees

right to advance notice of technological change

and in some cases the right to consultation

in the change. While there is no single blueprint, advance notice and joint consultation

seem to be the hallmarks of building a cooperative dialog between labor and management;

they reduce opposition and resistance to the

change. 166 The Communications Workers of

America (CWA), in its agreements with AT&T

and the Bell operating companies, has negotiated the right to advanced notice. 167

Consultation might in rare cases mean participation in the planning and implementation

of technological change, but more often it

means the right to negotiate about the adjustment mechanisms that will accompany the

change, for example, layoffs or retraining.

‘ ‘Nicholas A. Ashford, “The Impact of Office Automation

cm the Qualit>r of W’orklife: Policy I replications, paper presented at the Office of Technolo~ Assessment S~’mposium

on the Impacts of Office Automation and Computer- hlediated

Mrork on the Quality of l~rorklife, Dec. 10-12, 1984, p. 30,

“ ~’Vationai Labor Relations Board v. National Longshoremen Assn., op. cit. .

“ Ste~en Deutsch, ‘ ‘Technological Change and Laborhlanagement Relations, ” draft report to the Bureau of LaborManagement Relations and Cooperati~e Prograrm, Department

of I,abor, 19/i5; used with permission.

‘ Dwight 13. Dayis, “\\’orkplace High Tech Spurs Retraining El fforts, ” Iiigh Technology, November 1984, pp. 60-62.

In Europe, advance notice and the provision

of information are usually the first steps in

collective bargaining agreements. 168 Advance

notice typically means that management must

give the workers and their representatives

enough time to consult, negotiate, and prepare

for the changes. Implementation of the new

technology can be made contingent on a collective bargaining agreement. Some agreements specify that the employee be involved

in any job redesign.169

Close cooperation of unions and management in planning automation systems is rare.

The NLRA precludes any person acting in the

interest of the employer from being a member

of the union. ’70 Historically, this has meant

that supervisors were excluded. Therefore, if

decisions of the planning of technological change

are construed to be employer or managerial

decisions, union members may be precluded

from actively participating in some stages of

the decisionmaking.

One policy question for Congress to consider

is whether the NLRA needs revision so that the

traditional boundaries and relationship between

labor and management does not prevent a cooperative planning process.

Cooperative planning is not easy to achieve.

Union leaders may be uninformed about technological choices, long-term company, plans or

industry conditions. Management decisions

may be made at the national headquarters

while labor negotiations may take place on a

regional basis. Even in Norway, where whitecollar unionization is high and where law requires management to inform unions about

———-—

“ ’

h

Examples of the collective bargaining agreements are

provided in i4utomation, }i’ork Organization and Stress, op.

cit., 1984.

‘

h

’’ For example: “The employees shall, individuall}~ or in

groups, be given proper information . . about condi~ions at

the workplace that affect their own job . . . The employees shall

be given an opportunit~’ to take part in designing their o w n

job situations as well as in the work of change and development that affects their jobs. Agreement on Efficienc~’ and

Participation SAF-I.OPTK. Swedish I?mpio.\’er Confederation (Stockholm: Andren & Helm, 1982).

‘“f’ Recently, in the case Yeshiva University v. The NLRB,

the Supreme Court ruled that faculty members were managerial

employees and therefore not entitled to organize under the

NLRA, see NLRB v. Yeshiva Univ., 444 U.S. 672 (1980).
168 ● Automation of America Offices

— .

industry plans and conditions, actual participation of unions in technological planning is

rare. The process of alternating cooperation,

conflict, and negotiation requires a large

commitment of time and resources from the

union. 171

Several recent labor-management agreements

have centered around quality of worklife issues related to VDT use. In late 1984, claims

processors at Equitable Life Assurance Company became members of District 925 of SEIU

after a 3-year long effort. Points covered in

the contract include requirements for detachable keyboards, adjustable chairs, an additional rest break from VDT work, and (in some

cases) transfers to non-VDT work for pregnant

workers. 172 One strongly worded agreement

seeks to prevent the routinization of work

through technological change. The contract

between District 925 and a legal services organization states that:

. , . [t]he Employer recognizes that as a general matter the routinization of the secretarial profession through the introduction of new

technological changes, such as mag cards, is

undesirable, and the Employer has no present

intention of doing S0.173

The problem of electronic monitoring has

drawn the attention of at least 30 unions, many

of which represent office workers. Several, including the International Federation of Clerical and Technical Employees and the AFLCIO, have adopted the position that “no VDT

monitoring’ clauses should be included in contracts, but thus far, no contracts have prohibited monitoring. CWA has won contract

language providing that electronic monitoring will be used for training and not for discipline. The SE I U-Equitable contract provides

that employees will be given full information

about the monitoring system, access to their

—-

‘ U. Briefs, C. Ciborra, and L. Schneider (eds. ), Svstem~:

Design For, Writh and B-v the [Jsers (Amsterdam: Nor-th Ho]

land Publishers, 1983).

“’Stephanie K. Walter, “A VDT Victory at Equitable Life

Dents the Anti-Union Armor, Management Technology, Jan

ll~y 1985, pp. 6-8.

‘ ‘Ibid.

own records, and the right to file a grievance

if they believe their record is inaccurate.174

Some union contracts have focused on new

job classifications and higher pay for new skills

in office automation. AFSCME contracts with

the cities of Los Angeles anci New York require wage increases when word processing

systems are introduced. The contract between

Equitable and District 925 also modifies the

“piece rate” pay system previously used for

VDT workers.175The CWA contract with AT&T

and the Bell operating companies established

quality of worklife committees to deal with

the retraining issue, and workers are notified

in advance when a job will end so they can

be retrained. ’7’ An agreement between OPEIUand the New York Stock Exchange binds the

employer to train displaced employees ‘‘for an

available job resulting from such technological change or for other jobs which the producer

has available. . . .“177 In some cases, contracts

have specified that some form of income maintenance will be available to employees who

must be moved to lower paying jobs as a result of automation.178

Few unions have been able to negotiate a

contract that guarantees no layoffs as a result of technological change, but some contracts have set forth who can be laid off and

what severance pay, relocation benefits, or rehiring preference will be given to laid-off workers. However, the recent Supreme Court decision in favor of primary work preservation for

longshoremen does uphold the right of the employees to keep secure their work:

When the objective of an agreement and its

enforcement is so clearly one of work preservation as is the one involved here, the lawfulness of the agreement under Sees. 8(b)(4)(B)

and 8(e) is secure, absent some other evidence

of secondary purpose. 179

“Alan Westin, Privac-v Issues in the ,tlonitoring of Emplo-vee Work on VDTS in the Office Environment: Practices,

Interests, and Po)ic.v Choims, prepared for Office of Technology Assessment, December 1984, pp. 119-125.

‘

-rWalter, op. cit.

‘ ‘Davis, op. cit.

] Murphy, op. cit., p. 14.

“Ibid.

‘

-

’’Supreme Court, op. cit., 1985.
Chapter 6

Confidentiality and Security Issues

With Office Automation
—

Contents

Privacy, Confidentiality, and Security–Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Office and Data Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Period 1960-78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Political and Legislative Climate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Third Phase of Office Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Handling of Client Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Security and Confidentiality Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Privacy Issues in Work Monitoring. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Security and Confidentiality in Automated Public Offices . . . . . . . . . . . . . . . . . . . . . . . .

Government Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Special Concern About Employee Privacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accidental Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Comparisons With the Private Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Policy Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

171

172

174

175

178

178

179

181

182

183

183

184

185

185
Chapter 6

Confidentiality and Security Issues

With Office Automation

Protection of privacy or confidentiality in

recordkeeping (and security measures to accomplish such protection) is a concern that has

continued from the constitutional era of quill,

pen, and copybook through the invention of

the telegraph, telephone, typewriter, microphone, duplicating machine, large-scale manual filing systems, teletype, electric accounting machinery (EAM), and first-, second-, and

‘This chapter as a whole draws on a report to OTA, Privacy and Security Issues in the Use of Persona) Information

About Clients and Customers on Micro and Persona) Computers

Used in office Automation, prepared by The Educational Fund

for Individual Rights, Alan Westin and I.ance Hoffman, principal investigators, 1985.

third-generation computers. How much data

about individuals and groups is needed? Who

will use the data? How does one determine

what information about oneself should or must

be made available to others? What uses will

be made of the information?2 The third phase

of office automation—small computers linked

or networked—further raises these questions,

as the ubiquitous placement of computing devices in offices gives more people more opportunities to access records.

‘Alan Westin, “New Issues of Computer Privacy in the

Eighties, ” Proceedings of ZFIPS 11’or]d Congress, Paris, France,

1983.

PRIVACY, CONFIDENTIALITY, AND SECURITY–DEFINITIONS

Since analysts from various fields and disciplines write about privacy and security issues, there are differences in the use of terms

and concepts by these practitioners. In the

broadest sense, privacy is a set of values dealing with individuality, autonomy, personal

space, and personal information.3 Privacy deals

with the rights of an individual to limit others’

access to information about oneself, and the

social or legal rules by which such claims are

accepted or rejected in particular contexts.

Viewed as a desirable attribute of the data and

the way it is handled, this is better termed

“confidentiality’ ‘—the protection of privacy.

Security deals with a data-collector’s capacity to safeguard the existence and integrity

of the data it has collected and to provide the

proper degree of confidentiality as set by organizational or legal policy.

‘For a general discussion of privacy and how it is defined

and used in policy see, Priscilla M, Regan, “Personal Information Policies in the United States and Britain: The Dilemma

of Implementation Considerations, Journal of Public Poiiq’,

vol. 4, No. 1, 1984, pp. 19-38.

Confidentiality and security are related but

not synonymous. Confidentiality addresses the

use of data about individuals. Security is concerned with the accidental or intentional theft,

modification, or destruction of data. Breaches

of security may compromise privacy; for example, the theft of a mailing list stored on magnetic tape is a result of poor security and may

compromise the privacy of individuals on that

list. The breaches of security may also be unrelated to privacy or confidentiality.4

Respect for privacy in office automation involves three components:

1. Data collection—what personal information is relevant, necessary, and socially

acceptable for an organization to collect

to carry out its missions?

2. Protection—when should an organization

record and preserve identified personal

data, who should have access to it within

‘A representative discussion by EDP experts of the relation between privacy and security considerations appears in

Alexander Gaydasch, Jr., Principles of EDP ilfanagement

(Reston, VA: Reston Publishing Co., 1982).

171
172 ● Automation of America’s Offices

the collecting organization, and under

what circumstances can it be released outside the organization to third parties?

3. Notice and access–when can the subject

of data collection know that an identified

record has been created about him or her,

have the right to examine the record, and

be able to challenge the accuracy, completeness, or proper use being made of the

record?

Survey evidence suggests that American:~’

concerns about privacy are rising. A Louis

Harris Survey indicated that during the period

of 1970-78 American concern about the hvi~-

sion of privacy rose from about 33 to 64 percent. 5 This public concern was a factor in bringing about Federal privacy legislation. There

was also a shift in employee attitudes about

the prerogatives and responsibilities of employers with regard to employee data, adding

further impetus to Federal policy activity. By

‘

> The Dimensions of Privacvv: A National Opinion Research

Survey of Attitudes Toward Privac~r, conducted for Sentry I 1-

surance by Louis Harris & Associates and Alan Westin, 1973.

1983, another survey by Louis Harris6 indicated that the proportion of the public concerned with privacy had increased further,

from 64 to 77 percent.

This chapter is concerned with both confidentiality and security issues raised as more

and more organizations introduce new office

technologies, in both the private and public

sectors. While privacy or confidentiality and

security are interrelated, this chapter first discusses confidentiality and privacy issues, then

security issues in the protection of personal

and client data.7

‘Louis Harris & Associates, Inc., The lioad After 1984: The

Impact of Technology on Society-A Nationwide Survey of the

Public and Its Leaders on the New Technology and Its Consequences for American Life. Harris study No. 832033, 1984.

“Confidentiality and security of data involved in off-shore

sourcing of data-entry work are discussed in ch. 8. Issues of

software security are being addressed in another OTA report,

intellectual Propertey Rights in an Age of Electronics and Information (winter 1985). Issues related to the security of Federal information systems are being covered in the OTA report,

implications of Federal Government Information 7’echnolog.y

(winter 1985). Privacy issues in electronic surveillance are covered in Electronic Surveillance and Civil I.iberties, OTA-CIT293 (Washington, DC: U.S. Government Printing Office, October 1985).

OFFICE AND DATA PROTECTION

Much of the rising concern about confidentiality and security has been occasioned boy

the advent of computers and large data banks,

and these concerns have repeatedly been subjects of congressional action, resulting in new

laws. 8 End-user computing, in which many peo

ple may access and use organizational databases, raises new questions about how claims

to privacy can be respected and the confider~-

tiality of information be assured. In a recent

survey of privacy and security professionals,

almost half, 47 percent, believed that as a result of the third phase of office automation

‘In the mid-1960s, a Senate investigation was held to exanline the kinds and amounts of personal information collected

by the Federal Government. This investigation is considered

by many to be the beginnings of the national expression c~f

concern about the collection and use of computerized personal

records systems. (U.S. Congress, Senate Committee on the Judiciary, Subcommittee on Administrative Practice and Procedures, Government Dossier) (Washington, DC: U.S. Goverrlment Printing Office, 1967).

there is a trend for broader or more detailed

personal information to be collected.9 Concurrently, this proliferation of computers is leading to decreasing compliance by managers with

government-privacy regulations (45 percent).

Networking, computer-based messaging systems and electronic mail will exacerbate these

problems still further as personnel data can

be circulated among more people.

Computer crime legislation passed in the

98th Congress established penalties for indi-

‘Westin and Hoffman, op. cit., 1985. This survey was not

a representative sample of all types of organizations affected

by office automation. Rather, the participants were chosen based

on their reputation in computer and business circles as active,

advanced, and unusually skillfull users of office-systems technology and as leaders in dealing with the employee-relations

and organizational change aspects of new office technologies.

However, there is a paucity of quantitative data on the extent

of the privacy and security problems. Thus, the information

reported from this survey should be treated as indicators of

problem areas and not as indicators of the extent of the problem,
Ch. 6—Confidentiality and Security Issues With Office Automation ● 173

viduals convicted of theft, fraud and abuse

associated with Federal computer systems.

The first indictment and conviction under the

new Computer Crime Act involved a person

convicted of misrepresenting himself as a valid

user of the computer system, establishing a

super user code allowing future access to the

computer he worked on and other systems to

which it was linked.

As organizations rely more and more on

computer-based information to conduct their

business and to keep track of their personnel,

the privacy rights of clients and employees

must be considered. Coupled with the fact that

the purchase and installation of microcomputer systems is often haphazard and uncontrolled within organizations, an appropriate

degree of confidentiality is more difficult to

assure when access to data is widely distributed. Personal information is required to effectively run a business, and with telecommunications linkages between computers and

between organizations information can be collected in greater quantity and shared more easily. Client information can be processed at the

client’s workplace and sent via phone lines to

the organization’s computer system for processing. Office automation also raises questions

about traditional security measures in central

electronic data processing (EDP) environments.

The purchase and use of computers in office

automation is not controlled by a single department. Once microcomputers are linked

with larger computer systems, any individual

on the system has the potential for unlimited

access and distribution of information.

Before the recent wave of office automation,

the principle users of a computer system were

professionals, and the two chief dangers were

theft of funds or data by employees, and that

of novices external to the organization breaking into the system. The dispersal of computers

throughout an organization has extended accessibility to noncomputer-professionals. The

computer professional’s sociocultural system

had within it values, beliefs, and concerns

about privacy and security of information.

‘Counterfeit Access De\’ice and Computer Fraud and

Abuse Act of 1 9X4, Public I.aw ‘38-473.

Today, people who never participated in the

sociocultural system of EDP environments,

who have not been informed about the fine

points of the law and ethics of protecting confidentiality or assuring data security, have

easy access to an organization’s databases.

Violations can result from carelessness as well

as through intent.

This chapter differentiates current office

automation issues from the confidentiality and

security problems that have been present in

many organizations for two decades as part

of an EDP system. This distinction between

centralized and end-user automation is probably transient and likely to disappear as offices

tie their small computers into the larger EDP

systems highly integrated information systems. The transient nature of current systems

is important for policy considerations later,

and the distinction is useful in discussing new

problems that arise with office automation.

Three developments in office automation are

central to confidentiality and security issues,

not only because they deal with the technological changes mentioned above, but with how

the

●

●

●

technology is procured and installed:

the arrival of stand-alone word processors

and text editors in the late 1970s, perceived as higher-order typing instruments

and generally procured and controlled by

office administration staffs or user departments;

the move to widespread professional microcomputers, now available at prices and

with features that allowed organizations

to procure them for stand-alone work, and

not only when linkage to on-line mainframes and minicomputers was involved.

Generally, these machines were ordered

by user departments; though often with

EDP-department guidance; and

the explosion of personal computers (PCs)

in the early 1980s, for professional, sales,

and executive use as stand-alone computing devices, and increasing linkage of such

PCs to minis and mainframes. PCs in most

organizations were ordered by individuals

or by user departments, with limited guidance or control by EDP departments or

central administrative service functions.
174 ● Automation of America’s Offices

Each of these developments fostered new

ways of carrying out office work. By 1984-85,

each of these three original types of stand-alone

terminal/software machinery were being linked

to minicomputers and mainframes. This building of communication between computers makes

possible access to central or distributed databases. In the survey of computer security professionals mentioned above, 64 percent believed

that the spread of electronic mail and messaging systems poses a real problem in maintaining confidentiality. The ability to download

(take data from) or upload (add data to) mainframe databases, using small computers, makes

it possible for any employee with access to the

building or computer to generate a file of personal information. Seventy-six percent of the

survey respondents felt the automated office

environment allowed more people physical access to workstations and disks as compared

to earlier waves of automation. Finally, the

interconnection of microcomputers allows the

exchange of data within units or across units

of the organizations, independent of mainframe

system controls.

The following quote demonstrates the capabilities of the convergence of the various office technologies:

In IBM we now have a world-wide network

of more than 1,500 mainframes and 200,000

terminals. Any user at any terminal can send

a message or a file to any other user. A user

at any of those more than 200,000 terminals

can connect to any application in any of those

1,500 systems. Programs and even entire applications spread spontaneously through the

network, usually without management direction or intent and often without management

understanding or knowledge. Employees can

access the network from their homes. Some

vendors and contractors use it . . . [DP] management did not plan it. They bought it and

built it but they were just as surprised as anyone else when they saw what ‘God had

wrought. ’11

“W.H. Murray, “Security Programs, Functions, and Concepts for the New Computer Economics, ” Proceedings of the

1 lth Annual Computer Security Conference (Northboro, MA:

Computer Security Institute, 1984).

THE PERIOD 1960-78

EDP systems made it possible for client data

to be:

●

●

●

●

●

collected and recorded more easily;

analyzed, compared, and collated more

fully;

distributed to or made accessible to more

people within the organization;

amalgamated with data on individuals obtained from other organizations having

computerized record systems; and

disseminated more widely, both in intraorganizational networks and in response

to specific demands from other organizations.

These capabilities made it possible to provide more customized and personal services

by business and government. They also raised

the possibility of greater aggregation of data--

computerized databases can break down the

vital compartments and boundaries that helped

keep client information confidential. This is

what the privacy-and-data banks debate of the

1970s was about.12

There were also several aspects of internal

organizational control in the 1960-78 era, before end-user computing, that provided the

framework for carrying out new privacy rules

that were developed:

● in the EDP era, small staffs of EDP

professionals ran the data centers and controlled access to automated files; and

 centralized security procedures of access

and audit were available to check (if necessary) that terminal users followed the

legal and organizational rules.

“For an early discussion of the debate see, U.S. Senate,

Committee on the Judiciary, Subcommittee on Constitutional

Rights, Federal Data Banks and Constitutional Rights, 1974.
Ch. 6—Confidentiality and Security Issues With Office Automation 175

— - — .

Computer-system security measures originally evolved from manual techniques for

physical security carried over from the electronic accounting machines of the 1950s. Usually physical security (locking up sensitive card

decks and tapes) was the prime technique. As

first and second generation batch processing

computer systems were introduced, followed

by remote terminals and third generation systems, computer security techniques became

more technological and sophisticated. Passwords

were used to restrict access to information

based on a user’s or terminal’s privileges or

on the type of function being performed. A

few systems, especially those involved in national defense, used cryptography or enciphering. Some systems provided other mechanisms

to assist proper authorization, most notably

the hardware rings provided by the GE/Honeywell machines of the late 1960s and early 1970s.

During this period, it was hard enough to get

a program to run at all on a given hardware

system, and security took a back seat to other

design criteria such as correctness, speed, cost,

and utility.

As third generation computer systems became more common in industry and government, the use of data within organizations

changed and networks were built up. Rather

than use one computer center, one or more systems could be accessed via user terminals. Indeed, commercial time-sharing networks grew

to service the needs of organizations without

the resources or inclination to start their own

networks. Minicomputers (minis) appeared,

but in contrast to today’s microcomputer systems, minis were generally still purchased and

operated by data processing specialists within

the organization.

At the same time, there was growing public

awareness of potential loss of privacy and problems of fairness or due process. Thus, the security of computer systems took on added importance and led to additional safeguards such

as logs, journaling, of important operations

and more specific policies with respect to computer security, as a means to guarantee confidentiality and accountability. However, the

most sensitive narrative information was still

not computerized at this time; it remained on

paper in manual files. Thus, most problems

involving personal data in the 1970s still were

associated with paper records. In the early

1980s, medical, banking, credit and employment information was placed in large databases, beginning the current rapid move to

store personal, employee, and client data

on-line.

The advent of commercial products to enhance computer security, such as the ACF2

access control package for IBM mainframes

and various vendors’ versions of the National

Bureau of Standards Data Encryption Standard had not yet been introduced. Leading manufacturers were starting to take seriously the

task of educating users about these issues. An

advance guard of computer practitioners were

becoming knowledgeable about computer security issues. “Second-generation” technological security issues (e.g., the idea of kernels in

software engineering)13 were just starting to

be investigated.

‘‘A security kernel is a small nuclear piece of the operating

system that controls access to other parts of the computer

system—either information or data. This nucleus itself must

be tamperproof so that its programs maj not be modified, allowing system operators to verify whether it has implemented

the systems security policy through the programs. See G.J.

Popek and C.S. Kline, “ Issues in Kernel Design, ” Ad~-ances

in Computer Seczmit.}r, Rein Turn (cd. ) (Dedham, MA: Artech

130use, Inc., 1981), pp. 139-144; and R.C. Summers, “An O\rerview of Computer Security, ” Il?ltf SJwtems Journal, vol. 23,

No. 4, pp. 309-325. This de~’elopment has been primarily in

the Department of Defense; there are no commercially a\ailable security kernels.

THE POLITICAL AND LEGISLATIVE CLIMATE

The response of American society to both ied, 14 By the late 1970s, a detailed latticework

the social change aspects of privacy protection and the computer-based handling of per- ‘See for example, J$’. H. YI’are, “ Information Systems Securit~r and Pri\’acy, ” (’mnmunications of the ,4(’11, ~ol. 27, No. sonal data by organizations has been well stud- 4, 1984, pp. 31.5-321,
176 ● Automation of America Offices

of laws, regulations, organizational policies,

and social expectations regarding privacy protection in EDP systems had been put into

place. Codes of “fair information practices”

were embodied in law or organizational standards to govern the collection, use, and release

of personal data on clients and customers, and

to make this process visible and accountable

to both data subjects and the public.

Laws and regulations were promulgated to

deal with privacy in particular fields of organizational recordkeeping-Federal agencies,

banking, insurance, health care, education,

credit-reporting, employment, law-enforcement,

etc. ” The earliest statute was the Fair Credit

Reporting Act of 1970 (15 U.S.C. 1681). This

act requires all credit investigating and report -

ing agencies such as banks and retail charge

card firms to make the records they collect

available to the subject. Furthermore, it provides procedures allowing the subject to correct the information. Finally, it only allows

disclosure to authorized customers. Since thi:s

statute, many more have been enacted providing protection policies for information

privacy.

The Crime Control Act of 1973 requires that

State criminal justice record keeping systems,

developed with Federal funds, ensure the privacy and security of the information collected.

The Privacy Act of 1974 (5 U.S.C. 552a) restricts the collection, use, and disclosure of

individually identifiable information by the

Federal Government. It gives the individual

rights to access the information and to correct it.

The Tax Reform Act of 1976 (26 U.S.C. 6103)

protects the confidentiality of personal tax information. It restricts disclosure of tax information for nontax purposes.

In furtherance of such laws, and in manly

areas where no legislation had yet been enacted,

—.—

1’Exampl=s would be the Federal Privacy Act of 1974 ( 5

U.S.C. 552a); the Federal Freedom of Information Act Amenc.-

ments of 1974, and similar “jurisdiction-wide” statutes in 12

States. At the statutory level, this is exemplified by the Fan---

ily and Educational Privacy Amendments of 1974 (20 U. S. C’.

12239), and by State medical, banking, insurance, and employeeprivacy legislation.

many private and public organizations developed “privacy codes” or “fair information practices standards” to govern their own handling

of client or employee personal data. The motives for such action were a blend of concern

to meet legitimate privacy concerns of clients

and employees; the desire to avoid the necessity of detailed legal regulation; and the judgment that fair-information-practices rules had

a generally positive effect on accuracy, completeness, and timeliness in the management

of automated data systems, and could be initiated without heavy costs in money or efficiency. A few corporations such as IBM, Bank

of America, and Control Data Corp. had also

developed employee privacy codes in the early

to middle 1970s, but most of the 10,000 large

private employers in the United States had

not.

By the time that end-user computing began

to add new dimensions to the handling of personal data in office work in the early 1980s,

there were still debates among privacy advocates as to whether the data collection and the

confidentiality aspects of privacy had been ade

quately dealt with, in what was coming to be

called the “first-generation” of privacy protection measures. In spite of the emphasis on

notice, challenge, and due process rights of

data subjects, and workable procedures for

strengthening confidentiality rules, critics argued that there had been too few limitations

on what was appropriate information to collect about people’s transactions and activities

in many sectors of business and government

life. They also argued that merging data from

different organizations about the same individual (e.g., in computer matching programs)

threatened to shatter basic confidentiality

standards.

There was also debate among informed observers and the media about whether the necessary machinery with which to enforce privacy rights had been created, and about other

questions—the implementation of the Federal

Privacy Act of 1974, the desirability of a continuing Privacy Commission or Privacy Ombudsman (as Canada and many European countries have), and U.S. Supreme Court rulings
Ch. 6—Confidentiality and Security Issues With Office Automation . 177 —

in matters of data collection by business and

government organizations.16

The report of the U.S. Privacy Protection

Study Commission in July 1977 urged new

laws and voluntary codes in the private sector. What followed was a new series of statutes that affected information privacy.

The Right to Financial Privacy Act of 1978

(12 U.S.C. 3401) limits the access of Federal

agencies to information about the customers

of financial institutions, by describing the procedures necessary to obtain that information.

It also provides bank customers other assurances of privacy about some aspects of the

bank records.

The Privacy Protection Act of 1980 (42 U.S.C.

2000aa) prohibits government agents from

conducting unannounced searches of press office and file records if no person in the office

is suspected of having committed a crime.

The Electronic Funds Transfer Act of 1980

states that any institution providing EFT or

other services must notify customers about

third party access to customer accounts.

The Debt Collection Act of 1982 (Public Law

97-365) establishes due process procedures

that Federal agencies must go through to release any information about bad debts to

credit bureaus.

The Cable Communications Policy Act of

1984 requires any cable service to inform the

subscriber of any personally identifiable information collected. They must inform the user

about how the information is to be used and

how long the information is maintained on record. If the information is disclosed, the individual must be informed and restrictions are

placed on how and to whom information is disclosed.

Only after the passage of new privacy legislation in 1978-82 protecting bank depositors,

‘There were debates over whether new systems or applications were covered by “first generation’ privacy measures; for

example, electronic funds transfer (EFT) systems, two-way cable systems, and Postal Service electronic-mail projects. There

was also concern that plans for large sophisticated computer

systems as replacements for older systems in the Federal Government might go forward without sufficient attention to

privacy risks, for example, the proposed FBI “Triple 1“ system for processing criminal history records, and the planned

IRS, Social Security, Secret Service, and Veterans Administration systems.

and State laws on insurance, employment, and

medical privacy did broad private sector institutionalization of privacy rules take place.

The establishment of organizational procedures and regulatory or judicial enforcement

of privacy was just becoming the norm when

end-user computing began to spread in the

early 1980s.

In the mid-1980s as office automation is

spreading, an extensive set of confidentiality protections for manual and EDP systems has been

put into place; but debate continues as to whether these protections are adequate in scope and

are being vigorously administered.

The laws above basically deal with rights

to confidentiality. Until recently, no Federal

law dealt specifically with sanctions against

the use of computers by individuals to commit a crime, or with trespassing by reading

private computer files.]’ In October 1984, Congress passed the Counterfeit Access Device

and Computer Fraud and Abuse Act of 1984,

which makes it a felony to access confidential

or restricted information related to national

security without authorization, and makes it

a misdemeanor for unauthorized persons to

access the data banks of financial institutions,

or to use, modify, destroy, or disclose information in a government computer.

There are of course many criminal laws that

can be used in prosecuting computer-related

crime, but there are problems in applying many

of the laws defining theft to cases where only

“virtual property” (nonphysical property) is

concerned. Thirty-three States now have computer crime laws, but some do not cover hackers

who penetrate systems for fun rather than

profit. ”

‘“The Privacy Act of 1974 (Public Law 93-579) and the

Crime Control Act of 1973 (Public Law 93-83, sec. 524(b)) are,

however, designed to prevent misuse of Federal records of all

kinds in ways that would violate the privacy of citizens.

“List provided by the National Center for Computer Crime

Data (Los Angeles) includes Alaska, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho,

Illinois, Iowa, Maryland, Massachusetts, Michigan, Minnesota.

Missouri, Montana. Ne\ada, New Mexico, North Carolina, North

Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South

Dakota, Tennessee, Utah, Virginia, Washington, Wisconsin,

and Wyoming.
178 Automation of America’s Offices —.

THE THIRD PHASE OF OFFICE AUTOMATION

The Handling of Client Data

Confidentiality in an organization with new

decentralized or networked office technologies

requires consideration of a number of new

factors:

Low-security or no-security physical environments in offices. Except for military, diplomatic, and a few private-sector settings that

operate in “highly sensitive data” modes, most

organizations have put microcomputers onto

desks in working areas that are open to passing fellow workers, service personnel, invited

visitors, or even the general public. Storage

of diskettes, location of printers, and other

peripheral equipment is also usually in unsecured environments.

More finished and relined information in office automation systems. In most organizations, word processors contain finished correspondence, memoranda, documents, charts,

and reports. These stored materials may contain sensitive personal information on clients,

proprietary data of the organization, information confidential to particular employees or

units, and data about terms of contracts and

other legal responsibilities. While much raw

data and some reports of this kind are in mainframe storage, the information in word processors or professional/executive microcomputers is generally more complete, revealing, and

easily found, because it includes explanatory

text.

More readily accessible information in office computer systems. An interloper, whether

an employee or someone from outside, who

seeks to extract sensitive data from the mainframe database generally has to know specialized mainframe software codes, as well as how

to deal with special security protections that

most organizations have built into mainframe

databases. With microcomputers, unskilled interlopers are more able to call up data on

screens, print out documents, or copy diskettes than they would be in EDP systems.

The mobility of microcomputers and their

data-storage media. Dumb terminals connected to mainframes are known to the system, and their uses are usually logged or monitored. Microcomputers can be moved around

within organizational offices without central

control or notice, and portable versions can

be taken home or on trips. Information is archived on floppy discs rather than magnetic

tapes.

Less sophisticated office automation users.

While 10 percent of organizational personnel

may have been using terminals in the middle

1970s, either in EDP units or as EDP-trained

operators in users’ departments, at least 25

to 35 percent of personnel in large organizations are probably using microcomputers

today, and eventually this may approach 100

percent. Typically, new users have not been

educated about confidentiality issues or security protections.

Uncontrolled channels of data communications. Electronic message systems, bulletin

boards, and microcomputer networks encourage users to send messages to everyone using

these systems or to create their own distribution lists. As a result, messages with confidential data can move around either anonymously,

or without control for their confidentiality.

Fraudulent memos can be circulated for political purposes without an easily traceable origin. Reproducing machines, and before them,

mimoegraph machines had the same effect, of

course; computers merely allow this communication to be done in the privacy and safety

of one’s own office or home. 19

Wide ability to add information to or copy

or extract information from corporate databases.

Controls over alteration of data or unauthorized access become critical.20 Microcomputers

can be used to attack the security of mainframe and mini data, and obtain confidential

client data improperly. This can in fact be done

from any terminal, including those developed

for mainframe use, but more understandable

This situation may seem trite, but a recent State supreme

court ruling stated that an employee’s privacy had been violated by an interoffice memorandum. “S,JC Outlines Rules on

E~mployer Rule in Workers’ Privacy, ” Boston Globe, July 7,

1984; as cited in Philip Adler, et al., “Employee Privacy: Legal

and Research Developments and Implications for Personnel

Administration, ” Sloan Management Review, winter 1985, pp.

13-22), In this case upheld by the U.S. Court of Appeals, First

Circuit on Aug. 6, 1984; the memorandum was on paper.

“’This does not address. the problem of unauthorized users

external to the organization accessing the databases. One commonly suggested procedure is the use of tiered passwords for

accessing the computer and then the particular volume or file

the information is stored in.
Ch. 6—Confidentiality and Security Issues With Office Automation 179

software instructions are expanding the number of persons able to probe password security, attempt unauthorized entry, or alter confidential data.

Little or no hardware or software security

protections. Because of the ways that word

processors and microcomputers entered office

work, there was neither a perceived necessity

or an assumed “market demand’ for built-in

terminal hardware protections such as locks

on the machines. Similarly, in buying or designing software for office systems, organizations have generally not specified audit trails,

cryptographic protections, and other measures

that could have been installed–though at

added costs.

Unpredictable individual and group behavior.

There is no way to predict with any assurance

how office employees and managers will use

these powerful new capacities. There will be

some conduct by insiders and outsiders arising out of the new opportunities in microcomputer use that pose risks, and this has to be

the perspective from which managers assess

risks to confidentiality and security.

Security and Confidentiality Issues

The potential vulnerabilities to client data

emerging in office automation can involve either new situations created by microcomputer

use, or can be extensions of familiar risks in

manual and EDP recordkeeping. The types of

potential end-user conduct that could violate

existing privacy standards are discussed below. ”

Data Collection

Microcomputers permit the creation of any

files or databases that the end user wishes to

maintain. Either without awareness of or in

deliberate disregard of privacy, end users may

I+; xamining such potential twlnerabilities in office automation follows the studies of EDP s~stems impact done by the

National Academy of Sciences in 1969-72; the HEW Ad\risory

Committee in 1972-73: and the U.S. Pri\acy Protection Study

Commission in 1975-77. Hopefully, the examination of potential office automation ~wlnerabilities can benefit from the experiences with risk-assessment and reality-testing that were

de~’eloped in 1969-77 EDP studies, as well as the practical experiences gained o~’er the past decade in administering the standards promulgated (for client data) as the ‘*first generation’ of

pri~ac?’ and securit?r rules.

put personal client information into “their”

files that violate laws, regulations, organizations rules, or ethical guidelines. If there is

no auditing or physical inspection of end-user

files, then management may be unaware of

such conduct, and suffer legal sanctions or

have the companies reputation compromised.

Confidentiality

End users may take client information from

central files and merge it or match it with other

client data in ways that violate privacy standards. Through electronic mail and message systems, end users may send confidential client

information inadvertently to those not entitled to have it, especially if “automatic” distribution lists are used.

Subject Notice and Access

Where end users create files improperly or

record confidential data they should not have

accessed, failure to inform clients that such

files have been created and might be used in

making decisions about clients could be a violation of several basic privacy laws (the Federal Privacy Act, State fair information practices acts, Fair Credit Reporting Act, State

insurance privacy acts, etc.), as well as the organizational rules of many banks, insurance

firms, brokerage houses, medical facilities, educational institutions, and other private organizations. Failure to provide opportunities for

individual clients or potential clients to examine and challenge these files would be a violation of such laws or rules.

It is critical to distinguish the privacy issues generated by the transition from manual

record systems to EDP systems, from those

of the current progression from centralized to

decentralized computing. The arrival of EDP

brought about revolutionary increases in two

areas: 1) data-collection capacities (reducing

costs and time constraints, magnifying dataanalysis capabilities, etc.); and 2) data-sharing

capacities (circulating personal data within and

between organizations). The response in terms

of privacy laws and organizational codes was:

1) to increase the visibility of organizational

activities affecting sensitive personal data
180 Automation of America Offices

(changing these from private “kitchen work’

to public notices and descriptions, with specific rights of data-subject inspection challenge); 2) to stipulate broad relevancy and social acceptability standards for data collection;

and 3) to provide rules and procedures for confidentiality or data sharing.

The use of microcomputers in the office has

the

●

●

●

foIlowing characteristics:

They do not significantly increase the

scope of data-collection capacities over existing EDP systems. However, because

of their ease of use or cost, data not entered into the mainframe system can now

be entered, potentially increasing the

quantity of data collected. This requires

managers to provide greater education

and oversight of users to see that they

know the limitations on data collection

set by law or code, and do not violate these

in “personalistic” data recording.

They do increase the risks of improper circulation of personal client (or personnel)

data within the organization and to outside organizations, threatening confidentiality, because they provide many more

employees with a tool for accessing the

records or information.

They do increase due process problems.

To the extent that stand-alone-diskettes

and off-line storage of personal client data

would not be known to data subjects, the

use of that data for decisionmaking could

not be challenged under privacy rules for

subject access.

Security

How to protect records from accidental or

deliberate destruction, loss, or theft is a security question. There are also differences between EDP and decentralized office automation. Surveys of private organizations show

general agreement that by the end of 1984

there were significant security issues in use

of microcomputers, not just for sensitive client and personnel data but also for general

proprietary business information, financial

data, national security information, and legally

sensitive information. These problems have

not been taken up yet by most top managements, and thus the policy directives and

budget authorizations necessary to address

this problem adequately have not existed in

most private-sector organizations. The major

problems developing with decentralized office

automation are:

Lack of clear identification of sensitive information. The basic requirement for sound

security is to identify information that is sensitive and needs special protection. Any effort

to protect all personal information in ordinary

business or government organizations would

be too costly and would virtually paralyze organizational programs. ’z

Failure to provide adequate physical security for machines and storage media. Many

microcomputers are not kept in locked rooms

and diskettes are often not kept in locked cabinets or desks. Easy physical access to such

microcomputer equipment poses real security

risks; for exampIe, diskettes can be copied on

another machine on or off the premises.

Failure to have key locks on terminals. Most

microcomputers do not have key locks that

control on-off functions, enabling third parties to activate them.

Weaknesses in password systems governing access to central databases. Microcomputers connected to mainframes in many organizations suffer from the same security

problems as dumb terminals; users are casual

about writing down or telling their passwords

to others. But microcomputer users are probably less disciplined in handling password regulations than EDP-trained personnel.

No logs or journals. Though central databases of confidential client data are often provided with audit trails, transaction logs, or

journaling capabilities, these techniques are

often not used when groups of microcomputers

are connected to minicomputers or, through

them, to mainframe files.

Not recording efforts to penetrate security.

Unlike mainframe systems, microcomputerbased office systems generally do not record

efforts to enter restricted files without proper

identification or passwords, or warn security

officers that such efforts have taken place or

are under way.

-’Many European countries do attempt to protect a large

amount of the personal data collected.
Ch. 6—Confidentiallity and Security Issues With Office Automation 181

Absence of either security education for

users or auditing of their practices. Even if

sensitive information was identified, security

measures were adopted, and records were kept

of efforts to access databases improperly from

microcomputers, most experts would agree

that security of sensitive client data also requires that users be educated about security

policies and procedures. Second, it requires

that inspections or auditing be carried out to

learn whether security policies are being

followed.

When it comes to security measures needed

to safeguard sensitive client data in microcomputers and end-user office automation, current

evidence shows that: 1) the techniques for installing security protections are well known;

2) the process of risk-assessment and vulnerability analysis to determine cost-beneficial policies is well known; but 3) these techniques

and processes have just begun to be undertaken in the private sector, and are only somewhat further advanced in the Federal establishment. The first task in dealing with security

is not to identify wholly new security approaches

or methodologies, but to stimulate organizations to provide directives and resources with

which to modify and apply known techniques

and processes.

There are some situations in which new

forms of office automation may require special measures. For example, if combined voice/

data terminals are widely used, manufacturers

may have to provide means of preventing the

undetected turning on of the microphone capabilities of terminals, to ensure that neither

officials within the organization nor outside

hackers, or more serious intruders, used these

terminals for organizational espionage.

Local area networks present particular problems. Three different types of network configurations exist and present different security

problems. In a star network, several terminals

are connected to a central controlling device;

the central computing power can be used to

control data and software, maintaining a high

degree of security. In a ring configuration (or

a loop) the workstations are arranged in a circular network. Each station is linked by a

repeater mechanism that monitors all passing information to see if any are addressed to

that workstation. This configuration has gained

more acceptance in Europe than in the United

States. Because information travels around the

ring, any workstation has the capability of accessing it. The tree or bus network, the most

easily expandable of the three, does not require

a central controller and, security is therefore

contingent on the security capabilities of individual workstations.

PRIVACY ISSUES IN WORK MONITORING

The monitoring of office work by computers

was discussed in chapter 5; but it is sometimes

discussed as a privacy issue rather than as

a quality of worklife issue. The privacy issue

raised by computer-mediated work monitoring is whether the collection of operator performance data through “machine capacities”

and its use to evaluate employees constitutes

an intrusive form of ‘‘employer surveillance’

that violates reasonable expectations of personal privacv by the employee. Whatever the

pros and cons of computerized-work monitoring, it is probably not best posed in terms of

privacy. The work is done on the employer’s

premises; the activities are usually group settings open to view rather than individual activities taking place in closed or private rooms;

supervision is a normal condition of the employer-employee relationship; and collecting

quantitative data as to employee output has

long been used in evaluating and compensating work performance in factories and offices.
182 automation ofAmerica Offices

Unlike the use of TV-monitors to watch as- ployees know that monitoring systems are

sembly lines, or of hidden microphones to over- used, employees have access to their individhear workers in cafeterias or restrooms, the ual records; and a procedure is provided for

collection of operator-production statistics contesting the accuracy or fairness of applygenerated by system software does not repre- ing records for evaluative purposes.

sent an intrusive act per se, provided that emSECURITY AND CONFIDENTIALITY IN

AUTOMATED PUBLIC OFFICES

The protection of data is a major concern

in public-sector offices, especially in regard to

matters of national security, diplomacy and

foreign relations; the Federal role in monetary

transactions; government funds transfers; and

foreign trade. Most of the sensitive information about such subjects, however, is usually

in large computer and communication systems, and is usually protected by encryption

and a variety of other mechanisms. However,

shared databases and the downloading of data

to microcomputers for end-user computing is

raising new concerns, especially since data that

are not per se identified as sensitive can, when

aggregated, reveal information that is highly

sensitive.

The Federal Government collects large volumes of detailed personal data about citizens

and in particular about Federal employees. As

early as 1967, a study of computerized Federal records revealed that the files contained

more than 3 billion records and that over half

of them could be accessed via computer terminals.23 Several years later in 1974, another

congressional committee found that 86 percent of the 858 known government databanks

were computerized.24 Successive waves of office automation have continued to provide

greater access to these expanding data files.

This information can be integrated through

computer matching and other techniques and

through the exchange of data between agencies and with State governments, in ways that

cause deep concern about confidentiality. For

example, when one applies for Food Stamps,

Go\,ernn]ent Dossier, op. cit.

‘Federal Data Banks and Constitutional Rights, op. cit

the Department of Health and Human Services, which administers the program, matches

one’s name with those in the Internal Revenue Service (IRS) earnings file (which is in fact

maintained and used by the Social Security

Administration (SSA) to verify eligibility. SSA

checks the data in the IRS earnings file to verify income reported by recipients of SSA retirement benefits.25

In general, information-handling associated

with end-user office automation is not classified information, but it is often sensitive information, especially when aggregated in

certain ways.26 Routine records, forms, and correspondence often contain information that

would allow individuals to put together and

profit from advance knowledge of government

actions. For example, plans for siting highways and government facilities, impending

regulations, actions that affect interest rates,

sales of minerals and timber rights, etc., are

very tempting. Personal data about Federal

employees can be used to discourage whistleblowing. Less often voiced, but still important,

is the concern about unauthorized access to

~ According to briefings and interviews provided for OTA

by SSA.

-“This has chiefly been of concern to the Department of Defense; for example, the problem was exhaustively discussed

in a planning conference held for the U.S. Army Information

Systems Command by SRI in Tucson, AZ, in December 1984.

Hypothetical examples given in an informal talk concerned the

possibility of aggregating routine travel orders or schedules

for key individuals to reveal the (undisclosed, sensitive) location and timing of small meetings; or the possibility of aggregating data on materials delivery to a site to reveal information

about development of weapons systems, However, some civil

liberties specialists have long been concerned about the ability

to aggregate information from many sources about one indi-

\’idual to produce a profile of his or her marital, financial, social, business, professional, and political activities.
C/J 6—Confidentiality and Security Issues with Office Automation ● 183

information that is simply embarrassing or politically fatal to officials or to their nominees

for official positions. In congressional members’ offices, there are grounds for concern

about protection of information in computers,

which is chiefly protected by ID’s and passwords. (The privacy and security issues related

to large Federal computer systems and databases will be covered in a forthcoming OTA

report. 27

Even when nonclassified Federal data is normally stored in large databases or processed

in central EDP centers, it is increasingly hable to be at some point accessed, handled,

analyzed, or even generated using personal

computers or terminals scattered throughout

agency headquarters and field offices. Most

of the concern about government security has

focused on large information systems. There

has been much less attention to the protection of data in day-to-day agency operations

in which decentralized office automation is

used. Violations of security and confidentiality need not be intentional or malicious; they

are often the result of ignorance or carelessness. Office workers have not yet been acculturated to think routinely about computer

security; there are stories of government workers routinely locking away sensitive papers but

leaving the disks from which the copy was

made lying next to their personal computer

or word processor.

Government computers are thus subject to

the same risks that plague banks, corporate

payroll and financial management operations,

and other private-sector computer systems,

plus some risks that are particularly political

in nature. As extreme examples, records could

be destroyed to cripple a government program

or project; or calendars and trip schedules

could be used to plan the assassination of a

political leader or a foreign dignitary.”

- Implications of FederaI Go\crnment Information 7’echnoIo~;~’ for Ci\.il I.ihertie.s and Congressional O\ ”ersight, op. cit.

‘According to the Itrashington Post. an air traffic controller,

angry about the Soviet in~’asion of Afghanistan, deliberatel~

endangered an Aemflot jet carr~ing So\’iet ~\mbassador Dobr~-

nin, b~’ manipulating a signal so that a computer read the jet

as a small craft and did not properly monitor and control its

landing at a bus~ airport. (hlar~r Thornton, “Age of E~lectronic

C’on\enience Spawning In\entl\e Thie\res, ” The 11’ashin@on

})o.~t, Yol. 107, hla~r 20, 1 984).

Government Guidelines

Security and confidentiality for nonclassified government information is covered by the

Privacy Act of 1974 and:

OMB Circular A-71 Transmittal Memo

No. 1, July 17, 1978, which provides general guidance to agencies, on administrative, technical, and physical measures to

increase security; and

OMB Circular A-123, which sets standards for internal controls implementing

the Federal Managers Financial Integrity

Act and directs each agency to review and

update its security provisions.

The General Services Agency (GSA) and the

National Bureau of Standards (NBS) in 1983

began development of guidelines for security

in end-use computing and small office systems.

The Office of Personnel Management (O PM)

recommends personnel security policies for

computer-related jobs. However, the General

Accounting Office (GAO) has repeatedly criticized the lack of compliance with guidelines

established in the circulars by Federal agencies. 29 In 1982, GAO said that:

. . . increasing Federal investments in automated systems . . . have resulted in growing

vulnerability to fraudulent, wasteful, abusive,

and illegal practices because greater concentrations of information are accessible from remote terminals.

The Office of Management and Budget (OMB)

is now updating A-71, A-123, and other circulars related to computer security. It is expected

that they will be combined into one broad policy statement.30

The Special Concern About

Employee Privacy

An aspect of Federal computer security that

deserves–but has not received–special atten-

—-.— .-. —

-’U.S. General Accounting Office, Centra) Agwncies Con]-

pliance 11>’th OJfE Circu]ar ,4-71, Transmittal Nlemorandum

No. 1, I, CD-80-56- 1, Apr. 30. 1980: and Federal Information

S?’stems Remain High]j- I’ulnerah]e to Fraudulent, 11’asteful,

.4 busi\e, and Illegal Practicesq NIASAD-82-18, Apr. 21, 1982,

“ Susan \l. Nlenke, “Sur\re~ of Agencies Finds Nlan}’ Are

Implementing Standards, ” Special Section: Securit?’,(;olernment Computer ,\”e\~’s, Yotrember 1984.
tion is the question of the ability to protect,

the privacy of Federal employees. Agencies

collect and keep much personal data about em”.

ployees and even applicants for Federal jobs,

Much more data is likely to be collected than

would be sought by corporation personnel offices.” These files may be, and usually are.

widely dispersed and only superficially protected. As files are computerized, they can,

more easily be aggregated and accessed, or

tampered with. If files are stored in personal

computers or can be accessed or downloaded,

more and more people will have access to them.

and may use them for satisfying curiosity, for

mischief, for exerting political pressure, or for

sheer malevolence. This raises significant questions about protection of privacy in Federal

computer systems and databases.

Federal employees are the subject of much

computer matching, which was described earlier; that is, the comparison of two or more

computerized lists of individuals. For example, Federal employee lists were checked against

lists of people earlier defaulting on student

loans. A very early example of computer matching occurred during the Carter Administration; this was Project Match, through which

names of Federal employees were matched

with names on the roll of the Aid to Families

with Dependent Children, in an effort to discover ineligible recipients.32

Accidental Losses

Telecommunications and computers are vulnerable to crime, mischief, and terrorism, but

they are also vulnerable to unintended disruption, a point that is sometimes overlooked. This

includes error or accident, and the simple

breakdown or failure of equipment; it also includes destruction by fire, flood, earthquake,

and other natural and technological disasters.

Data can also be lost permanently, or made

temporarily inaccessible, by electrical outages.

As government activities become more and

“See Alan Westin, “Personnel Practices in the U.S. Civil

Service, ” Information Age, July 1982, pp. 149-169.

‘According to information supplied by Federal officials to

OTA.

more dependent on microelectronics there is

the strong possibility-and given enough time

the virtual inevitability—of electrical failures

that affect critical activities or whole regions

of the country, bringing all computer-mediated

activity temporarily to a halt. Emergency response systems may be unable to respond adequately because some step or link depends on

office automation that is down because of the

same emergency. Routine recovery procedures

may be hampered by loss of data in the same

incident. GAO called attention to this danger

in a strong report in 1981, identifying the need

for further emergency planning by the Department of Energy and the Federal Emergency

Management Administration.33

Some government operations are highly time

sensitive (e.g., transfer of funds, transmittal

of orders to the armed services, air traffic control, response to natural disasters, law enforcement actions). Others are dependent on ready

access to individual and case records (tax collection, processing of welfare payments, payrolls, etc.). As the government becomes more

and more dependent on office automation for

orderly performance of necessary activities,

the result of any disruption-whether irreparable or of brief duration and narrow scope–

becomes more severe.

Federal agencies have not adequately prepared for natural or technological disasters

that might wipe out electronic information,

according to GA0.34 Many still have no contingency plans or rely on letters of agreement

from other agencies to supply equipment in

emergencies. This course assumes that the

other agency will: 1) be able and willing to live

up to its agreement even at the cost of prejudicing some of its own activities, and 2) will not

—- —-. —...

“U.S. General Accounting Office, Federal Electric Emergency Preparedness IS Inadequate, EMI)-81-50, 1981.

“U.S. General Accounting Office, Most Federal Agencies

Have Done Little Planning for ADPDisasters, AFMD-81-16,

1980; and Federal Electrical Emergency Preparedness Is Inadequate, EMD-81-50, 1981.

A contingency plan should have most or all of the following

features: backup files at external storage sites, standby arrangements for renting processing time or services, a recovery operation center, a multilateral aid agreement involving five or more

agencies, or a plan for reverting to manual (nonelectronic) operation if necessary.
Ch. 6—Confidentiality and Security Issues With Office Automation ● 185

have been disrupted at the same time by the

same events. Nonelectronic equipment is often

not available, and reversion to manual systems

not possible; data may exist only in electronic,

machine-readable form.

The cost of downtime or time lost because

the computer is malfunctioning, is seldom calculated in justifications or cost-benefit analyses of office automation. In most cases, the

downtime is merely an annoyance and a temporary problem. In some cases, it significantly

aggravates the workload peaks and degrades

the quality and timeliness of important services. In time-sensitive situations, such as response to local emergencies, it can mean catastrophe.

Comparisons With the Private Sector

In spite of these problems and concerns, the

Federal Government is probably well ahead

of the corporate sector in attention to the need

for safeguarding privacy and security in the

use of microelectronic office automation.35 This

reflects the implementation of provisions of

. —

‘

r

This is the conclusion from an OTA contracted study, F?-it’ac~’ and .9ecurit.v Issues in Office A utmnation, Alan F. \t’estin and I,ance <J. }ioffman, 1985. Their study used documentar~. material from 44 Federal agencies and inter~iews at 7

agencies, Federal policies and practices were compared with

findings from site visits and interviews in approximately 100

corporations and nonprofit organizations in 1982-84. The researchers did not do on-site studies of the implementation and

efficacy of securit~’ measures in Federal agencies, but relied

on reports of the manager and staff.

the Privacy Act over the last 10 years, including annual reporting requirements; OMB guidelines; agency implementation procedures; and

continuing attention from congressional committees, media, interest groups, and scholars.

However, if the government is ahead of the

private sector, this says more about the lack

of systematic attention to these issues within

corporations, than about the effectiveness of

government attention. It does not mean that

the problems have been taken care of. The particular vulnerabilities of office automation systems to casual misuse, and even serious abuse

and fraud, are still not realized by most of the

users.

But the openness of these small office automation systems, which makes them especially

vulnerable, is probably also their best protection. The many users and the open office environment means that abuses are likely to be

observed and reported, if they are recognized

as abuses. They will be recognized only if office workers understand the ethical, legal, and

policy issues involved and are sensitive to their

importance. A thorough attempt to educate

Federal office workers about this problem is

in order.

Individual workers, however, can do relatively little about protecting their data in the

case of power outages, system malfunctions,

and technological or natural disasters. The primary responsibility for backup and fall-back

systems, and other kinds of contingency planning must rest with top-level agency managers.

POLICY CONSIDERATIONS

Nearly a decade ago, the Senate Government

Operations Committee investigated computer

abuse in both the public and private sector; 36

as a result there have been proposals in the

‘ L’. S, Congress, Senate Committee on (io\’ernment operations, ~+ot~lerns Associated Il”ith (’omputer Technolog\’in fi’ederal l>rograms and I)ri\’ate Industr>’: (’omputer .4 buses, (~onlmitt.ee Print, 94th Cong,, 2d sess., 1976; and Computer Securit}

in Federaf Programs, Committee l)rint, 9,5th (’ong., 1st sess.,

1977.

last three Congresses related to computer security in general and in particular to the security of computerized government information. 37 In April 1984, the House Committee

on Science and Technology issued a special

report on Computer and Communications SeFederal Computer Systems Act of 1977, S. 1766 and Ii. R.

H421: S. 40 and Ii. R, 6196, 1979; Federal (’omputer S?rstems

Protection Act of 1981, 11. R. 3’790.
186 Automation of America Offices

- — —

curity and Privacy38 that recommended that

Congress charter a national commission to

study the issues and outline a framework for

policy. While recognizing the threat from

“hackers and other outside intruders, ” the report said that the greatest threat is from personnel who are authorized users of the computer resources that they attack. The report

was highly critical of recent policy and programs related to computer security.

OTA concurs that violations of data confidentiality are most likely to occur within the

organization by authorized users. External

threats, whether from hackers, ordinary thieves,

political opportunists, disgruntled former employees, terrorists, or others, nevertheless deserve greater attention. But these threats

chiefly concern large systems. With small computers violations by insiders are most likely,

and there are fewer safeguards against them.

Both large systems and small computers are

at risk from accidental disruption because of

natural events, human error, and technological failure.

Because decentralized end-user computing

is raising new uncertainties about how well

data is protected, Congress may wish to reexamine the structure of privacy laws and thek

application to these technologies, perhaps

through a special commission or task force.

Stringent actions have been suggested. One

possibility is to establish a new authority to

implement, oversee, or enforce current and future statutes. This organization would have

no responsibility for collection and distribution of data. There are precedents for this:

Sweden for example has a Data Commission

to oversee all records and their linkage. Another

— . —

“U.S. Congress, House Committee on Science and Technology, Computer and Communications Securit~r and Pri\’ac.y, report prepared by the Subcommittee on Transportation, A\’iiition and Materials, Committee Print, 98th Cong., 2d sess., April

1984.

possible strategy is to have an ombudsman

within each data-collecting organization. This

is the approach used, for example, in Germany.

However, current laws may be adequate to

address the problems of decentralized automation. Whether organizations treat “office

automation” and centralized EDP as one or

separate and distinct components of office

activity, the critical element is to adapt existing rules to apply to predictable oversights,

carelessness, or misuse by some persons in the

large end-user population, and to assign organizational responsibility and continuing oversight duties to effective units at various levels

of the organization. If organizations are not willing or able to create and enforce policies to ensure that existing safeguards and guarantees

are applied in end-use computing to protect their

clients and their employees, Congress may wish

to clarif y and strengthen through legislation the

liabilities that such organizations incur by their

failure.

Current laws chiefly strengthen the right

and the ability of an individual to control information about himself or herself. Thus, the

individual is the final enforcer of principles of

fair information use. Given the ubiquitous nature of the new information technologies and

their linkages and systems integration, more

specific data collection and data protection policies may become necessary as opposed to

traditional policy approaches strengthening

individual rights.

For Federal agencies, strong oversight attention is merited to make sure that reasonable security provisions are enforced. Special

attention should be given to the questions of:

1) the ability of essential day-to-day government operations to continue when computers

cannot operate, 2) the need for protecting employee data, and 3) the adequacy of procedures

for protecting correspondence and records with

congressional offices.
Chapter 7

Home-Based Automated

Office Work
Contents

Page

The Controversy Over Home-Based Office “Work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1$9

Historical Roots. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191

The Status of Home-Based Office Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192

How Many Home-Based Office Workers .Are There? . . . . . . . . . . . . . . . . . . . . . . . . . . . 192

How Many May There Be in the Future? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

Mechanisms for Home-Based Work ...,

What Work Can Be Done at Home? . . .

Parties at Interest . . . . . . . . . . . . . . . . . . . .

Employers . . . . . . . . . . . . . . . . . . . . . . . . .

Productivity . . . . . . . . . . . . . . . . . . . . . . . .

The Workers: Why Are They at Home?.

The Benefits and Costs for Home-Based

Family Considerations . . . . . . . . . . . . . . .

Effects on Society . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

...,, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198

199

workers?” : : : : : : : : : : : : : : : : : : : : : : : : : : : : 200

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204

Legal and Regulatory Barriers to Home-Based Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205

Public Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206

Encouragement or Prohibition of Home-Based Office Work...., . . . . . . . . . . . . . . . . 206

Regulation of Home-Based Office Work..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208
Chapter 7

Home-Based Automated Office Workl

New information technologies allow the dispersion of office work over time and space. As

many functions of an office become internal

to computers, and as computers are increasingly linked by communication networks, it

becomes less necessary for office coworkers

to be located in the same room, or in the same

building. When a worker’s primary interaction

is with “the system” rather than with other

people, she can do her work wherever she can

get access to the system–in the office, while

traveling, or even at home.

Some futurists have predicted that the availability of low-cost computing power and telecommunications will increase the number of

Americans working at home. The dawn of the

Parts of this chapter draw on a contractor report prepared

for OTA by Kathleen E. Christensen, New York University,

Impacts of Hmne-Based H-m-k on }1’mnen and Their Families,

tJanuar~ 1985.

information age will find millions of people

“telecommuting” from their “electronic cottages, ” that is, using computers and telecommunications to do office work in their homes. z

At the present, there are only a few thousand

Americans for whom working at home is a fulltime substitute for working in the office, but

the number is growing and many more might

be so employed by the mid-1990s.

-The word telecommuting was probably coined by Jack

Nines, now at the University of Southern California, in the 19’70s

and reflected the interest at that time in working at home as

a means of conserving automobile fuel and reducing urban air

pollution. The term is not full~. appropriate for those who are

hired (or contracted) specificzdl~ for home-based work and might

not otherwise commute to an office to do the same work. In

any case, o ‘telecommuting’ is an awkward back construction

since it means ‘‘commuting from afar’ rather than ‘‘working

at a distance. Other terms often used are homework, remote

work, telework, or flexiplace. Blue Cross calls its home-based

workers, cottage keyers, or telenauts. The home as a computerized workplace is sometimes called an electronic cottage or an

electronic sweatshop.

THE CONTROVERSY OVER HOME-BASED OFFICE WORK

The term “home-based office work” describes three very different phenomena. The

first is the practice of working occasionally

or sporadically at home instead of at the office, when it suits the purposes of the worker.

The primary work site is still the office, and

the worker continues to be a fully participating member of the office staff while enjoying

greater control over when and where, and under what conditions the work is done. The occasional home-based worker is most often a

professional. This kind of home-based work

is not controversial.

In other cases the residence is the primary

work site. Some of these full-time home workers are entrepreneurs—people who have founded

small businesses with headquarters in their

homes. They may intend to move the business

to separate quarters as soon as it can generate enough income to cover the overhead, or

they may choose to keep their business at home

no matter how successful it becomes. In any

case, these owner-managers seek work from

a number of clients and set their prices based

on their perception of the value of their work

and their competitive environment. These

home-based businesses provide a variety of

professional and clerical services from word

processing to accounting to computer programming. This kind of home-based work is

also, for the most part, noncontroversial. s

Finally, the residence can also be the principal work site for workers who are employed

by a single organization, but seldom or never

work in the central office. As employees, their

‘Christensen found that women who developed word processing businesses in their home, seeking multiple clients rather

than tied to one corporate client, thought of themselves as,

and functioned as, professionals and businesswomen, in spite

of the fact that the work they were doing would be called clerical work if done in an office, and the women had in fact previously been clerical workers. Christensen, op. cit.

189
190 ● Automation of America Offices

wages are usually set by the employer. Most

home workers in this category are clerical

workers, usually performing data entry or

word processing; in some cases however, the

home may be the primary site for professional

work such as computer programming.

Most of the workers in this last category

are women. They may decide to work at home

because they must combine work with other

responsibilities such as care of young children

or elderly relatives. Some other full-time home

workers have physical disabilities or live far

from commercial centers.

Those who are enthusiasts for home-based

work usually discuss it in terms of the first

two images, the privileged worker and the entrepreneur. Those who oppose it are likely to)

speak mostly of the last, the woman struggling to juggle two or more full-time responsibilities.

There are three important variables here,

which relate to controversial positions on

home-based office work. One is the extent to

which the home replaces a separate office as

the primary work site. Another is the degree

to which the home-based worker functions as

a separate unit providing services to the organization, rather than as an integral and participating member of the organization. The

third variable is the degree of choice exercised

by the worker, either in choosing a job that

is home-based rather than office-based, or in

allocating his or her time between two locations.

The controversy about home-based work can

only be understood in the context of other social issues, including the long-range outlook

for employment, the feminization of poverty,

labor-management relations, protection for

workers, the adequacy of child care sytems,

and opportunities for the handicapped and the

elderly. If we had full employment and ample

social services, home-based work would probably not be controversial at all. The concern

hinges on the question of whether, now or in

the future, some workers are forced to work

at home under undesirable conditions because

the lack of certain social services deprives them

of other options.

Home-based workers themselves are not

divided over the issue; they would be unwilling to give it up. Many have demanded the

privilege or worked hard to persuade employers to grant it. Some have accepted the

risks that go with free-lance employment in

order to work at home. Some have made the

basic decision to stay at home while their children are young, and regard the opportunity

to do paid work at home as a pleasant bonus,

the icing on their cake. Others would much

prefer to work away from home but have not

been able to find any satisfactory alternative.

Their choice is to work at home, or to settle

for child care arrangements that they regard

as unacceptable, or not work at all and become

dependent on others.

Congressman Newt Gingrich of Georgia introduced a bill in the 97th and 98th Congresses

(H.R. 2531, The Family Opportunity Act) that

would have allowed a tax credit of 50 percent

of the cost of computers bought primarily for

“nonrecreational use in the home. One purpose of the bill, which has not been reintroduced in this session, was to encourage

computer-mediated work at home.4

In contrast, the AFL-CIO has called for a

ban on computer-mediated home-based work.

The labor organization says that it is not possible to enforce health, wage and hour, and

other worker protection measures in homes

without invasion of workers’ privacy. The unions are concerned that many home workers

are paid under piece-rate systems and are

deprived of benefits packages. They also claim

that overhead costs are shifted from employer

to employee, and that the threat of sending

‘H. R. 2531 would amend the Internal Revenue code to allow an income tax credit for 50 percent of the expense of computers designed primarily for educational, professional, or other

nonrecreational use in the home. It would limit the amount

of such credit for a taxable year to $100 multiplied by the number of qualified members of the taxpayer’s family. The bill was

referred to the House Committee on Ways and Means and was

not reported out. Computers used for work in the home are

tax deductible; the bill called for a tax credit.
work out to be done at home could be used

to discourage office workers from demanding

rights and benefits or from joining unions.5

The Service Employees International Union

(SEIU) also supports the call for a ban by refusing to enter into collective bargaining with employers who use home workers, but is not completely opposed to home-based work if ways

can be found to regulate it.

The implementation and enforcement of labor standards in home-based work is probably

the central policy issue in this discussion.

Those who call for a ban on home-based clerical work argue that such enforcement would

be excessively costly or impossible, and that

without it women (especially mothers), the

elderly, new immigrants, and other disadvantaged minorities may be exploited. Those who

favor home-based work argue that protective

regulation should not become a reason to deprive workers of benefits that are often sought

after, such as the privilege of choosing where

they will do their work.

Historical Roots

Americans have a long tradition of working

in the home to earn family income. Cottage

industry did not entirely disappear with the

development of factories. It is thought that

about 10 million to 11 million Americans earn

part of their income by working at home at

a wide variety of craft, production, and service occupations. G This includes some farmers

(although their number has been steadily decreasing) and many others who are only earning a little supplemental money at home, are

part of the underground economy, or for other

reasons are not counted in the labor force. The

1980 census counted about 1.2 million people

in the labor force whose primary place of work

was in their residence.7

.—

<Judith Gregory, “The Future: Clerical Workers, ” a presentation for Nine to Five, National Association of W’orking

\3’omen, to the National l?xecuti~v Forum: Office W’ork Stations in the Home, National Academy of Science, Washington,

DC. Not’. 9-10, 1983, p. 9.

‘ Sarah l]an Breathnach, “Trends: hlothers and Others of

I nkwntion, “ The T1’ashington Post. ,Jul~ 16, 1984, 13.5.

According to unpublished anal~sis by Robert P]. Kraut of

Ilell Communicant ions Research, private communication of Dec.

20, 1984.

Ch. 7—Home-Based Automated Office Work 191

Home-based production work in a few industries, such as knitting of women’s outerwear, was banned in 1938.8 The Reagan Administration ended the prohibition on industrial

home knitting in November 1984.9 In addition,

a bill has been introduced in the Senate to

amend the Fair Labor Standards Act to lift

the ban on sewing, knitting, and other industrial home work so long as the employer complies with minimum wage and maximum hour

laws. 10 The controversy over the knitting ban

began to focus attention on, and inflame, the

emerging controversy over home-based automated office work, which is, of course, not restricted. The AFL-CIO and others assert that

the conditions that brought about the ban in

the 1930s can recur, that home-based office

work can also be used in the future to exploit

the unskilled, women, children, and immigrants.

In recent decades some kinds of office work

–for example, typing and envelope stuffing–

have been done at piece-rates in the homes of

‘A 1930 publication of the U.S. Department of Labor pro-

\’ides background on the prohibition:

The industries that use the home-work s~rstem \rar}’ but

they are alike in using, to quicklj’ expand the labor force when

a rush of work comes, the labor a;ailahl(~ in the home. Thus

the industries need not pro~ide factor}’ space and pay rent and

other o~.w-head for this part of their production The burden

of expansion and production is passed on to the home workers in the form of irregularity of emplo~’ment and earnings. InevitahIj’ questions arise as to the soundness and the social ethics

of such a s}’stem of production. From the standpoint of the

public there is a clear case for regulation, If not the more drastic

measure of prohibition, to set limits to the condit ion~ that this

highly competitive tjpe of production imposes upon a group

of workers who are, by’ L he nature of the case, in poor position

to protect themselves.

I{ome workers are largely women, aided all too frequentl~ b>

children. They’ are chiefly unskilled or semiskillt,d (and I

recruited largely in tenement neighborhoods, often from recent

immigrants or other groups with little or no indus[ rid experience.

Emily C. Brown, Zndustria) Home Ilrork {M’ashington, DC:

U.S. Department of I,abor, Jf’omen’s Bureau, 1930).

‘Regulations, pt. 530: Employment of Home J4-orkers in

Certain Industries. Title 29, pt. 530 of the Code of Federal Regulations. U.S. Department of I,abor, Emplo~’ment Standards

Administration, J$’age and Hour Di\ision. W’hite Iiouse Publication 1026. Revised h!arch 1980. See also, S. 2145, a bill to

amend the Fair I.abor Standards Act of 1938 to facilitate industrial homework. . . . and H. R. 6103, a bill to amend the Fair

Labor Standards Act of 1938 to pro~’ide that an emplo}’er who

\’iolates sees, 6 or 7 of that act shall be liable to the employee

in~’ol~’ed . . . These bills represent opposing sides of the issue

of relaxing homework restrictions.

‘“A bill to amend the Fair I.abor Standards Act of 1938, ”

S. 665, was introduced by Senator Orrin G. Hatch of Utah in

Nlarch 1985 ~ith eight cosponsors.
192 Automation of America’s Offices

workers. These are usually women housebound with small children, or retired people.

How much work is done in this way is unknown, much of it perhaps being part of the

underground economy (that is, not reported

to IRS), but it has provoked little comment

and aroused little or no controversy. The tasks

that can be done in this way are limited and

poorly paid, and the number of workers willing to do such work is also limited. Homebased

work has not been a viable option for most

employers or employees, nor a threat to the

mainstream clerical work force.

Two other categories of home-based office

work have always been relatively common. The

first includes the clerical and management

aspects of home-based small businesses that

most often involve crafts, personal services,

and professional practices. In most communities, there are many such home-based commercial activities, even where they are officially

forbidden by zoning laws and other local legislation. Another kind of home-based work is

‘‘overflow, work brought home to be done

outside of regular office hours. An AT&T survey in 1982 concluded that in 16 percent of

households there is at least one person who

frequently brings work home–possibly as

many as 30 percent of all employed people. 

Few people doing office work at home, in

any of these categories, have until recentl:y

been using sophisticated technology. The

AT&T survey found that most people bring-

“Robert E. Kraut (13ell Communications Research), “Telework: Cautious Pessimism, a presentation at the National Research Council’s National Executive Forum: Office Workst[itions in the Home, ” Washington, DC, Nov. 10, 1983, p. 3

(manuscript, no date).

ing work home with them used only the telephone, pencil and paper, and perhaps a calculator. These, plus typewriters, are more than

likely the most frequently used equipment for

cottage industry offices as well.

Computers and telecommunication increase

the viability of home-based work and make

it possible for a significant portion of all office work to be done at home. The information

that is to be processed or generated, the instructions for handling it, supervision and

monitoring of the work, interaction between

coworkers, and distribution of the output can

now or at some future stage of technological

development, all be done at a distance. In addition, American households are becoming

equipped with computers that could be used

for paid employment. By 1990, at least onethird of households may have a PC and some

projections are much higher. ’z

Much of the interest in home-based work

using computers arose, however, years before

the technology was ready to allow it. In the

early 1970s, the need for conservation of gasoline and the problem of growing air pollution

and congestion evoked much talk about the

potential benefits of decentralization of work.

If or when these problems again become high

national priorities, they will surely act as a

powerful stimulus for interest in home-based

office work.

“About 15.8 percent of American households have a computer in 1985, according to an estimate supplied to OTA by

Future Computing, Inc. (a division of McGraw Hill). This is

based on a total installed base of 15.4 million in 1985, expected

to rise to 38.8 million in 1990. They estimate that by 1990,

32.9 percent of households will contain a computer.

THE STATUS OF HOME-BASED OFFICE WORK

How Many Home-Based Office of Labor Statistics’ projection. ]3 But many of

Workers Are There? these estimates include those who only do casEstimates of the number of home-based of-

“’iHomebodies,” Forbes, September-October 1984, p. 10.

Joanne Tangorra, in an article, “Telecommuting,” Working

fice workers using electronic equipment at Woman 7:1 1:52-54; quoted in Telecommuting, Advanced Syspresent range from 10,000 to 30,000. The most terns Laboratory, Wang Laboratories, Inc., educational brief,

frequently used estimate is 15,000, the Bureau

1984, p. 6, says that the number of full-time home-based, computer-based workers is only 1,000.
ual or “overflow” work.14 Probably there are

only between 3,000 and 5,000 people who are

doing office work, using microelectronic equipment, in their homes for outside employers or

clients, and most of these began only in the

last 4 years.

While there was much discussion of “telecommuting’ during the oil crisis there was little or nothing in the literature discussing real

experience or examples.l5 A survey in 1970

identified few home-based workers using computers. ” But some corporations had already

begun formal home-based work programs in

the United States and in other countries. There

are now at least 40 such programs in the United

States. That could amount to only a few hundred people. But there may be at least 3,000

home-based workers in zOO companies that less

formally allow employees to choose to work

at home.17 This does not include many people

who work at home as contractors or free-lance

workers.

How Many May There Be

in the Future?

Some enthusiasts, such as Alvin Tofiler say

that there could be as many as 15 million homebased white-collar workers by 1990. ’8 This is

loosely based on the estimate that 15 million

of today jobs could be moved to remote locations. 19

‘Jack M. Nines, University of Southern California, “An

O\erview of Office Workstations in the Home, ” presented at

the National Executive Forum: Office l?’orkstations in the

Home, National Academy of Sciences, J$’ashington, DC, Nov.

10, 1983.

‘ Ibid., pp. 1-2.

“Joanne H. Pratt, “Home Teleworking: A Study of Its Pioneers, ” Technological Forecasting and Social Change 25, 1-4,

1984, p. 1.

-Patrick Honan, “Telecommuting, W’ill It J$’ork For You?”

Computer Decisions, June 15, 1984, p. 89.

“Quoted in 13reathnach, op. cit., and elsewhere.

‘An estimate by economist E;lisabeth Allison of Data Resources, Inc., quoted by Judith Gregory, op. cit., p. 3, and Business 1$’eek, “If Home Is k$’here the N’orker Is, ” May 3, 1982,

p, 66,

Ch. 7—Home-Based Automated Office Work ● 1 9 3

Others project 5 million to 18 million homebased workers (up to 18 percent of the whitecollar work force) using computers by 1990.20

One estimate is that 50 percent of all whitecollar workers, or 26 million people, could do

their work at home using computers.21 There

are similar estimates in other industrialized

nations. For example, one organization has

forecast that by 1990, 40 percent of people in

Britain could be working at home.22

All of these highly unlikely estimates (some

of them even presented as projections, or at

least possibilities for the future) assume, explicitly or implicitly, that some driving trends

will continue or that some existing constraints

will be eased. Factors most often mentioned

as encouraging the growth of home-based work

are lower equipment costs, the growth of electronic mail systems, improved technology for

linking the home and central office, rising energy costs, stable or decreasing communication costs, and renewed inflation (which tends

to increase the demand for part-time workers

or an externalized work force).

Some long-range social and demographic

trends seem to make it likely that more people will be willing or eager to work in their

homes in the future, or will see it as their only

way to earn a necessary income. Married women increasingly want an independent income

even when they choose the traditional role of

housewife; in the absence of alternative provisions for child care they may be forced to combine work with family duties. The same choice

or lack of choice may face people who must

care for elderly relatives. Large numbers of

“’See for example, Lad Kuzela, “Office Old-Fashioned?” lrJdustry Week, Oct. 19, 1984, p. 71; and Sally Jacobs, “Working

at Home Electronically, ’ New England Business, May 21, 1984,

p. 15, for summaries of recent forecasts and projections. In

the Kuzela article, Dr. Jack Nines of the University of Southern California is quoted as saying that under different sets of

conditions the number of telecommuters in California, by the

year 2000, could range from 300,000 to 8 million.

“R.C. Harkness, Technology Assessment of Telecommunications-Transportation Interactions, Stanford Research I nstitute, Menlo Park, CA, 1977.

-Business Equipment Trends 1983/1 984, compiled by

Kern/Ferry International for Beta Exhibitions I,td., quoted in

B. C. 13urrows, “Information Technology-Its Impacts on Property Development, I.ong Range Planning, vol. 17, No, 4, August 1984.
194 ● Automation 0f America offices

retired workers want or need a way to supplement retirement income on a part-time basis.

Handicapped people seek the self-reliance that

comes from an earned income. Many people

simply like the idea of more flexibility in the

use of their time, or wish to live in rural areas

but are reluctant to spend large parts of the

day commuting.

However, many observers are skeptical

about the likelihood that home-based work will

expand greatly .23 The conventional office has

proven to be a remarkably useful and stable

institutional structure.24 It has four valuable

characteristics that cannot be matched by

home-based work: the presence and cooperation of coworkers, its role in socializing the

worker to the corporation and its unique culture, the prevalence of informal communication networks, and mechanisms for structuring the allocation of time. The office is also

a major focus of social and recreational activities for many workers.

The central office provides economies of scale

in capital equipment acquisition, communication and cooperation of coworkers, access to

central files and reference material, and the

supporting superstructure of superior/subordinate relationships.25 Some of these benefits

are lost or attenuated with dispersion of the

work to other locations. If home-based work

threatens to disrupt established corporate culture, employers are likely to choose instead

to increase productivity by further automation within the office.26

. .——— .. —-.

-’Margrethe Olson has surveyed corporations experimenting with work-at-home programs in 1983-84 and concludes that ‘.

. . . while there is continuing interest in the prospect, there

are no significant trends toward shifting large numbers into

their homes either part or full time. ” (Margrethe H. Olson, New

York University, “Working at Home and Telematics: Myths

and Realities, ” a presentation at the Office Automation Conference, Convention Center, Los Angeles, Feb. 20-22, 1984.)

-’Robert E. Kraut, Bell Communications Research, “Telework: Cautious Pessimism, a presentation at the National Research Council’s National Executive Forum: Office Workstations in the Home, Washington, DC, Nov. 10, 1983, pp. 17-18.

-’Steven S. Kawakami, Institute of Labor and Industrial

Relations, University of Illinois, “Electronic Homework: Problems and Prospects From a Human Resources Perspective, ”

September 1983, p. 14,

“Kraut, op. cit., p. 19.

There are other factors that may well retard

the spread of home-based office work. Managers and supervisors sometimes oppose it,

because it calls for entirely new techniques of

supervision, instruction, and quality control.

Home-based workers frequently report that

they are resented by coworkers who do not

have that privilege.27 Many work-at-home arrangements depend heavily on telephone lines;

if there is a significant increase in local telephone rates, home-based work may be less attractive to both employers and employees.’s

(In some cases, telephone costs are borne by

the home worker.)

Finally, it is generally assumed that further

development of information and communication technologies will tend to encourage homebased work. It is also possible however that

technological development may make some of

it superfluous. If the use of optical scanning

devices eliminates the need for much of today’s

mass data entry, a large portion of the work

now done at home may be eliminated.

Mechanisms for Home-Based Work

Work at home can be supported either by

an organization or by independent, free-lance

activity. The worker, in other words, may be

an employee, or may be self-employed.

A corporation may have a formal program

under which selected employees are offered the

option, or employees may request home-based

work (often under the condition that a supervisor also has the option of refusing to agree

to it). Other corporations informally allow individual workers to negotiate the privilege of

working at home, either full time or more often

part time.

Most employed home-based workers have

previously worked for the same employer onsite. But some corporations have set up programs to hire workers not otherwise available

to them or able to work, e.g., handicapped

workers, mothers with small children, or suburban housewives.

--Pratt, op. cit., p. 7; Jacobs, op. cit., p. 19.

“Honan, op. cit., p. 96.
Ch. 7—Home-Based Automated Office Work 195

.

Independent or self-employed home-based

workers may work under contract for one or

more organizations, or solicit piece work on

an ad hoc basis. Often corporations shift employees to self-employed contractor status

when they become home-based workers. However, if these workers contract with only one

organization, they may in fact be employees

in the eyes of the law, depending on how pay

rates are set, and other details of the arrangement .29

Professionals are often operating as consultants, one-person firms, or part of very small

businesses. Those who are employees, however,

typically retain salary and benefits, whereas cler-

‘A recent IRS ruling indicates that they are employees, at

least for some purposes. See p. 38 below. There have also been

cases under the National I.abor Relations Board : rider which

newspaper delivery truck drit’ers, for example, were held to

he employees rather than independent contractors as a company, had claimed, according to Dennis Chamot, Associate IJirector of the A FI.-C 10 Department for Professional l~mplo~-

ees (personal communication, ,Jan. 8, 1985).

A portable terminal can be connected via telephone

lines to business computer systems

ical home-based workers are usually shifted

to part-time status or independent contractor

status, and do not retain employee benefits.

Most clerical workers who are first hired for

home-based work are not given employee benefits. 30

Whether workers are full or part time, they

may not do their work in the traditional office

hours of 9 to 5. The ability to control one’s

own work hours is often cited as a major benefit of working at home.31But the choice of work

hours in practice is usually constrained. The

workers sometimes find that they must work

during the business hours of employers or

clients in order to ask questions or receive instructions. More often, they must fit their work

around family responsibilities, working during school hours, when another adult is at home

to care for children, or when the children are

asleep. It is common for them to work at night,

often after a full day of child care, cooking,

cleaning, and shopping.32

Some workers use dumb terminals connected

to an employer’s mainframe computer, usually by a ordinary telephone line and modem.

An additional telephone line is often installed

‘‘T!argrethe Olson studied work-at-home programs in 14

corporations in 1983. I n eight programs the workers were permanent full-time employees (salaries plus benefits). All of t,hese

programs except one involved professional workers. The other

six programs were for clerical workers. I n four programs, the~’

were permanent part-time workers earning hourl? wages. one

of these companies paid the workers no benefits, three prorated

benefits. One program paid the part-time worker-s bj output

(piece rate) with no benefits. The sixth program used contract

workers. paid hourly rates, but with no separate benefits package. Margrethe H. Olson, (h’er~’iew of 14’ork-at-Home Trends

in the United States, New York University, Graduate School

of Business Administration, Center for Research on 1 nfornlation Systems (New York: New York Uni\rersit~, August 1983).

p. 9.

The literature suggests that the disparity in arrangements

for professional compared to clerical Workers show’n in olson’s

data is probably typical of corporate pro~rams.

“Olson found that about half of the workers in her stud~r

did, howet’er, approximate a 9-to-5 schedule. The others tended

to work early mornings or late evenings, but on a fairll’ regular

schedule. These were most often professionals, working at home

under informal arrangements rather than formal programs.

Those in formal programs. i.e., clerical workers, who worked

odd hours usually did so because of the need to work around

fanlill constraints. Olson, op. cit., p. 22.

‘ Kathleen l+;. Christensen, “ Impacts of IIome-Based \t’ork

on J$’omen and Their Families, contractor report for OTA,

Januar~ 1985.
in the home for this purpose. Sometimes a dedi

cated leased line is necessary for security.

Other workers use personal computers or standalone word processors, dictating machines and

printers. 33

There have been problems with equipment

in some programs, but by most accounts technological problems have been minimal.34 The

equipment may be owned and installed by the

employer, and either lent or rented to the

worker. The worker may own or lease her own

equipment .35 Blue Cross clerical workers in

North Carolina, for example, pay their employer $2,400 yearly rental for use of their

equipment. 36 On the other hand, an employer

in the Netherlands pays home workers an extra 2,000 guilders per month to cover the costs

of operating a terminal at home.37

What Work Can Be Done at Home?

One of the most likely kinds of office work

to be done at home is professional work that

involves only one person’s creative activity

(programming, writing reports) or contacts

usually carried out by telephone (sales, brokering). A second kind is clerical activities that

are unitized, repetitive, and routine.38 Data en-

“In Pratt’s recent study of 59 home-based office workers,

57 percent of the equipment was employer-owned terminals

communicating with mainframe computers in the office; 31 percent was stand-alone computers; and 12 percent was standalone word processors usually not equipped for communication. Pratt, op. cit., p. 5.

“However, according to Elizabeth Carlson, second vice

president of personnel, as quoted by Honan, op. cit., p. 96, Continental Illinois curtailed its program in 1980 and again in 1981,

“waiting for vendors to come out with usable equipment. ”

‘“In most of the formal corporate programs that Olson

studied, the employer paid for installation of equipment and

monthly telephone charges; in one program employees rented

equipment from the company. Olson, op. cit., August 1983, p. 10.

““If Home Is Where the Worker 1s, ” Business Week, May

3, 1982, p. 66.

“Richard J. Long, “The Application of Microelectronics to

the Office: Organizational and Human Implications, ” Nigel

Percy (cd.), The Arrnagement Implications of New Information Technology (London: Croom Helm, 1984), p. 106.

‘“In one study of corporate pilot programs, it was found

that they had targeted either clerical workers, with the objective of cutting overhead costs, or professional workers, in the

interest of retaining valued workers who demanded the privilege of working at home. These were distinct objectives and

quite different kinds of pilot programs; no corporations had

both types. Olson, op. cit., 1983, p. 7.

try and word processing can be monitored and

measured electronically, computer checked for

errors, and paid as piecework. Raw data and

finished work can be physically transported

between office and home in batches, or can

be sent by telephone. Whether professional or

clerical, this work usually does not require

much face-to-face supervision or collaborative

effort between coworkers in real time.

Supervisors are least likely to be able to work

at home and there are now only a few firms

where they do so. This may change in the future with the spread of electronic mail, computer conferencing, PBX, and other electronic

tools that make possible cooperative documenthandling and reduce the need for frequent interactions with coworkers.39 However, the extent to which supervisors will be inclined and

willing to replace face-to-face interaction and

supervision with electronic communication remains to be seen.

Financial and computer service corporations

have been most likely to experiment with workat-home programs. Metropolitan Life, Control

Data Corporation, National Bank of Chicago,

Continental Illinois, Southern New England

Telephone, Seybold, and Aetna Life and Casualty Company have started such programs,

although some of these have been terminated

or suspended.40 Small new companies have also

experimented with the scheme. Few or none

of the programs have been found in old, traditional industries.

There is strong interest in work at home in

other countries, but the movement has been

strongest in the United States. In England,

early enthusiastic projections of “electronic

commuting” were not met, largely because of

the high costs of telephone lines.41 In France,

there have been a number of experiments with

working long distance from small neighborhood centers rather than homes. The national

telecommunications authority, which sponsored these programs, made an explicit policy

—— . — .

“Olson, op. cit., August 1983, p. 7. .

4“Honan, op. cit.; Jacobs, op. cit.; Wang Laboratories, op.

cit.

“Ursula Huws, The New Home Workers (London: I.ow

Pay Unit, pamphlet No. 28, 1984), pp. 14-15.
—

decision that home-based work would be too

isolating. These experiments have generally

not been successful and most of the workers

dropped out. ” However some pilot programs

for handicapped workers are now underway.

Sweden has also experimented with neighborhood work centers, and there is reported to

be much interest, but little experience, with

working at home.43 44

One multinational software company based

in Britain, with subsidiary offices in Denmark,

Ch. 7—Home-Based Automated Office Work . 197

Holland, and the United States, is deliberately

structured so that nearly all of its workers are

based at home. These are computer professionals, and in Europe, 96 percent of them are

women with small children, and 95 percent

work entirely at home. In the United States,

70 percent of the company’s employees are

women, and 50 percent are fully home-based.

The workers agree at the outset, they will

steadily increase both their working hours and

commitment to the company and career, as

their children mature.45

‘lt)id., p. 19.

“Ibid.

“lklonica I+jlling, Swedish Center for W’orking Life, Stockholm, “Remote J1’ork Telecommuting, ” presentation at IF IPConference on “}f’omen, 11’ork, and Computerization, ’ Ri\’a

del Sole, ltal~’, Sept. 17-21, 1984.

. ———

‘ Huws, op. cit.: and Nlarsha Johnston Fisher, “Firm Turns

Telecommuting Into a Realit~’, ” AlIS, No\’. 28, 1984.

PARTIES AT INTEREST

Employers

Employers who offer home-based work have

at least one of four possible objectives: response to employee demands, social responsibility, access to an untapped labor pool, or cost

cutting. The last is apt to be the critical factor

for the future spread of home-based work.

Some corporations have begun home-based

work programs, or allowed the option in individual cases, to hold on to particularly valued

workers. Some allow workers on retirement

to continue part-time work from their homes.

Others such as Control Data Corporation and

Metropolitan Life began programs in order to

offer employment to handicapped workers.46

A few corporations are reported to be turning to home-based work as a way of recruiting

otherwise unavailable but highly qualified workers, such as mothers of small children, or suburban housewives.47 Critics say that they are

trying to avoid hiring poorly educated urban

minority workers.

“ Ilonan, op. cit., pp. 88-91.

‘

-

Pratt, op. cit.

The strongest motivation for offering homebased work in the future is, however, likely

to be the possibility of reducing costs. The employer saves money in terms of:

● floor space and associated overhead costs,

● equipment costs (in some situations),

 direct labor costs, and

 workers’ benefits.

The office needs proportionately smaller facilities, with all of the reduced operating costs

that entails, if many of the workers are at

home. There workers pay for their own floor

space, heating, cooling, and amenities; in some

cases, they own and maintain the computer

and other equipment. In effect, these costs are

shifted to the workers.

If the workers use terminals to communicate with the employer’s central computer, the

employer benefits by the more intensive use

of the computer because workers often use it,

and can even be required to use it, outside of

peak hours. For example, in a pilot program

run by the Army Materiel Development and

Readiness Command, there was a 64 percent

increase in computer usage without additional

cost. Three homebased employees were shifted

to second and third shifts. The percentage of

work time that the remote employees spent
198 ● Automation of America Offices —

on-line also increased by an average of 93 percent.48

Home-based clerical employees are often

paid less than their peers in the office, although

this is not always the case.49 If the workers

are paid piece-rates, the employer is not paying for set-up time, time spent in collecting

or delivering work, coffee breaks, bathroom

breaks, discussions with supervisors, chats

with coworkers, or any of the other unproductive time that office work includes. The organization can define the work by task and pay

only when it is satisfactorily completed.

The employer’s biggest cost saving may

come from flexibility-workers can be used

when needed and not used when work is slow,

without the difficulties of firing and rehiring

or the expense of unemployment compensation. This-is a great advantage for a company

with a highly uneven workload. It means, however, that the worker does not have a steady

income .50

Many homebased workers received no benefits—health insurance, sick leave, vacations,

pensions, etc. Of 14 corporate programs studied in 1983, for example, the 6 designed for

clerical workers shifted their status from fulltime to permanent part-time workers, in which

category workers-did not receive benefits.5

Those classified as independent contractors

are generally not eligible for unemployment

insurance benefits when not working. Home”

based employees and independent contractors

“Mary T. McDavid, “The ALMSA Work-at-IIome Proto

type, ” presented at the National Executive Forum: Office Work.

stations in the Home, .National Academy of Sciences, Washington, DC, Nov. 10, 1983.

‘

qContinental Illinois, for example, paid at-home workers

the same salaries paid to in-office workers, expecting that costreduction would result from reduced need for office space. Honan, op. cit., p. 96.

“’’Business Week reported in 1982, for example, that “Aetna plans to pay telecommuters by the project and to use them

only for ‘peak work, ’ leaving them without a regular salary.

They will also be ineligible for health and pension benefits. ”

Blue Cross home-based data enterers are excluded from benefits, which for office-based workers amount to $2,000 to $3,000.

The company says that those at home earn “up to $3,oOO a

year more, ” but they also pay $2,400 rent for their terminals.

“If Home Is Where the Worker Is, ” Business Week, May 2,

1982, p. 66.

“’Olson, op. cit., August 1983, p. 11.

studied by OTA for this project did not receive any employee benefits. Entrepreneurs

had purchased their own health insurance and

retirement plans.52

It has also been suggested that unionbusting is, or will be, a motivation for some

employers. At present, few office workers belong to unions, and home-based workers are

likely to be even more difficult to organize than

other office workers. The low pay for homebased clerical workers, especially piece-rates,

could act over the long run to depress the pay

of the main clerical work force. Critics argue

that employers might use the threat of expanded homework programs to undermine attempts by office workers to organize.

In spite of seemingly significant benefits to

the employer, many companies resist the concept of work at home. It involves a significant

change in traditional techniques of management and supervision, and managers fear a

loss of control over quality, quantity, and pacing of the product. The workers themselves

sometimes complain of poor instruction and

a lack of feedback from managers.53

Productivity

Almost without exception, studies show that

home-based workers are more productive than

those in the office. Estimates of the increased

productivity of home-based workers range from

Control Data Corporation’s estimate of 15 to

25 percent to other estimates of up to 60 percent54 and even 80 percent55 for some work-

——--_———

“Christensen, op. cit. Most of the home-based workers

studied in depth were, except for those who were active entrepreneurs who owned their own business, regarded by their

companies as independent contractors. Since they each worked

only for one company, in most cases had been regular employees until they took maternity leave, and had been approached

on the question of working at home in each case by the company rather than themselves soliciting home-based work, they

probably should still be regarded as employees.

‘ ‘Pratt, op. cit., p. 6.

“’R.A. Manning, Control Data Corp., “Alternative Work

Site Programs, ” a presentation to the National Research Council’s National Executive Forum: Office Work Stations in the

Home, Washington, DC, November 1983.

““In a study of about 1,000 home-based workers by Electronic Services Unlimited, reported in Jacobs, op. cit., p. 15.
Ch. 7—Home-Based Automated Office Work ● 199

. — .

ers.56 In part, this is an artifact of measurement. With home-based workers, only actual

working minutes are counted. In the office,

there is a considerable amount of “wasted

time” that is so fragmented that it is not noticed. However, many experts believe that

much of this “wasted” time is in fact spent

in informal help and support to other workers, or in the exercise of “invisible skills’ beneficial to the company .57

Home-based workers who were interviewed

for OTA said that they did not bill their employers for extra work they did in correcting

mistakes. Some did not request payment for,

or even report, hours that they put in on a

project over and above the time that had been

estimated as required, feeling that they should

have been able to work faster–even though

these estimates of required time had been made

by the employer rather than by themselves.

This kind of self-exploitation maybe common

among those for whom home-based work is

new and regarded as a rare privilege, and

should be taken into account in assessing the

reports of high productivity .5*

Workers themselves tend to attribute the

increased productivity to their control over

their schedule, their ability to work when they

most feel like working. In part, the additional

productivity probably results from the fact

that home-based workers are carefully selected,

highly motivated, and working in an environment chosen and designed by themselves.

Some observers argue that all of these effects are transitory and will disappear when

‘ hlc~at’~d, op. cit. Nines concludes that gains of 20 to 50

percent are common. (,Nilles, op. cit., p, 3.) In one group, 6’7

percent of the workers perceived their own productivity, as

well as the qualit,y of their work, to have significantly increased.

(Pratt, op. cit., p. 5.) In another study, workers reported their

perceived increase in producti~’ity to be 35 percent on the average, with the self-reported range from 5 to 100 percent.

In;risible skills are important aspec~s of the job that are

not specified in job descriptions but make the worker traluable

to an organization: for example, a secretar~’ chatting hospitably with important \risitors, or a word processor showing coworkers features of the equipment that they have not yet disco~’ered,

‘Christensen notes that this response was typical for the

emploj’ed home workers, but that it was not typical for entrepreneurs who had clear ideas about the \’alue of their time

and priced services to be competiti>’e with similar businesses,

the novelty of working at home is gone, and

when less highly motivated or selected workers are involved. The cross-fertilization and

mutual support that occurs in an office working group are valuable. Workers learn from

each other on the job. When there is no chance

to do this, productivity y may suffer in the long

run.

The Workers: Why Are They

at Home?

Because the number of home-based workers is uncertain, their characteristics-age,

gender, occupational status, etc.—cannot be

described quantitatively with confidence. Certain groups are thought to be represented far

out of proportion to their number in the total

work force—women, single parents, the handicapped, and retirees. 59

Professional home-based workers include

both men and women; the clerical workers are

overwhelmingly women, and the evidence indicates that most have one or more children

under 6 years old.60 This is true in other countries as well as in the United States. The typical home-based white-collar worker, then, is

probably not a male professional, but a young

mother doing clerical work.61

Most of the home-based clerical workers are

women because: 1) most clerical workers are

women, and 2) women are most likely to be

responsible for care of children, the elderly, —

‘“An analysis based on the 1980 census suggests that of

people regularly working at home (but not necessaril~’ doing

office work or using computers), 57 percent were women compared to 43 percent of those working outside the home. (Robert

E, Kraut, in on-going analysis, communication of Dec. 20. 1984.)

‘“ Among those who volunteered to be interviewed b)’ 0’rA

contractor Kathleen Christensen there were two groups, roughl~.

equal in size. Those who were in effect employees (although

called independent contractors they worked only for one organization, usually their employer before they took maternit~’

leave) were all women in their thirties, married or with partners, and with small children. Those who were entrepreneurs.

with their own companies and seeking multiple clients, were

typicall~’ older, single, with no small children. An as-~’ etunpublished survey of se~’eral hundred home-based workers confirms this finding.

‘‘Nlost home-based women workers with children under 17

are clerical workers, according to a major sur}’ey: Kathleen h;.

Christensen, “National Survey on 14’ornen and Home-Based

1$’ork ” F’amilJF C’ircle, Dec. 15, 1984 (publication of results in

progress).
200 Automation of America’s Offices ——.— —

or the ill.62 Women are probably also most likely to need additional income after retirement,

because they live longer than men, and are less

likely to have adequate pensions.

Most if not all home-based workers are now

working at home by choice, in the sense that

other jobs are available and no employers are

known to require working at home as a condition of employment. In most cases, the demand

for home-based work has so far come from the

workers, not from employers, who are often

reluctant or at least hesitant to provide this

option. But this may already be changing, as

organizations become aware of the cost-saving

possibilities. 63

“Choice” in any case has a wide range of

meanings. In some cases, it means that other

options are not available, or are less attractive to a worker for reasons over which she

has little control—staying at home is necessary because of other responsibilities, because

of social inhibitions (the traditional housewife’s

role), or because of physical disability. Often,

however, the person has first decided that he

she wants to stay at home and care for a family; the opportunity to do paid work at home

is a secondary choice that is not a critical factor in the first decision. Other people simply

prefer a lifestyle that does not include going

to an office, at least not at any preset times.

These people who have actively sought

home-based work as part of a new lifestyle are

more likely to be the professionals (including

males) simply because professionals usually

can exert more control over the conditions

under which they earn a living. Corporations

frequently report that they have formally or

informally provided the option in order to retain valued employees.

—.——

“’While women constitute 80.5 percent of all clerical workers, they are even more dominant in clerical occupations most

likely to include home-based work. For example, over 96 percent of typists are women, but less than 23 percent of shipping

clerks. Kraut, op. cit., p. 5.

“’The group of 13 “independent contractors” who worked

only for one client included nine former employees of an insurance company, who had been offered work to be done at home

when they applied for maternity leave. Four others were housewives who had each been asked to do work at home by friends

or husbands who were the proprietors of small companies.

Christensen, op. cit.

Many of these professionals believe however

that home-based work, especially if done full

time or nearly full time, seriously prejudices

their chance of promotion and advancement.

They have consciously traded-off advancement

for a preferred lifestyle.64 Women managers

especially tend to believe that this choice is

particularly prejudicial to their careers; some

have done it in preference to dropping out entirely when they became mothers, and in order to maintain their expertise and credentials

until they could return to work.65

Those who look for home-based work reluctantly, because they must beat home, are more

likely to be clerical workers.66 They are less

likely than professionals to be able to afford

professional child care or specialized transportation for the handicapped. But even for these

people, the opportunity to work at home may

be cherished, in contrast to not working, or

working under less desirable conditions.

It is therefore not surprising that overwhelmingly home-based workers are pleased with

their situation. This must be kept in mind when

evaluating the implications of home-based office work. Controversy over home-based work

does not arise from the dissatisfaction of the

current home-based workers themselves, but

from the possibility of future exploitation.

The Benefits and Costs for

Home-Based Workers?

How workers assess the relative benefits and

costs to them of working at home undoubtedly

depends on the degree to which they exercised

free choice from a wide range of employment

options.

All studies, and all journalistic accounts of

home-based workers, indicate that most value

the opportunity to control their own work

hours. Many report that the quality of their

leisure time is also improved because they can

select and schedule recreational activities that

“Pratt, op. cit., p. 7. See also Breathnach, Honan, Jacobs,

Olson, op. cit.

‘“’Pratt, op. cit., p. 11. Also substantiated in Christensen,

op. cit.

“For example, see Olson, op. cit., August 1983, p. 17.
. —

are not otherwise available. Many of them find

the home a congenial and comfortable working environment; this is not always the case

for those who are combining work with child

care in crowded living quarters. Many value

highly, the additional time spent with their

families, or the latitude to spend more daytime hours with family. The opportunity to

care for children at home rather than have

them cared for by others is the primary benefit for many people.

It is not always true, however, that working at home allows the worker to control when

he or she works. The home-based worker indeed often has a double constraint, having to

fit work around family needs and the times

when the company computer is down, such as

on Sundays. Thus, they may have as little control as office workers over when they work,

and they may even lose some of what is usually considered family time.

Cost savings can be significant for some who

give up work in an office. Workers have reported savings up to $200 per month for meals,

$100 for gasoline, parking, and insurance; $100

for clothes and cleaning bills. Large costs of

children’s day care may be avoided. 67 Those

who are entrepreneurs avoid the cost of outside office space and take tax deductions for

the use of their home.

Eliminating the commute to work is for

many a primary benefit. The average American worker now travels over 9 miles in each

direction, often a 1- to ‘2-hour commute.68 The

time and the stress spent in commuting is often

resented even more than the cost of gasoline,

insurance, car maintenance, and parking.

These cost savings of working at home do

not tell the whole story. There are also added

costs, both direct and indirect. Some workers

must lease or buy terminals. Most pay the telephone bills and some must pay for special dedicated telephone lines. Workers generally provide the furniture that they use in connection

with the equipment. They pay higher electri-

‘ Pratt, op. cit., p. 5.

‘‘hlotor }’ehicles hlanufacturers Association, Facts and

Figures, Detroit, hl I, 1981.

Ch. 7—Home-Based Automated Office Work ● 2 0 1

city bills because of the equipment, and some

report additional heating- and cooling bills.69

Clerical home workers almost always earn

less than their peers in the office, even within

the same firm.’” Sometimes the pay rate is technically the same, but those at home are shifted

to part time or piece rates without fringe benefits. They usually work fewer hours than those

in offices, either because work is not regularly

available, because of their home-related duties,

or by choice.

Part-time and piece-rate home-based workers usually report that their workload is very

uneven.” (For employers, the flexibility of labor supply is a major benefit.) The lack of a

regular income can be as much of a problem

as is low pay; those who are dependent on income from home-based work may live balanced

on the edge of financial disaster.

Health insurance coverage becomes a major problem for those converted to the status

of independent contractor or part-time worker.

The majority of home-based workers may be

covered as dependents by the health insurance

of spouses, but the separation from employee

status leaves others to pay the high costs of

individual coverage or be without protection .72

“4Pratt, op. cit.; and Honan, op. cit., p. 97.

“See for example, Olson, op. cit., August 1983. Other case

studies of home-based clerical work have consistentl.v found

that home-based workers make less than peers. However, some

preliminary analysis by Robert Kraut at Bell Communications

Research, shows higher hourl~’ wages for home-based workers

in a few clerical categories as compared to those not working

at home.

Reduced income is typical of the larger category of all work

at home as compared to work away from the home. According

to the 1980 census, 10 percent of home-based workers are below the poverty line, compared to 6 percent of other workers.

Male home-based workers have an average hourly wage of $6.77

compared to $8.20 for nonhome workers; women home-based

workers have an hourly wage of $3.06 compared to $4.80 outside the home. In addition, home-based women workers a\’erage 30.6 hours work per week compared to 40.2 for those working away from home, 35 for male home-based workers, and 41.6

for other male workers. There may be several variables invol~ed

in this phenomena.

Pratt (op. cit. ) also reported that many retired people found

home-based work not worth their effort because of the low pa~,

even though many enjoyed ha~’ing some work to occup~. their

time.

“ Pratt, op. cit., p. 10.

“-Among those interviewed b>’ Christensen, independent

contractors working for one client were cotrered under a hus-
202 Automation of America Offices — . —

While home-based workers have more control over their working environment than they

would in most offices, in the sense that the

decisions are their own, in fact, they often work

under very undesirable conditions. It may not

be possible to set aside space dedicated only

to work. They may not know how to select,

or perhaps cannot afford to buy, chairs and

desks that accommodate the equipment and

reduce muscular strain for the workers.73 Poor

lighting may cause eyestrain and headaches.

It is possible that office automation equipment

also introduces unrecognized hazards into the

home.74

One intangible cost to the worker may be

the social isolation of working at home. Saloman and Saloman point to the importance of

social interaction at work, and studies that

have shown that small, cohesive work groups

are for most workers the most effective and

satisfying work unit. For these workers, separation from the office work group may in the

long run result in dissatisfaction and low motivation. For managers and professionals, the

social role of the workplace may be less important; they rank achievement, advancement,

and the work itself as the most important factors in work satisfaction. The Salomans hypothesize that for some of these workers, the

shift to working at home may cause the individual’s “motivators” to shift. He or she may

become less concerned with achievement, status, and recognition, and more concerned with

.—

band’s health insurance. Those who were entrepreneurs with,

or seeking, multiple clients were mostly not married; they said

that the high cost of health insurance (in one case, $1,400 per

year) was one of their greatest concerns, and one or two had

gone uncovered for long periods of time. Christensen, op. cit.

“K1’e]ecornmuting Review, Dec. 31, 1984, cited a survey of

computing furniture needs conducted by the Business Products Consulting Group, which found that only 25 percent of

personal computer users, whether in the home or in the office,

had specialized computer furniture, and many of them complained of flaws in design that caused discomfort. Overall 7

out of 10 PC users had complaints about the furniture used

with the computers. The situation is likely to be worse in homes

than in offices, since home furniture is often jerry-rigged to

hold office equipment.

“If fire breaks out, there is a serious hazard to residents

and to fire fighters from the highly toxic gases produced when

the plastic casing of computers burns. Any special cabling that

might be installed in homes could also involve fire hazards,

according to discussions with insurance risk assessors.

affiliation and emotional contentment within

the family and community, which will become

more important to the worker than his or her

organization. If these needs for “belongingnes s cannot be met within the immediate

environment, then frustration and dissatisfaction will result.75

Home-based professionals whose salaries do

not depend on the exact number of hours

worked have remarked that minor illnesses,

for which they would have stayed home from

the office, now make them feel guilty-there

is no ritual process of calling in to validate

their reason for not working.

Distractions and interruptions by family

members, normal household noise, salesmen

and solicitors, friends who do not respect working hours at home and repeatedly call or visit,

are sources of annoyance and stress for homebased workers.76 Some people have reported

giving up work at home because they could

not resist the temptation to eat or drink too

much. Men have reported that wives resented

having them under foot all of the time.77

On the other side, some researchers have reported that both the loners and the gregarious types say that they can overcome these

problems with time. Handicapped people report that they feel less isolated with work to

do, even if their human contacts do not increase, and young mothers according to one

survey said they were no more isolated than

they would be if they were caring for children

without paid office work to do. It appears to

be the young, never married workers who are

most likely to give up home-based work after

they have tried it because they miss the social

aspects of the office.78

--.— .-

‘‘Ilan Saloman and Meera Saloman, “Telecommunicating:

The Employee’s Perspective, ” Technological Forecasting and

Social Change 25, 15-28, 1984. The Salomans here are drawing

on the work of N.D, Dunnette and others in Work and Nonwork in the Year 2000, Dunnette (cd. ) (Californiiz Brooks/Cole,

1973).

“’Saloman and Saloman, op. cit., pp. 23-24.

“Nelson B. Phelps, “Mountain Bell Telephone Company, a

Case Study, ” a presentation to the National Research Council

National Executive Forum: Office Work Stations in the Home,

Washington, DC, September 1983.

“Pratt, op. cit.
Ch. 7—Home-Based Automated Office Work ● 203

Again, those who found home-based work

unpleasant or stressful, have so far either had

the option of returning to the office or have

found this alternative even less acceptable.

Thus, studies of home-based workers almost

always find the workers enthusiastic about this

lifestyle.

Family Considerations

Advocates of home-based work stress the

benefits to family life of returning the worker

to the home. Little research has been done to

determine the real effects on family life. Such

indicators as there are point to generally positive effects, but with some caveats .79 Mothers

perceive several specific advantages for their

children, in addition to the primary advantage

of having a parent care for them, instead of

strangers or a commercial facility. They believe it is good for their children to realize that

“mothers can do more than cook . . . and take

care of them. They want their children to see

women performing a broader social role than

that of housewife, however they themselves

value that role. Some say that their children

become more independent because they are not

the only focus of mother’s attention. They say

also that their children become familiar with

computers and what they can do.

On the other hand, some mothers report that

their children get less time and attention, and

that the mother gets impatient when she is

under pressure to get work done.

For women struggling to earn an income and

care for children at the same time, home-based

work may be a golden opportunity, but it is

not an unalloyed blessing. It involves significant stress, both physical and mental, and may

create emotional strains within the family as

well. so One expert says, ‘‘It appears that work

‘Ma~erial in this section, unless otherwise noted, is drawn

from Kathleen Christensen’s study and chiefl~’ from the responses of 14 mothers working at home, so that it is merely

illustratii’e. Iler findings as discussed in this section are, however-, in man~~ cases confirmed by or congruent with the somewhat scant~’ and widel~ dispersed observations of other researchers about the family situation of home-based workers.

‘ ‘Gregory, op. cit. discussing Cynthia Costello, “On the

Front: Class, (jender, and Conflict in the Insurance Workplace,

Ph. D, dissertation, University of J4risconsin, Dept. of Sociolat home cannot be called a ‘good’ solution to

child care. “81

Mothers working at home typically try to

work when other adults are at home to care

for the children or when the children are at

school or asleep; they are not so much combining work and child care as interweaving

them.” It is hard to find 40 such hours a week

even when work is available and the income

is wanted, and typically they work split shifts,

often late at night. Those who must earn as

much as possible because they and their children are dependent on their income, may therefore have little or no time for rest or recreation, like the cottage sweatshop workers of the

turn of the century.

Those who regard this income as discretionary often have babysitters while they are working.” Since taking care of the children themselves is important to these women, the fact

that they turn to baby sitters indicates two

things: that doing paid work and taking care

of children at the same time is difficult and

stressful; and that it is important to them to

have some other work, in addition to caring

for a family, for reasons other than the marginal income. The second point is repeatedly

confirmed by home-based working mothers,

who say that they need something to occupy

their minds or that paid work gives them pride

—.

ogy, 1984. In one study, 50 percent of mothers working at home

reported that the-y found it necessary to have a paid bab~’sit ter

for part of the time in spite of their desire to combine work

and child care. Also Margrethe olson, Remote Office l! ”ork:

Implications for lndi~’iduals and (~rganizations, CAIS No. 25.

GBA No. 81-86 (CR), New York Uni\rersit~, (lraduate School

of Business Administration (New York: New’ York Uni\’ersit~’),

“’Olson, op. cit., August 1983, p. 27.

‘-The 14 mothers inter~iewed by Kathleen Christensen,

nearly all said the hours the~’ could work were those in which

the children were asleep, in school, being watched by the husband, or “playing bv themselves and or in a good mood. ” These

women are in ~radit-ional t we-parent households where the husband is the primary breadwinner.

“Six of the 14 mothers interviewed by Kathleen Christensen, all of whom were from traditional two parent households

and said that the~. stayed at home to care for their children,

relied on some form of paid child care while they worked. The

mothers, whether or not they had child care, usually ga~e as

their reason for working “to ha~’e something to do, so that m~’

mind can keep working, or to show ‘ a ~hat I can do something

besides cleaning the house and being a house~’ife.
204 ● Automation of America’s Offices

and self-respect (and respect from others) that

is lacking otherwise.84

In the few cases where effects on the marriage, or other personal relationships, of homebased women workers have been studied, most

husbands were said by their working wives

to be supportive and helpful—sometimes because they welcomed the supplemental family income, sometimes because they recognized

its psychological importance to the worker,

sometimes for both reasons. A few husbands

were said to have mixed feelings, perceiving

that work sometimes interfered with housework; none were reported to be actively

opposed.

Most of the women said, however, that their

husbands helped no more with housework than

they had before. The women had been, and still

were, predominantly responsible for the household work, and a few spontaneously expressed

dissatisfaction or resentment of this. Most

were unable to draw boundaries between household and work responsibilities, and move back

and forth between them during the day.

Even those home workers without children

to care for often report significant stress resulting from the lack of separation between

work and family responsibilities. Saloman and

Saloman, in a paper on home-based work from

the perspective of the sociology of work, point

out that:

Work and family life today are not only

physically separate entities, but each also gives

rise to distinctly different role behavior that

may have little in common. It is not only that

the two different environments require different behavior, but that they also offer the individual a chance to express different aspects

of his or her personality .85

Sociologists define a‘ ‘role’ as a set of structural demands being placed on the individual

——. —

“’Ibid., citing D.T. Hall, “A Model of Coping With Role

Conflict: The Role Behavior of College Educated Women, ”

Administrative Science Qmrterl.v 17 (4), 1972. See also J. Pleck,

“The Work-Family Role System, Social Problems 24 (48), 1977.

in a given social position.86 Role conflicts can

result when the demands and expectations imposed by multiple roles operate at the same

time. Working at home, the Salomans argue,

can introduce identity conflict as it eliminates

the sequential operation of the different roles

related to home and work. For men, it has normally been “acceptable for work (to) interfere

with family life”; at home, the reverse interference may happen more often. For women,

who may have more social inhibitions to overcome in establishing a career role, the conflict

may be particularly severe when the roles of

mother, wife, housekeeper, employee, and career aspirant overlap in time and space.

These sociologists say that the trip between

work and home is often a useful separation

between two arenas of social interaction. Thus,

eliminating the commute may be a cost as well

as a benefit.

Effects on Society

Workers and employers are part of one society and the interests and concerns of each are

part of the public interest. But society at large

may have a general interest separate from the

specific concerns of either party.

In this case, some of the costs that are ordinarily borne by employers or shared by employers and employees are shifted to workers—

for example, in the case of independent contractors, social security taxes, health insurance, pensions, and the costs associated with

periods when the workload falls below normal

levels for long periods of time. For people who

are not employed, those costs ultimately may

be borne by the taxpayers. Thus, a strong

trend toward farming out work to “independent contractors’ who were previously, or would

otherwise be, employees, also implies a shift

of life-cyle costs from the employer to the general public.

“’This was a theme that recurred repeatedly in the interviews conducted by Christensen.

“’Ilan Saloman and Meira Saloman, op. cit., pp. 15-18, 21.
—

Ch, 7—Home-Based Automated Office Work . 205

LEGAL AND REGULATORY BARRIERS TO

HOME-BASED WORK

Zoning laws in some communities prohibit

any paid employment in residential areas.87 The

Internal Revenue Service (IRS) has in recent

years progressively restricted the income tax

deductions that may be taken for home offices.

It is not clear under what conditions homebased workers can claim deductions, especially

if the workspace that they use is not entirely

dedicated to work (many home-based workers use a corner of the dining room, bedroom,

or living room). But when there is dedicated

space, a recent IRS ruling says that the home

office is to be treated as business property

rather than residential property, and thus part

of the proceeds of selling a house that includes

a home office are not eligible for the standard

exclusion from tax on the proceeds allowed

to people who immediately buy another house,

or who are over 55 when they sell the house. 8s

There have until recently been unresolved

questions about the status of home-based “contractors’ who contract with only one organization, especially, if they have previously been

employees of that organization. The National

Labor Relations Board has ruled, in similar

situations, that such independent contractors

are in fact employees. The tax code says that

anyone who performs services for any person

as a home worker, performing work according

to specifications on materials furnished by the

other person and required to return the finished product to that person, is an employee.

This holds unless that person has a substantial investment in facilities used for the work,

in which case, he or she may be an independent contractor. 89 The Internal Revenue Service has ruled specifically that computers with

word processing capability are not ‘‘ substantial investments’ in that sense, and that home-

‘-Tammara H. Wolfgang, “M’orking at Home: The (jrowth

of Cottage Industry, ” The Futurist, ,June 1984, p, 31.

“’1’e]ecommuting Re$’iew, Dec. 31, 1984, p. 7.

“ ‘Sec. 312 l(d) (3) (C) of the Internal Re\.enue Code.

based workers providing transcription services for one person or organization are employees at least for certain tax purposes. go The effects of these rulings on home-based clerical

work are not yet fully apparent. It will open

the door for home-based clerical workers, if

they choose, to argue that they are employees, even if regarded by their client as contractors, and thus, entitled to certain worker

benefits and safeguards.

Government work-at-home pilot programs

have been frustrated or terminated because

of regulatory requirements. The pilot program

of the Army Material Development and Readiness Command wanted to use either direct

lines or telephones with a modem to connect

home-based workers to the central computer.

The Army Communications Command determined that for the government to provide telephone service to a home violated a Federal statute;91 but employees could not use their own

telephones because another statute” placed

some limitations on government acceptance

of voluntary services from individuals.93 The

problem was solved by installing direct lines

without voice capability; a legal opinion sanctioned occasional use of the employee’s home

phone to communicate with a supervisor.

This introduced a second problem: how to

protect the government if personal property

was damaged as a result of installing the communication lines or the use of governmentowned equipment. This was solved by requiring employees to sign a “hold harmless’ agreement with the government as a condition for

participation.”

--

“’’Internal Re\’enue Ser\rice, Technical .4d\’isor?’ hl[~morandum 8451004, Aug. 1, 1984. Index nos. 312 1.04 -00,” 3306,05-

00, 3401.04-00.

‘4 Stat. 32 U.S.C. 1348.

‘ Rev. Stat. 3679, 31 U.S.C. 1342.

4’McI)avid, op. cit.

“That is, an agreement not to hold the go\wrnment liable

for accidental damages,
206 ● Automation of America’s Offices — — .

A third problem was the question of responsibility y for injury to the employee while working at home. Workers’ Compensation (U. S. C.,

title 5, sec. 8102) covers Federal employees

on duty, but the question was how to prove

that they were on duty when the accident occurred. The solution to this problem was a written work agreement stating hours to be worked

each day; participants had to formally request

changes to their designated work schedule and

get a supervisor’s approval. This of course

eliminated one of the major benefits that workers typically see in working at home.

Finally, this program ended when government auditors ruled that there was a risk of

fraud or abuse in spite of electronic monitoring of work done at home.

Some of these problems also appear in the

private sector, for example, the problems with

the installation of communication lines and

questions related to the protection of home

workers from work-related injury or illness.

Installing an additional telephone line in a

rented residence, for example, sometimes requires the permission of the owner. One study

of home-based corporate employees found that

half of them had no accident insurance, and

most “assumed” that they were covered by

Workers’ Compensation.95 It appears to be true

that home workers are covered by Workers’

Compensation if injured while working at

home, and by the employer’s insurance plan

if injured at the same location while not

working-if the worker is covered by employee

benefits.96 In either case, how the worker is

to demonstrate whether or not he or she was

actually working when injured, is so far unanswered. ——. . . —

“Pratt, op. cit., p. 8.

“ Honan, op. cit., p. 91.

The more general question as to how Occupational Safety and Health rules apply to homebased workers is also unanswered. Laws pertaining to the use of VDTS in the office have

been proposed in 13 States but it is not known

how these will apply to home-based employees.”

A British document illustrates that these

questions arise in other countries. Draft regulations proposed by the U.K. Health and Safety Commission in 1979 says that:

Home workers, properly speaking, work for

the person who puts out work to them in the

sense that they contribute to products which

he markets. For this reason, those who put

out work to home workers bear the prime

responsibility for ensuring that, so far as is

reasonably practical, no risks to health and

safety arise. 98

In the next paragraph however, clerical workers are expressly excluded: “The Commission,

particularly in the absence of evidence of risk

to home workers from these processes . . . propose to exclude from these regulations all office type work undertaken in domestic premises. ” The document continues:

It is important to reemphasize that any person requiring a home worker to utilize potentially hazardous processes in connection with

clerical work is nonetheless bound by the requirement . . . to ensure that risk is controlled.

No further reasoning supporting the exclusion

is given, nor are “potentially hazardous processes in connection with clerical work” specified or defined.

“Gregory, op. cit., p. 2.

““Health and Safety Commission, Home

Regulations, consultative document (issued

sion in compliance with its duty to consult

of the Health and Safety at Work, etc., Act,

Workers: Draft

by the Commisunder sec. 50(3)

1974, 1979, p. 1.

PUBLIC POLICY ISSUES

Encouragement or Prohibition of

Home-Based Office Work

actively discourage or forbid it, or 3) take neither action.

The primary public policy issue in home- Parties at interest include: employers, homebased office work is whether the Federal Gov.. based workers, their families, other workers

ernment should: 1) actively encourage it, 2) (especially clerical workers and working women
with children), and unions. The issue also tends

to engage people with an ideological position

regarding home and family values, equity for

women, and alternative life styles. Society in

general has an interest, in that some potential costs may be shifted to the taxpayer when

home-based workers are converted to the status of independent contractors.

Congress, and State governments, could

take a number of steps to further encourage

home-based work, although these are probably

necessary. These include:

revising IRS rulings on independent contractors and relieving employers of some

tax liabilities for them, for example, rewriting social security tax provisions;

resolving the problems of applying workers’ compensation to work performed in

the home;

persuading States to grant exemption

from zoning and building codes for computer-mediated employment in residential

buildings;

providing significant tax incentives for

equipment purchased for home-based

work; i.e., a tax credit rather than deductions; and

clarifying and expanding tax deductions

allowed on home- office;, especially providing large deductions when all or a significant portion of family income is earned

in the home (this would benefit some

home-owning workers).

If public policy is to discourage home-based

office work—or more narrowly, home-based

clerical work—the clearest option is to prohibit

it, as was done for some other occupations in

the 1930s. However, this would require very

careful definition to limit the prohibition to

those kinds of office work that are subject to

exploitation. The prohibition would very likely

be seen, even by some of those it was designed

to protect, as discrimination against women

(who would be mostly affected) or against certain occupational and income groups.

There are a few ways to discourage the

spread of home-based work that are largely

the converse of options for encouraging it:

●

●

●

Ch. 7—Home-Based Automated Office Work ● 207

strong enforcement of the rules requiring

organizations to treat independent contractors in some situations as employees,

with full benefits;

placing a special tax on income derived

from services provided from homes, for

both the employer and the employee; and

high telephone rates for digitalized information transmitted between office and remote workers, which would run counter

to present policies of deregulation.

Other government actions are possible that

would both: 1) tend to discourage the spread

of home-based clerical work, and 2) enhance

the element of free choice for home-based work,

thereby reducing the possibility that it will

be used exploitatively. These actions are:

● developing subsidized, high-quality day

care centers for children of working parents;

● providing larger tax deductions for expenses related to child care (or the care

of elderly or infirm dependents); and

● requiring or providing further significant

incentives for modifying transportation

systems and office environments to facilitate employment of the handicapped, and

providing positive inducements for employment of the handicapped.

Congress may choose not to take actions either to encourage or discourage home-based

work. There are now few important legal or

regulatory barriers to its growth; therefore the

option of no-action will allow its spread. Eventually, home-based work is likely to grow since

it offers benefits to both employers and many

individual employees, while the costs that it

imposes on some workers are generally considered acceptable in the absence of more desirable alternatives.

Controversy about home-based work is likely

to become a major policy issue only if and when

one of three conditions obtain:

the number of home-based clerical workers becomes a significant fraction of all

clerical workers, so that this becomes a

factor in the competitive position of office workers in the job market and in negotiations with employers;
208 ● Automation of America’s Offices

●

●

cases of serious exploitation of homebased workers come to public notice

through the media; and/or

unions are highly successful in their attempt to organize white-collar workers

Regulation of Home-Based

Office Work

If, however, the Federal Government neither actively promotes nor prohibits home”

based office work, then issues arise regarding

its regulation to provide protections that are

assured to other workers. In summary, these

include wage and hour guarantees, assurance

of safe and healthy working conditions, the

right to negotiate collectively with employers,

guarantee of equal opportunity, equitable pay,

and equitable access to insurance, pensions,

and other entitlements.

At present, managers and professionals are

generally exempt from the Fair Labor Standards Act of 1938 (which covers such conditions

of work as wages and hours) and managers,

but not professionals, are exempt from the National Labor Relations Act (right to collective

bargaining), whether they work in an office

or at home. They are assumed to protect themselves individually by negotiation with employers, although some belong to unions or

professional organizations that bargain collectively. They are however covered by the Equal

Opportunity Act and other recent work-related

legislation.

The chief concern in regulation of working

at home therefore focuses on clerical workers.

Predominantly female, nonunionized, and

often bearing heavy responsibilities as mothers

(increasingly, as single parents), they are particularly vulnerable to exploitation. Another

growing concern is the vulnerability of new

immigrants, of disadvantaged minorities, and

of elderly workers to possible exploitation.

It is quite possible that States or local governments may impose regulations on homebased work, especially with regard to health

and safety issues.

Questions with regard to regulation are:

 clarification of the application of existing

regulations to home-based work (e.g.,

Workman’s Compensation);

. what additional protection is needed for

home-based workers? and

 what means can be devised for effective

implementation and enforcement of regulations related to home-based work?

With regard to the last question, there are

concerns that any attempts to implement and

enforce regulation of home-based work may

destroy the benefits for which it is valued (i.e.,

autonomy over work hours), or may lead to

unacceptable violations of the privacy of workers and their families.

This—how existing labor standards can be

implemented and enforced for home-based

workers—is in fact, the critical policy issue

most likely to confront the Congress in this

area in the immediate future. It is the point

on which opponents usually base their argument for an outright ban, since they maintain

that real enforcement will be extremely costly,

and in practice impossible. This is the problem that led to the ban on home-based work

in some industries in the 1930s. However there

has been little real examination of the possibilities and difficulties of enforcement today.

It can be argued that the same difficulties

would arise in enforcing a prohibition. It can

also be argued that either a ban or regulation

would be easier to enforce today than in the

1930s. Reporting requirements laid on businesses have proliferated, the rights of workers and the benefits they stand to gain by

demanding those rights are larger, and people doing computer-mediated work are likely

to be far better educated and more sophisticated in understanding to what protection they

are entitled. The same technologies that make

computer-mediated work at home possible,

might be used to make it difficult to hide.
Chapter 8

Off-Shore Office Work
Contents

Page

The Present and Future Status of Off-Shore Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

How Off-Shore Offices Operate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Linkage Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Types of Data Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Examples of Off-Shore Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Factors in Moving Data Entry Off-Shore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Differing Views of Off-Shore Office Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

U.S. Off-Shore Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

U.S. Labor Organizations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign Government Officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Economic Development Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Public Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Regulating or Prohibiting Off-Shore Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Regulation of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Encourage or Do Nothing About Off-Shore Office Work . . . . . . . . . . . . . . . . . . . . . . .

211

214

214

215

215

216

223

223

224

225

226

227

227

227

230
Chapter 8

Off-Shore Office Work1

While the cost of electronic office equipment

declines, the cost of employing Americans to

perform routine office tasks is rising both per

employee and in the aggregate. Some U.S.

firms have established off-shore offices in order to take advantage of lower cost labor. Some

of these offices involve manual clerical work

such as coupon sorting. However, advances

in information and communication technologies make it increasingly attractive to move

data-entry operations off-shore. Data entry

means converting information from ‘hard’ or

paper form into digital form so it can be stored

electronically. This entry phase of data processing is commonly referred to as “keypunching , “keyboarding,” or “keying.”

High domestic labor costs could lead to an

international division of labor in data processing. Data-entry clerks in Caribbean countries, for example, typically earn weekly wages

that range from about $15 (U.S. equivalent)

to approximately $60, while their counterparts

“I’his chapter draws hea~’il~. from an OTA contractor report: (’Christopher P. Astriab, .4n .+ls.sessment ofoff-.$hore Office 11’ork, prepared for the U.S. Congress. Office of ‘I’echnolog~’ .4ssessment, contract No, 583-0630, Feb. 28, 198.5; and

from an additional report from Consultant Anne Posthuma.

in the United States may earn at least six times

the latter figure per week. Even with transportation, communications, and other costs

accounted for, total expenses for keypunching data off-shore may still not equal the cost

of carrying out the process domestically. z

Several data-entry facilities are presently

operating in the Caribbean region, and their

number is expected to increase. Labor costs

are low and the region is easily accessible and

close to the United States. Transportation and

communication networks are reasonably well

developed, literacy rates are high, and there

are favorable tax provisions for foreign investors. The Caribbean is only one region,

however, in which off-shore offices could proliferate.

These operations can be simple to implement. The tools and raw materials are light,

relatively inexpensive, and easy to transport.

If full advantage is taken of communication

technologies, distance and time become almost

incidental factors when choosing sites at which

to locate off-shore offices.

-F’ig-ures deri~’ed from Caribbean Central American ~\ction

data (Washington, DC, 1982).

THE PRESENT AND FUTURE STATUS OF OFF-SHORE OFFICES

While off-shore offices have existed for the data processing operations in the Caribbean.

better part of two decades, the arrival of elec- Barbados hosts seven such firms, while Jatronic communication and information tech- maica hosts at least three, and St. Christophernologies has set the stage for new and possi- Nevis and Haiti each host one. In these four

bly rapid growth in the near future. The countries, approximately 2,300 workers are

number of companies entering data at off-shore directly employed in off-shore offices. The

sites are still few, and the impact of the largest such office in the region is a couponphenomenon on foreign and domestic employ- sorting operation that employs approximatement and economic situations is at present in- ly 1,200 people in Haiti.

significant. At least three off-shore offices in St. VinOff-shore data processing facilities are pre- cent, Haiti, and Grenada closed down in redominantly located in the Caribbean region. cent years. Managerial and transportation

Currently, there are at least 12 U.S. firms with problems were the causes; the ability of the

211
212 Automation of America’s Offices

employees to carry out the operations were

apparently not in question.3 In the case of

Grenada, which hosted a firm for some 10

years, recent “unsettled conditions” there were

cited as the cause.4

Other countries including India, Singapore,

the People’s Republic of China, and Ireland

also host at least one data-entry firm each.

Approximately 27 coupon-sorting operations

are located in Mexico, one of the first countries to host off-shore offices. The total number of people employed by these firms is not

known.

There are generally two types of firms involved in establishing off-shore offices. The

first perform only their own clerical work offshore in order to reduce labor costs. The second group are vendors who have established

off-shore offices to provide data processing orword processing services to clients in the

United States.

All signs indicate that off-shore data entry

could undergo rapid growth over the next 10

to 15 years. The vendors who provide these

services are optimistic about the future of the

industry:

In 3 to 5 years we expect to have 300 to

500 people (keying) in different locations (in

Jamaica). This is a large market, perhaps $50

billion by 1990.5

The growth industry in Barbados has to

be information services and data processing . . . As Barbarians acquire data processing skill, Barbados, with its investment in

telecommunications, can develop software

and other applications. The industry in Barbados . . . has tremendous opportunity to

grow and evolve, especially given. . . the government’s commitment to it. G

For now, any softening of data-entry markets is being offset by explosive growth of

data-base services. Such growing needs will

‘Donald Marsden, Coopers, and Lybrand, St. Kitts-Nevis.

Personal interview, Miami, Dec. 7, 1984.

‘Ibid.

‘Mary Ramond, “Jamaica On the Move, ” Business Week

special advertising section, Sept. 17, 1985. (Gary Bechtel, president of Telemar Data Systems, Fairfield, NJ, is quoted.)

‘Mary Ramond, “Barbados - 1984, ” Business Week, special

advertising section, Apr. 16, 1984.

give (data-entry firms) a big market to shoot

at . , . 7

In view of dramatic growth in data processing and expanding needs for digital data, these

observations may be justified. There is considerable interest in establishing new data

processing facilities abroad and some companies already in the business have cited expansion plans.

Several companies are now studying the possibility of setting up keying operations in

the Caribbean. Barbados, St. Lucia, St. KittsNevis, Dominica, Jamaica, Trinidad-Tobago,

and Grenada are all possible sites for further

growth. 8

Firms already in the region maybe expected

to expand, but the scale of this expansion is

uncertain. A firm in Jamaica that presently

employs approximately 60 plans to expand to

about 500 employees over the next several

years. This growth-approximately 700 percent—is probably exceptional, however. The

whole industry now employs about 500 people in Jamaica. The Jamaican Government

encourages this industry, and ,Jamaica Investment Promotion, Ltd.—the government development agency—has reportedly secured contracts for another company that would require

it to expand “significantly.

While the industry has existed m the Caribbean for some time, investors are showing

renewed interest since the passage of the Caribbean Basin Initiative Act by the U.S. Congress.10 While no specific provisions in the act

deal with data processing, the act does express

the commitment of the U.S. Government to

assist in the development of the region. Early

signs of success in using satellites to trans-

“’The Instant Off-Shore Office, ” Business Week, Mar. 15,

1982, p. 136.

“Anecdotal information from various interviews, U.S. Department of Commerce, Caribbean Basin Business Information Center, and others.

“Audley Shaw, Director, North America, Jamaica National

Investment Promotion, Ltd., New York, personal interview,

.New York, Jan. 14, 1985.

“Gary Bechtel, President, Telemar Data Systems, Fairfield, NJ, personal interview, and presentation given at the Miami Conference on the Caribbean “Off-Shore Key Punch Operations” square table discussion, Miami, Dec. 7, 1984.
mit data from the region are also attracting

attention. Based on observations of people

knowledgeable about the industry, it is probably safe to assume that at least l,000 to 2,000

additional data-entry jobs could be created in

the Caribbean region over the next decade.

In Mexico, the growth potential of data processing is high. An estimated annual growth

rate of 10 percent has been cited, but competition from the Caribbean region is anticipated. 11

In other areas of the world, growth is dependent on: 1) companies’ willingness to establish operations at great distances from the

United States, 2) the type of data they are dealing with (i. e., the lead time available for dataconversion work), and 3) the mode of operation being used (i.e., air transportation or electronic transmission). At the present time, the

practice of flying hard copy to off-shore sites

and returning the data on magnetic media is

the predominant mode of operation. Only a

few firms are using two-way satellite links to

any extent, and the oldest has been operating

for about 3 years. Unless satellites are used,

it seems unlikely that time-sensitive work

would be exported to areas such as the Far

East or India. Air transport to these areas can

be relatively slow and complicated, particularly if time is of the essence.

Wage rates in these areas, however, can be

much lower than in the Caribbean. In the People’s Republic of China, a figure of $2.00 per

week for clerical workers was cited.12 In India, the labor rate for keyers may be as little

as one-tenth to one-fifteenth of the U.S. rate,

which more than compensates for transport

costs, ’3 The president of one firm operating

there estimates that it would cost approximately $65 to key 10,000 characters in the

United States, while he can get the same job

done in India for about $7 to $10, and the quality is higher. ’4

— ..— .

‘lMollie Shields, Commercial Officer, U.S. Embassy, Mexico City, Mexico. Telexed response to inquiry.

Posthuma, op. cit., p. 5.

‘ ‘Nick E}age, General Information Ser\’ices, Philadelphia.

Telephone inter~’iew, July 3, 1984.

‘Ibid.

Ch. 8—Off-Shore Office Work . 213

At least one U.S. firm keys data in Singapore, but this site may have been selected because the data is then relayed to the firm’s

office in Australia. Presumably, transmission

costs also were an important factor. However,

a World Bank report says that two-thirds of

Singapore’s total output is services and over

35 percent of these services were devoted to

the production and distribution of information.

The primary information sector in Singapore

contributes over 24 percent of gross domestic

products. 15 In the Far East, therefore, Singapore would be a promising site for expansion

of data processing work.

As to the future of off-shore keying, there

may be inherent limitations on growth. International telecommunications to link off-shore

offices with the United States may not be available everywhere or may not have the tremendous growth in capacity that some expect. Not

all “raw” information (i.e., hard copy) can be

readily transmitted abroad for keying. Facsimile clarity is still a significant problem, particularly if operators must process large volumes of data. The use of facsimile equipment

does not appear to be cost effective as yet.

Facsimile transmitters may take as long as

6 minutes per page, “. . . far too long to let

overseas operators compete for time-sensitive

jobs, ” according to one firm.16

Advances in facsimile technology will, presumably, solve these problems. But the very

fact that such advances are being made may

drastically reduce the need to hire operators

for many kinds of data-entry work.

Perhaps the most important technological

consideration when assessing the future growth

of the industry regards optical character readers (OCRs). As advances in the field permit

the widespread use of scanners, and the use

of machine-readable documents increases, the

need for human intervention in data entry will

be reduced considerably.

“W’orld Bank, il’orld De\’elopment Report, 1982, New

York, 1982.

“’’The Instant Off-Shore Off ice,” p. 136.

52-644 0 - 85 - 8
214 Automation of America’s Offices

Most of the experts consulted on behalf of

this study agreed that the arrival of cost efficient, highly capable optical scanners would

mean the end of off-shore data-entry work. For

example, an executive of one company believes

that his firm will stay as long as the costeffectiveness of satellite transmission is not

outpaced by advanced technologies that could

eliminate the need for a majority of data-entry

jobs altogether: “To say that we’ll be doing

this for the rest of our lives is not accurate;

but to say that we’ll pull out in the near future is also not accurate. ”17 Others in the industry agreed. It is thus reasonable to expect

that off-shore keying may have an effective

lifetime of only 15 to 20 years, but during that

period it could grow rapidly and have a significant effect on U.S. clerical employment.

‘Posthuma, op. cit., p. 18. (James Marston, vice president

of data processing for American Airlines, is quoted. )

HOW OFF-SHORE OFFICES OPERATE

Linkage Arrangements

There are three principal methods of linking off-shore data-entry sites with data sources

and end users in the United States. All three

use some combination of air shipment or electronic transmission to move data back and

forth between sites.

The least sophisticated approach is to ship

information by air in both directions. Typically, paper documents, microfiche, magnetic

tapes, cards or discs, or audio recordings are

collected at one or more U.S. sites for packaging. In the case of paper documents some preliminary hand sorting may occur at this time.

A major U.S. airline, for example, sorts ticket

stubs according to station, flight number, and

passenger class before shipping them abroad,

Documents are then packaged and shipped

to the off-shore site via regular air freight or

overnight courier services. On arrival at the

host country airport, the packages are cleared

through customs and delivered to the processing site by courier services or employees

of the user firm. At the processing facility each

keyer has a video display terminal that is typically linked to an onsite computer central proc

essing unit. The information on the documents

is keyed into the computer, the data is recorded

on magnetic tapes, disks or cards, and shipped

back to the United States, where the data can

be stored, printed on paper, or fed into a computer program for analysis.

The second method of linking sites involves

air shipping documents from the domestic

point of origin to the processing site and then

electronically transmitting the digitized data

back to its source or to other end users. Typically, the data processing sites are linked via

terrestrial telephone lines to satellite Earth

stations. The use of this method is, of course,

limited by the availability and proximity of

earth stations, but permits shorter turnaround

times. Where satellite communication facilities

are not available it maybe possible to use submarine cable links to the continental United

States. Theoretically, the reverse of this process (i.e., transmitting data to the off-shore

site and shipping hard documents back to the

United States) is also possible, but OTA found

no instances of such use.

Finally, electronic links may be used to transmit data in both directions. Documents are

facsimilied in the United States and transmitted to the off-shore site, keypunched, and

then retransmitted back to end users. Information that has already been digitized, but

requires further processing or revision may

also be sent abroad by simply “playing back”

data on magnetic media and transmitting it

from the United States to the off-shore site.

Two-way electronic links offer the shortest

possible turnaround times, and may, in fact,

be the only practical method of processing data

off-shore when the ability to deliver it to end

users within a very short time is essential. A
major U.S. printing house that must process

and deliver financial data to end users in as

little as 15 hours is presently exploring the

feasibility of establishing data processing facilities off-shore.

Types of Data Processing

The kinds of data processed off-shore and

the types of processing they require are many

and varied. Documents sent abroad for processing include manuscripts; legal documents;

insurance or medical records; statistical data;

financial statements; coupons for food and

other products; order or subscription forms;

business documents such as ledgers, payrolls

and the like; ticket stubs; mailing lists; contest or sweepstakes entry forms; and audio

recordings. In most cases, the documents are

produced in large volumes on a relatively continuous basis, and their conversion to electronic form is essential to the end users.

Processing in many instances is limited to

converting textual or tabular information on

hard copy into digital form so it may be more

readily reproduced, stored, manipulated, or

analyzed. One company, for example, keys in

mailing lists and contestant entry forms, while

another concentrates on keying textual and

financial data for a Fortune 500 client base.

Processing may also involve reformatting

documents or revising and correcting texts

that have already been proofread or edited and

digitized in the United States. The printing

firm noted previously may transmit to an offshore site “rough’ copy that had already been

keyed. The off-shore facility would key in the

necessary revisions to make copy ready for

typesetting. 18 Another firm reformats financial data at its off-shore facility into standard

forms for use in the United States. ’g

Examples of Off-Shore Offices

The following capsule descriptions exemplify

the types of off-shore offices and the methods

by which they operate.

‘Keith Adams, R.R. Donnelly & Sons Co., Chicago. Personal interview, Miami, Dec. 5, 1984,

‘gBechtel, op. cit.

from airline ticket stubs for a major U.S. airline,

●

●

the keyed information is returned to the

United States via satellite

A California-based firm air-freights batches

of paper copy to its keying facility in Singapore. From there, the keyed data is sent

to its branch office in Australia via satellite. This allows the company to update

the files of its Australian clients on a daily

basis.

A Texas businessman has an arrangement

with students at Tsinghua University in

the People’s Republic of China to key in

numerical and narrative information from

surveys. Magnetic tapes containing the

information are then flown to the United

States for analysis.

In Limerick, Ireland, a major U.S. market research firm keys magazine subscription information. The same firm has

branches in Port-au-Prince, Haiti, and Chihuahua, Mexico, where product coupons

are sorted and rebate lists are developed.

A major U.S. international airline collects

ticket stubs from its operating bases

throughout the United States and flies

them to its keying facility in Barbados.

There, information on passenger class,

point of embarkation, and destinations,

etc., is keyed by a staff of almost, 300. The

revenue database is sent over private

leased lines via satellite to its data processing office in the United States on a
216 ● Automation of America’s Offices —

●

●

daily basis. The company transmits about

2.25 million characters to the United

States every month. Information on data

entry personnel efficiency is transmitted

back to Barbados for analysis by managerial staff. The airline is now soliciting

contract work in order to make its keying

operation into a profit center.

A New Jersey company has entered into

a joint venture with a Jamaican firm to

key financial data for approximately two

dozen Fortune 500 clients. The data--

about 50 percent textual and 50 percent

tabular-is used for financial reports. The

firm cited a document turnaround time

of 1 to 2 weeks. It presently flies hard copy

to the facility for keying, but anticipates

using facsimile equipment in the United

States to transmit information to Jamaica,

and then return it to the United States

via satellite. Approximately 60 people are

employed in the firm. It expects to double its size sometime in 1985.

A firm in Montego Bay, Jamaica keys in

mailing lists for such companies as The

Great American Sweepstakes and Publisher’s Clearinghouse. The responses to

mass mailings are flown to Jamaica and

mailing lists on magnetic media are flown

back to the United States.

A small, Philadelphia-based firm operates

a joint venture data-entry service that employs about 20 people in Madras, India.

The company concentrates on keying in

past records, and disk-to-disk conversion

of data for clients shifting from one kind

of computer system to another. It had

originally used a Kurzweil optical scanner that translates printed characters into

digital form for storage on magnetic media. It found that use of the machine was

not cost effective, and also encountered

technical problems regarding the capability of the machine to read accurately. It

gave the machine to a university and now

uses data-entry workers exclusively to key

in information.

—

Factors in Moving Data Entry

Off-Shore

Several general factors encourage American

companies to establish off-shore offices:

●

●

●

●

●

●

●

The

growth in information processing and increased need to convert information from

hard copy to digital form;

rising domestic labor costs and the availability of lower cost labor off-shore;

the availability of good communication

infrastructure;

the existence of suitable office space,

transportation facilities, electrical power,

and other support infrastructure;

the availability of measures that can be

taken to ensure the security of information in transit;

the general absence of regulatory impediments to the exportation or to the flow

of data across international borders; and

the existence of politically stable and economically attractive environments in other countries.

Information Market

The director of one foreign government industrial development corporation says:

In today’s world, information resources

have become abundant. . . and more efficient

as a result of the progress stimulated by the

new electronic technology. It seems fairly

clear, to me at least, that as the U.S. economy continues its transformation from industrial activities toward information creation

and distribution, that the demands for information services will continue.20

The need for rapid access to information

helped to stimulate the creation of electronic

data storage and retrieval systems. Their existence, in turn, has accelerated the speed at

which information must be generated, and in-

‘[’Fred Gollop, Chairman, Barbados Industrial Development

Corp., Bridgetown, Barbados. Gollop moderated the “Off-shore

Key Punch Operations” square table discussion at the Miami

Conference on the Caribbean, Miami, Dec. 7, 1984.
Ch. 8—Off-Shore Office Work . 217

creased the volume of data needed to enter

into computerized information systems, The

president of a U.S. firm, presently engaged

in off-shore keying, notes that “. . . the history of the world, which is in writing, is about

to be put into electronic databases throughout the world. 21

The capability and need to generate information in large volumes and on a relatively

continuous basis is essential for the move to

off-shore data-entry operations. It is the

strength of this growing information market

that makes owners of off-shore keying operations enthusiastic about their future. In the

absence of an expanding information market,

the viability of off-shore operations would be

doubtful. Attracting workers would be difficult if work were sporadic, and cost efficiency

could decline rapidly, thus defeating the purpose of establishing such operations in the first

place.

Domestic and Foreign Labor Costs

In the recent past, there has been a trend

toward an international division of labor, in

which labor intensive manufacturing work has

moved to countries where wages are significantly lower than in the United States. This

has allowed many American manufacturing

firms to maintain their competitiveness in international markets. The exportation of dataentry work—one of the most labor intensive

phases of data processing—is now occurring

for the same reasons.

The hourly wage rate for keyers in other

countries may range from one-fourth to as little as one-fifteenth of rates paid to U.S. keyers.22 One U.S. firm reports that it was paying

domestic keyers $9.50 per hour, whereas average hourly rates at its off-shore facility in Barbados are approximately $2.10.23 This is a savings of 78 percent in labor costs alone. While

companies use different methods of estimating their savings by moving off-shore, those

questioned indicated that it is costing them

about 75 percent less off-shore than it would

in the United States to obtain a comparable

level of labor output.

The availability of trained workers is a major consideration in choosing an off-shore site.

Because the bulk of the work done at dataentry sites involves typing (typically, 60 to

90 percent of the employees of data-entry operations may be keyers), a pool of trained typists

must be assembled. Companies located in

Jamaica and Barbados report no apparent

shortage of trained clerical workers; they invariably had more job applicants than positions.24 Young women comprise about 99 percent of the workers. One firm reported that

the average age of its keyers is 26.25 Most of

them have at least a secondary school education, while many have completed at least some

post-secondary training.

A keying rate of 10,000 keystrokes per hour

is cited as an industry standard.26 Higher rates

may be achieved if conversion is limited to keying tabular data on a numerical ten-key pad,

while rates may average somewhat lower if

text data is being keyed.

All companies surveyed indicated that a high

literacy rate was a primary consideration. Literacy in English is strongly preferred to avoid

the complications of crossing a language barrier, although language barriers may not be

critical if keying is limited to numerical data.

However, other firms have experimented

with using non-English speaking workers for

keying text, and report excellent results. The

workers do not need to understand words to

key the right letters. Workers can learn to recognize up to 100 characters without any prior

knowledge of them, and to respond by hitting

the correct key. Because thousands of ideograms are used to write many Oriental languages, workers literate in these languages

may be particularly adept at character recognition.

Bechtel, op. cit.

‘-Page, op. cit.

-’Jordan, op. cit.

-’Bechtel, op. cit.; and Jordan, op. cit.

-

c Jordan, op. cit.

“Bechtel, op. cit.
218 Automation of America’s Offices

The ability to achieve high accuracy rates

seems to be a direct result of employing low

cost labor. In order to assure high standards

of quality control, two or three keyers may

be given the same information to key, on the

theory that no two people will make the same

error. After copy is “double-” or “triplestroked, ’ parity checks may be conducted to

spot errors. The original copy is then checked

in order to correct those errors .27 It has been

reported that by using this technique firms

have been able to obtain very high accuracy

rates even using non-English speaking keyers.

It would obviously be expensive to achieve

quality control in this manner in the United

States. Using the hourly wage comparison

cited earlier as an example, copy triple-stroked

for one hour in the United States would cost

$28.50, while the same task off-shore would

cost $6.30. This estimate is for Barbados,

where wage rates are higher than those for

most developing countries.

Some firms have noted that it is more difficult to find skilled managers locally than it

is to find clerk-typists. However, this was usually overcome through programs to promote

and train supervisory personnel, sometimes

by sending them to the U.S. office for training.28

The size of available off-shore labor pools

may be an important consideration for large

operations, especially in countries with small

populations, such as many of those in the

Caribbean. U.S. off-shore offices in the Carib~-

bean presently employ from 10 to as many as

1,200 personnel each. At least one firm chose

to locate in Jamaica because keying operations

companies already were absorbing most of the

available labor pool in Barbados, and bidding

for such labor “might get a little steep . . .

particularly for a start-up company. ”29

In sum, countries most apt to attract U.S.

firms to off-shore offices are those with lowwage rates and a highly literate, skilled labor

force of a size sufficient to support proposed

.—— -- . . -- .

‘

-Adams, op. cit.

‘Becker, op. cit.; and Jordan, op. cit.

“’Bechtel, op. cit.

operations. The degree to which these characteristics are present promotes establishment

of off-shore data conversion.

If English literacy is not critical, then virtually any developing country willing to provide the necessary infrastructure and having

a large pool of unemployed people could host

an off-shore data-entry operation.

Communication Technology

Advances in telecommunication, in particular, the advent of satellite communication,

have encouraged the operation of off-shore

offices. Unlike manufacturing industries, which

face high costs and pay a time penalty for

transporting raw materials and products, the

information industry may ‘‘ship’ its raw materials and products thousands of miles in

seconds when in electronic form.

International communications usually take

place by satellite or by undersea cable. The

use of satellites appears to predominate, but

the use of international submarine cables cannot be discounted, and the desire for greater

security and reliability of data transmissions

may prompt some firms to maintain access

to both.

A number of technologies are used to provide access to the international communication networks. Some firms have satellite earth

stations on their own premises. Most, however gain access to common-use earth stations

or to undersea cable terminals as subscribers

to the local telephone system or by leasing

dedicated lines. Firms transmitting large quantities of data generally find dedicated lines

more economical since they can be designed

to accommodate high-data transmission speeds.

Thus, one criterion for locating off-shore data

conversion facilities is the existence of a communication infrastructure with sufficient capacity to provide dedicated lines to large users.

Microwave transceivers are widely used for

private line communications in the Caribbean

where an extensive microwave system is already in place. It has been suggested that cellular telephony could also offer the capability

of providing data links between off-shore
. .

Ch. 8—Off-Shore Office Work ● 219

offices and international communication terminals. Cellular telephony allows voice or data

communications without the use of land lines.

It could play a significant role in bringing the

information age to Third World countries, allowing them to not only catch up, but perhaps

also even surpass the phone networks that

presently exist in the developed countries.’”

According to a representative of a U.S. cellular telephone company:

Cellular will provide nationwide data network capability and needed mobile and fixed

services to all segments of an emerging nation. It may well assume the role of the wireline system replacement in smaller cities and

in isolated rural areas. Cellular could be utilized to remove isolation, encourage dispersal of industry and increase the efficiency of

projects located far from the urban concentrations of industry.’]

Costa Rica is expected to begin installation

of a cellular system in early 1985, which will

probably make it the first Third World country to use cellular technology as an integral

part of its telecommunication systems. Installation of cellular systems in several countries

could increase the options of firms looking for

off-shore office sites.

Of importance to operators of many off-shore

offices are the telecommunication regulations

in the host country. In many developing countries, communication networks are owned and

operated by the government in order to generate public revenue. In some cases, all phone

equipment and services must be purchased or

leased from the government, thus limiting

users’ options with regard to the availability,

type, and capabilities of equipment.

A country’s reputation for providing hookup and maintenance service also deserves consideration. Clearly, it would not be desirable

to establish an off-shore office where bureaucratic problems or lack of well-trained technical personnel caused significant delays in

— — —

Charles T. 1 lagel, .4pplication of Cellular ‘17echnolog-?’ for

L~e\wloping Countries, presented at the Miami (’conference on

the Caribhean ‘‘Communications I nfrastructures’ squaretahle

discussion, N!iami, December 1984.

‘ I hid.

service, or impeded the timely and proper

maintenance of the phone network.

Facilities, Transportation, and

Electrical Power

By and large it does not appear that U.S.

firms have had serious difficulties in locating

facilities in which to set up shop, especially

in the Caribbean. Many governments have developed industrial estates that rent or lease

factory space at very low rates to foreign investors. In Jamaica, for example, the average

rent for such space is a mere $.42 per square

foot per month, or about $5 (U. S.) per square

foot per year (1982 figures).” The leasing of

space at off-shore sites is considerably cheaper

than in the United States, and in some cases

so much cheaper that leasing costs may be

a minor consideration in the course of site

selection.

Space may be leased or purchased outright

from the private sector, depending on foreign

ownership restrictions imposed by government. Or, it may be possible to expand existing locally owned data processing facilities,

if, for example, a U.S. firm enters into a joint

venture with an existing host country firm.

The quality of available facilities in developing countries may vary considerably. Some

‘-Caribbean Central American Action, op. cit.

Photo credlf M/v/s(r) of Trade /~?cfustrj and Deve/oprnent

S( Chmfoober and Neb/s

Off-shore data processing offices occupy a wide range

of fact I i ties from modern office buiIdings to converted

factory shells. This one is In St. Christopher and Nevis
220 Automation of America’s Offices

office buildings may be on equal footing with

those commonly found in the United States,

while others may be simple corrugated metal

or concrete block shells adaptable to many

uses. One U.S. firm adapted such a shell for

its data conversion operation in St. KittsNevis. Another spent approximately $1 million (U. S.) to upgrade an existing office building in Barbados. Its facility is regarded by

the company, the Barbados Government, and

the company’s competitors as a “showcase

operation” equal to the best facilities in the

United States.33

The availability of international air transportation may be essential if electronic linkage arrangements are not being used in both

directions. Both regular air freight and overnight courier services are used. One reason for

the proliferation of off-shore offices in the

Caribbean is the availability of frequent, direct flights of relatively short duration to many

of the islands from major cities in the United

States. Time in transit from New York to Barbados, for example, is about 4.5 hours. This

is particularly attractive if time-sensitive documents are being dealt with. It also makes

it easier to manage off-shore facilities, since

U.S. personnel may get to the sites relatively

quickly if necessary.

Companies generally indicate that availability and reliability of electrical power are not

major concerns in their site selection. Some

firms use on-site back-up electrical generators

because power grids in some countries experience sporadic brownouts (i.e., voltage drops

below specified levels) or blackouts. The cost

of electrical power is not a major concern; in

Jamaica for example electrical rates are comparable to those on the eastern seaboard of

the United States.34

In general, facilities are less costly off-shore,

although infrastructures in many countries

lack the reliability and redundancy that is

taken for granted in the United States. The

growth of foreign investment in less developed

countries has, in many cases, spurred government efforts to enhance their infrastructures

with a view toward attracting still more foreign capital, technology, and expertise.

Security of Data Shipments

and Transmissions

With large amounts of data being transferred across international boundaries, security of data shipments and transmissions is

a concern, but has so far been a minor problem in off-shore sourcing. None of the firms

interviewed for OTA identified any special

measures that they take to ensure the security of shipments. Yet the loss or interception

of documents containing sensitive information

could conceivably cause serious damage, particularly if, for example, information on stock

offerings or other financial information were

made known prematurely, or if private, intracorporate communications are intercepted.

Interception of such shipments is not without its difficulties. One would need to know

in advance about the nature and timing of shipments. If particularly sensitive documents are

being shipped, air courier services may be used

to ensure their safety. One courier firm in the

Caribbean region indicated that its shipments

are accompanied and monitored by their personnel on a continuous basis.35 The companies

shipping the information, as well as their

clients, appear to be satisfied with its security.

Intercepting electronic data transmissions

is another matter; it requires technical knowledge, and may not necessarily yield usable,

understandable data because encryption can

be used. Even if unscrambled transmissions

were intercepted, strings of characters may

not be useful unless one knows what to do with

them. 36 In some industries such as airlines,

much information is already shared, so the

value of information transmitted may be negligible to another airline.

Nevertheless, wires can be tapped, and satellite transmissions can be picked up by parties other than the intended ones. Wiretapping

‘;The firm referred to has operating bases in Miami, New

York, and other cities in the United States and the Caribbean.

“’Jordan, op. cit.

‘iGollop, op. cit.

“Ibid.
Ch. 8—Off-Shore Office Work . 221

can be detected fairly easily because the amplitude of an electronic signal is attenuated

when a third-party taps the line.37 Identifying

unintended recipients of satellite transmissions can be far more difficult. In either case,

however, it would seem that a considerable

amount of technical ingenuity would be required to not only intercept transmissions, but

make them usable as well.

Rules and Regulations

At the present time, regulations of any sort

that bear directly on the establishment or operation of off-shore data-entry services appear

to be so few and/or minor that firms involved

have expressed relatively little concern over

them.

Laws that generally affect off-shore keying

operations are those concerning telecommunications. Such laws often mandate the use

of government-owned Post, Telephone, and

Telegraph (PTT) networks and equipment,

since the PTTs of developing nations typically

generate revenues needed for other government functions. Firms report that these regulations have been more of an annoyance than

a major obstacle to off-shore sourcing.

Foreign customs regulations also do not appear to have been a problem for data-entry

operations. Many firms investing in developing countries are granted concessions including the privilege of importing raw materials

and equipment duty free. The only notable

complaints have to do with the difficulties in

getting documents and other items cleared

quickly through customs, especially on weekends, which can be a problem for firms keying

time-sensitive documents. However, serious

customs problems would probably spur authorities to make remedial actions to avoid losing sizable foreign investments.

U.S. telecommunications and customs regulations at present raise no obstacles to offshore keying. Customs laws govern the importation of documents and magnetic recordings, but tariffs are extremely low or not levHough, op. cit.

ied at all.38 U.S. companies keying their own

business data (e.g., payroll, inventory, archives, etc.) may import these records duty

free. These are classified under schedule 8, pt.

7 of the Tariff Schedules of the United States

Annotated (TSUSA) (1981) as item 870.10–

“records, diagrams and other data with regard

to any business . . . operation conducted outside the United States, whether on paper,

cards, photographs, blueprints, tapes or other

media. 39

Ordinarily, recorded magnetic tapes, cards,

or discs are classified under TSUSA schedule

7, part 2, subpart G as item number 724.40–

‘‘recordings on magnetic tape or any medium

other than wire. ’ ’40 A duty of 9@ per square

foot of recording surface is specified. Thus,

a duty of only $9 would be payable for a recording on a standard 2,400 foot reel of .5" inch

computer tape (which contains 100 square feet

of recording surface). Even this duty may not

be imposed if the recordings originated in a

country that is beneficiary to the Generalized

System of Preferences. Such countries may

export most or all of their goods to the United

States duty free. In any event, recorded media from data-entry operations are, by and

large, regarded as returned U.S. goods and not

subject to duties.41

While the physical characteristics of the media itself are not “advanced or improved” at

keying operations, it can be argued that such

media has an intangible good—information—

added to it, and is, accordingly, increased in

value. There has been sharp criticism in this

regard, particularly by U.S. labor representatives. As one union spokesman says, “You may

—.—

‘“John R. Gray, Chief, Classification and Value Di\’ision,

U.S. Customs Bureau, Miami, personal inter~iew, Nliami, Dec.

6, 1984.

“’Tariff Schedules of the United States Annotated 1980,

Washington, 1980, p. 774.

“’Ibid.

‘

]

’’ The Instant Off-Shore Office, ” p. 136. Specifically, they

are listed under TSUSA schedule B, pt. 1 as item number

800.00–’’products of the United States when returned after

ha~’ing been exported, without having been advanced in \ralue

or improt’ed in condition by any process of manufacture or other

means while abroad. ”
222 ● Automation of America’s Offices —

be importing a $10 tape with $50,000 worth

of information on it. “42

Such claims do not appear to be exaggerations in view of the prodigious volume of data

that can be recorded on a given amount of magnetic media. If recorded at maximum density

(data density is dependent on the type of recording equipment used), a .5" inch wide ninetrack computer tape can hold 6,250 bytes or

characters of data per linear inch. A 2,400 foot

reel of tape holds up to 94 megabytes (i.e., 94

million characters). To put this in perspective,

a commercial directory listing the names, addresses, telephone numbers, chief executives,

Standard Industrial Classification numbers,

sales levels, and number of employees of the

top 51,000 U.S. corporations comprises only

about 30 million characters.43 This equals approximately 1,500 pages of high-density text

in very small print.

The president of a domestic data-input company has argued that duties should be payable at least on the labor value added to processed tapes and disks. The directory mentioned

above, for instance, probably took at least

3,000 person-hours to key at 10,000 keystrokes

per hour. Using the $2.30 per hour wage for

Barbados, it would cost roughly $6,900 to enter all of the data in the directory. His concern stems from the fact that his firm has lost

“millions of dollars in contracts to off-shore

firms. ’44

Certain countries have erected tariff and nontariff barriers to regulate the content and

operation of data banks, and designate the

methods and routes by which data can be

transferred across international borders. Where

these regulations exist, they usually stem from

governments’ concerns over the privacy of

their citizens, national security, perceived loss

of cultural independence, and concern that

unrestricted data transfers could lead to loss

“Dennis Chamott, Assistant Director, Professional Workers Division, AFL-CIO, Washington, DC, personal interview.

Washington, DC, Dec. 17, 1984.

“The listing referred to is Ward’s Directory of 51,000

Largest U.S. Corporations, vol. 1 (Petaluma, CA: Baldwin H.

Ward Publications, 1984). The directory consists of “1,504 pages,

11 “ x 914 “ over 30 million computer data bytes. ”

“’’The Instant Off-Shore Office, ” op. cit., p. 136.

of control over economic development and

growth.45

Off-shore data-entry operations have not

been significantly affected by such laws because they have generally been established in

the countries that have not enacted such laws.

Many countries have not yet addressed the

issues surrounding data and its transfer, and

these countries tend to be less developed, have

wage rates that are generally lower, and want

the jobs, training, and capital that data-entry

operations can provide. They view data entry

as a basis for the development and advancement of computer and computer-related industries and capabilities.

Thus, data-entry firms presently operate in

a very lenient regulatory environment. Developing host countries are not inclined to kill

the proverbial “goose that laid the golden egg”

by legislating against the data-entry industry. The benefits they obtain from it far outweigh any gains to be had by levying discriminatory taxes or imposing other restrictions.

Undoubtedly, any moves in this direction would

quickly cause firms to relocate to countries

with more favorable business environments—

of which there are many. U.S. laws impose virtually no burden on off-shore sourcing. Vigorous debate over regulatory matters can be expected to continue, however, as labor unions

and domestic firms pressure authorities to extend tariff treatment to international trade in

data and data processing services.

Political Stability and Investment

Climate in Foreign Countries

The reason most frequently cited by U.S.

firms in all sectors for not investing abroad

is perhaps that they must deal with too many

unknowns. Political stability of a foreign country and its policies regarding foreign, private

investment are foremost concerns of U.S. businesses thinking about establishing off-shore

enterprises.

45James R. Basche, Jr., Regulating International Data Transmission: The Impact on Manag”ng International Business,

Washington, DC, 1984, p. 16.
————. -.. — ..— - —-.——

Despite these problems, U.S. firms have

found that the Third World presents an abundance of business opportunities for those willing to assume the attendant risks. Many developing countries recognize the advantages

of permitting foreign investment to enhance

private sector development. Not only does it

expand their capital base, but it also provides

new opportunities for host-country owned

businesses, brings in foreign technology and

expertise, and provides training for their people, which in many cases is their most abundant resource.

The host country’s investment policies are

also instrumental in attracting off-shore business. Specific investment incentives differ depending on the country, but various forms of

tax relief and import duty exemptions are commonly used. The investment incentives provided by many developing countries are helpful to investors, and their existence is generally

a good indicator of a country’s need for such

investment and recognition of its importance.

Such incentives may, at the very least, provide an appearance of political stability and

continuity, and an indication that foreign governments are aware of the need to create favorable business environments for investment

by industrialized nations.

Ch. 8—Off-Shore Office Work ● 223

.

The U.S. Government and the governments

of other countries have encouraged investment

in developing nations by helping firms to locate

business opportunities, guarding them against

the effects of adverse political developments,

and providing attractive business incentives.

At least one American company notes that

both United States and foreign government

assistance was instrumental in the establishment of its data-entry operation in Jamaica.

Of significant importance to the firm was assistance provided by the Overseas Private Investment Corporation (OPIC). OPIC is a selfsustaining, profit-making Federal agency (a

component of the U.S. International Development Cooperation Agency, which also includes the Agency for International Development) whose mandate is to “mobilize and

facilitate the participation of United States’

private capital and skills in the economic and

social development of less developed, friendly

countries and areas. To do this, the agency

provides political risk insurance, direct loans

and loan guarantees, and other service, “All

(of which) are designed to reduce the perceived

stumbling blocks and risks associated with

overseas investment. 46

“ <l~?rseas Prit’ate investment Corporation, corporate

brochure, Washington, DC 1984, p. 1.

DIFFERING VIEWS OF OFF-SHORE OFFICE WORK

U.S. Off-Shore Companies

For the most part, U.S. companies cite savings in labor costs, as much as 75 percent, as

their primary motivation for seeking off-shore

sites for data processing.47 None of the companies questioned thought that this trend

would have a very significant detrimental impact on U.S. employment, and some suggested

it would create many new marketing jobs in

the United States.48

——

‘-Answers were in response to interviews conducted by the

contractor primaril~’ at the Miami Conference on the Caribbean, Miami, Dec. 3-7, 1984. Other interviews were carried out

in New York and Washington in early 1985. Astriab, op. cit,

“Bechtel, op. cit.

Some companies have found that productivity off-shore is often higher than in the

United States, and standards of accuracy and

employee conscientiousness are generally higher. One company had originally underestimated the capabilities of foreign workers, and

anticipated a standard of performance 70 percent of that attainable in the United States.

After only 1 year in operation, the company’s

foreign employees keyed better than its U.S.

keyers who, on the average, had over 5 years

seniority over their foreign counterparts. 49 At

least two other companies confirmed the claim

of higher productivity .50 As noted earlier, high- —

“’Jordan, ;p. cit.

‘13echtel, op. cit.; and Becker, op. cit.
224 Automation of America’s Offices

er accuracy rates for converted data can also

be obtained abroad because low-labor cost permits redundant keying.

Another argument raised in favor of offshore data processing is that in some cases

the work will not be done otherwise. One company official pointed out that his firm is doing massive archival work for several major

customers. The customers had considered doing it in-house, but finding the work too costly,

they postponed it until they could find a company like his to do it at an economical rate.51

U.S. Labor Organizations

Representatives of U.S. labor unions argue

strongly against the movement of data-entry

operations off-shore. While the AFL-CIO has

not yet adopted an official position, their general opposition to moving any type of work

off-shore is based largely on the following

points:

●

●

●

The creation of off-shore work represents

a direct displacement of U.S. workers

which is detrimental to our domestic employment situation, and does not always

have a permanent, positive effect on the

development of needy countries.

Labor competition for jobs based on wage

rate differentials is not fair or equitable,

and is inherently exploitative of labor in

less developed nations.

Moving operations of any kind off-shore

reduces effective control of our economy,

and threatens our economic security.

U.S. labor organizations argue that for every

job created off-shore, one is lost in this country. Exporting clerical work to low-wage countries is the latest phase in a trend that has

been going on for a long time in U.S. manufacturing industries. While the number of people

employed in off-shore offices has had, as yet,

no discernible impact on U.S. labor, this

should not preclude our taking steps to stop

this trend.

—

“Bechtel, op. cit.

Further, it is argued, creating such work offshore does not always have a permanent developmental impact on poorer countries, because companies always seek areas where wage

rates are lower. As a country develops and its

wage rates rise, companies located there may

move to still less developed and less costly

areas in which to operate.52

Union representatives argue that because

our economy is becoming more heavily dependent on information and white-collar work, as

opposed to manufacturing or blue-collar work,

and as white-collar work becomes more automated, we could be “taking away the last large

group of jobs that the economy is supposedly

going to have available. ”53

Others argue that locating more and more

jobs off-shore may jeopardize our economic

security because: 1) investment in the economy is lost, and 2) off-shore operations exist

in environments that cannot be controlled,

thereby making the investments vulnerable

to adverse political developments. The continued relocation of work out of this country

is economically unsound because we are foregoing opportunities to create domestic jobs

and new business enterprises.54 Also, our dependence on foreign labor further diminishes

the ability to function economically and independently, and, therefore, weakens the United

States. There have been repeated nationalizations of U.S. investments abroad in recent

years. Off-shore office work is particularly

worthy of special consideration:

What (we’re) doing now with shipping jobs

overseas (via the use of) electronic transmission. . . is making (companies) even more vulnerable. Work that they have to have for

(their) company to function, they are placing

outside the realm of their control. In terms

of control, what do you do if you’re not

-Chamot, op. cit. This argument is also presented in The

Electronic Sweatshop: The Use and Misuse of Work Stations

in the Home, a presentation given by Dennis Chamott and John

1,. Zalusky to the National Executive Forum: Office Work Stations in the Home, November 1983.

“’Chamot, interview,

“Barbara Hutchinson, Director, Women’s Bureau, AFI,-

CIO, Washington, DC, personal interview, Washington, DC,

NOV. 19, 1984.
Ch. 8—Off-Shore Office Work ● 225

duplicating that system here, and that system shuts down?55

Off-shore offices would be very easy to shut

down, because they tend not to be very large,

do not have a major impact on host country

economies, and are heavily dependent on vulnerable communication and transportation

networks.

Foreign Government Officials

The direct impact of off-shore data entry on

increased employment in developing countries

may be significant and quite rapid. One company began interviewing prospective employees in Barbados in May 1983, commenced

training on August 1, and began production

in October of the same year. The operation

presently employees 275 people, 80 of them

managerial, technical, and supervisory personnel. This suggests that keying operations, especially larger ones, may provide significant job

opportunities not only for clerical workers, but

also for more highly trained workers. The same

firm let approximately $1 million in contracts

to local firms to refurbish its building. Thus,

business opportunities and jobs may also be

created in other economic sectors.

Reactions of foreign government officials to

off-shore office work are very positive. Those

countries that already host such operations

are pleased with the results, while those that

do not yet have such operations want them.

In an informal survey, representatives from

more than 20 Caribbean and Central American countries unanimously claimed that such

investment projects would aid their economies

and would be welcomed.56

Barbados has gone so far as to single out

information services as a sector to receive major emphasis for development. At the other

end of the spectrum, representatives of some

—

Ibid.

‘ Answers were in response to informal interviews conducted by the contractor at the Miami Conference on the Caribbean, Miami, Dec. 3-7, 1984. Representatives of approximatel~’

20 Caribbean and Central American countries were queried,

Astriab, op. cit.

countries know little about the phenomenon,

but are eager to learn more about it.

The work is labor intensive, requires only

a moderate capital outlay, and can generate

employment rapidly. It is a “clean’ industry,

without the heavy equipment, large space requirements, and pollution often associated

with other industrial enterprises. The industry provides, at the very least, rudimentary

training in computer use—a rare opportunity

for workers in less developed nations. Finally,

it establishes a foundation on which further

advancement in computer-related industries

such as software development, technical services, and data transmission may grow. The Director of the Barbados Industrial Development

Corporation (BIDC) elaborates:

1 know from experience in Barbados . . .

that we can offer a lower cost location (for

the industry), and answer the needs of many

industrial companies in the United States. I

know too that the countries in the Caribbean

can benefit from increased employment, and

in the case of off-shore keypunch operations,

this can be fairly rapid. And I also think we

can benefit from technical education which

would ultimately set us on the path to higher

levels of technology in the computer services

industry .57

Barbados has targeted information services

as an industry group that is expected to have

a major impact on the objectives of the Barbados Industrial Development Corporation

and the Barbadian economy. According to its

1983-87 Development Plan:

The Information Services industry can be

expected to generate substantial employment

in the short term . . . linkages with the more

technically proficient computer industry . . .

will be sought as a means of expanding the

sector’s contribution to the economy . . . Local participation in the Information Services

Industry can come about through the establishment of service bureaus to perform offshore data processing for North American

companies. 58

Gollop, op. cit.

‘Ilarbados Industrial De\relepment Corp., Industrial De\’elopment Plan, 1983-1987, 13ridgetown, Barbados, 1983.
226 ● Automation of America’s Offices

.

Development officials interviewed for OTA

all agreed that foreign data-entry workers view

their jobs and status in a considerably more

positive light than their American counterparts. While keying in the United States is

sometimes pictured as a low status, boring job,

foreign workers often consider it a gateway

to opportunities that did not formerly exist

(as do many minority workers in the United

States–see chapter” 12).

Over-dependence of countries on information services is not seen as a problem at this

point because the industry is presently so

small. In addition, many developing nations

opt for diversification of industrial development as a key ingredient of a more stable economy. They want to avoid heavy dependence

on traditional industries such as tourism or

agriculture, with their characteristic seasonal

fluctuations in income and employment.

Economic Development Organizations

Development organizations are in essence

the ‘middlemen” in regard to the development

of off-shore office work. They view the expansion of the sector in the much larger context

of economic development, are supportive of

its growth, and reaffirm the arguments put

forth by U.S. companies and foreign governments in favor of such growth. “The sheer

number of jobs (off-shore data processing) creates is the main attraction of the industry in

the view of developing countries, ” says one

official of a private, nonprofit development

organization .59

This development expert claims that negative reactions, if any, in developing countries

usually come from the more educated sectors

and the labor movement, or, as he put it: “people who are not worried about having a job. 60

Those citizens of developing countries who

view U.S. investment as exploitative are those

who are generally of higher economic status

“’Gordon Hunt, Director, Investment Services, Caribbean/Central American Action, Washington, DC, personal interview, Washington, DC, Dec. 18, 1984. This claim was also

affirmed by Gooch, op. cit.

“’Ibid.

and are not in need of the job opportunities

that result from such investment.

Some experts favor investment in developing country private sectors as opposed to just

public-infrastructural development projects.”

According to this argument, in many cases

developmental aid programs have not achieved

their intended purposes. For example, while

good roads may indeed have been built, private businesses along those roads are necessary for the general advancement of the economy. While the wages paid to workers in these

businesses may be extremely low by U.S.

standards, this should not be considered exploitative.

Rebutting arguments from U.S. labor that

the flow of clerical work out of the United

States should be stopped, development organizations point to the great impetus of increased international economic interdependency and the disadvantages of impeding capital

flows. “Business goes where business can be

done, ” as one development organization official

said, “The flow of capital cannot be stopped

unless one wishes to control the economy, and

this runs against the whole tradition of free

trade. 62

Answering U.S. labor’s claim that wage competition is the only focus when selecting business sites, a development official countered

that it has never been a case of just wage rates:

“If that were the case, there wouldn’t be a bit

of work done but in China and India. 63 While

this is, of course, an overstatement, higher

profits are not the only motivation for many

businesses off-shore. For some, it may simply

be a matter of survival. Viewing the exploitation argument in a different light:

You will certainly get cases of exploitation,

but it is far more exploitative to say (that

we will) keep those jobs here, and pay an unacceptably high level of wage which will make

our products unacceptable anywhere other

than in our own economy. Plus, by doing so

‘

] Ibid.

“Ibid.

“Ibid.
Ch. 8—Off-Shore Office Work ● 227

we will ‘starve’ (the people in less developed

countries). 64

There has been massive legal and illegal immigration to the United States from the Caribbean. Many countries in the region have their

second largest, and in some cases their largest

population centers in the United States. Some

see it in the best interest of the United States

to create jobs for people in their own countries to stem this tide of immigration:

———-

“Ibid.

Do you employ those people in their own

countries or do you employ them (in the

United States)?, because that’s where they’re

all coming. Do they come up here and work

illegally for sweatshop wages , . . or do they

stay in their own countries, where they would

rather be to begin with if they could make

a decent wage?65

 Ibid.

PUBLIC POLICY

Off-shore office work does not have a significant influence on the U.S. economy at present.

Only a few dozen firms and a few thousand

employees are involved. Nevertheless, it could

grow. If domestic wage rates remain comparatively high and telecommunication and transportation costs continue to fall, market forces

will encourage more firms to investigate the

off-shore alternative. Growth could be quite

rapid, at least in the short- to medium-term

future.

In the long term, technological advances in

input technology, especially optical scanning,

are likely to undermine the cost advantages

of off-shore data-entry work. Thus, off-shore

offices are likely to be a temporary phenomenon, unless some other technological advances

or economic conditions make it feasible to

move other types of office work off-shore—

for example, telephone reservations or order

processing.

Assuming that it is temporary, the question

remains how U.S. public policy should deal

with off-shore offices. The alternatives include

prohibiting, regulating, or encouraging it.

Regulating or Prohibiting

Off-Shore Offices

Methods for limiting the growth of off-shore

offices could include such government actions

as:

ISSUES

imposing regulation on the types of data

that can be imported,

imposing restrictions on the hardware and

software used off-shore,

using taxes to discourage off-shore work

or encourage that work be done domestically, and/or

imposing restrictions on the use of private telecommunication lines.

Regulation of Data

Many nations have imposed restrictions on

transborder data flows for the purpose of protecting the privacy of their citizens, for example, prohibiting transmission of name-linked

information to countries with less stringent

privacy laws.

The United States has data protection laws

designed to restrict the uses of name-linked

data and assure access to the data by persons

referenced in them. These laws do not, however, address the “front-end’ issue of how or

where information may be entered into electronic databases. Nor does U.S. law restrict

the flow of data across international borders.

It is not clear that privacy protection is necessarily a good motivation for U.S. regulation

of off-shore offices. Even if it were, the enactment of privacy protection laws governing

transborder data flows would affect other industries, such as banking, and the internal
228 ● Automation of America’s Offices

operation of many multinational corporations,

as well as off-shore keyers.

A more direct approach to discouraging

establishment of off-shore offices is to simply

designate data entry as a phase of processing

that U.S. companies must, in virtually all circumstances, carry out within our own borders

if the data is destined for eventual sale. This

would, in effect, constitute a local content requirement.

Because such a requirement implies that the

data being entered is a commodity, this type

of restriction may not be applicable to certain

types of data—e.g., revenue, personnel, payroll information, and the like-reserved for the

exclusive use of a business, and not meant to

be sold. “Buy national” requirements could

fill this gap by mandating that off-shore data

entry could not be resorted to unless domestic alternatives were unavailable. Brazil and

Canada for example, have imposed regulations

that require certain phases of data processing

to be conducted within their own borders.66

If viewed in a broad context, however, imposition of such regulations may serve to stimulate reciprocal actions by other countries.

Thus, more harm could be done to the U.S.

data processing industry than could be counter-balanced by benefits of restricting a particular phase of data processing to our own

shores.

Restrictions on Hardware and Software

In lieu of limiting the kinds of data that could

be entered off-shore or requiring that data entry be carried out domestically, requirements

that U.S. equipment be used could be imposed.

In essence, this would constitute another “buy

national’ requirement. This might effectively

preclude the establishment of keying operations in some countries, since, as previously

mentioned, foreign communications authorities often monopolize telecommunication equipment markets and require that their locally

manufactured equipment be used. However,

many countries do not even have a computer

“Joan E. Spero, “Barriers to International Information

Flows, ” Telecommunications, November 1983, p. 68.

industry, and U.S. computers and modems are

already usually the equipment of choice for

off-shore firms.

Taxation Alternatives

In theory, duties could be imposed on the

data that is keyed off-shore and subsequently

imported into the United States by physical

or electronic means; the data could be treated

as a commodity or primary good imported for

consumption. Alternatives might be to levy

duties on the labor value added to data keyed

off-shore, or to impose a trigger price tariff

that would keep the price of off-shore keying

above domestic levels.

In practice, however, levying any such tariffs

would be fraught with difficulty. First, this

shotgun approach to regulation would probably affect all data importers, of which offshore keyers area very small minority. In addition, a method for determining the value of

data would have to be developed. Value might

be related to proposed end use or might be

based simply on the basis of the volume of

data imported (e.g., a duty might be levied for

every kilobyte—one thousand characters-of

data). The latter seems inherently inequitable,

since some kinds of data are much more valuable then others. The former seems nearly impossible to enforce, unless customs officials

are going to play back and analyze every computer tape.

Imposing duties on data imported via telecommunication presents even more onerous

technical and political problems. The sheer volume of transmissions to the United States and

the many routes they may follow present logistical problems of inestimable proportions

for monitoring. In the future, the increased

use of direct satellite links between off-shore

installations and domestic offices will make

the imposition of border controls on data flows

extremely difficult, if not impossible.67

In any case, it seems clear that on-site monitoring by government authorities and/or wiretapping on a grand scale would be necessary

“-Ibid.
Ch. 8—Off-Shore Office Work ● 229

to police electronic data flows. Even if this were

technically feasible, it is doubtful that revenues accrued by a government could justify

the efforts made to collect them.

Putting technical and economic considerations aside, moves toward monitoring data

flows in the United States would undoubtedly

encounter many political obstacles. The practice would cast a clear shadow of authoritarianism, and have a very inhibitive effect on business and communications in general. A far

greater purpose than stifling a minor industry would obviously be in order if the practice

were adopted. In sum, while the objective to

curtailing off-shore keying could readily be attained through tariff legislation, a more tightly

focused approach would

priate.

seem more approRestrictions on Dedicated

Telecommunication Lines

Limiting the availability of leased private

telecommunication lines to off-shore keying

operations or prohibiting their use for this purpose would unquestionably deter the establishment of such operations, because it would

directly effect one of the lifelines of the industry. Since leased lines appear to be the most

cost effective way to transmit large volumes

of data across international borders, off-shore

keyers relying predominantly on telecommunication capabilities to operate would be acutely effected by any such restrictions.

Regulations of this sort could, of course, be

applied only to the U.S. side of any communication link (e.g., the down-link from a satellite

sending data to the United States, a terrestrial cable in U.S. territory, etc.), since the foreign ends of such links are out of American

jurisdiction. Nonetheless, this strategy could

be effective since the regulations could be applied specifically to off-shore data-entry firms

without impinging on the rest of the data processing industry.

Restricting access to dedicated lines might

be accomplished by specifying a limitation on

the number of lines available to off-shore keyers in different regions. Implicit limitations

might be achieved by imposing stiff tax penalties or surcharges on data-entry firms leasing

such lines.

Several countries already use this strategy

to protect their internal data processing industry and it is quite effective in curtailing

undesired activities. In Japan, the Ministry

of Posts and Telecommunications, through the

international telecommunication authority,

KDD, kept two large U.S. data processing

firms out of the country’s market by first denying them dedicated lines, and then restricting

their use so that the firms could not market

all of their services.” The Deutsche Bundepost

in West Germany requires users of leased lines

to use the public-data network. In 1982, the

authority declared that it would permit the

use of international leased lines only if some

phase of data processing were conducted in

Germany before data was transmitted out of

the country.69 Brazil has enacted many restrictions on the use of leased lines. For instance,

firms may not use them to access databases

located outside the country.’”

Short of limiting access or prohibiting offshore data-entry companies from using leased

lines, legislation could require telecommunication carriers to impose usage-sensitive rates

on these firms. A number of foreign governments have expressed interest in usage-sensitive rates, since they fear the loss of revenues that could result from reduced use of their

public networks.” One international data processing service estimated that the introduction

of usage-sensitive rates would raise its operating costs by 700 percent.72 In the face of such

cost increases, many off-shore data-entry firms

would probably have to close up shop.

Regulations on leased lines could, therefore,

offer a relatively “clean” approach toward discouraging off-shore keying; impeding other

types of data flows could be avoided because

restrictions could be tightly focused. To be

—

‘‘Spero, op. cit., p. 68.

‘ ‘Ibid.

Ibid.

,Jussawal]a and Cheah, op. cit.. p. 292.

Spero. op. ci~., p. 68.
230 ● Automation of America’s Offices

truly effective, however, such restrictions would

probably have to go hand-in-hand with some

form of customs regulations so that control

could be extended over firms who import data

recorded on magnetic media.

Encourage or Do Nothing About

Off-Shore Office Work

Encouraging off-shore offices is discussed

in the same section as a “do nothing alternative” because the current status of telecom-

—

munication and customs regulation already favor the growth of this industry. Inaction will

undoubtedly assure the continued export of

data processing work for so long as the marketplace provides the needed incentives.

Further encouragement might be achieved

through increased activity of international development agencies. For example, the Overseas Private Investment Corporation could

make more loans available and otherwise step

up efforts to help U.S. firms find suitable locations and establish keying operations off-shore.
Chapter 9

The Automation of

Federal Government Offices
Contents

Page

Federal Procurement and Acquisition of Office Automation . . . . . . . . . . . . . . . . . . 234

The Three Phases of Federal Office Automation . . . . . . . . . . . . . . . . . . . . . . . . . . 234

Laws and Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235

The Federal Inventory of Office Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238

Acquisition Strategies and Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239

The Dilemma of Procurement Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241

What Will Office Automation Mean for Federal Office Productivity? . . . . . . . . . . 242

Evaluations of productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242

Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243

Implications for the Federal Work Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244

Size of the Work Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244

Changes in the Mix of Federal Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246

Shifts Among Occupational Categories and Grade Levels . . . . . . . . . . . . . . . . . . 246

Unanswered Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250

Part-Time and Temporary Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251

Women in the Federal Work Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252

Quality of Worklife. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252

Labor Management Relations and Federal Unions . . . . . . . . . . . . . . . . . . . . . . . . 254

International Comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255

Effects of Office Automation on Public Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256

A Case Study of Expanding Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256

Changes in the Nature of Delivered Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258

Effects on Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258

Figures

Figure No. Page

9-l. Paid Civilian Employment of the Federal Government, 1881-1983 . . . . . . . . . 245

9-2. Changes in the Distribution of Federal Employees by Occupation,

1975 and 1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247

9-3. Change in Distribution of Federal Employees by Grade Levels, 1974-80 . . . . 248

9-4. Distribution of Federal Employment by Grade Level 1975 and 1983 . . . . . . 249

9-5. Full-Time White-Collar Employment in the Federal Work Force by

Grade Level and Sex, 1974-75 and 1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253
Chapter 9

The Automation of

Federal Government Offices

Automation of Federal Government offices

is generally keeping pace with automation in

the private sector. The effects are likely to be

at least as significant in government offices

as in corporate offices. But the forces that drive

change are not the same, and the consequences

will not necessarily be the same. Government

is not business, although it is often argued

that it should be business-like in its approach

to delivering services.

Federal office automation is preceding on

the reasonable assumption of significant benefits. Large investments of public resources

are involved, and most Federal employees will

be affected. Thus, a close look at the potential

consequences of Federal office automation is

merited,

The Federal Government is in effect the Nation’s largest office. It occupies 2.6 billion

square feet of office space; it has 332 accounting systems and over 100 payroll systems; and

it employs about 1,7 million white-collar

workers. 1

Opinions vary widely as to how well and how

rapidly the Federal office is being automated.

One trade journal concluded that “government

is pioneering some leading-edge office automation programs and in many respects is

ahead of the private sector because the Reagan Administration is emphasizing automaIt is in fact surprisingly difficult to ascertain how many

white-collar Federal employees there are, or indeed how many

Federal workers there are in all, at any one time. The Office

of Personnel Management, the Bureau of Labor Statistics, and

the Bureau of the Census all publish figures, but they are nevrer

the same figures. The total given varies widely depending on

the time of year or month; or whether it is a monthly average

or an estimate or a survey; or whether and how the count treats

temporary workers, part-time workers, intermittent workers,

postal workers, census takers, CIA and NSA workers, congressional employees, judicial-system employees, student interns,

fellows, etc.; and on how many of the approximately 106 pay

plans OMB chooses to count. All of these are traps for the unwary analyst.

tion in the effort to increase efficiency. Some

experts say with equal confidence that government offices are behind the state-of-the-art.

Comparisons based on many case studies however indicate that while some large corporations are far ahead of Federal agencies in using

information technologies, the government is

at least keeping up with the private sector as

a whole. Among major institutional sectors

it has been the largest user of computer-based

information systems.3

Some agencies are behind their closest private sector counterparts. For example, the Federal Reserve Board does not compare with leading financial institutions in terms of either

advanced applications or the proportion of critical work that is automated. On the other hand,

some agencies are at the frontier in specific

office automation applications; International

Revenue Service (IRS) is one example. Most

agencies are in the mainstream in terms of

penetration and in terms of advanced applications of hardware and software. ’

Federal agencies were among the first institutions to adopt large computers. In the last

few years, they have been adding small computers and word processors to augment their

large-scale data processing. For the next few

years, a major trend will be the linking of

microprocessors, mainframe computers, and

other devices into integrated office systems;

and the networking arrangements that will

connect office to office, headquarters to field

‘Office Administration and Automation, September 1984,

p. 56.

‘John Leslie King and Kenneth L. Kraemer, “ Information

Systems and Intergovernmental Relations, ” Public Sector Performance, Trudi C. Miller (cd. ) (Baltimore: The Johns Hopkins

University Press, 1984), p, 103,

‘This judgment is based on materials supplied by Federal

agencies and comparisons drawn from the literature and from

OTA contractor case studies; and specifically, on the conclusions of an OTA contracted report by The Educational Fund

for Individual Rights.

233
234 Automation of America's Offices

offices, and Federal agencies to external systems and databases.

This section looks briefly at the effects of

office automation that can be detected now,

and the effects to be expected over the next

15 years. After a discussion of Federal procure- ●

ment and acquisition policies with regard to

office automation, the rest of the chapter looks

●

in succession at the following questions:

●

●

●

●

Are there major problems in Federal ac- ●

quisition of information technology?

Will automation make Federal offices

more efficient, or more productive?

If so, can that benefit be translated into ●

lower labor costs, and lower Federal

budgets?

What are the potential effects on the size

and structure of the civil service, and what

are the implications for recruitment, classification, and retention of Federal workers and for budgetary and personnel

policies?

What are the implications for career expectations and opportunities of Federal

white-collar employees?

How will automation affect the quality

of their working environment?

Will automation affect the relationship of

government and citizens—will it change

the availability or quality of government

services?

Could it affect the exercise of authority,

accountability, responsibility, and the quality of decisionmaking?

FEDERAL PROCUREMENT AND ACQUISITION OF

OFFICE AUTOMATION

It is the declared policy of the present Administration that information is an economic

resource and should be managed efficiently.

The emphasis has been on reducing the cost

of information-handling rather than on increasing information services.

Federal agencies have had wide latitude in

making decisions about office automation. The

policy has been to keep governmentwide requirements and restrictions to a minimum.

Critics charge that this has led to uncontrolled

proliferation of small computers, and that the

lack of compatibility among them is preventing the realization of expected benefits of automation. On the other hand, overly detailed and

rigid specifications in procurement of major

information systems, including local area networks, is said to preclude vendors from finding innovative ways to meet government

needs, and to result in purchase of equipment

that is already far behind the state-of-the-art

when it is installed.

The Three Phases of

Federal Office Automation

The adoption of mainframe computers in the

late 1950s5 led almost immediately to development of large centralized-computer centers.

The Office of Management and Budget (OMB)

and the General Services Administration (GSA)

were soon given governmentwide authority

over automatic data processing (ADP) policy

and standards. During the 1960s and 1970s

many of the major activities of government

became dependent on computers for management functions such as planning, program control, financial and payroll operations, procurement control, auditing and inspection, and

other government functions. The acquisition

process was framed around centralized ADP

‘The first general data processing computer, UNIVAC I,

was acquired by the Bureau of the Census, in 1951.
Ch. 9—The Automation of Federal Government Offices . 235

and the communication functions that were

developing in parallel.’

In the 1980s however the dominant theme

in Federal office automation has become the

spread of end-user computing. It is difficult

to distinguish the effects of these two phases

of computerization since decentralized computing does not replace, but is superimposed

on, centralized computing. Now personal computers and word processors are often networked and part of an integrated system. Federal procurement policy, and accounting and

inventory practices also blur distinctions between these two kinds of office automation.

Most Federal agencies now have word processing, spread-sheet packages, automated document transmission, and calendaring. The other

most frequently used functions are electronic

filing and computer graphics. Many agency

headquarters communicate by computer with

their field offices nationwide.’

Personal computers are being used more and

more by managers and professionals as well

as by support staff. The National Academy

of Public Administration, in a 1983 report, assumed that this reduces the load factors and

utilization rates of mainframe computers, and

said that this cast “serious doubt on the future role of many of the large central computer

service centers that have been built up. . . over

the last 10 to 15 years. 8 But experts generally do not believe that ADP centers will be

superseded by distributed processing. Rather,

as small and large computers are linked, the

ADP center will be the locus and guardian of

the agency data to which all managers and

professionals will increasingly have access and

make contributions.

—.

‘ International Data Corp., Procurement Information Management Service, “Federal Acquisition Strategies for Office

Automation, ” research paper for Continuous Information Services Clients, March 1983.

‘According to an office automation survey compiled by the

Information Management Assistance division of the Office of

Information Resources Management, General Services Administration, November 1984. Thirty-one departments and agencies responded to the survey.

‘National Academy of Public Administration, I?e~ritzziizing

Federal Management: Managers and Their Overburdened S.F’stems, November 1983.

Some large Federal computers are, however,

already obsolete or will soon become so.9 “Obsolete, ” in this case, does not mean that they

are no longer functioning, but merely that more

cost-effective technology is available. The old

systems require repeated patching and modification, maintenance costs are high, and spare

parts sometimes not available. Older computers sometimes have limited on-line processing capacity because they were designed

for 24-hour operation and not for the peaks

caused by many end-users.

When these computers are replaced, databases often have to be converted, and new software packages developed or adopted. This is

expensive. The incompatibility of equipment

from many vendors is also causing problems.

Laws and Policies

The Paperwork Reduction Act of 1980, Public Law 96-511, was a milestone in government

information management. ’” In addition to reducing the paperwork burden imposed on business by government, the act was aimed at improving efficiency and effectiveness in the use

of information. It promulgated the concept of

information resources management (IRM),

meaning the integrated management of all

basic information-handling activities and functions. The sections of the act dealing with

information-resources management cover everything from conventional libraries to centralized ADP sytems, and have a direct effect on

office automation.

The act required each agency to appoint an

information-resources manager. 11 It charged

‘The Grace Commission criticized the government for allowing its data processing systems, which in the early 1970s

were state-of-the-art, to fall behind; according to the Commission about 60 percent of the government’s then 17,200 computers were in need of replacement or significant upgrading.

However, in a recent review of 100 “major systems, GSA concluded that only 5 percent are “totally supported by obsolete

ADPE systems, ” and that obsolescence ‘‘is not as extensive

as has been claimed. ” See Assessing ADPE Obsolescence in

Major Federtd S.ywtems, U.S. General Services Administration,

February 1985.

“The act built on the recommendations of the Commission

on Federal Paperwork (1975-77).

“The act specified that these officials should be at the level

of Assistant Secretary. Since the number of these positions

(continued)
236 ● Automation of America’s Offices

OMB, assisted by GSA, with reviewing information resources management in each agency

at least every 3 years. OMB has largely delegated this responsibility to GSA. ’2 In practice, each agency conducts its own review, for

which GSA provides a voluminous handbook

or set of guidelines. The agency reviews are

then reviewed by GSA.

OMB has stated two basic tenets that govern its approach to information-resources management: 13

● Information is an economic resource and

should be managed in the same way that

other economic resources are managed.

● Information-resources management should

entail the management of the total information life cycle from collection to dissemination.

OMB provides guidance on all matters of

budget allocation and procurement in Federal

agencies, but this guidance is not specific

enough to materially affect the acquisition of

office automation equipment. 14 GSA does provide guidance to agencies on this subject, although agencies still make their own basic decisions.

Twenty years ago, in 1965, the Brooks Act

(Public Law 89-306) gave GSA sole authority

to procure ADP systems. ’5 Although this auin each agency is limited by law, the responsibility was generally given to the Assistant Secretary for Administration or

the equivalent. These are now referred to as Senior Designated

Officials or SDO’S, and there is typically an Office of Information Resources Management under them, with a director who

acts as the IRM and represents the agency on the Interagency

Committee on Information Resources Management. There is

an Office of Information and Regulatory Affairs in OMB that

coordinates OMB responsibilities for implementation of the

Paperwork Reduction Act.

“Letter of delegation of June 13, 1983, and Temporary

Regulation 10.

“Executive Office of the President, Office of Management

and Budget, Improving Government Information Resources

Management, March 1982, p. I, hereafter cited as EOP/OMB 1.

“0MB guidance on procurement (which comes from the

“M” or management side of OMB, and specifically from the

Office of Federal Procurement Policy or OFPP) is of course

to be distinguished from OMB review of agency budget requests

on the “B side of OMB, which certainly does affect the level

of office automation procurements.

“’DOD computers and related devices were exempted if the

equipment was “a mission critical computer resource. ” DOD

has argued that if any office automation system is tied into

thority is premised on large-systems procurement it remains the basic authority for purchase of office automation equipment. If office

equipment contains data processing components it must be bought under GSA standards and rules governing competitiveness in

procurement. Procurements of microcomputers

and word processors, 16 when under $300,000,

are handled under a GSA schedule (Schedule

C), which means that there are simplified procedures for competitive bids from already authorized vendors. When the total value of a

procurement exceeds certain thresholds (for

ADP equipment in general it is now $2.5 million) GSA usually issues to the agency a Delegation of Procurement Authority, based on

information provided by the agency about the

justification for the procurement. The agency

then draws up specifications and goes through

its own competitive bidding procedure. (GSA

can withdraw this delegation or change the

thresholds.) GSA acquisitions do not account

for all, or even for the preponderance of, Federal-agency microcomputer acquisitions.

The Competition in Contracting Act17 that

took effect April 1, 1985, created simpler procedures for using GSA’s ADP Schedule in

microcomputer purchases under $300,000.

GSA has an approved list of 45 microcomputers, available from 36 suppliers at special

Federal rates. In addition, a GSA Computer

Store carries 15 brands (not necessarily on the

list); this is designed to encourage the selection by end users rather than leaving the choice

to an agency’s central-purchasing agent. GSA

has published several attractive booklets of

a mission-critical computer resource system then it is also exempt from GSA procurement regulations. Statement of Undersecretary of Defense DeLauer on Mar. 4, 1983, according

to International Data Corp., op. cit., p. 22. The question of

whether this applies to word processors has been under review

several times and the outcome is not clear.

“

)Word processors were not included under ADP equipment

until late 1983 (SPMR Temporary Reg. F500, Oct. 25, 1983).

‘“Part of the Deficit Reduction Act of 1984. The CIC Act,

aimed at increasing competitiveness in procurement, makes

it more difficult to buy from a preselected sole source, but defines as competitive, awards that are made under a GSA MultiAward Schedule Program such as the ADP program. An agency

may also exclude a specific vendor in the interest of maintaining alternative sources.
Ch, 9—The Automation of Federal Government Offices . 237

advice to help agencies in buying and managing microcomputers.18

GSA also has responsibility for most of the

many common-user telecommunication facilities used by Federal civil agencies. If an

agency wants to make a major change in common-user services (e.g., Wide Area Telephone

Service, or WATS, lines) to implement office

automation communications, GSA must approve.]’

The GSA authority under the Paperwork Reduction Act (and by delegation from OMB)

was until recently exercised through two different services. The Automated Data and Telecommunications Service, which dealt with

ADP equipment, and part of the National Archives and Record Service, which dealt with

records management, micrographic, and word

processing equipment, have been merged to

create the Office of Information Resources

Management. 20

In April 1984, a number of policies and regulations related to information resources and

technologies were consolidated in a Federal

Information Resources Management Regulation (CFR Pt. 41, ch. 201). Amendments to

the Paperwork Reduction Act have been introduced in Congress aimed at strengthening

some aspects of the law. 21

Other agencies have roles in office automation procurement. The Institute for Computer

Science and Technology in the National Bureau of Standards develops standards for ADP

and communications equipment, develops technical guidelines, and prepares a yearly forecast of developments in computer technology,

including office automation. 22 The General

“office of Information Resources Management, U.S. General Services Administration, Managing End User Computing

in the Federal Government, June 1983, and End User Guide

to Bu.ving Small Computers, August 1984,

“DOD manages its own procurements of communications

technology.

“’Another part of GSA’s National Archives and Records

Service became the independent National Archives and Records

Administration.

-’S. 2433 (amendments of 1984); H.R. 2718 (amendments of

1983); hearings were held in the House in April 1983 and in

the Senate in April 1984.

‘-Recent budget cuts have abolished the planning office of

ICST, leaving in doubt the question of whether these forecasts

will be done in the future.

Accounting Office (GAO) has general auditing power over all government expenditures

and has repeatedly evaluated office automation acquisition programs.

The President’s Private Sector Survey on

Cost Control (the Grace Commission), which

was highly critical of government management

procedures, asked, “Can improvement of information systems create cost savings and

efficiencies and facilitate managerial decisionmaking throughout the Federal Government?”23

The report concluded that it could, and that

this offered the “opportunity for savings and

revenue of $15.2 billion over 3 years, an estimate that included both office-microelectronic

equipment and large systems. The survey team

said that the acquisition process was inadequate, characterized by excessive procedural

steps, a confusing array of policies and directives, lack of qualified personnel, and deficient

training and supervision. The survey team recommended stronger, centralized, govemmentwide policies for information-technology acquisition and management, but not necessarily

less discretion for the agencies, although it is

not clear how both objectives can be preserved.

The Administration has stressed the importance of planning, and OMB, GSA, and the

National Bureau of Standards together prepare a 5-year plan, updated every 2 years, together with guidelines to assist agencies in

planning. A new OMB circular, 85-12, will provide agencies with further guidelines to be used

in planning. Agency managers, however, often

express a feeling of futility in doing long-range

planning for information systems because their

budgetary constraints are constantly changing. Nevertheless, the desire to link personal

computers and word processors to mainframes

and minicomputers, and to other devices, is

pushing Federal agencies toward planning and

coordination of equipment acquisition, probably more effectively than could be done by

instituting government-wide requirements.

“The Executive Committee to carry out the survey was

established by Executive Order 12369, June 30, 1982. See: President’s Private Sector Survey on Cost Control, Management

Office Selected Issues, vol. VII 1, ‘‘Information Gap in the Federal Government, winter 1983.
238 Automation of America’s Offices

The Federal Inventory of

Office Automation

Expenditures for information technology for

Federal agencies grew from about $10.4 billion in 1983 to $13.9 billion in fiscal year 1985,

increasing 19 percent in the first year and 13

percent in the second.24 This is a much larger

growth than that for Federal expenditures as

a whole. About a third of these expenditures

are for defense-related agencies.

The government has been spending about

1.4 percent of its budget on information technology; this is perhaps somewhat less than

the rate of spending by private corporations

in the services and manufacturing sectors,25

in spite of the greater intensivity of whitecollar

work in government (about 80 percent of the

Federal work force are white-collar workers,

compared to about 55 percent of the total civilian work force). The average length of time

in service for Federal computers in 1982 was

just under 7 years, and decreasing as old systems are replaced.

The purchase of equipment (capital investment) accounts for only about 19 percent of

these expenditures, compared to 36 percent

for commercial information services (ADP,

etc.). The rest is for equipment leasing or rental

and for personnel costs. Federal policy has generally been to encourage purchasing rather

than leasing; it is more cost effective, and the

proportion of systems that are leased has declined from 36 percent in 1970 to 12 percent

at present.26 But some procurement specialists

question this strategy since leasing would

make state-of-the-art technology more readily available.

—-— - .- -

“Office of Management and Budget, General Services Administration, and Department of Commerce, A Five-Year Plan

for Meeting the Automatic Data Processing and Telecommunications Needs of the Federal Government, vol. 1, April 1984.

Hereafter cited as Five Year Plan, 1984.

“’Thomas G. Cody, “How Senior Execs View Info Technology, ” Government Computer News, July 1984, p. 64.

“In 1960, over 80 percent of computer systems used in the

Federal Government were leased; by 1970 this had dropped

to 36 percent, from 1977 to 1983 it was about 9 percent, and

since then it is rising again, to 12 percent in 1984. Five-Year

Plan, 1984, pp. 1-3.

In recent years, the largest absolute increases

in expenditures for information technologies

have been in the Department of Defense (DOD),

the Department of Energy, and the Department of Health and Human Resources. But

a number of small agencies that had lagged

behind have had bigger percentage increases

in order to catch up with the pace; for example, the Office of the U.S. Trade Representative (USTR), the Department of Justice, and

the Securities and Exchange Commission.

DOD is by far the largest user of office automation among Federal agencies with about 67

percent of the stock. DOD however also has

the largest share of all Federal white-collar

workers (about 40 percent of them). One measure of the extent to which an agency has automated is the comparison between its share of

total Federal office automation, and its share

of the Federal whitecollar work force. The ratio of DOD’s share of automation to its share

of the white-collar work force is a modest 1.68

compared to 8.24 for the Department of State,

3.41 for the Environmental Protection Agency,

and 3.34 for the National Aeronautics and

Space Administration.27

In 1982, the Federal Government had in its

computer inventory about 13,667 major systems with over 20,000 central processing units.

This inventory is not complete nor accurate.”

Moreover, GSA will no longer attempt to list

systems costing less than $50,000, and has

recently discontinued its tracking of communications use and costs. It is therefore impossible to say how much office automation equipment the government owns. In early 1983, the

General Service Administration said that

“there are estimates” of 82,000 word proces-

———

‘

q Internat~onal Data Corp., op. cit. These percentages are

for 1982-83; more recent figures are not available.

‘“GSA, Automatic Data Processing Inventory, April 1984.

GSA guidelines require agencies to report all systems with a

CPU but agencies nevertheless differ on their interpretations

of the guidelines-e. g., some do not include word processing

systems and some do. An on-line version of the inventory is

being developed, but it will not include systems costing less

than $50,000. GAO concluded in March 1985 that “GSA’s data

base of the government’s inventory of computer equipment has

been inaccurate for some time. ” (U.S. General Accounting Office, Effective Management of Computer Leasing Needed to

Reduce Government Costs, IMTEC-85-3, Mar. 21, 1985, p. 11 1).
sors in government offices,

29 but these estimates were based only on old rules-of-thumb

about government’s share of computer purchases. Most agencies are not sure how many

personal computers or small word processors

they have. Accounting and inventory catego -

ries differ across agencies in how they categorize leasing arrangements, paced payments,

etc .

30 Agency IRM officials nevertheless complain about surveys or audits aimed at clarifying these questions; audits are seen as a heavy

burden that detracts from more productiv e

work .

Much of the office automation equipmen t

now being bought is low cost; decisions about

personal computers are in this sense not much

different from decisions about desks and typewriters. Over-elaborate regulations and con -

trols could be needlessly costly. Organizations

need the freedom to experiment in order t o

identify the most useful technology for them.

However, monitoring and inventory could b e

done without affecting the range of choice .

Current procedures for inventory of office

automation equipment make it difficult to assess the status, l;evel of capital investment, and

rate of investment. Projections of future office

automation, future costs, and future benefits

are therefore unreliable, and effects hard to

measure. This is a problem for agency planners and decisionmakers trying to assess the

cost-effectiveness of automation.

‘<U.S. General Services Administration, Office of Information Resources Management, Mana~”ng End User Computing

in the Federal Government, June 1983, p. 3.

“’U.S. Office of Management and Budget, U.S. General

Services Administration, and U.S. Department of Commerce,

A Five Year Plan: Meeting Automatic Data Processing and

Telecommunications Needs of the Federal Government, April

1983, pp. 12 1-146; National Bureau of Standards, Future Information Processing Technology–1 983. Special Publication

500-103, pp. 177-179; International Data Corp., “Federal Acquisition Strategies for Office Automation,” research paper for

Continuous Information Services Clients, ” by the Procurement

Information Management Service, March 1983, p. 32; and Dr.

Richard J1’erling, “Applications of Information Technology in

Government, ” July 1984, contractor report for the CIT Government Information Systems Assessment, OTA.

Ch, 9—The Automation of Federal Government OffIces . 239

Acquisition Strategies and Problems

Within OMB and GSA guidelines each agency makes its own decision about office automation acquisition. OMB Circular A-109 requires every agency to have an acquisition

strategy; some of these strategies have been

widely criticized.31 A series of GAO reports

has faulted agencies for:32

not complying with guidelines and regulations,

not studying alternative methods of acquisition,

leasing rather than purchasing,

using vendor-specific programming language,

not adequately analyzing agency mission

and needs,

failing to have a long-range plan,

not consolidating individual small-volume

orders,

purchasing equipment in excess of need

or likely use,

failing to properly inventory equipment,

lack of accountability in controlling

equipment,

failing to issue or enforce departmentwide

policies,

not separating short-term objectives from

long-range plans,

failure to use word processing to reduce

the cost and size of the work force,

faulty cost/benefit analysis,

not realizing maximum productivity gains,

underestimation of operating and maintenance costs, and

use of untested technology.

. —

“For example, a National Academy of Public Administration panel {op. cit. ) concluded that only a few agency leaders

“are really aware of how swiftly change is being forced on their

organizations as a result of rapid office automation. ” As a result, the panel said, acquisitions are often haphazard and poorly

planned and fail to meet their objectives.

Wee U.S. General Accounting Office reports CED-81-15,

Oct. 23, 1980; AFMD-81-55, Apr. 21, 1981; HRD-81-74, Apr.

21, 1981; HRD-81-106, June 30, 1981; CED-82-1 13, Sept. 30,

1982; GGD-83-103, Sept. 1, 1983; IMTEC-84-11, May 25, 1984;

and AFMD-82-54, Sept. 21, 1982.
240 ● Automation of America’s Offices

Noncompatibility

Some of the most difficult decisions about

acquisitions strategies involve the value of

compatibility of small systems and devices.

Some Federal executives insist that it is most

important to get office equipment that is useful now; diversity will help the agencies determine what kinds of automation are most successful. Noncompatibility is a minor problem,

they say; by the time it becomes cost-effective

to tie systems together, it will be time to buy

new up-to-date equipment. The experience and

learning gained meanwhile will carry over.

This seems to be a minority position. The

tying together is already going on, and for

most agencies noncompatibility is certainly

a problem. However, this problem may be an

unavoidable cost of competitive procurement.

Moreover, cumbersome attempts at coordination and control during the first few years of

personal computers would almost certainly

have greatly delayed the automation of Federal offices and put the government far behind

the private sector in the pace of adoption.

Because the government is a major market

for office automation, it is often urged to force

the development of industry-wide standards,

or to develop its own standards. Many experts

think however that since the development of

voluntary standards is proceeding, it would

be preferable in the long run for government

not to force this issue by intervening more

strongly. There appears at present to be little

pressure for such intervention.

Inappropriate Choices

Many day-to-day problems come about because of the selection of equipment by managers who do not understand the mechanics

or flow of work in their own offices. The support staff is often not consulted, although they

could bring to the decisionmaking valuable information that is otherwise not available. Formal description of work procedures often bears

only nominal relationship to the real process

of moving a form, a letter, or a report out the

door. How smoothly the movement proceeds

is affected by a myriad of details from how

the office furniture is arranged, to what else

has to be done at the same time. Hardware,

software, or auxiliary furniture can improve

this workflow or it can disrupt it, depending

on characteristics that may appear unimportant or irrelevant to those who are not actually doing the work.

The Complexity of Options

The procurement of networking technologies

involves much higher costs and longer-lived

systems than the choice between stand alone

devices. Mistakes are more serious. Even in

procuring simple systems, the procurement options are becoming complex. To get a telephone

system for a new office, the Federal executive

must now choose between buying and leasing.

If the budget only has operating funds, not

capital investment funds, lease financing is

necessary .33

Privatization

An agency’s evaluation of its needs for computers and related equipment has also been

complicated by confusion over Administration

policy about contracting with private organizations for information-related services. OMB

Circular A-76 requires the contracting out of

services that can be performed more cheaply

by the private sector. Many agencies have contracted for data entry or word processing to

relieve the load on old systems and avoid the

need for new systems. Some have become dependent on outside sources for training and

support of office automation instead of developing the capabilities that they will need in

the future.

Recent studies of productivity factors resulted in revision of A-76 to emphasize 14 major categories of services in contracting out.

These include ADP, data entry and keypunch,

audiovisual, and mail and file services. Agencies are now required to consider three options

—internal performance, use of another government agency, and outside contractors. They

“Patrick J. Keogh, Chief of the Economic Analysis Branch

of GSA, “Deregulation is Challenge to Procurement Officials, ”

Government Computer News, November 1984.
Ch. 9—The Automation of Federal Government Offices ● 241

are still encouraged to contract out as many professional procedures and the increasingl y

services as possible, if those services woul d demanding safeguards and checks imposed b y

require more than 10 Federal employees.

3 4 Congress to ensure fair competition .

OMB recently reported that cost comparisons are now going against privatization in

about half of the activities reviewed, a much

higher percent than in the past. This has been

advanced as an indicator that government is

becoming more efficient in carrying out its

activities .

The Dilemma of Procurement Policy

In their own audits and reviews, agencies

frequently identify problems such as thos e

GAO listed above. For example, the Inspec -

tor General of a major agenc y

36 in a 198 5

post-installation review of major system s

listed a number of failures: no clarification over

who has control over the project, no determination of total-user requirements, poor plan -

ning and design, lack of coordination between

two user groups, and acquisitions occurrin g

at field level, resulting in incompatibility. Mistakes of this kind can and should be avoided

as better procedures are developed .

But at the same time, for larger systems,

agency procurement procedures may be too

elaborate and too rigid. 37 For advanced Systems, including the computer networks that

are becoming a high priority goal in most agencies, the procurement procedures often result

in specifications that are precise, elaborate ,

and rigid. This creates major problems. Th e

agency contracts officer finds himself caugh t

in a tension between the agency or program

officer’s need to solve old problems or achieve

new goals with advanced technology on th e

one hand, and on the other hand, customar y

“Eric Fredell, “OMB Restricts Contracting Out in A-76

Revision, ” Government Computer News, November 1984.

‘

5 Myron Struck, “Workers Break Even in Cost Studies, ” The

Washington Post, Apr. 11, 1985, A19.

‘This was typical of audits and reviews shown to OTA by

agencies; there is no intent here to single out a specific agency

for criticism or otherwise, and the agency is therefore not identified.

‘Based on discussions at workshops for Federal agency office automation specialists held by OTA in October 1984 and

July 1985, and on many other written and spoken communications from Federal officials.

To guard against violations of established

safeguards, the contracts officer tends to insist on elaborate specifications before requesting bids. As a result, the development of the

technology may outrun the procurement cycle, and equipment may be behind the state -

of-the-art by the time it is installed. Vendors

have no opportunity to propose alternativ e

specifications that could provide more inno -

vative ways of meeting agency needs.

Overspecification is particularly likely to occur with information technologies because contracting officers usually are not experts in the

technology and are unable to rely on their own

professional judgment about how detaile d

specifications must be. Contracting officers

are themselves at severe risk if there are too

many challenges to their actions on ground s

of inadequate competition and this make s

them even more cautious.

3 8

An additional complication with competitiveness in regard to information-technolog y

procurement is the desire for compatibilit y

with existing equipment. If the procuremen t

is decided on the grounds of compatibility, it

may be faulted for noncompetitiveness; i f

greater competition results in procurements

that require additional high expenditures t o

compensate for noncompatibility, the decisio n

may also be faulted .

Overspecification, according to industry experts, can result in procurement specifications

that reflect obsolete approaches to technica l

problems, or specifications that no vendor can

exactly meet, although several vendors ma y

have alternative approaches that would solv e

the technical problem, perhaps at less cost than

is entailed in meeting the government specifications.

‘Federal contracts officers have a warrant, giving them

sign-off authorit~’ on contracts up to a specific dollar limit. If

there are serious challenges to their decisions about competitive contracts they may not only get a poor performance evaluation, but can lose their warrant, or have their sign-off authority reduced, which would seriously damage their future career

outlook.
242 ● Automation of America’s Offices

In some cases, attempts to make procure- policies that give agency managers wide discrements more competitive and to increase ac - tion in formulating acquisition policies, has kept

countability result in procedures that seriously pace with private sector office automation, and

obstruct the accomplishment of agency respon- that the opportunist y for increased productivity

sibilities. will not be unduly limited by procurement-rein spite of these problems, OTA concludes lated problems.

that office automation, under Administration

WHAT WILL OFFICE AUTOMATION MEAN FOR

FEDERAL OFFICE PRODUCTIVITY?

Nearly all observers agree that Federal office automation is increasing agency productivity. But because there is no agreement o n

the definition of productivity, this benefit is

hard to measure and document .

Based on past experience and analogy wit h

the private sector, the gain in productivity is

probably far below that which is eventuall y

possible. A mixture of old and new technology is rarely completely effective. Workers

using the new technology must cope with existing paper-based data, through procedure s

built up around older work activities, coordinating with other offices that have not bee n

automated, in a bureaucratic structure orga -

nized to fit the earlier patterns of workflow

and task sequencing, and in a workplace environment that was not planned with the new

technology in mind .

Moreover, the training that is given to workers using the new technology is clearly inadequate. Most of them are learning on their own,

and from each other. This takes time to ac -

complish, and also cuts into the time that is

spent in direct production of output, both for

learners and teachers. Managers, too, are still

struggling to learn new techniques for man -

aging the automated office. (Federal trainin g

is also discussed in chapter 3.)

Evaluations of Productivity

The General Accounting Office estimated

the cost of the government work force as $81

billion in 1980 and on that basis calculated

a potential savings of $12 billion, or 15 percent, through the use of office automation.

39

It is not clear how this estimate was calcu -

lated, but the 15 percent estimate recurs fre -

quently in agency projections of increased productivity .

The first round of agency reviews of their

information-resources management, as re -

quired by the Paperwork Reduction Act, be -

gan in 1982. These reviews varied in scope and

objective; some were designed to assess system performance, some evaluated the effec -

tiveness of systems in direct support of spe -

cific program areas, and some concentrate d

on the effects on administrative responsibilities and budgets.

4 0

The reviews were intended to address progress

in reduction of the paperwork burden, im -

proved delivery of services, elimination of activities that duplicate private sector sources,

budget savings, improved productivity, im -

proved technology, and improved management

controls. But few cited specific productivit y

gains that could be quantified. These statu s

reports illustrated why it is difficult if not impossible to specify, either in advance or in retrospect, the direct productivity y benefits of office automation. First, information resource s

management goes beyond office automatio n

“AS quoted by the U.S. General Services Administration, Office of Information Resources Management, Managing End

User Computing in the Federal Government.

‘“OMB then targeted and monitored 66 of the reviews, being conducted by 26 agencies. Executive Office of the President, Office of Management and Budget, Improving Government Information Resources Management: A Status Report,

March 1983. Hereafter cited as EOP/OMB 2. See also EOP/OMB

1, cited previously.
Ch. 9—The Automation of Federal Government Offices . 243 — . —

and some of the gains come from reorganization or increased management attention. Sec -

ondly, in most cases, automation is not a onetime, self-contained event and comparison o f

clear-cut before and after measurements ar e

not possible .

Many agencies have provided OTA with system plans and evaluation reports in which they

made estimates or projections of productivit y

gains from office automation. For example ,

a natural resource agency recounts cuttin g

staff in one field office from 370 to 120 when

much of the work was automated by a new

computer system. There are also many estimates of future savings. A science-oriente d

agency estimates that 10 percent of the wor k

hours of administrative personnel and 3 percent of those of its scientists

’ will be saved .

Another agency expects time savings of 1 0

percent for administrative personnel and 2 0

percent for professionals, and the eliminatio n

of some technical positions. These estimate s

are persuasive in context, but they use so many

different ways of estimating or aggregatin g

that they cannot be evaluated or compared .

Although not called out as a criteria fo r

evaluation in the status reports, there appea r

to be many cases where information technology has resulted, or can result, in services to

the public that would not be possible without

i t .

4 2But in the interest of reducing the Fed -

eral deficit, there has been more emphasis on

attempts to reduce or constrain the growt h

of government services than on expandin g

them .

OMB, while specifying productivity as a n

evaluation criteria, has not defined it nor provided a metric for it. OMB says only that with

the technolog y “the Federal Governmen t

should be able to utilize available resource s

in a more efficient and effective manner. ’

4 3

— - . —

“Fifteen percent of the 20 percent of their time that the

scientists spend on administrative duties.

‘For example, the automation of the Occupational Safety

and Health .Administration technical Data Center allows

0S11A to respond yearly to several thousand inquiries by go\rernment agencies, workers and their unions, employers, public

interest groups, and the general public.

‘lEOP 021111 1, p. 12.

Productivity could mean more or better work

performed or services delivered; it could mean

doing the same work at less cost.

The Merlin Experiment

One example of productivity assessment is

an Office of Personnel Management (OPM )

evaluation of the General Service Administration’s Merlin System, installed in GSA’s Western Region in July 1983.

44 Merlin is compose d

of 84 personal computer workstations linke d

by a local area network and used by mana -

gerial, technical, and senior clerical employ -

ees. The OPM study was based on systematic

measurement and evaluation of work befor e

and after the installation. In 39 of the 47 categories of tasks studied, output increased “re -

markably”: OPM rated this ‘‘a strong overall

improvement . The volume of output per employee hour went up in 14 of 19 categories.

Cost per unit of output was reduced in 79 percent of the categories. In some categories it

was possible to compare the same kinds of output with and without use of Merlin, in the same

time period; 10 of the 17 categories showe d

improved unit time with Merlin. OPM als o

found a reduction in contract preparation time,

improved time and project management, an d

a ‘‘marked reduction’ in time spent in meetings, due to the system’s communications capabilities. OPM’s figures appear to indicat e

about a l-percent cost saving for the organization as a whole (across about 4.4 person years

spent in all tasks done by the organization) .45

No information is given about the cost of Merlin or its anticipated lifetime .

Incentives

In the private sector, increasing the output

and/or the quality of the product should increase the organization’s market share an d

ultimately its profits. This incentive does not

“U.S. Ge~eral Services Administration, Office of Information Resources Management, Merlin Impro\’ements, January

1985.

‘ App. D of the cited report gives “total time and total

cost” for sample 1 (preMerlin) as 9,200.6 hours and $132,160,10

or S 14.36 per hour; for sample 2 (post-Merlin) as 9,763.0 hours

and $138,731.30 or $14.21 per hour.
244 ● Automation of America’s Offices

operate in government. On the contrary, a government organization that performs its wor k

at less cost typically finds its budget reduced

for the following year, usually with no reward

for the managers who achieved the cost re -

duction. Instead, if they have fewer employ -

ees they may lose status and find their chances

of a higher grade level significantly prejudiced .46

The always present possibility of across-the -

board budget cuts encourages Federal execu -

tives to keep staff levels above the minimum

that is necessary so that cuts can be absorbed

“For example, a 1980 U.S. General Accounting Office report concluded that productivity rates achieved by Federal payment centers varied by 600 percent, and added that the GAO

auditors were told by payment center managers that there were

strong disincentives against raising productivity, of the kind

described here. GAO, Improving the Productivity of FederaJ

Payment Centers Could Save Millions, FGMSD-80-13, Feb. 12,

1980.

without damaging their ability to get the work

done.

New York City undertook to automate its

municipal offices under a strong drive to re -

duce costs and increase government revenues,

47 and high level officials say that progress

is being made toward these goals. The same

pressures are operating within the Federa l

agencies, and there is every reason to anticipate that the results will be much the same .

Productivity as measured by output and b y

labor costs is likely to increase; whether this

is accompanied by improvement in the quality of government services is much more un -

certain .

“According to a case study of municipal office automation

done for OTA; see app. B for a summary.

IMPLICATIONS FOR THE FEDERAL WORK FORCE

If office automation does increase productivity in Federal offices, it could allow Fed -

eral whit~collar employment to be reduced (or

it could allow government services to be ex -

panded without a proportionate increase in employment). Automation may also :

● change the nature of the work and the

skill requirements of some jobs,

● effect the number of people needed in

some job categories,

● create new jobs and occupations, an d

 make other jobs obsolete .

Such effects would change the relative number of people needed in the major categorie s

of Federal jobs—professional, administrative ,

technical, and clerical; and also affect the distribution of people at each grade level and salary level .

48 Such changes in the structure o f

the Federal work force, as well as the size of

the work force, will strongly affect total labor

costs and thus the cost of government .

——- .-—.

In the Federal civil service, employees hold a grade level

in one or the other of approximately 100 pay plans used by

the executive branch. About two-thirds of them are covered

by the largest pay plan, the General Schedule (GS). This has

grade levels from 1 (the lowest) to 18. The employee’s grade

level determines the range of salaries that he or she can obtain.

These potential changes should be considered in work force projections, in planning, and

in developing policies about personnel recruitment, rewarding and promoting, retention, and

retirement. There is no indication that OPM,

OMB, or other central agencies of government

are studying the implications of such changes.

Since Federal offices have been using computers for about 20 years and have been rapidly automating over the last 5 to 10 years,

indicators of such change should already be

apparent with careful statistical analysis. This

analysis has not been done on a systemati c

basis. However, OTA concludes that there are

at least some general indicators that suc h

changes are underway .

Size of the Work Force

If office automation is affecting Federal employment levels, then historical growth rate s

should be slowing or reversing. Growth of the

Federal work force has in fact slowed, stabilized, and then been reversed over the past

15 years. It is not necessary to argue that office automation has been the cause of this decline. The volume of government employment
Ch, 9—The Automation of Federal Government Offices ● 245

depends strongly on the political philosophy

of the Administration in power and of Congress about the scope of Federal Governmen t

responsibility and the services that govern -

ment should provide. It is also strongly affected by population growth and economic expansion. However, given apolitical imperativ e

to reduce the cost of government and henc e

to shrink Federal employment, it can be argued that office automation has at least allowed and facilitated a reduction of the work

force .

Federal employment has grown every decade of our history except the 1920s. (See figure 9-1. ) It has not, however, kept pace with

growth in population or in the economy.” Federal employment grew by 73s percent durin g

the 1930s and the New Deal, 88 percent during the 1940s and world war, 23 percent i n

the 1950s, and 24 percent in the 1960s.

50 T h e

——

“’Federal employment has steadily decreased relative to the

size of the economy and the national population, from 3.7 percent of U.S. civilian employment in 1960, to 2.9 percent in 1982,

and from 13.1 (executive branch) Federal workers per 1,000

population in 1960, to 12.2 in 1982. The Federal proportion

of total public sector employees has declined from 33 percent

in 1950 to under 18 percent in 1980 (U.S. Department of

Commerce, Statistical Abstracts)

‘ Bureau of the Census, Historical Statistics of the United

States, Part II, Series 308-317.

Figure 9.1 .—Paid Civilian Employment of the

Federal Government, 1881-1983

1881 1891 1901 1910 19201930194019501960 197019801991

Year

SOURCES Data from 1881-1960 based on U S Department of Commerce

Bureau of Census li~s(orical Abstracts of the U S Co/on/a/ T/rnes

to 7970, fart // Series y 308-317 Washington DC 1975 Data from

1970-1983 based on U S Department of Commerce Bureau of Cen

sus Stat(st/cal A bsfracfs of fhe Um fed States. N 523, Washl n gton

DC 1985

growth in the 1960s was perhaps in part related to the Vietnam War, but it was charac -

terized by increases in the number of posta l

workers and the number of general administrative, clerical, and office service workers in

nondefense agencies.

51 Thus, it was probabl y

related to the trend toward an information -

intensive economy and to political initiative s

such as the War on Poverty .

But from 1970 to 1980, Federal employment

growth slowed; it grew only 2 percent in that

decade.” During this period the Federal wor k

force was–like the country’s general labo r

force–becoming more thoroughly white-collar.

The ratio of white-collar to blue-collar Federal

workers changed from 2.9: 1 in 1960, to 4:1 in

1980. Yet at the same time the growth of the

Federal whit~collar work force has also slowed;

it grew more than 13 percent from 1960-6 5

and again from 1965-70, but only 7 percen t

from 1970-75 and 3 percent from 1975-80. This

change was at least coincident with the speeding up of office automation, which began about

1974 .

Every 2 years from 1960-74, the number of

General Schedule and Merit Pay employees

(about two-thirds of all Federal white-collar

employ ment)53 grew about 3 percent; from

1974-84, the average growth rate each 2 years

was only 0.3 percent. This may also be an indicator that office automation was having a n

effect.

Such indicators do not of course establish

a cause-and-effect relationship. Nevertheless,

the cumulative evidence that automation o f

white-collar work can at least allow employ -

—— -- --

“Department of Defense employment increased 15 percent

from 1960-70, but it was 43 percent of total Federal ci~’ilian

employment in 1960 and only 41 percent in 1970. (Stat. Abstr.

1984, table 535.) But General Administrative Clerical, and Office Services increased 20 percent and postal workers increased

by 26 percent.

“Stat. Abstr. 1984, table 535, p. 333.

“There are over 100 pay codes or schedules for Federal executive branch employees, although some co~’er only a handful

of workers. A few, such as those used only for Foreign Service

employees, the Tennessee Valley Authority, or the Veterans

Administration, co~er thousands of employees. However, the

GSGM pay codes cover about 67 percent of all white-collar

workers, and a higher percentage of those who are administrative or clerical.

52-641 0 - 85 - 9
246 ● Automation of America’s Offices —

ment growth to be constrained or reverse d

while the amount of information-handling in -

creases, is persuasive .

Changes in the Mix of Federal Jobs

There are now 8 percent fewer people in the

jobs grouped under “General Administrative,

Clerical, and Office Services” than there were

in 1975 .

54 A closer examination of this group,

which contains about one-quarter of all Fed -

eral workers, also suggests that office auto -

mation is bringing about basic changes in Federal office work and in Federal jobs.

For example, four job titles within this

grouping have disappeared since 197555—coldtype composing machine operation, dictatin g

machine transcription, electric bookkeepin g

machine operation, and calculating machin e

operation. Together they accounted for 8,50 0

jobs in 1975, although even then they wer e

on the way to becoming obsolete jobs. In 1975,

there were already 42,500 computer operators,

specialists, and aides; that number has grown

by 9,000 .

5

’

Some job titles have changed as the technology associated with them changed-for example, card punch operations has become data

transcription. The number of people who presumably spend much of their time typing (now

known as keyboarding) may have grown de -

spite the spread of word processing. In 1975,

there were over 7,146 dictating machine transcribers (a classification that does not no w

exist), 72,895 clerk-typists, and 62,373 secretaries. By 1983, there were 11,780 fewer clerktypists but 29,100 more secretaries, a 7-percent

“’U.S. Office of Personnel Management, Federal Civilian

Work force Statistics: Occupations of Federal White-Collar and

Blue-Collar Workers, MW 56-18, Oct. 31, 1983, table E, and

U.S. Civil Service Commission, Federal Civilian Manpower Statistics: Occupations of Federal White-collar Workers, SM 56-

11, table F-1. Postal workers have been removed from the 1975

data to make it comparable to 1983 data.

“The only entirely new job title is equal opportunity specialist, although as noted the title of some job classifications

(as identified by code number) has changed.

“The extent to which people displaced from eliminated jobs

move into newly created jobs cannot be answered from this

data. However, it appears from OPM print-outs that most of

the over 7,000 dictating machine transcribers were women; most

of those in computer specialties are men.

overall increase. Secretaries, who have more

diverse duties and make higher salaries tha n

clerk-typists, now make up 60 percent of this

group of workers, as compared to 44 percen t

in 1975 .

Shifts Among Occupational Categories

and Grade Levels

These changes in and among job classifications imply that there will also be changes in

the shape of the Federal work force—the distribution among major occupational catego -

ries (professional, administrative, technical ,

and clerical) and across grade levels and salary levels. Such changes have occurred in the

last decade, although undoubtedly many forces

are operating to affect this trend. The distribution in terms of the major occupational categories is squaring up. The proportion of clerical workers is declining, and the proportions

of technical, administrative, and professiona l

workers have been growing (although the share

made up by professionals is now beginning to

shrink slightly). (See figure 9-2. )

Clerical Workers

In October 1983, about 25 percent of General Schedule (GS) employees were clerical

workers. In 1975, more than 31 percent were

clerical workers. The figures for both years exclude postal workers (who were removed from

OPM’S occupational survey between 1979 and

1981); with them included, more than 45 percent of white-collar employees were in the clerical grouping in 1975. Ninety percent of Federal clerical workers in 1983 were in grad e

levels 3 through 6, with another 3 percent in

grades 1 and 2 .

57 

.

——

‘“As a reference point, there were over 305,000 Federal clerical workers in grades 1-6 in October 1984. At the high end

of the scale are secretaries and claims, payroll, legal, and travel

clerks and statistical assistants; average grades for these job

classifications are between 5 and 6 (roughly $16,000 to $17,000

in 1983) and there are about 110,000 people in such jobs. At

the low end of the clerical scale are messengers, clerk-typists,

mail and file clerks, and computer clerks, with average grades

of 2-4 ($12,000 to $14,000). The breakdown of workers in each

category by grade level is based on an OMB computer printout

as of Mar. 31, 1983, while the total numbers for each category

are for October 1983. This should not, however, cause any major misstatements.
Ch. 9—The Automation of Federal Government Offices ● 247

Figure 9-2. —Changes in the Distribution of Federal

Employees by Occupation, 1975 and 1983

1975

Technical (1 80/0)

Admlnl strative

(24 %)

professional ( 19°70) ‘ Other (8 O.)

1983

Technical (22 O/. )

Adminlstratlv e

(28 O/. )

Clerlcal (31 0/0)

Clerical 25%)

0/0 )

Professional (22°/0)

SOURCES 1975: U S CIVII Service Commlsslon, Federal Ciwlfan Manpower Sfaf~stfcs Occupat~or?s of Federa/ kVh/te.Co//ar Workers, Oct 31, 1974

and 1975, SM 56.11, Washington, DC, 1975, and 1983: U S Off Ice of

Personnel Management, Federa/ C/v///an Workforce Stat/sf/cs Occupations of Federa/ Wh/te-Co//ar and B/ue-Col/ar Workers, Oct 31.

1983, MW 56-18, Washington DC, 1983

In internal Federal agency documents an d

in anecdotes told by Federal office automa -

tion managers, it is frequently said that government clerical workers, once trained in th e

use of office automation, are often hired away

by private sector industries that offer higher

wages. This is alleged to be true especially in

field offices in some sections of the country.

This disparity is largely at lower salary levels;

34 percent of Federal data processing workers made under $23,400 in 1983, compared to

22 percent of those in the private sector, according to figures derived by the Congressional

Budget Office. However, 35 percent of Fed -

eral data processing specialists earned $35,400

or more, compared to 33 percent of those i n

the private sectors

”

‘

-U.S. Congressional Budget Office, Reducing Grades of the

General Schedule Vt’ork Force, September 1984, p. 43.

Technical Workers

About 22 percent of GS employees in 1983

(nearly 332,000) were technical workers o r

paraprofessionals with such diverse titles a s

economics assistant, communications specialist, tax technician, and equal opportunity assistant—120 titles in all. In 1975, only 1 8

percent ” of the Federal workers had technical ratings. This trend probably reflects th e

development of an information society in which

scientific and technical information is a ma -

jor factor in all economic activity.’ ”

Administrative Workers

Another 28 percent of GS workers in 1983

(432,000), were classified as administrative ,

compared to 24 percent in 1975. Nearly 11 percent of all Federal white-collar workers are supervisors; just over 2 percent are called managers, or top-level executives. (The latter are

usually in the professional rather than th e

administrative category.)

61 About 90 percen t

of administrative workers in 1983 were low

and middle-level managers in grades 9 through

15, with nearly another 10 percent just below

in grades 5 through 8 .

62 Program managers ,

health systems administrators, and computersystems administrators, for example, hav e

average grade levels of 13 or over. Passport

and visa examiners and social insurance claims

examiners are at the lower end of the rang e

and have grade levels under 9. Again, it is the

administrative classifications with lowest grade

levels that appear most likely to be reduce d

in numbers as some of their tasks are auto -

mated, if the experience of their closest counterparts in the private sector, insurance raters,

and underwriters, can be generalized .

“U.S. Civil Service Commission, Federal Civilian Manpower Statistics: Occupations of Federal WhiteCollar Workers, Oct.

31, 1974 and 1975, SM 56-11, pp. viii and x. The 1975 figures

have again been revised to exclude postal workers. See table

B of the CSC publication.

“The grade levels for technical jobs vary widely (the 90 percent range is from GS 4-11) but the a~’erage grade is 7.14 (a\’erage salary $21,000 in 1983].

‘ ‘U.S. Office of Personnel Management, Federal Civilian

Work force Statistics: Occupations of Federal White-Collar and

Blue-Collar Workers, Oct. 31, 1983, MW 56-18, p. 8.

( The average grade for administrators is 10.9 (average salary $32,000 in 1983).
248 Automation of America’s Offices

Professionals

Just over 22 percent of Federal workers were

professionals in 1983, as compared to 19 percent in 1975. Again, this increased proportion

is probably related to changes in American

society and economy as well as to office automation. In 1983, 94 percent of professionals

were in grade levels 9-15. Their average grade

level was 11.7 with an average salary o f

$36,000. (In 1983-84, however, the proportion

of professionals in the Federal work force was

reduced slightly from that in 1980.)

6 3

Changes In and Among Grade Levels

These changes have squared up the Federal

structure, viewed in terms of occupational categories, so that their proportions, which i n

1974 ranged from 18 to 31 percent, are now

more nearly equal, from 22 to 28 percent, with

administrative rather than clerical occupations

as the largest group. Paralleling these shifts,

the number of workers at each grade level has

also changed. (See figure 9-3.) In 1974, 41.9

percen t

64 of Federal workers were in the lower

grades 1-6, where clerical workers are concen-

-— ..-.

“About 3 percent of Federal workers are usually classified

as “other or unspecified, ” usually because their jobs are being

reclassified during the counting period.

“The figure for both years excludes postal workers; if they

are included for 1974, the percentage becomes 41.6 percent.

Figure 9-3.—Change in Distribution of Federal

Employees by Grade Levels, 1974-80

51

4 —

3 —

2 -

1 —

o

–1 —

- 2 —

–3 —

: ; ~

GS 1-6 GS 7-8 GS 9-14 GS 15+

Grade level

SOURCES: u.: +wil Service Commission, federalCivl/ian Manpower Stafh3tics:

Occupations of Federal White-Co//ar Workers, Oct. 31, 1974 and 1975,

SM 56-11, Washln@on, DC, 1975; and U.S. Office of Personnel Management, Federa/ Civi/ian Workforce Statistics” Occupations of Federal White-Co//ar and B/ue-Co//ar Workers, Oct 31, 1983, MW 56-18,

Washington, DC, 1983

trated. By 1980, it was 38.6 percent. The percentage of workers in grades 7 and 8 remained

much the same (11.4 percent in 1974, 11.5 percent in 1983). But the proportion in grade s

9 through 14, where most of the professionals

and supervisory administrative workers ar e

concentrated, has grown from 45.1 to 49.4 percent .

65 (Congressional Budget Office (CBO),

taking slightly different parameters, says tha t

the percentage of people in middle-manage -

ment grade levels 9 through 15 has grown from

33 to 37 percent since 1974.)

6 6

The establishment of the Senior Executiv e

Service (SES) was intended to increase th e

retention of senior Federal executives by providing them with the opportunity for highe r

rewards (bonus pay) in return for some sacrifice in job security. It is generally agreed that

it has not worked well; many SES people believe that they have been made more visibl e

and therefore the particular target of reduc -

tions in force (RIFs) and salary caps or freezes,

and most of the few bonuses have gone to a

relative few of the highest ranking people .

6 7

People tend to think of bureaucracies a s

shaped like a pyramid. The Federal work force

is shaped more like a very flattened figure 8

or hour-glass. There are relatively few people

in the lowest grades, a large bulge at grade s

5 and 6, a narrow waist representing grade s

7 through 10, another large bulge at grade s

11 and 12, and a rapid drop-off in numbers in

grades 13 through 15. The number of positions

at grades 16 through 18 and in the Senior

Executive Service (equivalent to grades 1 6

through 18) is limited by law and is less than

0.5 percent of all Federal jobs. (See figure 9-

4.) The figure eight is getting squashed down,

the bulges growing wider, and the top and bottom flattened .

— . — — . -——.

65Figures supplied by OPM in advance of the 1984 analysis

of Federal civilian work force statistics now in progress, and

compared to OPM occupational statistics for 1974 and 1980,

see previous cites.

‘U.S. Congressional Budget Office, op. cit., p. x.

“’Sar Levitan and Alexandra B. Noden, Working for the

Sovereign: Employee Rdationsin the Federal Government (Baltimore: The Johns Hopkins University Press, 1983), pp. 94ff.
.- —

Grade level

GS 15+

GS 13-14

GS 11-12

GS 9-10

GS 7-8

GS 5-6

GS 3-4

GS 1-2

GS 15+ a

GS 13-14

GS 11-12

GS 9-10

GS 7-8

GS 5-6

GS 3-4

GS 1-2

I

400

Ch. 9—The Automation of Federa/ Government Offices ● 249

Figure 9-4.— Distribution of Federal Employment by Grade Level, 1975 and 1983

1975

I

I

I

I I I * I I I

300 2!0 2!0 150 100 5’0 o 50 1 JO 150 200 2!0 3! 0

1983

I

1

I

I

1

111111 1 111111 1

350 300 250 200 150 100 50 0 50 100 150 200 250 300 350

Employees (in thousands)

‘The ~r~d~~ 16.1s excluded senior executive service empkwees

36,902

165,930

296,800

178,712

165,538

273,454

282,406

28,745

39,883

181,163

361,904

189,316

170,512

289,732

188,666

12,425

I

400

SOURCES” 1975: U S Civil Service Commission, Federal Civilian Manpower Sfati5tlcS. Occupations of Federal Whlfe-Col/ar Workers, Oct 31, 1974 and 1975, SM 56-11,

Washington, DC, 1975, p 34 1983: U S. Office of Personnel Management, Federal civilian Workforce Statistics Occupations of Federal White. Co//ar and

Et/ue-Co//ar Workers, Oct 31, 1983, MW 56-18, Washington, DC, 1983
250 ● Automation of America’s Offices

Unanswered Questions

The Question of “Overgrading”

The average grade level for the civilian work

force, not surprisingly in view of changes described above, increased from 8.03 to 8.51 between 1974 and 1983. As a result, salaries increased 4 percent (in equal dollars) and about

1.3 billion was added to payroll costs.68 The

President’s Private Sector Survey on Cost Control, and others, have charged that the Civil

Service is “overgraded, meaning that grades

are too high in comparison with earlier levels

and with the private sector.69

The Congressional Budget Office (CBO) concluded that the growth in the proportion of

nonclerical jobs accounted for about two-thirds

of the half-grade increase. They attributed

most of the additional increase to promotions

granted by some managers to compensate for

repeated caps. 70 An earlier OPM analysis (1980)

said that 60 percent of the half-grade rise was

due to “changes in the occupational mix of

the workforce, citing the disproportional decrease in the clerical work force.71

Neither the Private Sector Survey report,

OPM, nor the Congressional Budget Office explicitly addressed the effect of the increasing

professionalization of government work nor

of the penetration of information technologies

in the office. CBO did acknowledge “the changing character of governmental work’ in identifying the factor of growth in nonclerical

jobs, 72 but did not explicitly raise the question of how the declining proportion of clerical jobs might be related to office automation,

— —

‘“U.S. Congressional Budget Office, op. cit.

“’The Administration has proposed reducing the number of

positions graded GS 11-15 by shifting 8 percent (about 40,000

jobs) to lower grades; this would be done over a period of 4

years, as vacancies occur. This would save $3.9 billion over

a 5-year period. See U.S. Congressional Budget Office, op. cit.,

p. xi.

‘[’R. Mark Musell, “Reducing Grades of the General Schedule Work Force, ” LRS84-12344 (Washington, DC: U.S. Congressional Budget Office, 1984).

“’’Average Grade Trend 1974 -1980,” prepared by James

Hall, Program Management Information Section, Work Force

Information Division, U.S. Office of Personnel Management

(manuscript, unpublished).

“’Ibid, p. x.

nor did it point out that the Federal work force

is far more thoroughly white collar than the

private sector work force. CBO also pointed

out that while the government has more middle- and top-ranked workers than the private

sector, it also pays them much less; “Federal

and private sector salary distributions were

almost identical” in proportion going to people at those levels.

CBO noted that only 43 percent of Federal

jobs were, at that time, below grade 11 compared with 61 percent in equivalent levels in

the private sector. Again, it did not specifically note the greater proportion of white-collar

work in the public sector.

Neither CBO, nor OPM in its own analysis,

have given attention to the implications of office automation for future work force size,

grade distribution, and payroll costs. Neither

has systematically analyzed the forces behind

the changing character of governmental work,

nor acknowledged that these forces are likely

to grow stronger in the future. There appears,

in fact, to have been no major executive branch

study of the possible effects of office automation on the Federal work force or labor costs.

Considering the current emphasis on cutting

the costs of government, the high priority

given to increased productivity, and the strong

trend toward procuring information technology

to accomplish these goals, this is surprising.

Whether the potential increase in productivity

because of office automation, and the consequential possibility of shrinking the size of the work

force, will more than compensate for the need

for more highly paid technical and professional

workers is a question that should be studied

thoroughly. To both reduce the clerical work

force and artificially hold down average grade

level and salary could mean that the government

cannot attract and hold the people it needs for

excellence.

The lack of systematic analysis and planning for changing work force needs makes

some Federal workers anxious about their jobs.

In discussions and workshops with Federal

clerical employees concern is often expressed

about what it may mean for job security and
Ch. 9—The Automation of Federal Government Offices 251

the opportunity for promotion. Some of this

concern may be unrealistic and exaggerated;

it could be alleviated if officials could talk with

their workers about current effects and the

implications for the future. They cannot honestly do that at present because little or no

information is available about the effect that

office automation is now having on Federal

employment.

How Jobs Are Classified

As discussed in chapter 4, office automation changes the nature of work and the skills

requirements for many jobs. In both the private sector and the public sector, this leads

to an expectation that job descriptions and

personnel classification schemes will be revised.

OPM uses a point/factor rating system in

assigning grade levels.73 Brief definitions of

the factors do not mention any consideration

of equipment that is used in the work. The

first and most heavily weighted factor is

“knowledge required, ” defined as “the nature

and extent of the information or facts that the

worker must understand to do acceptable

work. ” It is not clear whether more knowledge

is required to operate a word processor than

to operate a typewriter, or whether using a

spread-sheet program takes more or less special knowledge than using a bookkeeping ledger. In some cases automation requires less

knowledge about the process being carried out,

in other cases it requires additional abstract

thinking or ability at problem solving. It appears that Factor No. 1 could be interpreted

so as to accommodate necessary technological skills, and thus jobs could be reevaluated

and their grade level moved up or down, if their

nature changes because of automation.

. . . . —

The factors are:

1. knowledge required hy position { 1,850 points, 41 percent

of maximum total),

2. supervisory control (650 points),

3. guidelines (and judgment needed to apply them) (650

points),

4. complexity’ of work (450 points),

5. scope and effect of work product (450 points),

6. personal contacts with nonsupervisors (220 points),

7. physical demands (50 points), and

8. work en~ironment (.50 points).

The point range for grades 1-6 is 190 to 1,350 points; for grade

9— 1,855-2, 100; for grade 15—4,055 and up. The maximum total is 4,480 points.

Unless this is explicitly recognized, however,

it is likely that there will be challenges to the

factor evaluation system, especially if workers believe that they are mastering new skills

not recognized and explicitly valued in their

old job descriptions. Catherine Waelder, General Counsel of the National Federation of Federal Employees, has already said that “the factor system is new but its standards and values

are old. ” She points out that if not continuously revised, the system will “fail to account

for the ability needed to use developing technological resources essential in many professions. . . .“74

Part-Time and Temporary Workers

Government use of part-time and temporary

workers is determined by many factors; it may

or may not increase because of office automation. The Federal Employees Part-Time Career Act of 1978 was passed after several years

of effort by members of the Senate and House

of Representatives who were responding to

urging of female constituents wanting to protect career opportunities in government while

reserving time for at-home child care. Unions

objected on the grounds that it would take

jobs needed by over three million women actively seeking full-time employment who could

not afford to support their families on parttime employ ment.75

The act required agencies to do feasibility

studies, establish annual goals and timetables,

and review and monitor part-time work opportunities. Part-time Federal employment did increase by almost 14,000 from 1979 to 1981,

to a high of 57,184; but in 1981 in the strong

effort to reduce Federal employment, part-time

workers were laid off at a higher rate than fulltime employees, and by 1984, the number of

part-time workers had declined by roughly

2,000. In a 1982 review of the Part-Time Career Act, GAO found that most agencies were

not conforming to its requirements. 76

“Statement in IIearing on 11. R. 4,599, Federal l]a~’ I;quit.}

Act of 1984, op. cit., p. 248.

“’William G. J4’hittaker, Federal Legislatitre Interest in

Alternative Patterns of It’ork: An O\er~’iewr, U.S. Congress,

I.ihrary of Congress, Congressional Research Service, Mar. 31,

1980.

‘ U.S. General Accounting Office, Part-Tinle ll~mp)o.~rn]ent

in the Federal Gox-ernment, Jul~T 1 !2, 1982.
252 ● Automation of America’s Offices —

OPM is now again encouraging part-time

and temporary employment on the grounds

that it is cost-effective.77 If office automation

allows the work force to be reduced and kept

lean, part-time and temporary workers are

likely to be used to augment permanent staff

when there is a short-term increase in the workload; thus temporary and part-time Federal

employment is likely to increase as along-term

trend. Since the objective of part-time work

is from an employer’s perspective to allow

rapid, flexible adaptation to changes in workload, the number of part-time workers will fluctuate widely .78

Women in the Federal Work Force

Several bills now before Congress deal with

questions of pay equity and comparable worth

in the Federal civil service. Comparisons of

job content and skill requirements will be made

more complex as office automation changes

the nature of the work. While many clerical

jobs have traditionally been considered women’s work, ” the degree of gender dominance

differs significantly by grade level. (See figure 9-5. ) In the occupational category of General Administrative, Clerical, and Office Services, women predominate at grade levels 1

through 9, and men at grade levels 10 through

15. In grades 2 through 6 the percentage of

workers who are female varies from 78 to 90

percent. 79 In grades 7 through 9, the proportion of women ranges from 71 down to 61 percent, and at levels 10 through 15 the proportion decreases with each level, from 41 to 10.3

percent. Thus, while office services jobs are

thought of as a group as “women’s jobs, ” their

grade level distribution is not much different

from their distribution in the Federal work

force as a whole for women. About 62 percent

of female Federal employees are in grades 1

through 6, as compared to 20 percent of male

employees. Only 10 percent of female Federal

-— —-. —— —-----

“’Since January 1985 agencies have been allowed to keep

temporary workers for up to 4 years; the previous limitation

was 1 year.

Wee ch. 2 for a general discussion of part-time and temporary work as related to office automation.

“Grade 1, which is held by fewer than 150 workers (many

of them messengers) is only 66 percent female.

workers are in grades 14 and 15. As a result

of their concentration in lower level jobs,

women (who hold 46 percent of Federal General Schedule jobs) have an average salary that

is 62 percent of men’s average.80

It is estimated that three-quarters of the

lowest ranking Federal jobs (by grade level)

are predominantly women’s jobs.81 Since office automation is most likely to bring about

reductions in lower level Federal jobs, women

workers are those most likely to be made

redundant. This could lead to a statistical improvement in the position of women in the Federal work force, as a group, since their average grade level should rise as a result. This

statistical “improvement should not obscure

the fact that the job losses will be disproportionately suffered by women.

Quality of Worklife

Again, the case study of office automation

in New York City82 offers some possible indicators of present and future effects on a civil

service work force. In automated municipal

departments, new tasks were learned that cut

across traditional occupational definitions, but

there was little or no evidence of job upgrading in clerical and technical (paraprofessional)

positions. Neither old or new job ladders provide a ready path for these workers to move

up in the hierarchy of jobs, and some rungs

of the job ladder have been removed by automation of intermediate tasks and responsibilities. In some jobs, abstract and conceptual

knowledge is becoming more important than

traditional skills, but this change has not been

accompanied by an increase in pay scales. This

. — —

““In the ‘Federal Wages Schedule (blue-collar workers)

women are only 9 percent of the total, and their average wages

are 79 percent of men’s average. Among all FWS and GS workers (83 percent of all Federal workers) women are 38 percent

of all employees and their average salary/wages are 68 percent

of men’s average. U.S. General Accounting Office, Options for

Conducting a Pay Equity Study of Federal Pay and Classification Systems, GAO/GGD-85-37, Mar. 1, 1985.

“

]

Statement of the Honorable Michael I). Barnes of Maryland, Hearings on H.R. 4599, Federal Pay Equity Act of 1984,

before the Subcommittee on Compensation and Employee Benefits of the House Committee on the Post Office and Civil Service, 98th Cong., 2d sess., pt. I, Apr. 3-4, 1984.

“Greenbaum, Pullman, and Syzmanski, op. cit., ch. 1,
Ch. 9—The Automation of Federal Government Offices c 253

Figure 9-5.—Full-Time White-Collar Employment in the Federal Work Force by Grade Level and Sex,

GS 1-3

1974-75 and 1983

I —

—

.

.

I

1974-1975

I I I I 1 I I I I I I I I I I

) 350 300 250 200 150 100 50 0 50 100 150 200 250 300 350 4

Work force (in thousands)

—

1983

I I I 1 I I I I I I I I I I I

] 350 300 250 200 150 100 50 0 50 100 150 200 250 300 350 4[

Work force (in thousands)

o

10

SOURCES 1974-75: U S CIVII Service Commlsslon, Federal C/v///an Manpower SfaI/sfics Occupat/or7s of Federal kVh/te-Co//ar Workers, Oct 31, 1974 and 1975, SM

56-11, Washington, DC, 1975 1983: U S Office of Personnel Management, Federal C/v/l/an Work force Staf/sf/cs Occupations of Federal Whife.Co//ar and

B/ue-Co//ar Workers, Oct 31, 1983, MW 56-18, Washington, DC, 1983
254 Automation of America’s Offices —

is becoming a union issue and apolitical issue Labor Management Relations and

in the city. Federal Unions

The observations made on quality of worklife and the automated office environment in

chapter 5 generally apply to the Federal office as well as to the private sector. Physical

conditions are probably not as good in public

sector offices as in many private sector offices.

Turnover of facilities and office furniture is

probably slower so that new technology is even

more likely to be inserted into old settings.

Furniture, lighting, and space layout is often

inappropriate for microelectronic equipment

now in use.

One issue likely to be controversial is the

use of computer monitoring and pacing of

work.83 Federal labor law holds that applying

work measurements and using these to evaluate employees are management prerogatives

and need not be negotiated with unions representing Federal employees.84 However, agency

management can if they so choose bring the

unions into discussion of work standards and

measurement. Unions have attempted to raise

the monitoring issue at some agencies but

these attempts have been rebuffed as “nonnegotiable’ under the management rights

clause. Arbitration rulings have upheld agency

management when work monitoring was challenged, for example, in the Social Security Administration.

——— . —

‘See ch. 5, for a general discussion of computer monitoring

of work.

“Civil Service Reform Act of 1978, Code of Federal Regulations, title V, sec. 7106 (a) (A) and (a) (B), “Management

Rights. ”

The discussion in this section on work monitoring, where not

otherwise cited, is drawn from an OTA contractor report, prepared by the Educational Fund for Individual Rights, Alan

Westin, principal investigator, February 1985. The report is

based on site visits and interviews in seven Federal agencies

between 1982 and 1984, supplemented by a letter of inquiry

to 78 Federal agencies, bureaus, and departments in September 1984 to which 44 agencies responded with letters and accompanying documentation. Follow-up telephone interviews

were held with 12 agencies that reported significant activity

related to work monitoring.

In the civil service, managers have less control over subordinates than in the private sector, because of civil service rules and protection. Managers themselves are subject to man)-

of the same rules, regulations, and restrictions

on wages and on bargaining as are their subordinates. Many Federal managers and professionals belong to professional associations that

serve much the same functions as unions;85 for

Federal employees, this means lobbying Congress rather than bargaining for pay and benefits, since these are set by legislative action.8G

Federal unions will not be able to mount effective resistance to reductions in employment

as these become possible, but they may be expected to monitor changes in job content, job

classifications, and compensation as a result

of office automation. The position that the

largest unions have taken and will take on such

issues as stress, risks to health from CRT use,87

These include the Federal Management Association, the

Professional Management Association, and the Senior Executive Association (the latter open only to those in grades 16-18

and the Senior Executive Service).

Until 1961, membership in unions by Federal workers was

not recognized officially, and there was no provision for collective bargaining. However, about 13 percent of nonpostal workers and a much higher percent of postal and blue-collar workers

had already joined. Between 1963 and 1969 the membership

more than quadrupled, from 180,000 to 843,000. President

Kennedy affirmed the right to join unions and a very limited

right to collective bargaining in 1962 in Executive Order 10988,

and the area for collective bargaining was slightly enlarged

by the Civil Service Reform Act of 1978. But Federal unions

are still generally precluded from bargaining about wages and

fringe benefits, hiring, firing, work assignment, disciplinary

actions, and contracting out. Levitan and Noden, op. cit.

Federal employees do not have a right to strike, and may

be dismissed and subjected to felony charges if they do strike.

The Supreme Court has upheld this ruling, saying that the employees’ rights under the First Amendment and other Constitutional provisions must be balanced against the right of government to regulate the behavior and speech of its employees, The

dismissal of the air controllers when they struck illegally is

likely to discourage other strikes for some time. William B.

Gould, A Primer on American Labor Law (Cambridge: MIT

Press, 1982), p. 171.

Thirty-nine States have some form of legislation protecting

the right of public employees to organize and bargain collectively. See William B. Gould, op. cit.

“Federal employees are not covered by the Occupational

Safety and Health Act but agency heads are responsible for

maintaining standards consistent with the act (Executive Or-
Ch. 9—The Automation of Federal Government Offices ● 255

—

or access to training, will be important. Federal unions have already adopted guidelines

or model contract provisions on VDTs, which

they distribute to bargaining committees for

use in agency negotiations. Their activism may

increase in the future.

Federal white-collar workers are more likely

to be represented by a union than are those

in the private sector. About 54 percent of GS

workers are covered, although only about onethird of those are dues-paying members.” In

the national labor force, only 8.5 million whitecollar workers, about 17 percent of the total,

are members of unions. 89

Those covered by Federal unions are predominantly women and predominantly in clerical categories. Although figures are not available, it is likely that Federal unions have had

a net loss of members in the last several years.

International Comparisons

The International Labour Organization (ILO)

says that in developed and developing countries’ public sector employment:

In respect of information processing, it is

most likely that the over-all impact of com -

puterization lies not so much in the threat

of redundancies, but in future limits on growth

in clerical and related employ ment. g O

—.—

der 12196, Feb. 26, 1980); and Federal emplo?ees ha~e the right

to compensation for disability, death, or in]uries sustained in

performance of their work (Federal Employees Compensation

Act, 5 USC sec. 8101 et seq.).

“About 61 percent of the Federal work force is represented

by unions, but this includes 86 percent of Federal blue-collar

workers. Dues paying membership is harder to determine; unions are not required to make these figures public, See Sar A.

I.evitan and Alexandra B. Koden, ii’orking for the So~rereign:

Ernp]ovee Relations in the Fecferaf Go}’ernment (Baltimore: The

Johns Hopkins University Press, 1983), pp. 15-20. Federal whitecollar workers are chiefly represented by the American Federation of Government Employees (34 percent of those who are

co~.ered by union bargaining), the National Association of Go\ Fernment Employees (4 percent), the National Federation of Federal Employees (7 percentl, and the National Treasury Employees Union (5 percent). The first two of these are part of the

AFL-CIO; the other two are independent.

‘Iienry Le\’in, “Jobs: A Changing Workforce, ” Chance,

I’ol. 16, October 1984, pp. 32-37.

“’International Labour Organization, The Effects of Structural Changes and Technological Progress on Employment in

the Public Service, Report I II, Joint Committee on the Public

Service, 3d sess. (Geneva: International Labour Organization,

1983), p. 30.

The I LO notes that this will have its most serious effects “on the prospects of women seeking to return to the work force and on school

leavers. ”

Nearly all governments are trying to improve efficiency and hold down costs, the I LO

notes, citing evidence that many advanced

countries have made cuts in their public work

force as a result of information technologies.

For example, Canada had a net reduction of

12 percent in employment in government secretarial positions from 1975-80. Within that

general category, the number of typists declined by 35 percent and the number of stenographers by 68 percent, while secretaries

increased by 17 percent and operators of office-composing equipment increased by 97 percent .91

Evidence of employment effects in centrally

planned developed nations are, according to

ILO, unreported or ambiguous. In developing

countries, wherever statistics are available,

they often show a shortage of qualified computer personnel.92

A technology forecast done for the Federal

Republic of Germany by a consulting firm suggested that if the government adopted a strategy of maximum use of information technology, 75 percent of all public sector office jobs

could be standardized, and 38 percent automated.” The ILO recognizes, however, that

“owing to cost, lack of planning, a desire to

maintain existing work arrangements, or simply bureaucratic inertia such comprehensive

plans will materialize only slowly, ” and a more

likely scenario for most countries is the gradual introduction of components and systems

that can later be linked, as the need arises.94

Rapid development of telecommunications

technology has affected postal workers in

many countries, although employment levels

have not fallen dramatically. Rather, they have

shown slower growth rates in recent years, and

—. .-— —

“Ibid.

‘-11.0, op. cit., p. 28.

“’J. Sleigh, et al., The Manpower Implications of Microelectronic Technolo~’ (London: Her Majesty’s Stationery Office,

1979), pp. 77-79, cited in 11.0, op. cit.

“11.(), op. cit., p. 17.
256 Automation of America’s Offices —

in some countries staff reductions or hiring most countries are all public service jobs) and

freezes occurred despite increases in the vol- some do not.95

ume of mail traffic. As to the future, some governments expect reductions in postal, telegraph, and telephone occupations (which in “ILO, op. cit., p. 42.

EFFECTS OF OFFICE AUTOMATION ON PUBLIC SERVICES

Productivity increases do not necessarily

lead to a reduction in labor force numbers or

costs. Complementary or alternative objectives may be to increase the volume of products or services delivered, or to improve their

quality. Or, increased productivity may merely

mean coping with, instead of being overwhelmed

by, an increasing workload.

Because our economy increasingly depends

on information as a resource and a driver of

growth, the office workload is inexorably increasing. The primary objective in office automation is sometimes merely to accommodate

this increased workload.96 One final meaning

of increased productivity is the creation of entirely new information-related services for customers, clients, or constituents.

There has been rapid change in the global

economy, and America’s role in that economy,

since the 1960s. There have also been significant changes-particularly during the 1970s—

in the expectations that our citizens have about

involvement in Federal decisionmaking, and

the demands that they make on government

agencies related to information about public

resources and public expenditures. In allowing Federal agencies to meet these demands

and to accommodate the increased workload,

office automation quite possibly helped to

avoid serious problems and disruptions that

could have weakened the U.S. position of world

leadership.

Many managers and professionals report

that the quality of analysis, reports, and other

forms of decision-related services is improved

by office automation, which allows large data-

‘Alan Porter, David Roessner, et al., Office Automation

Outlook, 1985-2000, contractor report for OTA, February 1985.

bases to be collected, manipulated, analyzed,

modeled, and systematically applied to policy formulation and decisionmaking. This improvement is more difficult to document and

measure than other forms of increased productivity.

It is also possible, however, that office automation may lead to a change in the nature of

some government services and even to their

deterioration. For example, services could become overly depersonalized and standardized,

inflexible, and unresponsive to changing needs,

if the technology itself is allowed to drive the

design of the service or delivery mechanisms.

A Case Study of Expanding

Responsibilities

The history of office automation in the Office of the U.S. Trade Representative is one

illustration of office automation providing the

means of meeting new challenges and avoiding disruptive overload in carrying out new

government responsibilities.97

The Trade Act of 1974, authorizing U.S. participation in a new round of multilateral trade

negotiations, elevated to cabinet status the

position of Special Trade Representative and

assigned that officer responsibility for representing the United States in the negotiations,

and administration of the Trade Agreements

Program under that and other existing acts.

---

“This section is drawn from an OTA contractor report, William Neufeld, Office Automation in the Office of the U.S. Trade

Representative, February 1985. OTA is indebted to the Office

of the U.S. Trade Representative for cooperation in allowing

this study to be made and in facilitating the research by the

contractor. The case study is also summarized in app. B.
Ch. 9—The Automation of Federal Government Offices . 257

The Office of the Special Trade Representative, which until 1972 had only about 30 employees, had grown to about 126 employees

by 1980, when it became the Office of the U.S.

Trade Representative. In 1980 it was assigned

overall responsibility for formulating and coordinating foreign trade policy among all government agencies, representing the United

States in all trade negotiations regarding the

General Agreement on Tariffs and Trade

(GA’IT), East-West trade, international investment, commodity agreements, the Organization for Economic Cooperation and Development, and the UN Conference on Trade and

Development. 98 These developments reflected

the growing importance of world trade in the

U.S. economy.

During the 1960s, the small agency had

needed more and more data to use in developing positions for multinational negotiations.

There was no central database on trade volumes, tariff rates, exports and imports, etc.

Data was kept or reported by many different

agencies, in different forms, and categories.

The Washington headquarters and the Geneva

negotiating office relied on different sets of

data collected from different sources, which

made policy coordination difficult.

Planning to build a computerized trade database began in the late 1960s, but not until 1977

did an integrated database begin to function,

serving many agencies and lodged for administrative purposes in a large computer system

at the National Institutes of Health.99 The development of the interagency trade database

helped pave the way for office automation

within USTR. It did not come about piecemeal

but was systematically planned and implemented over a 5- or 6-year period, to mesh with

the large computer system. It has so far cost

only about $2 million (including about $1 million investment in hardware).

. --

‘“The P~es[dent in 1984 proposed to Congress the creation

of a Department of International Trade and Industry, with

USTR under the direct control of the Secretary of that Department.

‘

qRenamed the Trade Policy Staff Committee Trade Net in

1984, the system provides a number of member agencies with

data directly available through dial-out computer terminals.

Through a combination of central computer

operations, personal computers, and standalone and shared-logic terminals the USTR

staff now has the capabilities of word processing, spreadsheet analysis, on-line data management, graphics, correspondence control, internal electronic mail, telemail, facsimile, and

telex. Users can access the general database,

and also a ‘‘magazine’ containing USTR

schedules, recent trade and labor summaries,

and economic news. They can call up trade data

on bilateral trade balances, imports and exports, domestic and foreign trade actions, and

GATT documents. They can communicate

through their terminals with the members and

staff of the Trade Policy Staff Committee (the

nine agency committee that provides analyses and recommendations to the senior level

Trade Policy Committee) and of its subcommittees, and can electronically transmit documents to them. They can communicate by

telemail with the Geneva office, USTR ambassadors, and staff members on travel, and can

use this method of transferring documents between Geneva and Washington. Hard copy

original documents can also be facsimile.

In interviews, nearly all professionals on the

USTR staff and half of senior managers said

that they use terminals extensively, for up to

75 percent of their working hours. Professionals who were interviewed say that they

can complete a project in half the time it would

take without their computers. They also reported that the increased productivity had allowed them to clear a backlog of work that

always built up in the past. Senior staff reported that they could ask for work on shorter

deadlines. Some members of the professional

staff reported that because of electronic communication and transmission of documents,

the time required for review and clearance of

trade-policy positions has in many cases been

cut in half.

At least in the perception of many professional staff members, the USTR has been able

to take on a continually expanding workload,

and maintain or improve the quality and pace

of performance at the same time, because of

information and communication technologies.
258 Automation ot America’s Offices

The staff has grown little if any during the

5 years in which office automation was implemented. 1°0

Changes in the Nature of

Delivered Services

Standardization and depersonalization of

government services is a possible outcome of

office automation. In the OTA case study of

municipal agencies in New York City,101 referred to earlier, an agency providing social

services to disadvantaged clients reorganized

the application and recordkeeping process so

—.—. —

““In 1980 after reorganization and expansion of responsibilities, the Office had 116 permanent full-time staff plus 10 Assistant U.S. Trade Representatives, or approximately 126 people. In 1984, it has 122 permanent staff members. But USTR

has always used detailees from other agencies, and some consultants and part-time people. When this case study was done

in 1984, the inclusion of such people brought the number of

people working at USTR to 183; the number of such people

on hand in 1980 could not be determined.

“’’This material is drawn from an OTA contractor report,

The Effects of Offi”ce Automation on the Public Sector Workforce–A Case Study, prepared by the Labor Institute (Professor Joan Greenbaum, principal investigator), February 1985.

as to use standardized coded forms. When inaccurate or incomplete information is fed into

the computers it cannot be detected until late

stages of the process, at which time the case

has to be put on hold. Case workers say that

some clients do not understand computerized

forms and throw them away; others are intimidated by them and throw them away. Many

of the municipal employees say that the quality of the services they deliver has been degraded.

The Federal Government also delivers some

services directly to individuals and households;

for example, social security checks. With office automation some element of personal

attention to the difficulties or foibles of recipients may be lost. The less educated or sophisticated, and those with language limitations,

are more likely to be unable to cope with formal, unfamiliar processes. Thus, as the delivery of government services is automated, special procedures may be needed to assure that

the access that some people have to services,

or the attention paid to their needs, is not inadvertently degraded.

EFFECTS ON GOVERNANCE

Bureaucracy–a hierarchy of authority, specialization of functions, and formal channels

of communication and command-is the basic

structure of government as it is of all complex

formal organizations. Bureaucracy is a valuable form of organization because it allows expertise to be harnessed, focused, and directed

toward collective ends.

Bureaucracies serve both despotic and democratic societies. In a highly technologized society, it can be argued that democracy can exist only because bureaucracy provides a way

of using experts without being ruled by experts. Policy can be made by political representatives, and implemented by the hierarchy

of specialists under their control and oversight.

But as bureaucracy becomes larger and more

complex, the specialization of functions at the

lower ranks can become extreme—’’rationalization’ of tasks makes the work routine, monotonous, and finally mindless. The managers

may spend increasing amounts of time correcting and coordinating, and little time doing anything productive. Some political theorists argue that in the electronic era, elaborate

bureaucracies may be unnecessary. Information and communication technologies may offer a way to replace overly large and complex

bureaucratic structures with more autonomous

units assuming responsibility for an entire job.

This prescription would be hard to implement in government without some sacrifice

of accountability. Those who want to transform bureaucracies into “democratic work

groups” tend to see formal channels of communication and control as a byproduct of

specialization of functions, or to imply that

they are antithetical to participatory democracy. But formal communication channels are
Ch. 9-The Automation of Federal Government Offices . 259

—

also a mechanism for achieving accountability, including accountability of bureaucrats to

politically responsible policy makers. Within

government, for example, communication typically moves through a series of nodes of authority.102 The flow of information also involves

in many cases a flow of authority. The presence of an authorizing signature on or with

the information may give it force—that is,

cause something to happen. It may create or

make binding the acknowledgment of an obligation. At least it acknowledges the receipt

of the information. The signature, in other

words, expresses a personal responsibility or

validation of the information or some action

associated with or flowing from it. Finding a

fully adequate electronic substitute for the

handwritten signature, as an easily recognizable and widely accepted validation for the origin and receipt of messages, is only one aspect

of the problem and probably a minor one.103

Electronic sign off may merely replace the

buckslip and the paper-based signature of authority and accountability.

But a signature is only one example of the

set of procedures that in a government bureaucracy are designed to control and standardize behavior. The procedures usually include the designation of particular, formal

channels of communication through which information (and authority) must flow. The flow

is limited to these designated channels not only

for the sake of efficiency and control, but to

make it auditable in the future. These procedures not only guarantee control, for those at

the top of the bureaucracy, but they also protect the general public; they are the means of

making power lawful, of limiting its exercise

‘ ‘-The di&ssion here draws heavily on Ronald M. I.ee.

“.Automating Red Tape: The Performative vs. Informative Roles

of Bureaucratic Documents, ” Office: Technolog~ and People,

vol. 2 (The .Netherlands: Elsevier Science Publishers B. V., 1984).

pp. 187-204.

“ Many organizations rely on the use of a combination of

identification numbers or names and passwords to substitute

for a signature. A few are developing techniques based on the

concept of public key encryption, a mathematical technique

developed in 1977 at the Massachusetts Institute of Technology (E.MMS, vol. 9, No. 13, July 1, 1985). Many people den~’

the need for electronic signatures, on a practical basis, saying

that messages sent by computer are no different from messages sent by telephone or telegraph.

within agreed on boundaries. Some political

scientists fear that reliance on telecommunications both within and between organizations

(e.g., electronic mail) makes it difficult to control or to monitor the flow of information and

blurs the location of both authority and responsibility. For example, changes in a database

may be made without an authorizing signature, or instructions may be transmitted to

contractors by persons without adequate authority for fiscal commitments.

Thus, bureaucratic procedures, including formal channels of communication, are integral

parts of the concepts of due process and accountability. But to the extent that information and communication technologies offer new

opportunities— and perhaps new temptations

–to ignore, evade, and erode those established

channels, care must be taken that they do not

diminish the accountability of government officials. The rules and established channels could

persist, ossify, but be ignored.

The principle of accountability, carried to

extremes, leads to inscribed, detailed, and inflexible rules for every process and procedure.

Information technology may provide a healthy

corrective, making information so generally

available that bureaucratic authority is constantly challenged in a productive, rather than

a disruptive, way. But when information is

electronic rather than paper-based, it propagates more rapidly, is less closely identified

with its source, is both more accessible and

at the same time more opaque to the casual

seeker. It may tend to be used less responsibly. The public could find itself less able than

before to identify and hold responsible the

propagator, or the user, of information.

On the other hand, as information becomes

the subject of formal resources management,

it is also possible for its use to become so encumbered with safeguards and procedures that

access to it is reduced for both the public and

the experts. None of these untoward consequences is inevitable. But the pervasiveness

of new information technologies does mean

that government information-handling is likely

to change in unanticipated ways.
260 ● Automation of America’s Offices

Over a decade ago Kenneth Laudon pointed

out104 that information about a government

organization affects that organization in four

ways:

 it affects the organization’s reputation

with the public, with its primary constituents, and with its employees (and, although not mentioned by Laudon, with

those who oversee the organization in

Congress);

● it affects the organization’s autonomy—

the more public information there is about

the organization’s inner workings, the less

independent the role it can play in formulating policy;

● the loss of full control over internal information tends to make an organization

defensive and may lessen its own propensity to self-evaluation; and

 increased public information constrains

the informal accommodations an organization can make with influential actors in

its environment (congressional critics, interest groups, other agencies, etc.).

In short, when the flow of information within

and from an organization becomes less controllable, the organization tends to react in

ways that are sometimes desirable, from the

standpoint of democratic responsiveness, and

sometimes not desirable. It cannot be assumed

a priori that information technology makes information management more efficient, from

the viewpoint of organization managers; nor

can the relationship between information management and effective performance of an agency’s mission be fully anticipated.

Another major concern is the way in which

information technology may be used either to

increase government’s collection and use of

information about individual citizens, or to increase citizens’ access to information about

government. Abuse of the capability to collect, aggregate, and use information about

citizens, to violate the citizen’s privacy, or to

make the citizen more visible to government

and more susceptible to its control, has been

“’’Kenneth Laudon, Computers and Bureaucratic Reform

(New York: John Wiley & Sons, 1974).

—

a pervasive concern. These issues are being

addressed in another OTA report, an assessment of government information systems.105

Many enthusiasts for information technology anticipate that it will greatly increase citizens’ ability to know what government is doing and how, and to use that information to

evaluate, influence, and participate in public

decisionmaking. Four kinds of information

about government are of primary interest to

citizens, especially to citizens actively attempting to monitor or to participate in public decisions: 106

●

●

●

●

information about decisionmaking, policies, and practices internal to an agency

–budgeting and programming priorities,

planning, key appointments and assignments, the locus of authority for specific

actions and decisions, the actions of specific officials, etc.;

evaluations, reviews, status reports, and

other policy-relevant information from actors external to the agency, such as administration officials, congressional oversight

committees, etc.;

intermediate and final outcomes of specific cases and decisions, especially individual client problems such as social security eligibility or income tax appeals, and

other personal data; and

information about the costs of agency decisions and actions to citizens-paperwork

burden, personal records disclosure, inequities in application of regulations, etc.

Citizen access to the first two kinds of information has been widened by the Freedom

of Information Act and other laws. Particularly when organized into public interest

groups, citizens are generally able to obtain

(“Government Information Systems, forthcoming from

OTA Communication and Information Technologies program

later in 1985.

wThis analysis draws on that of Donald A. Marchand and

Mark E. Tompkins of the University of South Carolina, presented before the panel on Information Control Policy at the

Annual Conference of the American Society for Public Administration, Phoenix, AZ, 1974, and later published as ‘‘ Information Management and Use in Public Organizations: Some Impacts on Citizen Participation, ” State and Local Government

Review, September 1981, p. 103.
Ch. 9—The Automation of Federal Government Offices ● 261

such information readily. Information technologies make it easier and less costly for an

agency to supply such information when

demanded by citizens. Some agencies are giving citizens direct access to such data through

information systems.

The citizen has much less access to information about the status or progress of his or

her individual dealings with government agencies as a client; for example, in appealing income tax decisions. Here the individual is dependent on the agency to give up information,

and has no means, technological or otherwise,

to access it directly. But the agency can use

information technology to collect, or at least

to aggregate, process, use, and disseminate

information about the client. In this case, “the

client’s information-processing relationship

with the public agency is likely to be onesided. . . . the client must reveal information

about himself to get services from the public

organization. 107

The thrust of this argument is that information technology improves the agency’s abilit y to get or use information about the citizen

as client, but does not improve the client ability to know about the progress or outcome of

his or her own case as it is handled by an

agency. But even the first kind of benefit cannot always be assumed; that is, that agencies

will have better data about clients. As already

noted, New York City social services workers

reported that many of their clients ignored,

failed to understand, or were intimidated by

standardized forms, and also that erroneous

information fed into the automated system

could not be caught and corrected until late

in the process. 108 In this case information technology may have degraded the client information going to the agency, without improving

the citizan/client control over it or access to it.

The fourth kind of information, about the

direct and indirect costs of government action

to the public, is diffuse and hard to make specific. Citizens have difficulty in figuring out

exactly what a change in policy or procedures

would cost them in taxes, additional paper-

“’-Marchand and Tompkins, op. cit., p. 106.

“’The Effects of Office Automation on the Public Sector

14rorkforce-A Case Stud.~’, op. cit. (OTA contractor report).

work, narrowing of options, or political power.

The same is true in many cases for those who

would benefit from government action. Thus,

“the poor, ” the “disadvantaged,” or the “small

businessman’ who are targets of government

programs, may not even know that they are

or would be affected.

Information technology could be of help to

both citizens and government agencies in making this kind of data available.109 Office automation could improve the ability of agencies

to target the recipients of their services

through conducting surveys and analyses, improved special census counts, and collection

and analysis of information about clients as

a group. It can be designed to improve the

handling of client correspondence and to allow customized response to inquiries. However, information technology can also be implemented in such a way that relationships

between government and constituents are further standardized and dehumanized, or information delivered to constituents becomes so

highly technical and jargon-laden as to become

useless to those who are not highly educated

or even to those who are not specialists in fields

such as contract law, taxes, or health delivery. Mechanisms such as forms for requesting information from, or delivering information to, a citizen are often designed for the

convenience of the computer, or data processor, rather than for clarity to the citizen.

This creates a real possibility that information technology, unless used with care and

judgment, could further increase the disadvantages confronting those who are already educationally and economically disadvantaged. The

effects of information technology on the delivery of government services, and more importantly, on the quality and equity of governance, must be carefully monitored so that

corrections can be made if needed.

—

“

W

This is not the conclusion of the authors cited above,

Marchand and Tompkins, who conclude on the contrary that

information technology is of little direct help to either the agency

or “the citizen as victim. ” They argue that because information technology and the ability to access and use it is not equally

available to all, it has distributive effects on the ability of citizens

to use information about government to monitor and influence

policy; current information policy has regressive distributive

effects—it benefits the well-to-do more than the disadvantaged.
Chapter 10

Office Automation in

State and Local Governments
Contents

State Government Office Automation Planning and Procurement . . . . . . . . . . . . . . . . .

The Extent of Automation in Local Governments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Perspectives on the Effects of Public Office Automation . . . . . . . . . . . . . . . . . . . . . . . . .

The Effects of Local Government Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Examples of Office Automation in State and Local Government . . . . . . . . . . . . . . . . .

The State of South Carolina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

New York City.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unanswered Questions About Information Technology and Governance . . . . . . . . . . . .

Figure

265

267

269

269

271

271

275

279

Figure~No. Page

10-1. An Example of a Statewide Integrated Communication Network

for South Carolina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273
Chapter 10

Office Automation in

State and Local Governments

There are 50 State and about 78,200 local

government units’ in the United States. To

make general statements about their activities is always difficult; one of the benefits of

a Federal system is that the diversity of their

approaches to problem-solving provides a living laboratory for public policy formulation.

The workload in State and local government

has increased more rapidly in recent decades

than that of the Federal Government. Between

the end of World War II and 1980, State and

local government employment increased steadily to a high of 13.3 million. It has since slightly

declined, as pressure for increased administrative efficiency and cost reduction has

grown. As a percent of total public sector employment, State government employment increased from 16.5 percent in 1950 to 23 perThis includes about 3,000 counties, 19,000 municipalities,

17,000 townships, 15,000 school districts, and 26,000 special

districts (when they are fiscally and administratively separate

from other governmental units). At the beginning of World War

II there were about 156,000 local government units, or 49 percent more. The big reduction was the elimination of over 93,000

school districts during the 1950s and 1960s, by consolidations.

cent in 1979; local government’s share grew

from 50 to 59 percent.’ Federal budget cuts

and the phase out of Federal grant programs

could bring about a massive transfer of administrative responsibility from central to State

and local levels of government. This provides

a further strong incentive for seeking greater

efficiency.

These governments are automating their

offices at different paces and following different strategies, and the consequences will be

different for each governmental unit. Much

of the information now available comes from

the limited number of case studies of individual jurisdictions. Many of these case studies

have a narrow perspective, being focused on

public administration criteria of cost-effectiveness. Relatively little literature is available as

yet dealing with effects of office automation

on governance, policy, or political responsiveness.

‘U.S. Department of Commerce, Bureau of the Census,

Public Emploj~ment in 1983, GE83-No. 1,

STATE GOVERNMENT OFFICE AUTOMATION

PLANNING AND PROCUREMENT

Some State governments have gone much

further than others in computerizing their

offices. Tax and finance operations, personnel records, and routine recordkeeping are

however thoroughly automated in almost all

States. It is common for a number of State

agencies to share a data processing center, but

there are usually several or many processing

centers within a State government. In planning, procurement, management, and degree

of control over information processing there

is wide diversity. Some State governments

have realized that computers represent the possibility of a fundamental change in the way

public affairs are administered, and have established long-range plans and strategies for effective use of the technology. Other States

have not gotten beyond treating office automation as merely the latest marginal improvement in office equipment. Some have let of265
266 ● Automation of America’s Offices

fice automation happen to them, unplanned

and incrementally, and are now struggling to

rationalize these changes.

This is reflected in procurement strategies.

Some States have governmentwide master

plans for investment in information technologies while some expect planning to be done

on an agency-by-agency basis as part of the

budgetary process. Many States, after some

floundering, have developed procurement controls and standards for large computer systems, only to be taken by surprise by the

infiltration of small computers and word processors, which generally fall below the threshold cost that requires centralized procurement

approval.

Minnesota, for example, has highly centralized planning and control of information systems, while in New York State the responsibility is almost completely decentralized. Other

States fall along the continuum between these

poles.3 Most States do, however, have some

central office or division that coordinates information-technology procurement, if not longrange planning. This office is usually within

a department of administration or general services, or in the department of finance. Some

States, however, give the responsibility for

such coordination to a special commission. For

example, in Florida, the Information Resources

Commission, made up of the Governor and six

major State officials, reviews agency information-technology plans. In Texas, the Automated Information Systems Advisory Panel,

with a similar role, has both public and private sector members.

State and local governments are regarded

as the largest single market for the microcomputer industry in the next few years.4 During

the early period of acquisition of government

computer systems, States were concerned over

‘Many of the examples in this section are taken from an

OTA contractor report, A Comparative Review of Information

Technology Management Practices in State Government, prepared by the Institute of Information Management, Technology, and Policy of the University of South Carolina, John C,

Kresslein, research analyst, December 1984.

‘J. Robert Ippolito (Director, Division of Electronic Data

Processing, Florida Department of General Services), “Computer Technology Procurement: Can It Be Standardized for

State and Local Governments?’” State and Local Government

Review, vol. 13, No. 3, September 1981, p. 85.

their ability to maintain their control over public purchasing (especially physical specifications, terms, and conditions of price competition) because of the powerful market positions

of a few firms. In this large but disaggregated

and dispersed market, it was difficult for State

governments to make effective demands regarding physical specifications of systems or

to specify the terms and conditions under

which they would do business with computer

system vendors. The Council of State Governments warned in a 1975 report that:

There are factors at work which defeat certain long-standing principles of public purchasing. . . . The effects of oligopoly are multiplying. 5

This led the American Bar Association to

develop a Model Procurement Code for State

and Local Governments, which was published

in 1979. Many States have since developed

their own standard contracts and agreements.

As State officials have become more knowledgeable and experienced with computer technology the problem has eased.

But more recently, stand-alone word processors and personal computers (PCs) have introduced a new element of uncertainty, since

their cost is low enough that their purchase

may not require centralized approval. It is common for State agencies and local governments

to find that equipment from several different

vendors have found their way into government

offices with no central plan for—or even inventory of—their spread. For example, one

State government report acknowledges that

“thousands” of PCs have found their way into

large organizations by the ‘end-user endaround, that is, users avoiding bureaucratic

purchasing procedures by buying their PCs

below required dollar review levels.’”

At the State level as in large corporations,

microcomputers and stand-alone word processors are almost always superimposed on an

existing pattern of centralized computing. A

‘The Council of State Governments, State and Loczd Government Purchasing, Lexington, Kentucky, 1975, p. 7.

‘State of South Carolina, Division of Information Resource

Management, Personal Computers in State Government, May

1984, p. 2.
Ch. 10—Office Automation in State and Local Governments ● 267

report on personal computers in the government of South Carolina notes that this has

caused a rethinking of management strategy:

In 1979, when the Division of Information

Resources Management began its original office automation efforts, the PC was not a viable end-user device for integration into the

State’s office system model. , . . However, we

now see the computing landscape changing

to a three level model in which: Level 1 is the

corporate mainframe node; Level 2 is the departmental (minicomputer node; and Level

3 is the personal computer node. These levels

more closely match the organizational hierarchy. At the time of this writing (1984)

DIRM has begun efforts to provide management direction and support for the PC and

is developing strategies to integrate the PC

into its overall State Plan on Technology.

(Emphasis added,)’

This State government anticipates, according to the report, that by the end of the decade there may be one PC for every State government office worker.

State office automation is not limited to

computers in the State House or capital city;

increasingly, it is including sophisticated systems to provide an interactive network between dispersed nodes of government services.

At least two States, California and South Carolina, are planning digital “backbone” networks

to link together centers of government activity around the State. Alaska has an audioconferencing network connecting 70 sites across

the State and 17 full-time information offices

that are also networked. Michigan has a distributed network throughout the capital complex, with a terminal in every senator’s and

representative’s office.

State legislatures, as well as administrators,

are using computers. Most States have electronic data processing systems for statute

search and retrieval and reporting on the status of bills before the legislature.g

. — ———

‘Ibid. See the case stud~ cm South Carolina government

use of computers later in this chapter.

‘Linda Schulte, “A Survey of Computerized Legislative Information Systems, “ La% Library Journal, \’ol. 72, winter 1979,

pp. 99-129.

THE EXTENT OF AUTOMATION IN LOCAL GOVERNMENTS

By the mid-1970s most large counties and

municipalities were also using computer systems for high-volume data processing.9 By

1980 these governments had an average of 31

operating applications and as many as 30 under development, and were spending an average of $500,000 yearly for automated data

processing. The systems tended to be used first

and most pervasively for departments of finance. Recordkeeping and printing were other

‘James ,N. Danziger, “The Use of Automated Information

in IJocal Government, ” American Beha\rioral Scientist, vol. 22,

No. 3, January-February 1979, pp. 363-392. A survey by the

Urban Information Systems Research Group of the Pubhc Policy

Research organization indicated that more than 90 percent of

cities with populations of 50,000 and larger, and 90 percent

of counties of o~rer 100,000 people had computer systems, while

less than half of those smaller had them. Kenneth I.. Kraemer,

W’illiam H. Dutton, and Alana Northrop, The Afanagement of

Information Systems (New York: Columbia University Press,

1981), p. 8,

widely sought applications. 1° More recently,

however, a large number of sophisticated applications have been developed for use by local governments, both in the processing of data

for routine operations and in the analysis of

information for broader purposes of management and planning.11

Larger governments usually bought or leased

equipment and developed in-house technical

staffs, often developing their own software.

Others depended on contractual agreements

for specific computer applications with a corn-

—— —— .— —-.

“’Robert E. Sellers, “Mini- and Microcomputers in Local

Government: Their Application and Their Impact, ” State and

Local Go\wrnment Re~’iew, September 1981, p. 91.

“tJohn Leslie King and Kenneth L. Kraemer, “Information

Systems and Intergovernmental Relations, ” Public Sector Performance. .+! Conceptual Turning Point, Trudi C. Miller (cd. )

(Baltimore: The Johns Hopkins University Press, 1984), pp.

102-130.
268 ● Automation of America’s Offices

puter services/time-sharing company. In a few

cases local governments acquired computer

systems but hired a facility management concern to operate them, or two local governments

(e.g., a city or county and a school system)

developed a jointly owned and operated computer center. ’2

End-use computing is now spreading in the

government agencies of large cities.13 Public

Technology, Inc., surveyed its member cities

and counties with a population over 400,000

in 1983 and found that among the 50 respondents, 75 percent had microcomputers. By then,

93 percent had one or more minicomputers,

and over half had mainframes. A similar survey in 1984 indicated that 77 percent of 84

cities responding (80 percent response) had

microcomputers, and 87 percent planned to

have them by 1984. ’4 There are already hundreds of local government applications programs available for microcomputers.

But despite the low cost of small computers,

most small local governments have not yet

begun to use them. A survey in 1983 of 162

local governments within the State of South

Carolina found that 81 percent were using computers of some kind, but this usually represented centralized computing, or large-volume

data processing. While 3 of the 6 large cities

were using microcomputers, only 3 of 27 counties, 1 of 12 medium size cities, and 6 of 53

small cities had acquired them.15

The International City Managers Association (ICMA) surveyed 5,808 cities of all sizes

in 1982, and found that only 13.2 percent of

“Sellers, op. cit., p. 93.

“See Special Symposium on Microcomputers in Local Government, A Public Administration Review, vol. 44, No. 1,

January-February 1944, especially James R. Grieseemer,

“Microelectronics and Local Government: New Economies and

New Opportunities, ” p. 57.

“’’C-TAC Survey Reveals Members’ Information-Handling

Resources, ” Public Technology, vol. 5, No. 11, November 1983.

The 1984 data was reported in Joey P. George, “Who Does

the Buying?” Government Data Systems, August-September

1985.

“State of South Carolina, The South Carolina Local Government Survey of the Use of Computer and Communications

Technology, prepared by the Institute of Information Management, Technology, and Policy, University of South Carolina,

1983.

them were using microcomputers, although

about one-third planned to buy one or more

during the next 2 years.16 Most of those that

had computers were using them for word processing and financial management.

Of the more than 19,000 U.S. municipalities,

over three-quarters have populations of less

than 6,000. These small towns or villages usually provide the same basic services as larger

cities—utilities, fire and police protection, recreation, taxing functions, usually school systems, and often planning departments. In addition, they have many responsibilities under

Federal programs, such as administering revenue sharing and block grants.17 They too are

trying to cut costs and increase productivity.

In spite of this obvious need it appears that

small local units, especially those in rural areas,

are not rushing to computerize their offices .18

However, it is possible that the purchase

of microcomputers by small governments has

accelerated in the last 2 years beyond expectations. As late as 1982, lack of familiarity

with computers was probably the major factor impeding their purchase by small cities;

until recently there were likely to be few computer vendors in small towns and this market

was not being aggressively pursued. This may

have changed considerably by 1985.

“Donald F. Norris and Vincent J. Webb, Microcomputers:

Baseline Data Report (Washington, DC: International City

Managers Association, July 1983), as reported in Donald F.

Norris, “Computers and Small Local Governments, ” Public

Administration Review, vol. 44, No. 1, January-February 1984,

pp. 7off.

“Sellers, op. cit., p. 91.

‘“Another survey in 1982 looked at cities and counties in

seven Mountain and Plains States. Of 75 cities with populations of 2,500 to 50,000, 68 percent were using computers; of

75 counties under 100,000, 36 percent. Smaller communities

were less likely to have computers than larger ones—41 percent of those with 5,000 or fewer people compared to 76 percent of those with more than 10,000 people. Those with city

managers were much more likely to have computers than those

with mayor/council governments, and metropolitan counties

were more likely than rural counties to use them. About onethird of those who were already using computers, but only 16

percent of the nonusers, planned to buy more in the next 2

years. Over three-quarters of those that were using computers

had a minicomputer or “bookkeeping system’ and only 22 percent had microcomputers (7 percent of all the cities surveyed).

Most were using their computer system for payroll and accounting, budgeting, and utility bills. Ninety percent had only one

computer, and only 1 percent had as many as four. Norris, op.

cit., 1984.
Ch. 10—Office Automation in State and Local Governments 269

— — — -

PERSPECTIVES ON THE EFFECTS OF PUBLIC

OFFICE AUTOMATION

Early commentaries on State and local government use of computers tended to be theoretical rather than empirical, and often took

one of three basic perspectives:19

● Information technology will rationalize

not only operating procedures but the political/policy process.

● Adoption of information technology will

be driven partly by “the technological imperative” and partly by the self-seeking

actions of a technical elite, uncontrolled

by humane values and unresponsive to

public attitudes.

 Information technology is no different

from other technology and other kinds of

information resources, and will have no

unique or discernible effects on government.

The first of these perspectives tended to be

found in public administration literature, while

the second tended to come from political scientists, perhaps reflecting the different relative

values that the two disciplines place on efficiency and responsiveness.

Enthusiasts often saw automation as a way

of achieving the goals of the old reform movement, and claimed that technology would increase productivity, cut costs, improve decisionmaking, allow better management control

of operations, improve job satisfaction, and

allow streamlined governments to offer more

and better services. Critics feared that it would

lessen the responsiveness of bureaucrats to

citizens, put a technological elite in charge of

the local political process, shift power from

elected representatives to hired managers, deskill jobs, and greatly increase the costs of government.

The Effects of Local Government

Automation

Some local governments were indeed taken

aback by the costs of office automation because they had not anticipated that the lifecycle costs of the equipment, with the sup-

‘Danziger, op. cit.

port and training required, would so far exceed

investment costs. The first phase of computerization, at least, may not have reduced labor

costs but rather stimulated the hiring of clerks

because it required input of massive amounts

of data.2o There were widespread expectations

of a shortage of trained personnel in local government .21

Other effects were mixed but generally favorable. In some jurisdictions administrative

control was improved, and workers reported

increased job satisfaction. There are indications in many cities that office automation

tends to reinforce, rather than change, existing patterns of bureaucratic and political power.22 Some social scientists make this point

more strongly, concluding that computerization of local government has benefited those

who already have broad power and control in

the local hierarchy. They usually argue that

“K. I.. Kraemer, J.N. Danziger, and tJ.1,. King, 4’I.ocal Go\-

ernment and Information Technology in the United States,

Local Government and Information Technology>, In formatics

Studies No. 12, OECD, Paris, 1978.

-’J. L. King, “Local Government [Jse of Information Technology: The Next Decade, Public Administration Rmriew, vol.

42, No. 1, January-February 1982, p. 31.

--For example, a study of 42 cities from 1975 to 1979 found

evidence for improved administrative control and operating performance, especiall~r where computers were used for routine

tasks, for example, tax recordkeeping and traffic-ticket processing. In applications, such as support of police detect ii’es’

investigations or planning and policy anal?wis, the results were

mixed or marginal, or the evidence was ambiguous. P: ffects

on job satisfaction and the office work en~’ironment were said

to be beneficial; the researchers said that this was often an

unplanned, unanticipated benefit.

The same survey concluded that there was some e~’idence

that office automation reinforced existing pat terns of bureaucratic power rather than changing them. 1 n most cases, a trend

toward centralized, professionalized management in local government seemed to be strengthened as a result of automation.

The perspective of the research group in this case was clearly

that of public administrators who placed high \alue on rationalizing government activities. They found that the most successful implementations of automation were ‘‘alwa~rs linked

with the most advanced and sophisticated technolo~’ and

a highly professionalized work force; the sociotechnical approach,

emphasizing “user-friendly” equipment, human relationships,

and worker in~’oli’ement in planning and decisionmaking, often

worked best from the perspective of indi~’iduals, but at the cost

of some sacrifice of efficiency.‘*Evaluation of Information Technology in I.ocal C~o\’ernments, 1975-1979. a sur~’e~’ by the urban information systems research group of the Public Policq’

Research Organization, reported in Kraemer, et al.. op. cit.,

pp. 27ff.
270 ● Automation of America’s Offices

there is a need for explicit democratization of

government computer strategies.23

Local governments collect and use information for two broad categories of activity—management of routine government operations,

and planning and analysis.24 Most of the information systems and applications in use are

for operational purposes-management of government revenues, payrolls, etc. But local governments must collect and use information for

scores of activities; two middle-size cities, in

1980, identified over 300 distinct operational

information systems (not all then computerized).25 This operational data, in summarized

or aggregated form, is also useful for planning

and management, especially status reporting,

performance analysis, and compliance analysis.

Computer programs and models have been

developed for these purposes, including, for example, fiscal impact analysis, land use, transportation analysis, urban development planning,

and expenditure forecasting models. Many of

these are in the public domain and others are

readily and inexpensively available; but relatively few governments have used them, and

these are primarily the larger municipalities.

It maybe that most local government organizations do not yet have the expertise required

to use these tools, but it may also be that modeling does not fit the informal, pragmatic, personalized mode of decisionmaking characteristic of government close to the grass roots

of democratic government.26

“James N. Danziger (University of California-Irvine), Computers and Politics: High Technology in American Load Go}Ternments (New York: Columbia University Press, November

1981).

“This analysis draws heavily on the conceptual framework

provided by King and Kraemer, op. cit., see especially pp.

106-110.

“King and Kraemer, op. cit., p. 107.

“An analysis by Professors King and Kraemer of the

University of California-Irvine concludes that in terms of producing improvements in performance, most attempts to use

these models for planning and management have been “practical failures, ” because of several problems:

●

●

●

Information collected for operational use is generally not

aggregated at the appropriate level for, or organized for,

planning and management purposes. I.ocal governments

collect relatively little data appropriate for assessment of

output.

Models must be fitted to the expected analyses, and this

level of analytical competence is not always readily

available.

Behavioral and political constraints:

–Data useful for performance and compliance analysis

often depends on self-evaluation by government officials

and this affects their behavior in collecting/reporting the

There are many examples of local governments using information and communications

technologies in innovative ways that can be

copied and adapted by other communities. For

example, Jacksonville, FL, is using electronic

printing and a local-area network to keep its

city ordinances up to date. Amendments passed

by the city council are immediately incorporated in the code, and supplements are printed

four to six times yearly, whereas formerly the

one supplement per year required 6 months

and up to $50,000 to prepare. The Office of

General Counsel reports that it has reduced

costs by “eliminating the need for a large staff

of editorial lawyers, printers, typesetters and

other personnel. ” Boston has required its licensee for cable television to link with a coaxial

cable network all public buildings, including

municipal offices, schools, and fire and police

buildings. The system provides electronic mail,

and the city’s 29 word processor systems will

be part of the network. During the last municipal election a direct link was setup between

the ballot counting at City Hall and local television and newspaper offices.27

San Diego developed a computer-based planning and management system to determine

the most cost effective location for the city’s

service units in order to reduce travel to and

from work sites. By reassigning crews and

equipment among existing stations the city

will realize an immediate net cost saving of

over $445,000.28 Fort Collins, CO, installed an

automated information system for use by police officers that allowed it to eliminate one

position in the Records Department, freed

room for three additional workstations, and

increased the reliability and integrity of criminal justice information.

The effect of the advent of personal computers in local government offices, even if it

is now occurring more rapidly than was ex-

— .

data–especially if it is to be used to evaluate performance.

–The assumptions used in constructing models may be

unrealistic in a specific situation and location, given the

diversity among American communities.

—Models tend to be used to rationalize or defend decisions

already made for political or other reasons rather than

to help make decisions.

(King and Kraemer, op. cit., p. 108.)

‘-Reported in “The Government Office, ‘ Office Administration and Automation, September 1984.

‘

h

Information provided by Public Technology, Inc., to OTA

from a list of PTI computer-technology award winners, November 1984.
Ch. 10—Office Automation in State and Local Governments 271

.—

pected in 1982, will not be apparent for some uneven rate, and in many governments with

time, especially since they are likely to come little attention at the highest level of maninto use without systematic planning, at a very agement.

EXAMPLES OF OFFICE AUTOMATION IN

STATE AND LOCAL GOVERNMENT

In the absence of a large body of crossjurisdictional comparisons, some brief case histories are presented as illustrative of what is

taking place in government offices. They are

not necessarily “typical,” but they provide a

picture of some of the possible outcomes of

office automation for States and municipalities.

The State of South Carolina

South Carolina falls about midway among

the 50 States in size (it ranked 24th in terms

of population, in 1980) and in government revenue per capita (38th in 1980). Like other

States, South Carolina began to acquire computer systems during the 1960s and 1970s.

In 1981, South Carolina was spending as much

as 6 percent of its operating budget for telecommunications, data processing, and office

automation, but without any systematic plan,

strategy, or control over these expenditures .29

In buying equipment or services for data proc-

- ‘This section relies heavily on work done for agencies of

the State (especially the Division of Information Resource Management of the State Budget and Control Board) by Donald

A. Marchand, John C. Kresslein, and others at the Institute

of Information Management, Technology and Policy, College

of Business Administration, University of South Carolina.

Reports, to be referenced at points in this section as “South

Carolina (number), ” include:

1.

2.

3.

4.

,.5

6.

7.

Information Resource Alanagement: A Statewide Strate~’, April 1983.

The South Carolina Local Government Sur\’e~’ of the Use

of Computer and Communications Technology, November

1983.

Implementing Information Resource Jlanagement in State

Government: The South Carolina Experience, Research Report RR-84 -l(K-84-8), May 1984.

Personal Computers in State Go\rernment, May 1984.

A hfanager’s Guide for Implementing Information Resource ,$ fanagemtmt (IIiM) in a State ,4gencj’, ,June 1984.

Office Automation in the Office of the Go~rernor, tJanuary

1985.

Initial E}’aluation of Prcductivit} Benefits Achie\ed From

S0,4PS, Progress Report No. 2, tJuly 1983.

However, neither specific State agencies, the Institute, the

university, or the authors cited abet’e are responsible for the

interpretation and analysis in this section, which is solel~’ that

of OTA analysts.

essing some State agencies had underestimated the costs by as much as 50 percent. In

a decade, expenditures for managing data had

more than tripled; and outlays for telecommunications in 1980 were 38 times greater than

in 1960.30

The Governor, the State Budget and Control Board, and leaders of the State legislature agreed that something must be done. The

time was right since the legislature was then

working on a new Model Procurement Code.

The consensus across branches of government

was important, because power in this State

government is particularly fragmented and diffuse. The heads of major State agencies are

elected separately rather than appointed by

the Governor, and therefore tend to have their

own unique relationships with legislators as

well as their own constituencies. The Governor consequently must often depend on powers

of persuasion to initiate any change within the

State bureaucracy.

With a powerful consensus among State

leaders that some way must be found to cut

the burgeoning costs of information management, it was possible to take action. The State

administration began efforts to develop a comprehensive information resources management

strategy. Key officials throughout government

were interviewed, and State agencies were

asked to develop productivity objectives. On

this basis a preliminary State Plan on Technology was developed, and later a Master Plan.

Agencies were asked to prepare their own 3-

year plans for use of information technologies.

The Department of General Services was reorganized to create a new Director of Information Resource Management and a division

by that name (DIRM) under the Budget and

Control Board. Another important step was

South Carolina (5), p. 5.
272 ● Automation of America’s Offices

the creation of a new series of personnel classifications under the title Information Resource Management, to encourage the appointment of such specialists in each agency.

The State Plan, as it developed, encompassed office automation, telecommunications,

and large-scale data processing technology.

The backbone of the planned technology is to

be a statewide microwave network for voice,

data, and video transmission. (See figure 10-

1.) This network, which is planned for completion in 1986, will cost an estimated $16 million, but is projected to save the State $100

million over the next 20 years. The State “did

not set out initially to establish its own communication system, ” university consultants

say, “but sought instead the most cost-effective alternative with the goal of controlling

communication costs. “31 The planners sought

and got bids from 25 private industry vendors

but none could provide what was wanted.

Another aspect of the State Plan was a systematic approach to office automation (meaning, in the beginning, large-scale computer applications). An 18-month pilot project was

begun in August 1981. Task forces and study

groups were formed to consider procurement

and standards, ergonomic issues, training

needs, user perceptions, and contingency planning and security needs. The major objectives

in office automation were:

●

●

●

●

automation of formerly manual tasks to

reduce manpower requirements,

direct time-saving applications and work

redistribution to reduce time and manpower requirements,

time-saving applications providing opportunity to do additional work, and

quality improvements in office products.

The first pilot project was purchase of three

IBM 8100s and 100 peripherals for the Department of General Services in mid-1982. In

the following year further advanced data processing applications were installed, and technical assistance was given to other State agencies. The Model Procurement Code passed by

“South Carolina (4), p. 15.

the legislature in 1981 provided strong induce

ments for agencies to comply with standards

formulated by the Department of General

Services’ new DIRM. DIRM must oversee any

procurement of over $2,500. The State would

coordinate long-term contracts under which

agencies would receive a significant discount

on computer-related purchases. Office automation standards were developed in 1982 and

subsequently revised.

By September 1983, an electronic network

linked the Governor’s Office with nine critical

agencies within the State House Complex—

the office of the Executive Director of the State

Budget and Control Board, the Health and Human Services Finance Commission, the Department of Agriculture, the Division of Human Resources Management, the Department

of Social Services, the Office of the Secretary

of State, the Department of Insurance, the Division of General Services, and the Division

of Information Resource Management.

For automating the Governor’s Office two

minicomputers were linked to host computers

at DIRM and the University of South Carolina; there are 22 workstations, 3 data processing terminals, 7 letter-quality printers, a

line printer, and a data processing printer. A

recent assessment concluded that the result

was a 53 percent cumulative time saving in

actual time to complete all tasks studied (approximately one-half person year), with an

average time saving per task of 5.3 percent

or approximately 112 person hours per year.32

The improvement in time to complete each

task was estimated to be about 86.5 percent.

Three tasks that were done externally are now

done internally (answering employment application letters, approximately 10 per day; preparing proclamations; preparing 200 news release envelopes, about twice each week) with

an improvement in turnaround time of about

94 percent. Nine of twelve typewriters have

been relinquished for redistribution to other

offices.

“South Carolina (6). The specific tasks studied were property management certification, grant report, audit report, grant

award letters and forms, consolidated vouchers (math calculations), updating office personnel lists, preparing governor’s

schedule, repetitive letters, commission letters, educational statistical report.
.

Ch. 10—Office Automation in State and Local Governments “ 273

-—

L

m I r

a)

(5
274 ● Automation of America’s Offices

More qualitatively, the assessment found

that the successful adoption of the Governor’s

Education Improvement Act in 1984 was “partially achieved through the efficient and effective use of the office automation capabilities” that were used for creating the text,

completing 100 major revisions, preparing the

related speech by the Governor with 18 major

revisions, and performing mass mailings to

constituents, related to the act. The Governor’s Executive Assistant was quoted as saying that without office automation capabilities

the act would not have been adopted in that

fiscal year, or would have contained a lesser

program content. The assessment concluded

that:

. . . (0)ffice automation is indeed initially more

costly than conventional or semiautomated

techniques. It also is extremely difficult to

precisely measure the quantitative productivity improvements and equally as difficult

. . . to determine the return on investment . . .

However, . . . (automation resulted) in the capability to produce and distribute information faster and more accurately and to make

more accurate and timely decisions . . . Indeed, the. . . technologies helped improve the

level of service and the relationship of the Office of the Governor to the citizens of this

State.33

The Legislative Services Group also automated (with 200 word processing terminals

connected to a mainframe) and terminals were

put in the offices of legislators. Through the

system, legislators can access and track bills

and amendments and search the State Code

of Laws. Word processing, data processing,

key-word search, and calendaring are also

provided.

Automating State offices was not accomplished without significant problems. Those

identified at an early stage of the process were

those found in nearly every large organization

–functions beyond word processing tended

to be underused because people had not been

taught how to use them; there was sometimes

a mismatch between capabilities provided and

those needed; and distribution of terminals was

sometimes not appropriate so that people queued

to use them in some places while other terminals were idle. But four-fifths of the clerical

staff and over half of managers and professionals said that the new systems had improved not only their productivity but their

attitudes toward their work.34

By 1983 it was clear that personal computers

were rapidly being added to State offices. Their

prices often fell below the threshold at which

there is central oversight. There was concern

about the potential lack of compliance with

office automation standards, which could cause

compatibility problems later, yet the flexibility that PCs offer pointed them to becoming

the “primary office automation workstation, ”

university consultants said.35

A survey of 10 agencies in early 1984 showed

at least 500 microcomputers in use, and that

number was likely to double during fiscal year

1985. The Comptroller General’s Office was

using two personal computers to design a financial reporting system to be used by small

State agencies.3’ Several agencies reported that

there was a high demand for personal computers, and staff members were dissatisfied

and frustrated by the necessity for sharing

them. No local area networks (LANS) were yet

in place in these agencies and use of shared

hard disks was just beginning. But the two

State universities were planning campus-wide

networks and four of the agencies were interested in developing them.

The State now requires personal computers

to be bought under a term contract, so that

all agencies enjoy the volume discount and

guarantees of support negotiated by the State.

It is officially anticipated that by the end of

the 1980s there may be one microcomputer

for every State white-collar worker. DIRM has

purchased software packages for PCs that pro

vide ‘English-language-like query capability’

and facilitate the downloading of data from

mainframes to PCs. PCs and mainframes will

be linked using leased or dial-up lines to allow

“South Carolina (7).

“South Carolina (7), p. 26.

‘South Carolina (6), p. 2. “South Carolina (4).
— —

Ch. 10—Office Automation in State and Local Governments ● 275

end-users controlled, preauthorized access to

central government databases.

Several State agencies and institutions (e.g.,

the Department of Mental Retardation, the

Tax Commi ssion, a State technical college, and

the State university medical school) are systematically developing their own long-range,

information-resource management plans.

Throughout the process of automating government offices, this State government has

used university experts to monitor and report

on progress and problems in achieving its

stated objectives. A broader assessment from

the perspective of effects on delivery of government services, governmental responsiveness to citizens, and on the locus and exercise

of governmental power is to be undertaken but

is not now available.

New York City

The Mayor’s Office of Operations in New

York City cooperated with OTA in studying

the effects of public sector office automation

by encouraging and facilitating a case study

by The Labor Institute of automation in three

municipal departments—the Department of

Finance, the Department of General Services,

and the Human Resources Administration. 37

New York City has for several years been

under intense pressure to reduce government

operating costs and increase revenues. Major

reorganizations aimed at increasing productivity

took place in city government departments

both before and during office automation. The

case study focused on the consequences of

automation for the clerical, managerial, and

professional work force, and on their perceptions of how it affected both them and the services that they deliver to the public.

Many of the workers who contributed their

insights to this study said that in spite of some

early misgivings, they like office automation.

However, there is at the same time a high level

~;ffects of Office Automation on the Public Sector ll”orkforce: A Case Stud~, of Yew York Cit.}, done under an VI’*4

contract by The I.abor Institute ( N“ew York): ,Joan Crreenbaum,

principal in~’estigator, with Cydne~’ Pullman and Sharon Sz~zmanski, February’ 1985.

of dissatisfaction. Some—both clericals and

professionals-felt that their jobs had been

degraded, and their own interest in the job

eroded.

Most said that their own productivity had

increased; and some said that the quality,

quantity, and timeliness of services delivered

by their work units had improved. But in other

cases, services have been depersonalized, standardized, and routinized; accountability of individuals, if not of the government as a whole,

has been decreased.

The clerical workers in the three departments are group clerks, office aides, office associates, technical support aides, and word processor operators. The clerical work that has been

automated was all done manually until 1982,

but now requires personal computers, word

processors, Automated Forms Systems, and

other systems.38 For example, at the Bureau

of Child Support (in HRA) a clerical work unit

formerly typed between 400 and 600 letters

each week. Now a clerk enters a code to select

forms to be sent to a client from nine forms

that are generated by an automated system.

Clerks at the Income Maintenance Center once

hunted for paper files on particular clients as

they were needed by eligibility specialists; now

the files are called up on a cathode ray tube

(CRT) and the needed data is printed out. personal computers are used in the Real Property Transfer Tax Unit of the Department of

Finance to call up information on property

sales history and determine the market value

of property. Word processors are used for tax

billing, as well as for generating reports, mailings, memoranda, and other documents in all

of the departments. In one department the

most proficient typists were removed from

their old work units and placed in a central

production unit.

“Twenty-eight clerical workers took part in workshops and

group interviews for this case study. The~r are predominantl~’

women, and predominantly black and Hispanic. host ha~.e completed high school and a few have completed college; they ha~re

worked for the cits’ from 2 to 10 years, and have been using

computerized office systems for at least a year. The clerical

workers spent most of their 7-hour workda~’s using the s~’sLems, and usuall~’ hate two 20-nlinute breaks, in addition to

1 hour for lunch.
276 ● Automation of America’s Offices

One goal of city government is reduction of

the clerical work force and this has been occurring. Managers report that the objective is to

reduce the clerical work force about 15 to 20

percent through attrition. The effects of office automation cannot always be clearly separated from the effects of reorganization that

either preceded or accompanied it, but much

of that reorganization was itself for the purpose of making better use of the new technology. One work unit manager reported that the

automated systems have already resulted in

a 15 to 20 percent reduction in clerical staff

over 3 years.

Clerical workers said that when automation

began, they were fearful of losing their jobs

and afraid that they could not learn the new

systems. Minimal formal training was provided

by vendors. Most of the workers learned from

coworkers, and then taught others. Now the

workers generally approve of the automation,

saying that it freed them from tedious manual work and allowed them to learn new skills,

and that they can now produce better quality

work, at a faster rate. They also say, however,

that they still need more and better training

and that they are not being adequately compensated for what they perceive as their newly

learned and higher level skills.

Because the new systems can handle a larger

volume of work in a shorter period of time,

most of the workers work more steadily and

take fewer breaks.39 Those doing data entry

in many cases say that their control over their

work has decreased because it is paced by the

machine. However, those in one kind of decentralized word processing pool (“clusters’

now have relatively more variety in what they

are keyboarding and also have to prioritize it,

so that they feel they have more control over

their work.40

“’Their union, AFSCME, has negotiated two 20-minute

breaks for VDT users in some work units, but the workers say

that they do not always take them because they are too busy.

Some, however, say that they take informal breaks when necessary to relieve eyestrain and back discomfort.

‘“In two word processing units, one a pool and one a cluster, some similar effects were found, including rotation of jobs

and prioritization of work; but for different reasons. The cluster is a smaller unit where management encourages worker involvement in everything from selecting equipment to organizing the work. In the word processing pool the increased control

that the workers have is due to a virtual lack of supervision.

As a result, workers must work as a team to coordinate and

organize the unit’s work.

Most of the New York City clerical workers

say that even though they like the new systems, they also suffer from increased stress.

They report increased eyestrain, backaches,

and headaches. Many of the new systems have

been installed in old offices with unsuitable

furniture and lighting, and poor ventilation;

excessive noise from printers, and wires or

cables stretched haphazardly around the floor,

add to the risks to health and comfort.

Almost all of the clerical workers do more

work than before automation. Some say that

they now have a better understanding of “the

whole picture, ” that is, what the agency does

and how. The sharing of information and cooperative learning that has occurred has generally increased the interaction between coworkers. But frequently this interaction is

forced; it is an attempt to overcome problems

caused by lack of supervisory coordination,

lack of formal training, and problems with the

equipment. The only way that work gets done

is by the workers going into a huddle and finding some way to get around the problem. The

workers overwhelmingly say that they have

more interest in their work now, although as

they fully master the new process some anticipate that it will become boring.

In New York’s city government, paraprofessionals, who have less formal training than

professionals, can perform some of the work

of professionals and assist them in other tasks.

Some paraprofessionals are now using computers and related devices, although usually

less intensively than the clerical workers. Typically, they may review computerized files or

scan data for 2 or 3 hours a day interspersed

with other duties and activities.41 For example, in the Bureau of Child Support (HRA) preassignment investigators are now reviewing

forms, generated by computers, to track down

information about absent parents who are

evading child support payments. In the Income Maintenance Office (also HRA) eligibility specialists use computers to review client

“Nine paraprofessionals participated or were interviewed

for this case study, They were predominantly black and Hispanic

women between the ages of 30 and 50, all high-school graduates, most with some college training, They had worked for

the city from 5 to more than 15 years and are now using automated data-entry and or data-retrieval s}’stems in their work.
Ch. 10—Office Automation in State and Local Governments ● 277

files for recertification of public assistance

eligibility.

The eligibility specialists also have extensive direct contact with clients by telephone;

they help them with emergencies such as evictions, fires, or illness. These paraprofessionals

rate the work they do with computers for about

10 hours a week as the most satisfactory of

their tasks. They report that their productivity

has increased and the quality of the output

improved after automation. The workload has

also increased; because more information is

available they are now required to submit more

reports, and their deadlines are tighter. Although many feel that they have a better sense

of “the whole picture” and more control over

their work, many feel that they are overworked,

undercompensated, and that the quality of

services delivery has not necessarily improved.

The preassignment investigators in the Bureau of Child Support also rate their reviewing of files by computer as the most satisfying of their tasks. They have almost no direct

contact with clients, using forms almost exclusively in processing cases. But while they

find reviewing these forms more satisfying

than their other major task of sending out form

letters, automation has not, in their opinion,

improved the quality of the services.

The paraprofessional workers also complain

of eyestrain, backpain, and headaches, even

though they spend much less time in front of

CRTs than do the clerical workers.”

Professionals in these three city departments

vary widely in the extent to which they use

computers or other forms of office automation,

but their jobs have also been strongly affected.” For example, in the Department of

General Services, analysts in the Commissioner’s Office of Management and Analysis

use Wang VS terminals or IBMs linked to a

‘-Seven of the nine paraprofessionals who contributed

directly to this case study have had to get stronger eyeglass

prescriptions since they began using a VDT.

“Fifteen professionals participated in workshops and interviews. They included 9 men and 6 women (80 percent were white),

and their ages ranged from 20 to 40, with the average in the

mid-20s. All have college degrees and the majority some

graduate-school training. A few have worked for the city more

than 15 years, but most less than 4 years.

mainframe computer for data input or inquiry,

or word processing. Tax auditors in the Tax

Examinations Unit use IBM PCs for data inquiry and input, and caseworkers in the Bureau of Child Support use IV Phase terminals

for similar purposes.

Before automation, tax auditors in the Real

Property Transfer Tax unit handled all aspects

of a tax audit. Particular cases and case followup were assigned to one auditor. As automation is being introduced, this unit, with a staff

of seven, is being merged into the much larger

Examinations Unit, which now handles eight

kinds of municipal taxes. This represents the

beginning of a larger reorganization in which

all tax auditors in the unit will be trained to

handle all eight types of taxes. Auditors acknowledge that the computer generates more

information, quicker, and thus provides more

control over the status of each case. Yet the

auditors are dissatisfied with the overall process. With the reorganization of the work unit,

the tax audit procedure has become fragmented and more clericalized. Some of the auditors are frustrated with what they perceive

as a decreasing need for their professional

training and judgment.

Analysts in the Office of Management Planning and Analysis say that the improved quantity, quality, and accessibility of data has resulted in improved services from their office.

Unlike other employees participating in the

case study they do not see an increase in work

because of computers. Rather, the computers

have changed their perceptions of their jobs.

The expansion in the amount, speed, and wider

range of reliable information has given the

analysts more varied and creative possibilities

for solving problems. They feel that their influence has increased as they go beyond identifying problems and become more involved

in working out solutions.

But caseworkers in the Bureau of Child support think that the services provided by their

unit have definitely not been improved by

Automated Forms Service. Some of their

clients, they report, ignore all standardized

forms, others are intimidated by computerized

forms and will not respond to them. The

caseworkers say that the data fed into the sys-

~2- 644 O - 85 - 10
278 Automation of America’s Offices

tern is often inaccurate, and that, thanks to

automation, errors are not caught until late

in the progress of a case, which must then be

held up until the errors can be corrected. Also

the system has generated increasing numbers

of small procedures that not only increase the

amount of work but also the chance for errors.

These caseworkers, before the automated

forms service was adopted, wrote or typed numerous letters. They no longer perform such

clerical duties,44 but paradoxically their position is being deprofessionalized. Since they are

no longer solely responsible for deciding what

letters to send out, their control over a case

throughout its history is not as complete. Their

job title is being changed from “caseworker”

to “eligibility specialist. ” A college degree is

no longer required, and the new job title does

not have the range of possible grade levels that

went with the old title, so that opportunities

for promotion are decreased. This job degradation was not caused by office automation,

but office automation was used to foster an

ongoing process.

The professionals as a group have mixed perceptions about other effects of automation on

their work. They generally report that interactions with coworkers increased, with sharing of ideas about uses of the systems. They

continue to pace their own work to suit themselves and the needs of a particular project,

as professionals generally can. Some report

an increase in “petty” supervision, apparently

because supervisors can review more drafts

of reports and more easily ask for changes.

Some see the increased use of data (because

more is available) as an increase in their workload, while others perceive this in terms of more

options for solving problems. Most think that

their ability to perceive “the whole picture”

of their agency’s work is enhanced; yet some

say this is marred by increased uncertainty

as to the long-range effects of computerization on government.

Both caseworkers and auditors, however,

feel that they have lost some control over their

work, because it has been fragmented. Caseworkers, by being relieved of clerical aspects

of their work have also been relieved of knowledge about its progress and outcome. Crucial

steps are taken by other people who do not

know the whole story. Auditors do not always

complete an audit they have initiated, as it

may be passed on to others. Both the caseworkers and these auditors say that their overall job interest has decreased.

Managers, those top-level administrators

who set broad policies and exercise overall

responsibility for their execution, have also

been affected by office automation, although

they may or may not use any microelectronic

devices themselves.45 Some of the top-level

managers in these departments use word processors for memos, notes, drafting materials,

etc. Some use electronic mail and messaging.

Most also use database inquiry from time to

time; a few reported using spreadsheeting,

graphics, list files, and typesetting functions.

These managers used a computer from 2 or

3 hours a week to as many as 15 hours. Mostly

they had learned by watching others use the

systems, but a few had taken courses.

Buying microcomputers for managers to use

was said to be much harder to justify “to the

city” than buying large systems for clerical

use. Most of the purchases were approved on

an experimental basis. But all of the managers

said that computers increased the speed and

improved the quality of their work, and allowed

them to do new kinds of work. Almost all also

said that computers increase the amount of

work to be done.

The managers, however, were more concerned about the effect of office automation

on their departments than on their own work

habits. Some were eager to use office automation to reduce the work force and their operat-

“Their work was rationalized and restructured to relieve

them of some of the paperwork, prior to automation. The clerical workers who took o~’er the paper work became overloaded,

and Automated Forms Service was brought in to relieve this

problem.

‘

r Seven managers were interviewed in-depth; they include a

department commissioner, an assistant commissioner, a deputy general counsel, and the directors of four major offices within

departments. They included 4 men and 3 women, between the

ages of 28 and 50, who have worked for the city between 1

and 15 years. Their own use of computers varied from ‘‘none,

to working (at home) for several years on a computer.
Ch. 10—Office Automation in State and Local Governments ● 279 —.

ing costs. Others felt that the combination of

civil service rules and union resistance would

keep that from happening in the near future,

but that other changes set in motion by automation would nevertheless have major impacts

on the delivery of government services. Said

the Commissioner of a large municipal department:

UNANSWERED QUESTIONS

TECHNOLOGY AND

Since the city civil service ensures that jobs

and people stay, I feel that this offers us room

to experiment with using computer tools for

new uses. I see the line between clerical and

managerial workers blending. A clerical worker

is not just a clerk and a manager is not just

a manager.

ABOUT INFORMATION

GOVERNANCE

In all public sector offices, office automation is increasingly tied to and part of larger

information systems, and the effects on quality of governance must be considered as a

whole. In State and local governments this

is particularly important because this is the

level of government most likely to impact

directly on individuals and households on a

daily basis. To the extent that this assessment

has considered public sector offices, it has been

directed almost entirely to the effects of office automation on government itself, its productivity, effectiveness, and efficiency. There

has been only peripheral attention to the ultimate effects on the constituents and clients

of government offices.

A study of 42 cities, in the first phase of

office automation from 1975 to 1979, found

improved administrative control and operating performance, increased job satisfaction,

and improvements in the offices as working

environments. 46 The survey also produced evidence that office automation reinforced existing patterns of bureaucratic power, and in most

cases, this meant a trend toward centralized,

professionalized management at the expense

of the power of elected officials. This was one

of very few cross-jurisdictional studies and also

one of even fewer that looked at effects on

power relationships within government.

“‘ 1“: t’aluatif)n of I nf{)rrnation Technolog~’ in I.ocal (lo~’ernments, 1 W’5- 1979, a sur~’e} of the urhan information s~:stems

rest~arch ~rr(jup of the I)uhl ic Polic~ Research ( )r~aniz at Ion, t-e

ported in Kt-aemer, et al,, op. cit., pp. Yi’ff,

To date, the sparse and fragmented literature on government office automation and on

the broader topic of government information

systems, and the case studies reviewed above,

suggest some further questions that should

be thoroughly studied. If information and communication technologies can, as now appears

highly probable, increase the efficiency of State

and local governments and decrease their operating costs, what can be done to help the citizens of small as well as large governmental

units enjoy these benefits? How can office

automation be implemented and managed so

that it improves, rather than degrades, the

work life of civil servants and thus attracts

to government service capable and dedicated

people? Can office automation improve the effectiveness and responsiveness of government,

as well as its efficiency?

Several aspects of governance on which office automation has a direct bearing were beyond the scope of this assessment, but are particularly worth further consideration. One is

the ability of governments to gather essential

information needed to carry out their responsibilities effectively. A second is the ability

of citizens to know and understand what their

governments are doing—i.e., access to information. A third is the ability of citizens to withhold some personal information from government—i.e., civil liberties. Finally, there are

questions about how information technologies

affect the nature and the equitable distribution of government services.
280 ● Automation of America’s Offices

This assessment, although it did not address

the question directly, nevertheless indicates

that office automation can improve the quality as well as the quantity of information

available to government decisionmakers and

planners. It can also make it easier for the representative branches of governments to exercise oversight over executive agencies, and for

all branches of government to increase their

analytical and planning capabilities.

However, all improvements in the ability of

government to gather, integrate, and use information also increase the danger that this

information can be misused. Questions of confidentiality and civil liberties arise at the local and State level as well as at the National

level.

Office automation could also be used to allow government offices to be more effective

and efficient in responding positively to requests for information about government

activities. The prevailing Federal policy of information resources management, which is

now being adopted by many States, is based

on the principle that information is an economic resource and is to be managed accordingly. In itself this principle is not hostile to

the objective of increased public access to information, but it does not necessarily include

that objective. Some States are, however, making concerted and systematic attempts to give

the public access to government information

by means of public information systems. They

are confronting technological, economic, and

legal problems in doing so, and have so far

had mixed results.

There are disturbing hints, although as yet

only hints, that government office automation

can change the nature of government services

in ways that are not completely desirable. For

example, it may standardize and depersonalize the way in which some services are delivered. To the extent that depersonalization or

standardization reduces the likelihood of discrimination, favoritism, arbitrariness, or corruption, it is good. To the extent that it makes

government less humane, less sensitive to individual needs, and particularly to the needs

of the handicapped, the poor, and the ignorant,

it is not good. To the extent that it results

in people and their personal needs and problems being regarded as interchangeable, manipulable statistics, it is a deterioration in civil

life.

These questions, as already noted go beyond

the scope of this assessment. Some of them,

especially those related to citizens’ access to

public information and to the protection of

privacy, security, and civil liberties, will be

addressed in a forthcoming OTA assessment

of government information systems. All of

these questions should however be the subject of serious scrutiny by citizens, scholars,

and decisionmakers at State and local levels.
.- —

Chapter 11

Office Automation in

Small Business
Contents

—

The Importance Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Factors Affecting the Use of Office Automation in Small Businesses .

Extent of Office Automation in the Small Business Sector . . . . . . . . . .

What are

Capital

Software

Time . . .

Training

Security

. 0

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Problems? . . . . . . . . .

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Vendor . . . . . . . . . .

- Responses . . . . . . . . . . . . .

Future Impacts of Office Automation on Small

The Market for Business Services . . . . . . . . .

Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Competitiveness and Scale. . . . . . . . . . . . . . . .

Employment

Policy Options

and Skills . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Table No.

11-1. Percent of Firms Using

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Businesses

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Table

by Size of

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283

284

286

287

287

288

289

289

289

290

290

291

291

292

292

293

Page

1983 V. 1985 . 286
Chapter 11

Office Automation in Small Business

Small businesses play a vital role in our economy, and technological changes could affect

that role. Small businesses are often a vehicle

for basic innovations; they create new jobs;

they serve small, local, and specialized markets not otherwise served; and they employ

marginal resources that larger companies cannot utilize effectively. This chapter provides

some general background and a summary of

the limited information currently known about

the effects of office automation on small businesses.

The first phase of office automation required

relatively large capital investments and much

specialized expertise, and was chiefly implemented in large organizations. The availability of small computers and software packages

designed for small-scale operation is recent.

Manufacturers and vendors are now emphasizing this market. But very small firms, and in

particular beginning entrepreneurs, are often

uncertain and apprehensive about taking the

first steps toward automating their offices.

They would like to know more about the experience similar small businesses have had

with automation, but may find that it is difficult to get objective, disinterested information. Researchers and experts in the Nation’s

business schools and universities could help

to develop a body of information to fill this

need. Few researchers have studied the effects

on small business. This chapter can provide

a starting place for more detailed assessments

and discussions.

Purchases of office automation equipment

by small businesses are rapidly increasing as

the prices of the equipment come down and

as this market becomes a major focus of vendors. Computer systems have been used for

several years by entrepreneurs and consultants

working out of their homes, but the hardware

and software used for this purpose were hardly

differentiated from that sold for amateur, recreational, and educational use in the home market. Now small computers and specially designed soft ware packages are coming into use

by very small firms such as farms, restaurants,

mom and pop stores, and entrepreneurial sellers of business services, as well as for the larger

category of small business, firms with up to

500 employees. They are being used for many

applications, including accounting functions,

networking with peers, and research.

There have been few or no studies on the

impact of office automation technologies on

employment, job content, productivity, or survivability of the small business or beginning

entrepreneurs. Because of the importance of

the small business in the U.S. economy, the

extent of adoption of automated office equipment in that sector and the problems faced

in implementation of automated systems by

small businesses merit special attention.

THE IMPORTANCE OF SMALL BUSINESSES

Organizations with 100 to 500 employees,

although considered small businesses in law

and regulations, tend to have a well-developed

organization structure, formal procedures, and

company policies much like those of midsized

organizations. Over 99 percent of all firms, in

the United States, fall within this category.

While such firms might not be able to use a

mainframe computer, they are likely to be able

to mobilize the assets and acquire the expertise to proceed rationally and systematically

toward some form of office automation if they

choose to do so. But with personal computers,

organizations with fewer than 100 employees

can automate. Even very small firms, such as

a family business or a new venture by one or

a few people new to entrepreneurship, can automate many of their office procedures by

using, for example, word processing, spreadsheets, and automated mailing procedures.

283
284 Automation of America’s Offices

Such organizations are often the incubators

of new industries, new products, and new services. Their problems are often different in kind

from those of larger firms. Relatively little is

known about the factors that determine their

survivability and growth. For that reason, the

focus of this chapter is the question of what

is known about the potential effects of office

automation on independent firms having fewer

than 100 employees.’ Unless otherwise stated,

the term “small business” in the rest of this

chapter means firms having 100 or fewer employees and the term “very small business”

is usually applied to those with 20 or fewer

workers.

Such small businesses are a major part of

the American economy, accounting for over

34 percent of the U.S. labor force, and 32 percent of sales.2 These figures do not include selfemployed workers, who constituted 10 percent

of the work force in 1982, making the very

small business share of total employment even

higher than indicated in most studies.3 They

are a particularly important part of many industries, such as agriculture, construction,

wholesale and retail trade, and business and

personal services.

‘The Small Business Administration has two definitions of

a small business including those with fewer than 100 employees and those with fewer than 500 employees. The latter category includes 99.7 percent of total firms in the United States.

An establishment is a business located at one physical site,

an enterprise is a business consisting of one or more establishments, and the word “firm” refers to ail establishments under

the same ownership or control.

‘Executive Office of the President, The State of Smal f3usiness: A Report of the President (Washington, DC: U.S. Government Printing Office, March 1984), p. 73.

“’Job Generation, ” Econom”c Policy in the Eighties: The

Small Business Factor (Washington, DC: Small Business Administration, June 1984), p. 6.

Nonagricultural self-employment increased by more than

45 percent between 1970 and 1983. Eugene H. Becker, “SelfEmployed Workers: An Update to 1983, ” Monthly Labor Review, July 1984, pp. 14-18.

All of the net increase in jobs (984,000) between 1980 and 1982 was attributable to firms

with fewer than 19 employees.4 These small

businesses produced a total of 2,650,000 new

jobs, more than offsetting the 1,666,000 jobs

lost by larger businesses.’

Small businesses train beginning workers

in needed skills, providing two out of three

workers with their first jobs in the private sector; larger firms reap the rewards of this training through increased productivity y due to the

availability of trained workers. Small businesses also account for almost half of women’s

jobs and provide jobs for the elderly and those

wishing to work part-time or intermittently.

In addition, small firms are said to be more

innovative than large firms and they offer services considered too differentiated or too small

in market potential to be pursued by large

firms.

This is, therefore, an important segment of

the U.S. economy. Should Government policies aid small business in their efforts to use

new technologies such as office automation?

Can the private sector be encouraged to help?

Or will office automation tend to change or

diminish the role that small business plays in

the economy?

‘The State of Small Business: A Report of the President,

op. cit., pp. 26-27. The 1985 edition of the same report did not

update these figures.

‘The State of Small Business: A Report of the President,

1985, p. 2. But many small business firms start up and many

others go out of business each year. In addition, firms are constantly moving in and out of this classification due to expansion, contraction, and purchase by larger firms. This dynamism

of the small business sector is thought by many analysts to

be a useful indicator of overall business cycles; these cycles

are felt by small business 3 to 6 months before they affect large

businesses.

FACTORS AFFECTING THE USE OF OFFICE AUTOMATION

IN SMALL BUSINESSES

The factors affecting the use of office auto- ment, the growth needs of the firm, and the

mation technologies in small businesses cen- available labor or skills. The declining price

ter around the price and availability of equip- of microelectronic equipment is making it more
—.

Ch. n-Office Automation in Small Business ● 2 8 5

feasible for small businesses to purchase. Access to capital, however, is often still a problem. Even a few thousand dollars in capital

investment can be significant. High interest

rates limit the ability of very small firms, and

especially new businesses, to invest in capital

equipment, and the bankers’ interest in lending small amounts is minimal. Many small

firms simply do not feel the need for computerization yet, although that situation seems to

be changing rapidly.

The targeting of the small business market

by manufacturers and retailers has no doubt

influenced many to purchase and caused most

at least to consider the technologies. The interest of the vendors is evident from the increase in advertising aimed at small businesses

and the number of small business seminars

offered by vendors and retail outlets.

The retail computer store has been the most

common method or site of purchase because

vendors have been unwilling to develop a sales

staff to deal with small businesses. Thus, the

sales effort has been largely passive. The vendors now are dealing with that problem by

means of seminars oriented to small business

owners and new entrepreneurs, attracting a

target audience with which their sales forces

can deal more efficiently.

The dynamics of the firm and of the industry of which it is a member affect a firm’s need

for and use of automated office equipment. A

business that is growing rather than stagnating is likely to use it to service more clients

or provide faster response to clients. A growing firm is also more likely to have the capital

or credit to purchase new equipment. Struggling firms sometimes expect that office automation will allow them to compete more successfully with larger firms. For example, a

small travel agency may find that the addition of a computerized reservation system is

necessary for it to survive and compete.6

Businesses of less than 100 employees make

up over 45 percent of the miscellaneous business service industry, and an even larger

proportion of another seven industries expected to grow rapidly in the next decade.7

The miscellaneous business services, the finance, insurance and real estate industry, and

professional services (health and legal), are already heavily impacted by office automation.

Personal services, such as beauty shops, drycleaning establishments and repair services are

likely to be less affected by office automation.

The availability of people to use the equipment will also influence the decision to automate. More highly trained, specialized personnel such as systems analysts and programmers

may be needed if the office’s activities are in

any way highly specialized or nontraditional,

and only a few specialized very small businesses are likely to have such people, unless

they are themselves the owners/entrepreneurs.

The higher cost to the small firm of pension

plans and other benefits, the costs of recruiting and hiring these workers, and the small

scale of operations and markets put smaller

businesses at a disadvantage. Once they have

automated their operations, however, they are

less likely to be able to employ unskilled neighborhood labor, untrained new or occasional

workers, or family employees.

The proliferation of incubator facilities that

provide computer and telecommunications

equipment on a shared basis to small firms

or beginning firms will provide many of them

with their first opportunist y to use such equipment. Builders are developing “smart buildings” prewired for computer and communications networks, and are renovating older

buildings and furnishing them with electronic

equipment for lease to small business/entrepreneurs. Such facilities will provide small businesses with the benefits of office automation

at an affordable cost. The number of incubator facilities in the United States doubled in

‘Judith Kamm and Aaron Nurck, “The Organizational Implications of Implementing Technology in Small Businesses”

(Department of Management, Bentley College, Waltham, MA),

4th Annual Bentley College Small Business Resource Center

Research Conference, spring 1984.

‘Bruce Phillips and Kim Beverly, “Employment Projections in Large and Small Business-Dominated Industries, 1982-

1995, ” draft memorandum, Small Business Administration,

Jan. 4, 1985.
286 ● Automation of America’s Offices

the last year and shows signs of continued in- small businesses using these facilities, appear

crease. They are attracting private investment to be successful.8

capital as well as private-public partnerships, - ’ Business Incubators Are Doubling in Number Each Year, ”

and with a two-thirds survival rate for the ~dl Street Journal, Nov. 14, 1985, p. 1.

EXTENT OF OFFICE AUTOMATION IN THE

SMALL BUSINESS SECTOR

The lowering of prices has allowed small businesses to begin heavy purchasing of automated office equipment, as evidenced by several marketing studies.

Although, more large firms use computers

than small ones, small firms are increasing

their purchases steadily. Comparison of a 1983

Dun’s 5000 survey9 and a 198510 survey show

the increases. (See table 11-1.) The increases

in purchases for small firms were 60 to 70 percent during this short period. In fact, firms

purchased more than twice as many computers

during this time as they had predicted they

would in the 1983 survey.

Small firms responding to the 1983 survey

used their computers mostly for accounting

while the largest firms used them for financial analysis and forecasts. By 1985, the use

of financial analysis/spreadsheets had decreased

overall and the “other category” had increased

from 8.5 to 78.0 percent, indicating heavier

usage of specialized applications. 11 This con-

“Joseph Duncan, “Business Bets on Microcomputers, ”

D&B Looks at Business, August 1983, p. 45.

“Dun & Bradstreet Looks at Business, vol. 3, No. 3 (New

York: Dun & Bradstreet Corp., May/June 1985).

“Ibid., p. 4,

Table 11.1 .—Percent of Firms Using Personal

Computers by Size of Business, 1983 v. 1985

Size of business (number of employees) 1983 1985

1-19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.50/0 23.90/o

20-99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.4 36.3

100-499 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,3 47.2

500-999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.5 71.8

1,000 or more . . . . . . . . . . . . . . . . . . . . . . . . . . 65.7 85.4

All firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.9 46.1

SOURCE Joseph W Duncan, “Dun’s 5,000 Survey Shows Dramatic Increase in

Use of Personal Computers, ” Dun & Bradsfreet Looks at Bus/ness, VOI

3, No 3, May/June 1985

firms the need for specialized software and specialized personnel in the small business if they

are to use computerized systems effectively.

All of the surveys studied indicated that small

businesses are conservative in their choice of

systems and the use to which they are put,

which is mainly word processing and accounting functions. Larger firms are apt to be more

interested in state-of-the-art equipment and

more innovative applications than are small

firms.

In 1980, Inc. magazine surveyed its readers

and found 48 percent of the respondents then

using minicomputers and microcomputers or

small business computer systems;12 22 percent

were using word processors.13 Only 4 years

later, 57 percent owned/leased microcomputers

and 28 percent owned/leased minicomputers. ’4

The median number of employees of these companies was less than 25. Personal computers

are used most often by management, followed

closely by engineers, clerical and middle management; the most common use is word processing, followed by accounting/bookkeeping,

file/list maintenance, and records/schedules.

Further automation of tasks was planned by

72 percent of the respondents within the next

2 years.

The small business market for communications equipment is also increasing rapidly. It

was over $3 billion in 1983.15 The cost of tele-

‘21nc. Office Technology 1 (Boston, MA: United Marine Publishing Co., Inc., 1980).

] ‘Inc. Office Technology 11 (Boston, MA: United Marine

Publishing Co., Inc., 1980).

““inc. Personal Computers” (Boston, MA: Inc. Publishing

Co., Inc., 1984), and “Inc. Minicomputers” (Boston, MA: Inc.

Publishing Co., Inc., 1984).

“

)

Frost & Sullivan, “The Small Business Communications

Equipment Market Report, ” A 1254/D-1, winter 1983/84.
phone services is high on their list of problems, according to testimony before the Committee on Small Business in 1984.16 Small businesses are faced with much more complex

choices now in the selection of telephone and

other communications services, which intensifies the cost problem.

Most businesses (66.7 percent) used their

computers as stand alone workstations, ac-

“” Impact of Changes in the Telecommunications Industry

on Small Business, ” Hearing Before the Special Task Force

on the Impact of Telephone Costs, U.S. Congress, L$’ashington, DC, June 26, 1984, p, 405.

Ch. 11—Office Automation in Small Business ● 287

cording to the Dun & Bradstreet 1983 survey.

Larger firms were more likely to use personal

computers in telecommunications link-ups.

Very small firms often used their microcomputers to replace a Telex or Twix communications service and were comparatively strong

in their use of commercial databases.

It is evident from surveys, advertising efforts by vendors, and retail sales activities,

that small businesses are purchasing automated office equipment in increasing amounts.

Some are purchasing out of genuine need to

improve their productivity and others are purchasing because the competition is doing so.

WHAT ARE THE PROBLEMS?

The very small business is faced with a

myriad of problems when considering office

automation. Included among these are:

●

●

●

●

●

●

Capital-Even though the prices of equipment have decreased tremendously over

the past few years, this may still be an

expensive undertaking for the very small

firm whose access to capital is limited.

Time—A large investment of time is required to evaluate, purchase, and learn

to operate new systems.

Expertise–Small businesses often lack

the expertise and the financial capability

to hire technology experts for evaluation,

implementation, and maintenance of automated office systems.

Training-Small businesses often lack the

time and expertise to train operators of

the new equipment. In addition, the cost

of training is usually overlooked when

planning the purchase of new office technology equipment. The result is neglect

of the training function and underutilization of the equipment.

Repair services— Equipment is often purchased at retail outlets and the followup services are not available in a timely

manner.

Software-Much packaged software is

available for small businesses but it may

not be entirely suitable to a firm’s specific needs.

● Security–Lack of knowledge about computer security and little ‘control over

shared information systems are a problem that the small business will have to

deal with in the future as proprietary and

private information becomes more accessible to all employees through computerized systems.

Capital

The capital needed to purchase hardware

may actually be the lowest cost involved in

converting to automated office equipment.

Once it is purchased and installed, the owner/

manager needs someone to turn to for help

when it does not work and the vendor may

or may not provide good support. The implementation costs, which include training and

temporarily lowered productivity, are often unexpected. The five U.S. industries that are

dominated by small businesses—services; retail and wholesale trade; construction; finance;

insurance and real estate; and agricultural

services have capitalization rates much lower

than industries dominated by large businesses. 17

‘-Bernevia McCalip, et al., “The Sensitivity of Small Businesses to Interest Rate: A Cross Sectional View, Congressional Research Ser~ice, U.S. Congress, I.ibrary of (’ongress,

Washington, DC, May 26, 1982,
288 ● Automation of America’s Offices

—— — — —.— —

Photo credft Ffew/ett.packard Co

A small business owner/manager seeking

productivity through automation

This ratio will have to change if smaller businesses are to automate their offices.

The switch to computers can be a costly and

frustrating experience for a small business. A

company selling cheerleaders supplies leased

a computer system that would accept phonein orders, check customer credit limits, figure

shipping charges, adjust inventory, print an

invoice, add the order to accounts receivable,

and update inventory when supplies arrived.

Within 6 months, orders were piled up from

high schools ready to begin the football season, angry customers canceled orders, and attorneys general in three States were pressuring the owner to deliver the goods. What had

happened? Like many businesses, this company had purchased hardware first and then

purchased software from an independent supplier. The owner hired, then fired a computer

expert who was unfamiliar with the business

operation; neglected to solve poor inventory

control problems present before the computer

system was implemented; and failed to become

involved in the switchover. The owner blamed

the equipment vendor and the software supplier and they blamed the business owner. The

equipment has been reclaimed by the vendor

and the owner is suing them. 18

Software

The problems and costs of choosing suitable

software are even more significant than those

involved in choosing the hardware. Larger

firms often have software designed specifically

for their use. In these companies, programmers can spend 60 percent of their time doing

maintenance on programs.19 This is not feasible for the small business manager. Small firms

must make do with packaged software that

often does not work well for them, and the

developer is unavailable to them for consultation, A survey by the U.S. Chamber of Commerce in 1984 found that half of the respondents felt the need for more information than

was found in their software manuals, 39 percent found the manuals hard to understand,

and 23 percent complained of not having

enough written instruction.20 General Business

Services, a firm that provides consulting services to 50,000 small business clients through

franchised counselors, notes that many of the

client firms are purchasing microcomputers,

but only a small percentage of them are using

their equipment fully. The effective use of the

equipment depends on the motivation of the

users and on improvement and availability of

helping aids such as teaching diskettes, trained

consultants, and user friendly languages,

A small cleaning services firm bought a computer when a 15-year-old bookkeeping machine

broke down. The owner was convinced by a

salesperson that a computer would only cost

$2,000 more than anew bookkeeping machine.

However, he then had to spend $8,000 for customized software. He later learned that the

. — —

‘“Dennis Kneale, “Garbage Out: The Wrong Equipment in

the Wrong Hands Can Turn the Computer Dream Into a Nightmare,” The Wall Street Journal, May 20, 1985, p. 83C.

“David Thompson, “Small Business Buyers in the Retail

Computer Market,” Desktop Computing, May 1983, pp. 58-61.

‘“’’small Computers Market Study, ” Natjon’s Busjness,

U.S. Chamber of Commerce, September 1984.
—

system was too small to track all 6,000 of his

customers; two employees trained on the machine never got it working; and a second expert said fixing the system would take an

additional $8,000 in programming and equipment. The owner now stores the computer in

an upstairs corner since he could not find a

charity to accept it. He is aware of his

mistakes-trying to computerize before it was

necessary, buying hardware before software,

failing to get written guarantees, and failure

to plan for training cost. He feels he should

have hired a consultant for a second opinion

before purchasing the system.’*

Time

Time is a major problem. An owner/manager

with a 50-to 80-hour workweek will find it difficult to invest the extensive time required to

investigate office automation equipment and

then learn how to operate it. The lack of time

to learn the system could quickly cause discouragement. The equipment is then neither

properly nor fully utilized. And he or she often

lacks the knowledge needed to evaluate whether

automated equipment is really needed. The

pressure to be competitive or to purchase because peers are doing so may influence a business owner to buy equipment without the analysis of needs, benefits, and costs that should

precede such a purchase.

Training

Training of personnel is another problem

faced by the very small business. The manager must not only know how to use automated

office equipment, but often must also train

employees. Alternatively, he or she must hire

trainers or pay for commercial courses; hire

new already trained people; or depend on selfteaching software. As the costs of software

and training can be twice that of the hardware,

this is a significant problem. Salvate’s respondents22 indicated that lack of trained personnel

Ch. 11—Office Automation in Small Business ● 289

was a problem for them. This may, however,

only be a short-term problem, diminishing as

existing employees are trained, as more and

more new workers are already familiar with

computers from school courses, and as there

is more and more self-teaching software. At

present, however, it is a significant barrier to

automation for very small firms.

Bradley Schiller explores the role of small

business in training workers and concludes

that this may be the most important function

of small business.23 The economy benefits by

having a large pool of trained workers available. The advantage to the beginning worker

is the opportunity to gain marketable skills,

under close supervision, in a variety of activities—all of which are generally denied to them

in larger businesses. Schiller points out that

67 percent of male workers obtain their first

steady job with firms of fewer than 100 employees.

Small businesses now provide a valuable

service to the economy and to other businesses

by training new entrants to the labor force in

specific skills and in general business skills.

Only the successful adoption of office automation technologies will enable them to continue this function. However, there are costs

to the small business employer. According to

Schiller, there is a general exodus of employees from small firms to larger firms (300,000

in the past 9 years), where they obtain an average of 23 percent in wage increases in the first

year. High turnover can be very costly to the

small firm. The productivity of new workers

is often less than wages paid and the small

business may not keep the employee long

enough for the increased productivity to pay

off.

Security

As small businesses become more aware that

information is a primary resource they will necessarily be more concerned about computer

‘Kneale, op. cit., p. 84C.

James Salvate, “Microcomputer Survey, ” School of Business Administration, California State University, I.ong Beach,

CA, 1984.

“Bradley R. Schiller, Human Capital Transfer I’rom Small

to Z.arge Business (Washington, DC: Small Business Administration, July 1982).
290 ● Automation of America’s Offices

security. Not only could their information be

accessed by competitors but it could be distorted or destroyed, deliberately or accidentally, by insiders. The Small Business Computer Crime Prevention Act (S. 1920), which

became effective October 1, 1984, provides for

educational assistance to small businesses in

the area of computer security.” Specifically,

it provides that the Small Business Administration should, through its extensive network

of counselors to small business, provide the

computer security education that small businesses lack and may need.

Hearings held in March 1984 emphasized

the problems that the small business has with

computer security—lack of divisions and specialized employees (one employee could have

access to all company information), the high

cost of purchasing specialized computer security systems, lack of knowledge/education

about the problems, and little control over the

information systems used because of leased

communication lines, timesharing computers,

or packaged software. Even basic security

measures such as audit trails are not enforced

in many small firms and separating employee

duties is difficult.

Leslie Ball, founder of the Association of

Computing Machinery’s Special Interest Group

on Security (SIGSAC), testified to Congress

that small business membership and seminar

attendance in that group was extremely low,

indicating that the growing awareness of the

problems of protecting information is not reaching this group.

Vendor Responses

The vendors are aware of the problems faced

by the smaller business in adapting to office

automation technologies. Available but not

fully utilized yet, are systems and components

that address these problems, such as:

 software with a 30-minute learning time;

 modular systems that can grow with the

business;

● self-diagnostic systems;

● use of natural languages for easier retrieval of data;

● customer hotlines for quick, accessible

help; and

 expert systems that simplify managerial

tasks. 25

“Small Business Computer Crime Prevention Act (S. 1920),

Hearing Before the Committee on Small Business, U.S. Senate, Mar. 7, 1984.

‘

rDavid Cushing, “Vendor Watch: Perspective on Small

Business Automation, ” Venture, November 1984, pp. 123-158.

FUTURE IMPACTS OF OFFICE AUTOMATION

ON SMALL BUSINESSES

The impacts of office automation will depend

on the overall growth of the economy, the

growth stage of the firm, and the growth stage

of the industry of which it is a part. It will

affect the demand for certain kinds of business services, the extension of their markets,

and the employment levels and skills needed.

Small business is a heterogeneous category

including very small to medium-size firms, low

and high technology firms, professional and

unskilled services. Within firms under 100 employees, there may be a very big difference

in the effect of office automation on a three

employee owner-managed business and a firm

of 50 employees. Some jobs are similar such

as that of a secretary, and some functions are

similar such as payroll. But compared to larger

businesses, small firms have less uniformity

by occupation and more multifunction personnel. Some small business firms, both high and

low technology, are dynamic and growth oriented. Some are not. The difference may depend on entrepreneurship, location, and demo-
graphics more than on technology.26 However,

the use of available technologies will eventually affect their competitiveness.

The Market for Business Services

Forty-three percent of small businesses are

involved in providing services to other businesses. This industry is projected by the Bureau of Labor Statistics to develop the most

new jobs between 1982 and 1995, growing at

a rate of 3.9 percent per year.27 Although these

rates are high compared to other industries,

they are low compared to past years, when

business services employment grew at a rate

of 7 percent per year.

The use of office automation equipment will

allow firms to perform services such as graphics,

printing, and forms generation in-house. Electronic publishing systems can cut printing and

documentation costs by up to 50 percent.28

These trends could decrease the demand for

these services from small businesses .29 On the

other hand, office automation technologies

could also facilitate the entrance of small businesses into national and international markets.

Productivity

Most businesses that have automated office

functions feel that they have become more

productive, often by decreasing time spent on

word processing. Small professional offices

may gain productivity y by adding clerical chores

to the professional job, thereby eliminating

clerical jobs. Examples of this include legal

offices that use a computerized database from

which the lawyer can develop simple wills and

other legal papers without benefit of clerical

-’Peter Drucker, “Business Innovation: Our Entrepreneurial Economy, ” Current, May 1984, pp. 14-18. See also, Bruce

Phillips, The Marketing of Small Business by Big Business

(Washington, DC: U.S. Small Business Administration, August 1983).

--Valerie Personick, “The ,Job Outlook Through 1995: Industry Output and Employment Projected, ” hfonth)~’ I.abor

Review, vol. 106, No. 11, November 1983, pp. 24-36.

‘“Maureen Nevin Duffy, “Publishing an ‘ Inside Job’ With

Today’s Technology, ” MIS, NOV. 21, 1984, p. 42.

“’Carol Anderson, “SM17 Word Processing Department, ”

SA4E ,Vews, winter 1985.

Ch. 11—Office Automation in Small Business ● 291

help, and small advertising firms that can computerize all client presentation formats, allowing professionals to compose these without

clerical help. Conceivably, professional firms

could also go in the opposite direction, having

the clerical help develop the basic computerized will or presentation, allowing the professional to spend more time on exceptional work.

Nonprofessional offices may find greater

productivity in upgrading clerical skills to include some management functions, such as information gathering and organizing, in order

to decrease the need for professionals. The

small farmer, though reluctant to switch to

computers, is finding that the use of computers

will aid in generating the cash flow statements

and business plans that banks are now demanding. 30

The use of a microcomputer for administrative information processing such as accounting/billing forces the manager to develop more

organized work habits that will improve efficiency and lower recordkeeping costs. It could

also increase effectiveness by permitting more

communication with customers and potential

customers and a faster response time to customers’ needs without a comparable increase

in the time and labor required. Income taxes

and other Federal paperwork that require a

great deal of time could be accomplished with

much less stress and time with the aid of a

computerized system.

Loss of control of information is a significant problem for the growing business; the use

of a computer can alleviate this by allowing

the owner/manager to control all records.

Effective use of the equipment purchased

will depend on the motivation of the users and

on improvement and availability of helping

aids such as teaching diskettes and of trained

consultants. However, in the effort to minimize costs, the use of trained consultants is

most likely to be deferred or eliminated thus

reducing the effectiveness of the automation.

“’’Computers: How Ya Gonna Sell ‘Em Down on the

Farm?” Business Wreek, Feb. 18, 1985, p. 144.
292 ● Automation of America’s Offices

The use of office automation technologies

could aid small businesses in becoming more

efficient and effective. However, there is some

risk that firms may overburden themselves

with debt to make this capital investment,

overestimating the benefits or underestimating the time it will take to realize them.

Competitiveness and Scale

A special value of small businesses is that

they can serve small, specialized and widely

dispersed markets that, in general, large firms

would have to aggregate and standardize or

ignore in the name of economies of scale. Advanced information technologies may perturb

these special niches. They have allowed the

financial service industries, for example, to

diversify products, tailor them to special needs,

and offer them nationwide (e.g., special investment funds); and conversely, by aggregating

markets on a greater scale, to offer more standardized products (e.g., mail order life insurance policies with rates determined only by

age, and requiring no medical examination).

These offerings can intrude on specialized niches

formerly filled by small businesses. On the

other hand, real estate firms, formerly small

and highly localized businesses, have in some

cases gone nationwide. Information and communication technologies, by nullifying the barrier of distance and time, can also allow very

specialized (and formerly very small) firms to

operate in larger markets. To do so, however,

will demand a high level of entrepreneurial and

management skill that is always difficult to

muster in a new or very small business.

Employment and Skills

A general increase in overall economic activity could increase the demand for services, allowing small businesses to expand and/or encouraging the formation of new businesses.

The Bureau of Labor Statistics predicts that

the miscellaneous service sector, which has a

large share of small businesses, will provide

a large proportion of the new job opportunities over the next 15 years.31 Many of these

service industries, such as hotels, restaurants,

educational and medical services are labor intensive and, although already automated to

some degree, may not be as heavily impacted

by automation as business services.

The Salvate microcomputer survey32 indicated however that 11 percent of the small

firms surveyed were able to eliminate employees because of the use of a microcomputer and

59 percent expected to cut back on employment needs in the future. A U.S. Chamber of

Commerce survey33 also showed staff reductions in 11 percent of the respondents’ firms

and 63 percent reported more efficient use of

staff. A 1985 survey by the same organization showed that 16.5 percent of respondents

plan to reduce hiring in the future because of

automation. Since small business is the largest

employment growth area, this could have significant impact on employment opportunities

if it is representative of all small firms.

Drennan notes that less skilled labor which

used to be concentrated in manufacturing is

now concentrated in the service sector.34 He

predicts slower growth in clerical jobs in offices, including the business service industry,

which is predominantly small businesses.

In the near future, higher level skills than

are currently required may be needed by small

businesses who wish to automate. However,

in the long run, less skilled labor maybe needed

as people become familiar with computer equipment in grade/high school and as the equipment becomes more user friendly.

“’’Employment Projections for 1995” (Washington, DC:

U.S. Department of Labor, Bureau of Labor Statistics, Bulletin 2197, March 1984), p. 31.

Walvate, op. cit.

“U.S. Chamber of Commerce, op. cit.

“Matthew P. Drennan, Conservation of Human Resources

(Washington, DC: U.S. Department of I.abor Report, January

1983).
Ch. n-Office Automation in Small Business ● 2 9 3

POLICY

The public interest in the health of small

business is well established; a strong small

business sector prevents overconcentration of

economic power and wealth and provides opportunity for the exercise of initiative, innovativeness, independence, and challenge to obsolete industries and firms. Small businesses

have also played a major economic role in job

creation; training and testing of new workers;

serving small, specialized, or dispersed markets; and productively utilizing resources that

would otherwise be wasted. As small firms are

faced with technological change that may bring

about structural changes in their economic

environment, the related public policy questions are:

● Will office automation make larger firms

more efficient and allow them to participate in small and dispersed markets, putting small business at a further disadvantage? Or can small businesses also use

office automation to become more productive and increasingly able to compete with

larger firms, in local or in larger markets?

 To the extent that small businesses adopt

office automation, will their important role

in creation of new jobs diminish?

● If small businesses do not adopt office

automation, will the economic and social

benefit that they have provided by training new workers be diminished?

Only if they remain productive and competitive can small businesses continue to create

OPTIONS

new jobs, train first-time employees, serve

specialized markets, and utilize marginal resources. In the future, this is likely to require

them to participate in economy-wide changes

in basic technologies-viable small businesses

that did not adopt the telephone, the typewriter, electric lighting, and motor vehicles

would be difficult to find. Thus, small businesses sooner or later will have to use computers and probably some other office automation.

Congress may therefore wish to consider actions to encourage and assist small businesses

with efforts to automate. These actions need

not involve major programs or large expenditures since they would be directed only at reducing the problems encountered by very small

or beginning firms that have themselves made

the decision and taken steps toward improving

their productivity. Congress might, for example, urge the Small Business Administration

to expand its instructional and counseling services to small entrepreneurs who are considering the use of office automation equipment for

the first time. SBA could also provide initial

training for employees of very small firms at

low cost, or provide a telephone advice and

information service to supplement the often

inadequate support services available to small

computer users through computer stores and

vendors. It could provide incentives for banks

to provide small low-interest loans for the purchase of computers, software, and maintenance

and support.
Chapter 12

Office Automation and

Differentially Affected Groups:

Working Women and Minorities
Contents

Section 1: Women in the Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298

The History of Women and Work in the Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298

Current and Future Labor Force Participation of Women . . . . . . . . . . . . . . . . . . . . . . 300

Section 2: Office Work and Minorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302

Tables

Table No. Page

12-l. Minority Employment in Administrative Support Occupations, 1950-80 . . . . . . . 303

12-2. Minority Employment in Selected Occupations as a Percent of

Total Employment, 1972 Compared to 1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304
—..

Chapter 12

Office Automation and

Differentially Affected Groups:

Working Women and Minorities

This chapter gives closer attention to two

overlapping groups within society who have

an especially strong stake in the long-range

impacts of office automation—working women

and workers belonging to racial and ethnic minorities. A number of issues are now actively

before Congress related to employment and

economic equity for women and minority groups.

This assessment is not primarily directed at

exploring these complex clusters of issues. The

assessment nevertheless reveals obvious relationships between office automation, as a broad

technological, economic and social trend, and

the special concerns of working women and

minorities, which have been noted throughout the report. This chapter is intended only

to provide some general background on these

themes in the hope of contributing to future,

more detailed assessments of the effect of technological change on these issue areas.

Many of the trends discussed throughout

this report will affect women office workers

as compared to male office workers either differently or to a different degree, because men

and women tend to be concentrated in different occupations, jobs, and industries, and at

different levels of organizational hierarchies.

Economic, social, and legal conditions of long

standing, largely unrelated to technology, have

a bearing on how technology effects the life

of specific groups within the larger society.

With office automation there will be fewer

jobs in some occupational categories and more

in others; those now held predominantly by

women are most likely to decrease in number,

and those that women increasingly aspire to

hold will change in less predictable ways. The

possibility of working at home tends to have

a different meaning for men and women because their family roles tend to be, at present,

very different.

Congress now has before it a number of bills

dealing with pay equity and comparable worth.

These issues are not directly tied to office automation, but because automation will affect

both the number and nature of office jobs and

the skills they require, any attempts to compare jobs within a specific formal job classification or the demands of jobs across formal

classifications must take such changes into

account. The resolution of these issues will of

course be determined by many other factors

besides judgments about the comparability of

jobs. Legal and regulatory pressures as well

as economic, behavioral, and attitudinal factors and explicit management decisions affect

how jobs are designed, how they are filled, and

how they are compensated.

Section 1 of this chapter provides some background on the history of women’s position in

office work, summarizes their present whitecollar occupational status, briefly discusses the

evidence for pay inequity in white-collar jobs—

particularly those directly tied to computerrelated work—and highlights the relationship

between these issues and the potential effects

of office automation. The potential effects of

office automation on minorities and their relatively recent entrance into these positions is

explored in section 2.
298 ● Automation of America’s Offices

SECTION 1: WOMEN

The History of Women and Work

in the Office

In the early 19th century men performed

clerical work in offices as an apprenticeship

in business. This was the first step on a career

ladder that led to management positions. The

tremendous expansion in commerce in the mid19th century and the accompanying expansion in paperwork required a great expansion

in the office work force. Many businesses grew

in scale after the Civil War from small firms

with a few clerks and office boys into large

corporations with national and international

interests. Organizations were restructured into

functional divisions and clerical work tended

to be broken down into specialized tasks requiring an increase in supervisory positions.

The first significant recorded use of women

in an office in the United States occurred during the Civil War when, in spite of great opposition, the U.S. Treasurer General, Francis

Elias Spinner, hired women clerks to alleviate

a severe shortage of available male labor.1 By

1880, offices were being mechanized with typewriters and telephones. Organizations (sometimes unwittingly) began to recruit women for

de-skilled clerical jobs while the men retained

the management/administrative jobs.z For example, “The Bowery Savings Bank of New

York installed its first typewriter in 1894–

without realizing that only females had been

trained to use the new-fangled contraption. So

the bank promptly hired its first women. . . .“3

Although the new technology, typewriters, did

not cause the expansion in office work that

brought about the recruitment of women, it

did facilitate the movement of women into office work, in that typing was not prelabeled

as “men’s work’ and therefore unsuitable for

women. 4

Women were not accepted wholeheartedly

into the labor force. There was strong opposition from young men who felt they would be

losing opportunities because women worked

for less pay. Many people felt that women

would lose their femininity if allowed to work

in offices and would then be unsuitable wives

and mothers. Proponents argued that office

work did not denigrate women but rather provided them with training that would make

them better household managers, and also

argued that the office would benefit from

women’s “higher moral code.’”

‘Margery Davies, Woman Place 1s at the Typewriter

(Philadelphia, PA: Temple University Press, 1982).

‘Joan Scott, “The Mechanization of Women’s Work, ”

Scientific American, vol. 24, No. 3, pp. 167-185.

‘Sidney Feldman, “Women in Banking: An Overview of an

Underutilized Resource, ” The Bankers Magazine, vol. 166,

March-April 1983, p. 70.

‘Davies, op. cit.

When the U.S. economy was mainly agricultural, women were an equal and important

part of the economic team maintaining a family farm. In addition, single working-age wom-

‘Davies, op. cit., ch. 5
Ch. 12—Office Automation and Differentially Affected Groups: Working Women and Minorities 299

en were often expected to earn some income

from at-home work such as sewing, knitting,

and preparation of food for sale. When women

left the farm to work, it was as domestic workers and later as factory workers. For women,

this meant higher wages and increased economic independence over work at home. However, their wages were still quite low and working conditions poor.

When office work became available to women,

there was a large pool of women to seek these

jobs, which were easier, cleaner, and had more

status than factory jobs. Small farm employment declined from three-fourths of the labor

force in 1820 to one-half in 1880. During this

period many small family farms were barely

able to make a living or went out of business,

requiring their daughters to seek employment

elsewhere. 6 The same thing was happening to

many small family businesses that had used

the unpaid labor of the owners’ daughters.

In the first half of the 20th century, educational levels were increasing significantly, with

many more women than men completing high

school. Since literacy was required for office

work, women gradually became the preferred

sex for clerical employment in expanding businesses. Commercial business schools became

common in the 1850s to fill the needs for clerks

trained in office skills. They offered arithmetic,

bookkeeping, penmanship, stenography and

by 1880, typewriting. By 1890, they enrolled

80,000 students (for comparison, grades 1

through 12 enrolled 298,000 at that time).7

Until late in the 19th century, these students

had been almost entirely men, but with the

restructuring of businesses and office work and

the cutting off of the career ladder from clerk

to manager, men instead sought training in

business management in the universities,

whose now proliferating business schools did

not admit women.

The opportunity to work in offices brought

women into the labor market in steadily in-

——————

“Davies, op. cit., ch. 4,

‘Janice Weiss, “Educating for Clerical Work: The Nineteenth Century Private Commercial School, Journal of Histor~r, spring 1981, p. 407,

creasing numbers after 1890. In 1890, 17.4 percent of women aged 20 to 64 were in the labor

force; by 1920, 22.9 percent and by 1940, 29.4

percent.8

In 1984, the participation rate for women

aged 20 to 64 was 64.1 percent. Historically

nonwhite women participated in full-time work

in greater numbers than white women, but

were limited to fewer occupations. Their rate

in 1890 (for the same age group) was 39.3 percent and is currently 65 percent. Work force

participation for men is about 75 percent.

The burgeoning of office work influenced

women’s increased participation, but other

factors were also powerful. Birth rates had

been declining throughout American history ;

whether this was a cause or an effect of women’s growing participation in the work forc e

is a matter for some debate. Birthrates declined

in the period 1890-1947, reaching historic lows

during the 1930s. The birthrate increased rapidly during the 1950s, the baby boom years.

These periods were paralleled and reflected in

labor force participation rates for women o f

childbearing years, which increased steadil y

between 1890 and 1947, and decreased for 20-

to as-year-old women in the 1950s.

9

During this century, the acceptance of married women in the labor force slowly increased.

In 1900, less than 2 percent of married women were employed, and employers often fire d

working women who married and did not voluntarily leave. But from 1920 to 1940 their

participation rate doubled, from 9.7 to 20 percent. 1 0

Women’s participation rates in past decades

did not increase at the same pace for all age

groups. Women went to work in great numbers during World War II. Women whose children were past early childhood tended to stay

in the labor force after the war, while the par-

‘James Smith and Michael fJ’ard, “tf’omen’s R’ages and

Work in the Twentieth Century” (The Rand Corp. ) October

1984.

“Ibid. p. 5.

‘ ‘Ibid. pp. 7-9.
300 ● Automation of America’s Offices

.

ticipation of younger women dropped considerably in the late 1940s.11

Discrimination kept the majority of women

working in offices in clerical positions until

recent times. In 1919, Civil Service examinations covered 260 occupations, but for nearly

60 percent of those occupations, the examinations were not open to women.12 As recently

as the 1960s positions were advertised in newspapers as “male” and “female.”

Current and Future Labor Force

Participation of Women

In 1984, 53 percent of all women aged 16

or older were in the labor force in the United

States, totaling nearly 44 percent of the civilian work force.13 Between 1972 and 1982, women accounted for 68 percent of the 14 million

increase in employment in white-collar occupations. For those women born in 1951 to 1955

(now 30 to 34 years old) the participation rate

is now 66.7, a considerable increase over earlier

cohorts. 14 As older women, who were raised,

educated, and socialized when the traditional

nonemployed housewife was the norm, decline

in numbers, the overall participation rate can

be expected to rise. Moreover, the birth rate

is likely to remain low, and there has been a

dramatic increase recently in continued labor

force participation of women during childbearing years, including continued participation

by mothers of young children.

The available work force in 2000 will consist predominantly (75 percent) of people already in the work force in 1985. Today, 80 percent of the clerical work force is female, and

30 percent of working women are clerical workers. That gender segregation in clerical jobs

has, over the long range, been increasing in

“Women’s household burdens decreased during the early

20th century because of fewer children and because of the introduction of labor-saving devices for the home. There is still

debate, however, as to whether or not this provided housewives

with extra free time; there were also fewer women per household, the family servant disappeared, and new tasks appeared,

“Davies, op. cit., app. table 5.

‘3EmpZoyment and Earnings (Washington, DC: U.S. Department of Labor, Bureau of Labor Statistics, January 1985),

p. 156.

“Smith, op. cit., p. 8.

spite of changing social attitudes and public

policy objectives. Women continue to cluster

in traditionally female occupations, constituting 80 percent of all administrative support

workers compared to only 32 percent of managers, administrators, and executives in 1983.15

These higher level jobs account for only 7 percent of all jobs held by women, even though

they include many members of the traditional

female occupations of registered nurse, health

technician, elementary school teacher, librarian, and social worker. Where women are in

management positions, they are mostly in the

lowest rungs of management. ”

A report on Microelectronics and Working

Women for the National Research Council

notes that although there has not been widespread labor displacement of women by means

of layoffs, there has been lack of growth in

occupations that have been their main source

of employ ment.17 In the United States, employment growth in the clerical occupations

shows a lag behind increases in the volume

of business in insurance, banking, and other

offices where women have been so highly concentrated. A Canadian study confirms that

jobs such as secretaries, filing and other office clerks, bank tellers, keypunch operators,

telephone operators, mail handlers, and the supervisory personnel for these positions are

among the slower growing occupations.18 OTA’s

analysis (chapter 2) points to a long-range decline in jobs held predominantly by women.

Already employment declines have occurred

in the heavily automated insurance industry

in keypunch operators, bookkeepers, file clerks,

mail handlers, and typists.16

———————

“Facts on Women Workers (Washington, DC: U.S. Department of Labor, Office of the Secretary, Women’s Bureau, 1984).

“Time of Change: 1983 Handbook on Women Workers

(Washington, DC: U.S. Department of Labor, Office of the Secretary, Women’s Bureau, 1983), Bulletin 298, pp. 52-53.

“Diane Werneke, “Microelectronics and Working Women:

A Literature Summary, ” Cornrnittee on Women’s Employment

and Related Social Issues (Washington, DC: National Academy of Sciences, 1984), prepared for the National Research

Council.

IHWerneke, op. cit.

“Eileen Appelbaum, “The Impact of Technology on Skill

Requirements and Occupational Structure in the Insurance Industry, 1960-1990” (Philadelphia, PA: Temple University, Apr.

1, 1984).
Ch. 12—Office Automation and Differentially Affected Groups: Working Women and Minorities ● 301

Future employment opportunities for women,

although dependent on growth of total demand

in the economy, may be more dependent on

the opportunity for increasing their skills, work

experience and upward job mobility, which

would allow them to take advantage of changing job requirements. However, these opportunities may not materialize. In the insurance

industry, as overall female employment has

increased in all job categories, the professional

jobs into which they have moved have frequently been changed to lower pay levels to

reflect lower skill levels.20

New jobs are emerging in the computer and

technical specialist occupations, especially for

engineers, computer analysts, and paraprofessional computer technicians, positions in which

relatively few women are employed. According to the Bureau of Labor Statistics, computer specialist jobs increased from 275,000

in 1972 to 585,000 in 1980. Women increased

their share of these jobs from 17 percent in

1972 to 26 percent in 1980. However, women

were more likely to be programmers than systems analysts (a higher level, higher paid position).21

Whether it cuts off career ladders, eliminates

unskilled clerical work, or requires more or

different training and skills, office automation

will change the nature and skill requirements

of traditional office occupations and jobs.22

Whether or not these changes will be reflected

in changes in job title, job classification, and

compensation levels remains to be seen. Historically, “women’s” jobs have paid less than

“men’s” jobs. The figures comparing men’s

and women’s average salaries are well known,

as are the many discussions of the reasons for

——— —

“’Barbara Baran, “Insurance Industry and Trade Strategies, ” draft report prepared for the Office of Technology Assessment, September 1984, p. 6.

“Carol Boyd Leon, “Occupational Winners and Losers,

1972 -80,” Monthly Labor Review, June 1982, p. 22.

“Arbeidsnotat fra forskningsprammet “Teknologiens betydning for kvinners arbeidsliv ” (Working Paper From the Research Program “Technology and Women’s Work”) Journal

for Social Research, vol. 23, 1982, pp. 519-534; Roslyn Feldberg and Evelyn Glenn, “Technology and Work Degradation:

Effects of Office Automation on Women Clerical Workers, ”

Machina Ex Dea, Joan Rothschild (cd. ) (New York: Pergamon

Press, 1983), p. 72; and Baran, op. cit., p. 136.

the differences. The reasons usually offered

include differences in education and experience, occupational and industry choices, job

mobility and number of hours worked. However, men who go into “female” lines of work

earn more than women in those fields. Female

full-time, year-round clerical workers had a median income of $10,997 in 1980 while male clerical workers had a median income of $18,247.

A similar differential is found in all occupations.23

Pursuing a career in the computer industry

does not automatically alter traditional relationships. There were compelling reasons to

expect to find relatively little male-female disparity in computer-related occupations, especially programming. The occupations are new,

women have been involved in the field from

the beginning, there has been a steady sellers’

market, and the growth of the industry coincided with implementation of affirmative action and equal employment regulations. However, women are paid less than men in every

computer specialization, in every industry, and

at every organizational levelo

24

The possibility of a general decline in compensation associated with de-skilling of work

and enhanced interchangeability of workers

(generally in conjunction with anticipated job

polarization) is also of concern to some researchers. While these conditions have been

noted in specific organizations, particularly

those in office-oriented industries, the counter

trend toward job enlargement in both officeoriented industries and general offices may

provide some offset. Another uncertainty is

the effect of large-scale shifts in the structure

of the economy, together with changes in labor supply, on the wage structure (holding job

content constant).

Some observers express concern about undercompensation for skills that may not be

“’’American Women: Three Decades of Change” (Hearings

before the U.S. Congress, Joint Economic Committee, Washington, DC, Nov. 9, 1983), Testimony of Lewis Kincannon, Bureau of the Census, p. 26.

“Philip Kraft, “Computers and the Automation of Work, ”

State University of New York at Binghamton and Center for

Survey Research, University of Massachusetts, 1984.
302 Automation of America’s Offices

captured in formal job descriptions but are

nevertheless essential. Automation may de-skill

some jobs, but it may also involve a change

from manually intensive work to mentally intensive work that requires closer attention and

increased responsibility for accuracy. Increased

knowledge about the operations of the whole

organization may be required to ensure accuracy of data input. These “invisible skills”

become apparent only when they are not performed well.”

As office automation changes tasks and jobs,

blurring the distinctions between “men’s” and

“women’s” work and between clerical and

professional work, the opportunity is available

to objectively evaluate jobs, their skill requirements, and compensation. Major changes in

the occupational mix and in job content are

likely to bring about pressure for new pay

structures. In economic theory, individual pay

is a function of the contribution of the individual to the organization’s output; hence, pay

generally increases with productivity. In a

competitive market wages are also influenced

——. ..—— - .—

“Joan Greenbaum, Cydney Pullman, and Sharon Szymanski, The Labor Institute, “The Impact of Office Automation

on the Municipal Workforce of New York City: A Case Study,

contract report for the Office of Technology Assessment, April

1985.

by supply and demand. For example, an abundance of teenage candidates for fast foodservice work in the recent past may be one

reason why the pay is low. That situation is

changing now with the decrease in the number of young workers entering the labor force.

But in practice, other factors confound pay

structures so that there may not be a direct

relationship between the pay and the supply

of workers. If fast food restaurants in the

future were faced with raising pay rates to attract needed workers, they could further automate their tasks and insist on more selfservice by customers. It is evident from the

experience in other consumer service industries, for example banking, that we are becoming more and more a self-service society. This

could also be the case in offices as professionals

perform their own typing and graphics tasks

and clients input information directly into

computers, receive output directly into their

own computers, and print the information

themselves.

The effect of information and communication technologies on the nature of work, on

job classifications, and on compensation structures is thus far broader than the issue of pay

equity and comparable worth for women, but

it will have a direct and immediate relationship on those discussions.

SECTION 2: OFFICE WORK AND MINORITIES

Black workers account for 10.2 percent26 of

the clerical work force, which is comparable

to the black share of the labor force and the

population. Hispanic Americans account for

5 percent of this occupational category.” For

minority women, especially, the movement

into clerical jobs has in fact represented an

important channel of upward social mobility.28

-’Emplo-vment and Earnings (Washington, DC: U.S. Department of Labor, 13ureau of I.abor Statistics, January 1985),

p. 177.

“The Hispanic category includes black and white Hispanics, so the true number of black clerical workers is difficult

to ascertain.

-“See: Diane Nilsen Westcott, “Blacks in the 1970s: Did

They Scale the Job Ladder?’ Monthly Labor Rew”ew, June 1982;

(See table 12-1.) They began moving into office work in significant numbers only in the

1950s. Black w-omen increased their share of

clerical jobs by 163 percent between 1950 and

1960. Women of Hispanic origin increased

their share by 333 percent,29 now making up

about 4 percent of the clerical work force.

Center for the Study of Social Policy, “A Dream Deferred: The

l+~conomic Status of Black Americans, July 1983; and Thierry

Noyelle, “The New Technology and the New Economy: Implications for Equal Opportunity, ” work in progress, Columbia

University, New York, February 1985.

‘<’U.S. Census of Population for 1950: Occupational Characteristics, Special Report P-E No. 1 B, p. IB-31; and U.S. Census

of Population, 1960: Occupational Characteristics (Washington, DC: U.S. Department of Commerce, Bureau of the Census,

p. 23).
Ch. 12—Office Automation and Differentially Affected Groups: Working Women and Minorities 303

Table 12-1 .–Minority Employment in Administrative Support Occupations, 1950=80

—. —

White Black Other - -

———

Male -Female Male ” Female Male –Female

Year Total – (0

/0) (

0

/0) (0/0) (“/0) -- (%) ( % )

1950 6,864,600 ‘

-

2,476,710 4:187,820 109,740 75,060 5,580 9,690

(36.1) (61 .0) (2.1) (1.1) (0.08) (0.14)

1960 9,617,874 2,821,463 6,048,678 184,823 197,263 22,50~ 41,998

(29,3) (63.3) (1 .9) (2.1) (0.23) (0.44)

Hispanic

Male Female

(%”) (

0

/0)

1970 13,748,260 3,258,901 9,346,947 330,492 691,097 144,309- 297,116

(23.7) (68,0) (2.4) (5.0) (1.1) (2,2)

1980 16,851,398 3,235,744 11,325,716 435,365 1,200,516 234,132 595,461

(19,2) (67.2) (2.6) (7.1) (1 ,4) (3.5)

SOURCE Data are derived from the U S Department of Commerce, Bureau of the Census, U S Census for 1950-7980 Washington DC

Between 1960 and 1976 the proportion of

minority women workers employed as domestics dropped from 35 to 9 percent, while the

percentage employed in clerical work increased

from 9 to 26 percent, and the percentage in

professional and technical jobs rose from 7 to

14 percent. Half of all minority women were

in the work force in 1976, compared to 47 percent of white women. The movement of black

and Hispanic women into office occupations

has thus occurred almost entirely within the

last 30 years and has aided many of them to

move into the middle class.

By 1980, over 29 percent of employed black

women held clerical jobs, and 14 percent held

professional jobs. The wages of all minority

women relative to white women rose from 70

percent in 1960 to 94 percent in 1976.30 But

between 1976 and 1980 their income slipped

to 86 percent of that of white women. In 1976,

black female clerical workers’ wages were 107

percent of that of white female clerical workers, but it slipped to 97 percent in 1980.31 One

reason for the higher level in 1976 is thought

to be that black women had been in these jobs

longer and thus had higher pay levels because

of seniority. After 1976, higher paid, educated

black women may have been moving out of

clerical work and into supervisory, manage-

—— .

‘‘ \l inorit~ }!’omen Jlrorkers: A Statistical otrer~riew,

,Jlanuaf on l)a~ I+;quit>: Raising Jlrage.s for 11’omen ‘.? 1$’ork,

.JoJT .lnn (;run(’ (cd.], (’omtnittee on l)a~r [jquit~’, No\rt~mher

19X1. pp. :)1-:14.

\\’(’$[c(Jt t . op. cit., p. 37.

ment, and professional jobs as these options

opened up for them.

Black and Hispanic males also increased

their share of clerical jobs considerably between 1950 and 1960. Black males held a larger

share of clerical positions in the 1950 census

than did black females. The balance changed

however by the time of the 1960 census, when

black women slightly outnumbered black men

in clerical jobs; they have increased this gap

steadily since 1960.

During the 1970s, minority workers made

significant gains in moving into white-collar

occupations and in advancing within these occupations. Their share of professional jobs such

as credit and collection managers and office

managers increased tremendously as did their

share of clerical jobs such as bill and account

collectors, secretaries, and statistical clerks.

The jobs that showed the largest growth for

minorities between 1972 and 1981 are shown

in table 12-2. Many of these positions are, however, still at the lower end of the scale and

thus most likely to be affected by job displacement from office automation; the black workers also tend to have least seniority since these

jobs became open to them only in recent years.

Because of a growing economy and the active interest in social change in the United

States, employment opportunities for minorities have seen noteworthy improvements in

the last two decades. However, black workers

still have significantly higher unemployment
304 ● Automation of America’s Offices —

Table 12.2.—Minority Employment in Selected

Occupations as a Percent of Total Employment,

1972 Compared to 1981

Minority employment

Occupation 1972 198 1

Computer specialists . . . . . . . 5.5 9.4

Bank officials and managers ... 2.6 5.5

Credit and collection managers . 1.4 4.4

Office managers, . . . . . . . . . 1.0 4,0

Bank tellers . . . . . . . 4,9 7,6

Billing clerks . . ... ... 6.7 10.5

Bookkeepers . . . . . 3,6 6.3

Collectors, bill and account. . 5.0 10.8

File clerks ... . . . . . . . . . . . 18.0 22.9

Secretaries . . . . . . . 5.2 7.2

Statistical clerks . . . . . . . . . . . . 8.4 15.1

Typists . . . . . . . ... . . ... 12,0 17.8

SOURCE U S Department of Labor, Bureau of Labor Statlstlcs, Current Popu/afton Survey A Databook VOI 1 Washington, DC 1982 pp 651667

rates than whites and also higher rates of involuntary part-time work. Both of these trends

could be intensified by the use of office automation. The changing nature of skills required

for beginning and mid-level jobs and the changing nature of job training (see chapter 3) will

also have an effect on the future employment

levels of minorities in offices, unless their access to training is increased. Minority workers will have to find ways to obtain the more

formalized and more off-the-job training required to fill positions in the office.

Another problem for the minority workers

is the strong trend in the last decade for offices

to move from the central city to the suburbs,

and for business and industries to grow in the

South and Southwest and shrink in the Northeast. Because 55 percent of black Americans

live in central cities, as compared to 24 percent of whites, and only about 22 percent of

blacks live in the suburbs, the movement of

offices from central cities to suburbs decreases

their opportunity for office employment. Government employment in central cities, which

has been a significant source of employment

for minority workers, is likely to stabilize and

may well decline. The shift of office work to

the Southwest tends to further decrease the

access of black women to office jobs, although

it increases opportunities for Hispanics.

The greater instability of worklife for minorities and their concentration in the lower

level clerical jobs indicates that their efforts

to better their status may be more difficult

in the future than it has been in the past decade. The availability to them of training and

education and the continued growth of the U.S.

economy is of the highest importance if minorities are to maintain and increase the

progress they have made.

Appendix A

The Technology of Office Automation

Business is now faced with the problem of controlling 400 billion documents, a number that is

increasing at the rate of 72 billion per year. 1 Fortunately, technology is providing the means of electronically storing billions of characters on a single

device and moving data at the rate of millions of

characters per second. This appendix describes the

technologies that are in use in offices, those that

may be applied in offices during the remainder of

this century, and how they may affect office operations.

Information is ephemeral. It must be available

when and where it is needed; too late, it maybe useless. The goal in applying information technology

is to deliver information to the end user on time and

at the lowest possible cost. Information technology eliminates distance as a significant factor in

determining the degree of operational control that

managers can exert over operations. It reduces the

time required to analyze large volumes of data and

makes the resulting information available to those

who need it for decisionmaking.

Overview of Appendix

This appendix describes the technologies for

information processing and telecommunication in

the office. First, a taxonomy of the functions of the

office is presented, followed by a description of

relationships between the functions and the technologies that are now available or could be available in the future. Following that is a more detailed

description of the technologies and the options for

employing them.

A Systemic View of the

The following functions comprise

jor office activities:

● data gathering ,

Office

the set of ma-

● data organization and storage,

● data access and retrieval,

● data processing, and

● communication of results.

C, 1“: W’hlte, ( ’ “ LS’1’A and A’I’&’l’, ‘‘ 7’elec’omn]unic8tio ns,” April

1 VHF), p. 44.

Data Gathering

Information flows into an office from the internal accounting systems of the organization, customers and prospective customers, government

agencies, suppliers, trade groups, and other sources.

Intraorganizational data flows constitute a significant portion of the total, Data, once received, must

be put into a form suitable for processing, Some

has to be transcribed from one medium to another.

For example, an order that is received by telephone

has to be recorded on an order form. On the other

hand, automatic readers in supermarkets capture

all the data needed for inventory control as a byproduct of the checkout procedure.

Traditionally, the process of transcribing data

from one medium to another has constituted a significant portion of the work. I.arge numbers of people worked at typewriters transcribing manuscript

and at keypunch machines transcribing information from documents to punched cards. Modern

technology is reducing the need for transcription.

Professionals now create text that clericals edit and

format rather than transcribe. Scanners are included in materials-handling systems to capture

data in a form processable by machine.

Data Organization and Storage

Data is useful only if it is organized in a way that

makes it identifiable and accessible. Offices have

used multipart forms and files housed in cabinets

for organizing and storing data. Modern technologies for data storage and organization range from

large-scale computers that are capable of handling

hundreds of millions of records, as in the case of

the Social Security Administration, to small data

bases containin g a few dozen records that are stored

on personal computers. Copying machines reduce

the need for multipart forms because additional copies can be made on demand. Telecommunication lets

responsibility for organizing and storing data be

assigned to those responsible for gathering it. Or

all of an organization’s data can be gathered in one

central location. In either case, all who require access can have it immediately regardless of their

physical location,

A shared database reduces the problems of keeping multiple copies of data synchronized. But not

all data in an office is meant to be shared. Much

307
308 ● Automation of America’s Offices —

consists of working documents useful only to specific individuals.

Data Access and Retrieval

The third function provided by an office is data

access and retrieval. Implicit in this function is making all who may need data aware of its existence

and denying access to it by others. In a paper based

office, one of the means of assuring awareness of

data is to provide potential users with “information” copies of documents. Others who need data

must then seek out one of the existing copies and

its accessibility to those not authorized to have it

is implicitly limited. On the other hand, errors in

data are often discovered after documents have

been distributed, and corrective information has

to be sent to all who have copies so that all are operating from a common base of information. This goal

is difficult to attain.

Paper-based files may be less than satisfactory

because of the time that it takes to move physical

documents from point to point. Advanced technologies do not constrain the accessibility of data

to those in a specific geographic area and thus reduce some of the limits on office operations.

It is most efficient to access only those data of

interest. In the past, the user had to obtain one

or more documents and sort through them for specific data of interest. With the aid of modern technology, the user can identify and retrieve specific

data elements that are needed.

Data Processing

The tools for data analysis range from handdrawn graphs depicting relationships between and

among data elements through programs run on

the most powerful computers. Nonnumeric data

is assembled in tabular formats for study and

analysis.

The speed at which humans can process data

is limited regardless of whether they are performing numerical calculations, preparing charts and

tables, or creating text. It is unreasonable to expect an individual to even attempt some computations. But modern information technology provides

powerful tools, ranging from systems that will retrieve and order data to user specifications, to

those that routinely prepare reports representing

thousands of individual data items. The trend is

to reduce the need for professional data processing personnel by providing users with easy to use

tools having great analytical power.

In addition to automating traditional data reduction and reporting tasks, modern technology

puts new capabilities in the hands of users. Word

processors make it easy to alter text and combine

or refine documents. Computer-based models can

be used to explore the consequences of decision

alternatives. These range in complexity from comparatively simple spread sheets to econometric and

process simulation models that involve the interaction of hundreds of variables. Decision-support

systems can provide insight into the consistency

or interaction of judgments made by the decisionmaker.

Experience over the last 30 years shows that

users constantly find new and previously unforeseen ways to employ this technology effectively. As the number of users has increased, the

technology has evolved to require decreasing

degrees of technical sophistication from the user.

Innovative applications will thus continue to

emerge.

Communication of the Results

Another function of an office is the delivery of

information. Traditionally, it has been delivered

either orally or in hard copy. Preparation of hard

copy requires considerable effort, and transporting it requires time. Orally transmitted information is ephemeral and difficult to capture; transcription is required if an enduring record is to be

created.

Modern technology lets the user specify the format in which information is delivered. It can be

presented for viewing on a display screen but can

be easily replicated. Telecommunication has largely

neutralized distance as a factor. Many users can

work from a common database eliminating the

problem of inconsistent data.

Users and Providers

The trend in applications of advanced technology in the office is toward direct involvement of

the user with minimal technical training. The technologies to support these systems comprise two

relatively distinct classes. The first consists of centralized data processing equipment that is used

to prepare printed reports as well as provide for

direct user interaction through terminal devices.

The second includes a variety of stand alone devices, microcomputers and word processors that

are under the direct control of the end users.
App. A—The Technology of Office Automation ● 309

The user seeks a functional capability rather than

a specific technology. From this perspective, the

terminal tied to a central computing facility can

be the functional equivalent of a personal computer. However, from the systems point of view

of managing the information resources of an organization, the alternative technologies can have

quite different implications. For example, in an office served by a centralized facility, both the reporting needs of the organization and the needs of users

for selective access can be supported from a common, shared database. On the other hand, coordinating the activities of users of personal computers

who each define and structure data resources differently, may present a considerable problem for management.

Complicating this problem is the fact that the

technology is not neatly divided into centralized

processors and individual workstations. There are

hybrids of these technologies. Microcomputers can

be linked to central facilities to retrieve data that

can then be processed at the user’s location, Alternatively, networks of microcomputers permit

the sharing and interchange of information. Thus,

one of the effects of the emerging technologies is

that the functional characteristics of an office system can be defined almost independently of the

technologies used to implement those functions.

Furthermore, while the end product of a system

may be achieved through alternative means, the

internal structure of a system can have significant

implications for the operations of an organization,

its employees, and its management,

Technology consists of tools and the knowledge

of how to use them. Computers and telecommunication networks are virtually valueless to those

who do not have a clear understanding of how they

fit into the office environment and the benefits that

can be derived from them. Systems put in place

without such understanding have often failed to

meet the needs of users. These failures represent

a waste of significant resources and, in many cases,

result in the creation of barriers to future introductions of technology.

Equipment Providers

The providers of technologies for the office come

from three distinct heritages. First, there are the

suppliers of the kinds of equipment that have been

in offices for decades—typewriters, calculators,

copying machines, etc. They have traditionally assumed a comparatively rigid division of tasks

among office workers. Secretaries type; professionals use paper and pencil. They are accustomed

to selling to office managers who buy equipment

as though it were standardized, like paper clips

and forms.

Computer manufacturers comprise the second

class of equipment suppliers. They are most comfortable dealing with professional technicians and

have had little contact with other office workers.

While programmers and analysts were interposed

between the computers and the end users, sellers

of computer systems did not find it necessary to

structure their products to be understandable by

nontechnical people. Technicians were assumed to

know the strengths and limitations of the equipment and to take the steps necessary to ensure

its operability and the integrity of the work it supported. Data processors, for example, know the

importance of creating backup copies of data; office managers often do not.

The third group of providers of technology to

the office are telecommunication specialists, Their

traditional role was to place telephones where

needed and keep them in repair. Organizations with

significant communication requirements worked

with the providers of telephone service to establish private networks when such steps were economically justified. Data communication facilities

were generally separate from voice services. Additional circuits were obtained for facsimile and video

transmission as required.

The divestiture by AT&T of its operating companies and the emergence of a variety of competitors has complicated the job of the telecommunications manager. There has also been a marked

increase in data traffic and in requirements that

voice, data, and other traffic share telecommunication facilities. This has required that telecommunication mangers become heavily involved in

the design, development, and operation of information processing systems. They must now work

closely with technologies that are often unfamiliar,

In the past, the office manager, telecommunication manager, and data processing manager have

been able to operate more or less independently.

Each had a constituency of users able to maintain

a marked level of distinction between the three

classes of support services. Now there is a need

for greater interaction, a need that will increase

with time.

Equipment and service providers from each of

the three sectors have moved into areas served by

the others. Computer manufacturers offer word

processing systems; some word processors now

have the same capabilities as small to midrange

computer systems. All offer telecommunications

equipment, and telecommunication providers are

52-644 0 - 85 - I 1
310 ● Automation of America’s Offices

beginning to offer processing services. From the

point of view of the user, this competition is probably beneficial, but each kind of provider may have

difficulty in understanding the nuances of new markets. For exampIe, the firm that has been successful in providing word processing equipment may

not grasp all of the operational ramifications of

expanding its line to include capabilities normally

associated with data processing.

The Merger of Telecommunication

and Information Processing

In 1956, AT&T, in a consent decree, agreed that

it would not build data processing machines for

sale on the open market. In the mid-1970s, it

offered for sale a terminal that had some processing capabilities; and the question of whether that

violated the 1956 consent decree led to an inquiry

by the Federal Communications Commission,

called Computer Enquiry II. One of the purposes

of this proceeding was to establish a line of demarcation between telecommunication and data processing equipment and services. The final report

sidestepped the issue; it failed to differentiate between telecommunication and data processing, but

defined a set of basic telephone services that could

be offered by AT&T and enhanced services that

could be offered through an arm’s length subsidiary. This put to rest the assertion that telecommunication and data processing services and equipment could be differentiated. The interaction of

the two technologies has changed the fundamental character of both.

One result is the ability to deliver information

processing services directly to the end user through

a variety of system configurations, Terminals can

be connected to a central processing facility

through either the conventional switched telephone

network (dial-up service) or through a dedicated

network “owned”2 by the user organization. In this

configuration, all processing takes place at the central site. A variation of this substitutes computers

for the terminals so that some of the processing

is done at the user location and some at the central location.

‘An “owned” network, more often than not, will make use of circuits

that are leased from a common carrier and dedicated for the use of the

lessee. In some cases, organizations wilf build and operate their own

telecommunication facilities that may include such diverse components

as ground stations for use with satellite transponders, microwave towers, and fiber-optic cable. The balance between leased and owned facilities is struck by each organization to be consistent with the cost schedules for the alternatives and other, noneconomic consideration (e.g., the

organization makes the judgment that it does not want the problem

of operating a satellite Earth station).

Alternatively, a communication network may include only small computers under the direct control of end users, using the network facilities to

access data wherever it is located. Processing functions are controlled by the end users with, possibly, some coordination activities being the responsibility of a central data processing function.

Telecommunication facilities can be designed so

that they perform processing functions as well as

provide a conduit for moving information. For example, the network can convert codes used by one

type of equipment to a format usable by another

so that the two can exchange data. Network

switches can route data between locations on the

basis of address information that constitutes part

of the message, They can also combine information from a number of incoming messages into

another that is sent to a specified destination,

Advanced telecommunication equipment available for offices can select the lowest cost alternative for routing each call, with some calls routed

over one of the public long distance services and

others over the organization’s private network.

Some equipment can combine voice with data traffic on a common internal network. Computers that

comprise an office local area network function as

the switches for the network while at the same time

providing its data processing capabilities.

Broad Trends in Telecommunication

and Information Processing

Technologies

The foundation of new office technologies is the

integrated circuit. The equivalent of hundreds of

thousands of transistors can be built on a silicon

wafer with an area of a fraction of an inch. Although many argue that the limits of silicon-based

chip technology are being approached, the component density of chips can continue to increase at

least in the short run. Alternative technologies are

likely to become a factor in the market in the 1990s.

Gallium arsenide, for example, offers potential

advantages in speed relative to silicon oxide technology, and may provide a foundation for new materials that are more optimal than silicon for

microelectronic circuits. Chips that have circuit

components distributed in three dimensions rather

than two are likely to be on the market in the relatively near term, with improved performance to

price ratios relative to those now available.

Increasing the number of components that can

be built into a single integrated circuit, by reducing the physical size of a circuit increases its speed
— —

App. A— The Technology of Office Automation 311

. — —

Photo credif Be// Labs

One of the continuing trends over the last several

decades has been the reduction in the size of the

microprocessor. This shows a very large-scale

integrated memory management chip.

and hence the computational power of devices. As

production volumes grow, the prices of chips fall.

Generally, this is translated into increased performance to cost ratios for equipment. Fewer chips are

required for end-user devices, again lowering the

cost to build them and reducing the cost of maintenance.

Thus, the cost of office equipment will continue

to decrease, but they will not go to zero; the bottoming of prices is likely in the next few years.

Beyond that, the benefits of technological improvements are likely to be in the form of improved performance at relatively stable prices.’

Optics4 may provide an alternative to electronics

as the basis for the operations of computing and

communication devices. Already, fiber optic conductors are being deployed widely in telecommunication networks. They offer advantages over cop-

‘This statement has to be taken with a grain of salt. In the early

1970s a calculator with four functions, memory, and square root sold

for something over $100. In the last year, a major manufacturer of electronic equipment gave away such a calculator as part of a promotional

campaign. This adds some credibility to the argument that equipment

could become a ‘‘throw-away provided at no cost to the user who buY, s

some package of services.

‘Computers and communication devices can be built of components

that manipulate light waves just as microelectronic devices and conventional communication network components manipulate electrical

currents.

per wire, microwave and coaxial cable technologies

in the form of reduced physical size, elimination

of interference between messages carried over conductors in a common cable, and increased security

(because fiber optic circuits are more difficult t o

tap). The use of optical devices in switching and

storage devices is still a subject of basic research

and is not likely to be a significant factor in t h e

market in the near term. Such devices, if perfected,

could offer advantages over microelectronics in

that they could be less susceptible to electrical and

magnetic fields generated by office machinery, In

addition, since they would not emit electromagnetic radiation that can be detected and decoded,

they would provide more data security.

Because the prices of computer components are

expected to continue to decrease, it is possible that

functions now performed by software maybe built

into the hardware. For example, one of the most

popular spread-sheet programs is now built into

a portable lap-top computer and operates as if it

had been loaded as a diskette. On larger systems,

complex programs such as language processors,

database systems and communication processors

may be included in machine hardware.

A logical extension of this concept is the development of limited function machines dedicated to

a specific task or a narrowly defined set of related

tasks. Familiar examples of dedicated devices include stand-alone word processors and hand-held

calculators.

But running counter to the trend of building increased capabilities into the hardware is the recent emergence of reduced instruction set computers (RISC).’ These computers have 50 or so

instructions in their repertoire rather than the well

over 100 found in conventional machines. By processing a few types of instructions very quickly,

RISCs can in theory outperform those with more

complex instruction sets. A greater burden is

placed on software designers to optimize their designs in light of the attributes of the machines.

RISCs have gained some degree of commercial

acceptance, because tests have shown that in some

applications they can outperform conventional

computers. However, all of the reasons for this improved performance are not fully understood.

Changes in conventional computers that would use

some of the coding techniques and architectural

features found in RISCs may yield significant improvements in their performance.

““R ISCs-Reduced Instruction-Set Computers–5fake I,eap, ” SJrstems and Software, December 1984, pp. 81 ff.
312 ● Automation of America’s Offices

The users of office automation are less interested

in the nuances of the technologies used to implement systems than they are in the functional characteristics of those systems. Just as most automobiles are bought to provide transportation, not as

a hobby for the amateur mechanic, most users of

office systems want specific tasks performed and

care little about the inner workings of the computer. Designs of newer office systems are generally moving in the direction of insulating the user

from the specifics of the underlying technologies.

Many of the application programs now commonly used in offices are accompanied by thick

jargon-laden manuals purporting to inform the

user how to obtain the promised benefits from a

package. Some of the newer systems, on the other

hand, are self explanatory and are accompanied

by minimal amounts of paper documents. In the

long run, information processing systems will, like

the automobile, evolve to the point where the user

can operate them with only minimal understanding of their underlying technical structure.

As the capabilities of applications and hence

their complexity increase, total development costs

for office systems have tended to rise. However,

emphasis is moving from systems tailored to meet

needs of specific organizations to those having

sufficient generality to meet diverse needs. Because these generalized capabilities can be sold in

volume and development costs can be spread over

large user communities, their price should fall.

These tendencies toward lower priced microelectronic circuitry and systems designed to minimize

requirement for technical expertise, together with

the merger of telecommunication and information

processing imply:

●

●

a broad and increasing choice among technological options for accomplishing informationhandling objectives;

a strong movement toward distributed data

access and data handling, usually superimposed on rather than superseding centralized

automatic data processing;

more and more capture of data at the point

of origin, with decreasing need for repeat keyboarding and centralized data entry; and

unlimited capability for communication, between devices, between organizations, and between locations.

Managers will have the freedom to define organizational policies and objectives with more

alternatives for implementing them. This creates

a greater need for analysis to make good selections.

Both for the designer and user of office systems

there may have to be a significant rethinking of

the way an office operates if the potential benefits

of the technologies are to be realized.

Trends in Specific Technologies

From a functional perspective, information processing and telecommunication technologies can be

grouped into five broad categories: 1) processors,

2) input technologies, 3) storage, 4) communication, and 5) software. Trends in each of these areas

will be discussed in the sections that follow.

Processors

The Microcomputer.–The microcomputer that

is becoming ubiquitous in many offices is the smallest of computers, followed by, in increasing order

of size, minicomputers, mainframes and supercomputers. These constitute a continuum of capabilities, with considerable overlaps at the boundaries

between classes. A large microcomputer may have

roughly the same capacity as a small minicomputer.

Conceptually, given enough time, any computer

can perform all of the computational tasks that

can be envisioned. They all operate on the same

principles. Realistically, however, large computers

are necessary to perform tasks that require the

manipulation of large databases and extensive

computations. A large computer can also simultaneously support many small tasks each of which

could be handled alone by a smaller computer.

Thus, one alternative for offices is to provide all

processing support from one or more large computers with many terminals.

Generally, microcomputers are designed to be

used by a single individual and to perform one task

at a time. In 1985, a microcomputer for use in the

office can be purchased without a printer for $1,500

to $3,500. A printer, depending on the quality of

the output desired, can be bought for an additional

$300 to $2,0000

Microcomputers capable of supporting multiple

tasks and several users simultaneously are coming on the market. Programs that allow two or

more programs to be active simultaneously are

available. Networking microcomputers has become

possible using programs and hardware components

purchased off the shelf. A variety of generalized

spread-sheet, word processing, accounting and utility packages are available from both computer

manufacturers and third-party suppliers. Thus, office workers will have under their direct control

computer power that until very recently was found
App. A—The Technology of Office Automation ● 313

only in corporate data centers. At present they

need to develop the expertise to modify existing

procedures and design new ones to take full advantage of the available capabilities. But this could

lead to a significant redistribution of function and

power between data processing groups and end

users.

Stand-Alone Word Processors. -Stand-alone word

processors are microcomputers whose hardware

and software configuration has been optimized for

word processing. As other software, such as data

management and spreadsheet programs, are made

available for them, the dedicated word processor

becomes indistinguishable from a general purpose

microcomputer. But as yet, with a few exceptions,

the manufacturers of word processors have not significantly broadened the application packages for

these machines.

Electronic Typewriters. –Electronic typewriters

have limited word processing capabilities built into

the circuitry of the machine. The repertoire of the

machine is fixed and the purchaser does not have

the option of either expanding or modifying the

capabilities.

Integrated Office Workstations.–Integrated office workstations are now being developed that

combine a personal computer, telephone, and modem in one desk-top device, providing a voice, text,

and data terminal that can communicate with other

computers. First generation versions are now coming on the market, Whether this market will develop probably depends on how integrated workstations compare in price with enhanced versions

of conventional personal computers. The end that

is sought through integrated workstations is usually to allow files and documents in preparation

to be shared and passed between coworkers, or between professionals and support personnel. However, some designers speak of the need for a “multifunctional electronic office automation system

compact enough to fit into a relatively small office

area” and including in one unit an electronic typewriter, personal computer, word processor, laser

printer, copier, electronic mailer, filer, telephone,

modem, and facsimile machine.6 Many users are

likely to create their own integrated workstations

through add-ens, modifications, and software packages. Ultimately integration will come about in a

different way; it will result from the fact that

almost all information will routinely be available

in digitized form.

‘John Vacca, “Key to Automated Systems Lies in Miniaturization, ”

The Office, February 1985, p. 66.

Minicomputers. -Minicomputers trace their lineage to the requirements of scientists for low cost

computers for laboratories. They were the earliest

means of providing end-user computing. However,

they were delivered with little if any software, and

it was the responsibility of the users to do whatever was required to get useful work out of them.

Minicomputers have, however, evolved to achieve

many of the characteristics of mainframes. They

support large amounts of data storage and permit

multiple users simultaneous access. Often, minicomputer installations are run by a data processing

manager supported by a small group of programmers, The principle advantage of minicomputers

is that they offer the midsize organization considerable power at a cost significantly below that of

a mainframe. Generalized applications for accounting, inventory control, and other applications are

available to avoid the cost of developing custom

software. The equipment is self diagnosing so that

much of the required maintenance can be handled

by replacing failed components from an inventory

of spares.

Most minicomputers offer office-oriented software such as word processing and can support networks of terminals in addition to supporting conventional data processing services. Some are in

direct competition with the shared-logic’ systems

sold by the office machine manufacturers. Some

firms that entered the market as office machine

providers have expanded their product lines to include shared-logic systems with a significant range

of data processing capabilities. Some of these systems fit at the top of the range of microcomputers

while others can be classed with minicomputers,

However, all computers that offer users the opportunity to share resources, whether they are labeled

shared-logic word processors or general purpose

minicomputers, create new problems for managers

who must allocate the shared resources among

competing demands and at the same time protect

the integrity of the organization’s data.8

Mainframe or Large-Scale Computers.–Mainframe or large-scale computers are normally associated with data centers and/or data processing

departments. They are capable of supporting a

large number of users simultaneously, providing

them access to large databases and libraries of com7 A shared-logic word processor uses a central computer to support

a number of word-processing terminaIs. Many are, in reality, minicomputers that are limited only by the software that is available to support them.

“The problems of resource allocation and system integrity exist in

the microcomputer/stand-alone word processor environment as well.

But, they change in substance and magnitude in shared resource

systems.
374 ● Automation of America’s Offices

puter programs. Although these computers are capable of supporting routine office operations such

as word processing and small database systems,

they are not much used for such limited applications.

Where processing capabilities are distributed

among many devices in an information processing

network, large-scale computers may function primarily as repositories for data and programs that

are to be shared throughout the organization. Data

and programs can then be communicated from the

mainframe to a small computer for processing.

Drawing from databases stored on mainframe computers ensures that all users will have a common

base of information, but new problems of coordinating data input and updating activities are created. Generally, office work does not challenge the

computational capabilities of mainframe computers, but as applications that include voice and pattern recognition become available, greater processing capabilities may be required.

Supercomputers. -Supercomputers are very high

performance machines with capabilities approaching 100 million instructions per second. These systems are being delivered to universities, government agencies, and a few private companies who

have particularly intense computational requirements. Machines in this class as yet so far exceed

the requirements of the office that they are not

found in conventional data processing centers.

The laws of physics limit the computational

speeds of conventional computers. Therefore, the

supercomputers are structured to perform many

operations in parallel rather than sequentially.

Problems must be described in terms that make

it possible to take advantage of parallel processing. Descriptions of office operations with this in

mind have not been accomplished. Potential office

applications for supercomputers that come immediately to mind include the processing of voice input by pattern recognition.

The range of processor capabilities now available more than covers the range of office needs.

Moreover, technological developments are likely

to proceed at a pace sufficiently rapid to stay ahead

of the ability of office applications to challenge

them. More importantly, users of office automation will be able to acquire processing capabilities

appropriate to their needs and as those needs increase, expand those capabilities incrementally.

Even the smallest users are likely to be able to

enjoy the benefits of the technologies.

Data Capture Devices

The Keyboard.-The keyboard is likely to remain

the dominant data input device at least through

the remainder of this century, augmented by the

mouse, wand, touchscreen and other devices for

specialized tasks.9 But this assumption, while it

is perhaps the most obvious one, can certainly be

questioned. In fact, the most important question

about office automation, from the standpoint of

effects on future employment, may well be the outlook for input technology, especially optical character recognition.

OCR.–State-of-the-art optical character recognition (OCR) devices can now read typed, printed,

and some hand-printed material in a limited number of fonts. ’” Some OCR equipment can automatically feed about 75 pages into the reading device;

recognize characters in 23 different fonts, whether

in 10 or 12 pitch or proportionately spaced; read

the material into the computer’s memory at the

rate of one page every 15 seconds; and format the

text. The claimed error rate is one per 300,000 characters. Such systems are now being offered for

prices under $12,000.

OCR can already input a typed document into

word processing 40 to 50 times faster than a typist can rekey board it.11 It can capture data from

order forms, application blanks, ticket stubs, etc.

Publishers are beginning to instruct authors to use

specific fonts on their typewriters or computer

printers to avoid the need for retyping. Banks are

now introducing Automatic Teller Machines that

will accept, read, and cash a check.

Within a decade OCR may be able to read all

standard fonts, and have some capability to recognize, isolate, and read or copy specific bits of

information. It will be much more difficult to de9The mouse is a palm-sized device, used with some computers, that

when moved over a table surface positions a cross-hair curser on the

VDT, using mechanical, mechanical analog, opto-mechanical, optical,

and hybrid sensors. Touch-sensitive screens allow direct positioning of

a cursor on a screen through touch; one approach surrounds the screen

with infrared light-emitting diodes and sensors, the other places a resistive or capacitative layer on the screen that acts as a pressure-sensitive

switch. While these kinds of input are swifter than keyboarding instructions, they have limited uses in most offices.

‘“With OCR, a page is scanned with light. White, or background,

portions reflect the light and inked portions absorb it. The resulting

image is recognized, digitalized, and fed into a circuit. There are two

approaches to character recognition-matrix matching (the character

is gridded and compared to templates) and shape analysis (features of

the character are abstracted and used for identification). The latter is

most useful where characters are less predictable, as with handwriting.

“E. Polizzano, The Office, February 1985, p. 75.
——

App. A—The Technology of Office Automation ● 315

velop OCR devices that can read handwritten material except in very limited, constrained form.

During this early stage of office automation,

some offices are using OCR to deal with the problem of incompatibility of equipment. Advanced

OCR systems can take the hard copy printout from

one computer or word processor and forward it into

incompatible systems without rekey boarding. *2 In

another current application, time-sensitive forms

for reporting hours worked are marked by the

worker with a felt tip pen, collected or “batched”

and fed into a scanner, which checks them for

length and completeness, flags errors, accepts only

data thus checked, and stores it for further processing. OCR systems are now being used for processing subscriptions, proxy cards, surveys, orders,

sales call reports, piecework payroll data, utility

meter-reading, tax bills, and tax payments.

OCR print elements are readily available now

for office printers. If OCR reading capability becomes a standard component or add-on to standard office computers, printed and typed documents

coming from outside the organization can be entered without rekey boarding. The possibility of

transferring information from one medium to

another (e. g., from a printed page to a computerized data bank) without a second keyboarding, or

capturing data at the point of origin (directly from

a ticket agent in the field, from a customer’s order, or from business correspondence) rather than

sending it to the receiver’s central ADP unit could

greatly reduce the volume of secondary data entry that is now done. If OCR can be improved so

that it can read handwriting, the potential for laborsaving is even greater.

Optical character recognition technology has not

been widely introduced into offices in the past because of relatively poor performance and high

costs. Software has been a particular bottleneck.

But performance is now rapidly improving.

In principle, combining OCR with facsimile technology (FAX, or electronic transmission of images

from hard copy to hard copy) is attractive since

OCR involves substantial data compression. This

would allow FAX transmission to consist of intermixed ASCII code and digitized image bits. For

this purpose, OCR will have to handle graphics,

which it cannot do yet,

With the present rate of OCR development, by

the end of this decade today’s volume of manual

data entry could be reduced by a significant

amount, with a much greater reduction by the end

of the century. The amount of data that is collected

‘Polizzano, Ibid., p 75,

and used is of course steadily increasing, and likely

to increase still more if the cost of data-handling

decreases. Nevertheless, since more and more of

the data will be digitized from the beginning, or

can be captured with only one keyboarding at one

point early in its processing, the amount of manual

data entry to be done is likely to decline steadily.

OCR is a technology for translating hard copy

into machine readable form. But as time goes by

more and more data will be digitized from the beginning, and be translated into hard copy only

when a paper version is needed.

Machines can read a variety of formats to capture information. Optical wands can read bar codes

and alphanumeric characters printed in suitable

formats. The scanner used in supermarket checkout lines and wand readers used in retail stores

to gather inventory data are examples, Mark sense

document readers have been used in a wide variety of applications for years. In some applications,

the IRS Form 1040 EZ, for example, computers

can read manually printed characters. Cash registers and a variety of machines can be connected

to computers so that data capture becomes a byproduct of operations such as recording the details of a sale.

Speech Recognition Input Technology .–Speech

Recognition Input Technology (SR) could in theory mean that data need not be keyboarded even

once. This technology is however likely to develop

much more slowly than OCR. 13 State-of-the-art,

commercially available SR technology can recognize from several hundred to 5,000 different words,

spoken by a single individual for whom the device

has been programmed. However, for most SR systems the words must be spoken clearly and with

a pause between them, and there is still an unacceptably high error rate. Vocabularies are still too

limited to be very useful.

Speech recognition has been used in some environments with limited success. For example, baggage clerks at airports speak flight numbers for

routing baggage through automated baggage handling equipment.

‘ ‘Speech creates variations in air pressure that are transduced into

electrical signals that are then broken down into their component frequencies. In the processing system, words have to be time-aligned to

compensate for tbe variations in their length when they are spoken.

When a machine is “trained” for one speaker, he or she creates word

templates to which the SR system matches words. In another approach

the system extracts consonant and vowel features and recognizes invariant relationships among them. This is aimed at allowing the s}’stem to accept voice input from any speaker, but at present it is difficult to reduce the error rate below 10 percent. Continuous speech

recognition is also complicated by the fact that the acoustic properties

of a word are modified by adjacent words and by its place in a sentence.
316 ● Automation of America’s Offices

IBM and Kurzweil have demonstrated voice-

-activated typewriters that may represent steps on

the road to viable machines for use in the office.

It is conceivable that a commercially viable voice-

-activated typewriter will be marketed by the middle of the 1990s.

A few SR developers are now claiming to offer

continuous speech recognition-that is, recognition of speech at a normal pace and rhythm, without artificial pauses; and the ability to accept voice

signals from people for whom the equipment is not

specially programmed. A vendor recently announced

a possible breakthrough in SR technology-a digital filter chip integrated circuit that, when used

in sets, is said to allow something approaching the

sound processing capability of the human ear. It

is to be combined eventually with artificial intelligence techniques to allow software to deal with

such peculiarities of the English language as homophones (words that sound alike, such as “to,” “two,”

and “too’)14

If SR is improved so that it can recognize up

to 10,000 or 15,000 words of continuous speech,

from multiple speakers, it can be used to put data

into a computer for memory or processing, thus

automating many office functions—taking dictation for correspondence, dictating rough drafts of

documents, accepting commands to the computer,

recording observations as a worker reports on other

activities, keeping minutes of meetings, and perhaps most importantly accepting customer’s orders,

complaints, or inquiries over a telephone. If it can

eventually be combined with speech synthesis output technology, the computer might provide many

basic customer services without human intervention or with very little human backup—for example, taking airplane or theatre reservations over

the telephone.

Even by more conservative expectations, SR

could make some of today’s data-entry work unnecessary by the end of this decade. It is conceivable that OCR and SR together could displace a

significant amount of data keyboarding during the

1990s.

A related technology, voice identification, may

have some special uses in offices; for example, providing security for facilities or computers by identification of authorized users.

In general, technology will diminish the distinction between information that is machine processible and that which is not. The number of cases

“Kurweil Applied Intelligence, Inc.—a description of the new chip,

KSC 2408, appeared in Technology Watch, vol. 5, Nos. 1&2, NovemberDecember 1984; and Fortune, Jan. 7, 1985.

will increase where users will be willing to accept

information displayed on a screen in lieu of having

it printed on paper. Many people will find that

using a computer keyboard or alternative dataentry device gives them more flexibility and is

preferable to the traditional pad and pencil.

Storage

Conventional Storage Media. -From the time of

the first computers, there was a very strong dichotomy between machine processable data and

data that could be easily read and used by people.

Punched cards, magnetic tape and disks and

punched paper tape not readable by people were,

and continue to be, the data-storage media. The

computers that could read them were not readily

accessible to users. This has changed to an extent

as terminals and personal computers have become

readily available.

Paper is a “people medium. ” Together with microfilm it is the primary means of creating a permanent record and a primary way of transferring

information between people, and also the primary

means used by computers to convey their output

to users. Paper and microfilm are not media that

have been usable by computers for storing data

for further processing.

The media used for storing data should support

the delivery of data to the user’s location. Therefore, a key element that distinguishes alternative

data-storage media is the degree of portability it

offers. A large capacity magnetic disk is permanently attached to a computer. If the data is to

be transferred to another site, it must be transcribed to another medium. Magnetic tape and

portable disks can be shipped without transcription, but are not efficient if only a limited amount

of data is to be moved. Punched cards, on the other

hand, are very efficient for moving limited amounts

of data, especially if it can be put in the standard

80 character format.

Traditional data processing installations have

always stored large amounts of data primarily on

magnetic disk and tape. These media support databases that contain millions of pages of data. Disks

are available in two broad classes. The first, capable of holding hundreds of millions of characters

on a single unit, are the so called “hard” disks that

are permanently attached to a computer. The large

capacity disk with a system that permits the sharing of resources can put immense amounts of data

within reach of the users on demand. A single large

capacity disk drive can store well over half a trillion characters. Even the magnetic disks used with
App. A—The Technology of Office Automation ● 317

.

microcomputers and the smallest minicomputers

have on-line storage capacity that can approach

100 million characters.

The great volume of information that can be

stored on one large-capacity disk creates some

problems. A large number of people within an organization may need to access the data at one time.

Getting access to a specific bit of data maybe slow.

If the data is stored on or in a limited number of

physical locations, the problem of contending for

access will always arise. There may be technological ways to provide multiple access paths to the

same surface (whether that be a disk, tape, or other

object), but as will be discussed later, optical disks

designed for small computers may make it practical to provide multiple copies of databases.

This however creates other problems. With many

copies of the database there is no way for an organization, or user, to make sure that all copies are

identical, or are properly updated and corrected.

This can also raise legal, ethical, and psychological problems—e.g., questions about the ownership

of information and willingness to share it. Choices

about data-storage mechanisms will be a matter

of costs and management priorities.

Floppy disks are generalIy used with microcomputers and have capacities that range in the hundreds of thousands of characters. These offer the

advantages of low cost and high portability; they

can even be sent through the mails. Three sizes

of floppy disks are used with office systems—3.5

inches, 5,25 inches and 8 inches in diameter. The

last are most often used with stand-alone word

processors, the first and second by microcomputers. The 3.5 inch disk is just entering the market but may become the medium of choice. It is

packaged in a hard case that protects it from inadvertent damage, and its capacity of about a half

million characters far exceeds 360,000 character

capacity of the most popular 5.25 inch floppy disks.

The portability of floppy disks can be in part

illusory. Virtually every word processor using eight

inch disks uses a disk-storage format that is incompatible with all others. The same is true for

5.25 inch disks that are used on microcomputers

supported by the CP/M 8015 operating system. If

data and programs are to be transferred on disks

between machines that use incompatible formats,

a conversion process is required. There are businesses that specialize in offering conversion serv-

‘“An operating system is a program for a computer that performs

many of the overhead functions required to manage the machine,

Among the services it provides are those needed to move data and programs between external storage and the main memory of the computer

for processing.

ices in many major metropolitan areas. On the

other hand, floppy disk compatibility does exist

among office microcomputers that follow the DOS

format used, for example, by the IBM/PC, and this

format is becoming an industry standard for office microcomputers.

The storage medium used determines to an extent the degree of control managers have over the

data resources. Permanently mounted (fixed) disks,

can be reached only through a computer to which

access can be tightly controlled. Magnetic tapes

are stored in a controllable central facility. The task

of controlling access to data stored on floppy disks

is much more difficult.

In spite of talk of the paperless office, paper could

be widely used as a medium for storing data in

some future automated offices. For decades, the

punched card has been valuable as a turn-around

document, for example, inventory cards and checks

printed on punched card that could be machine

processed. Today, the punched card has disappeared from many applications. But technology

is now available that can read data that is printed

in a variety of formats. Packages can be imprinted

with a machine readable bar code and credit cards

with numbers in a scannable type font. In addition, standard fonts used by typewriters can be

read by optical character readers.

Therefore the printed page can be used as an

external storage device for data that will be processed by computers, because the cost of converting the printed image to the electrical signals processed by a machine is becoming relatively small.

Operationally, however, devices that read printed

pages are not likely to replace the magnetic disks

and tapes that are used to store data since the character reading devices are much too slow for anything but capturing data inputs for office systems.

Processing will continue to be performed using an

electrical representation of the data, but much of

the data may be captured initially by scanning.

From time-to-time there is heightened interest

in the use of microform (microfilm or microfiche)

technology in the office. It is often used for storing information where large volumes must be archived for an extended period. Financial institutions routinely microfilm all checks. Computer

manufacturers distribute infrequently used documentation on microfiche. There are some systems

that facilitate the retrieval of information from

microform files by coupling a computer to the reading device. Microform systems have been proposed

that would have information recorded as conventional images in one portion and as a machine

processable hologram in another.

52-644 0 - 85 - 12
318 Automation of America’s Offices

Optical disk technology may provide a viable

means for on-line retrieval and processing of the

types of records that would now be stored in a

microform retrieval device coupled to a computer.

If so, microform may be permanently relegated

to the task of preserving large volumes of infrequently accessed records.

Optical Disk Storage.–Optical disk storage can

potentially provide 25 times the per-disk capacity

of magnetic disks, at one-thirtieth of the cost. The

equivalent of 250,000 typed pages can be stored

on one disk.16 A read-only disk already available

in the United States carries the equivalent of

100,000 typewritten pages on a 4.7 inch diameter

disk. A number of optical disks, making up a very

large database, can be stacked and sorted and accessed like platters in a jukebox.

Optical disk storage is still in the development

phase, but the development is moving rapidly and

reaching the market faster than expected even a

year ago. It is likely to have a major effect within

this decade. Diode lasers are used for “writing”

data on optical disks in digital form. The disks may

be “read-only,” which means that users cannot

change them; or they may be “write-once,” meaning that users can record but not wipe clean; or

they may be erasable. Read-only disks are useful

mostly for archiving.

At least 30 American companies are working on

development of optical disks, but it was generally

believed until recently that the Japanese held the

lead in development of erasables. In March 1985,

3M Corporation announced that it would immediately begin producing (in small quantities) 51.25 inch

erasable laser disks that will store the equivalent

of 250,000 pages, the capacity of 25 magnetic hard

disks of the same size. ” They are designed for

microcomputers, and will allow data to be moved

and changed or erased just as on magnetic disks.

This will let personal computers perform many

tasks that until now could only be done on a

minicomputer or mainframe.

Because optical disks have such a large capacity it becomes reasonable to use them for storing

images as well as alphabetic and numerical data.

This capability will make it possible to organize,

process, and present data more effectively than

is possible when image and textual data must be

stored separately.

‘“In early 1985 a draft of this report said, correctly, that the best

commercially available optical disk (read only) stored 1 billion bytes or

the equivalent of 40,000 pages. By June that statement was incorrect,

This is an example of how rapidly events are moving in this field.

“Brian Dumali, “Here Comes the Erasable Laser Disc, ” Fortune,

Mar. 4, 1985, p. 100.

Image Processing.–Image processing capability

will be readily available as part of, or an add-on

to, small business computers in the near future;

it is already available from some vendors. It will

allow drawings, photographs, maps, and other

forms of graphic information to be scanned, stored,

incorporated into databases, copied, or rearranged.

It will allow parts of these images to be removed,

added to, switched to a new location, or otherwise

modified. Image processing has many uses in a

general office, such as in presentations and facilities planning, and it will be very important in some

specialized offices such as those in the real estate

industry, marketing, and advertising. It should be

noted that for the unscrupulous, image processing can be a tool for counterfeiting, misrepresentation, and fraud.

Special-Purpose Terminals.–With falling hardware prices, it is reasonable to expect the development of special purpose terminals. Some are already used, for example, to gather inventory data

through either a hand held keyboard or an optical

wand. Pocket-sized terminals with a key pad and

small display screen, that can be easily connected

to a telephone, may become available soon.

Portable computers that maintain memories

when the power is turned off can be used to gather

data to be transferred at a later time to another

computer, either directly or over the telephone

lines, In this way, a traveler can, while on an airplane, create a document to be transferred to the

main office system for further processing and archiving.

Personal Storage Devices. -Machine-readable and

updatable data storage devices exist that can be

personally carried or attached to an article in transit. Included among these are the familiar credit

card magnetic stripe technology18 and the “smart”

card that contains a microprocessor and memory. 19

— “The fare card used on the Washington, DC, subway system provides one example of what can be done with magnetic stripe technolOgy. When the card is purchased, the purchase ~ralue is recorded on the

stripe, Then, whenever the user enters the system, the station of origin

is recorded. At the destination, the fare is ccimputed based on the

recorded data and the value of the card decremented appropriately. Similar cards could be used to capture and store data for office applications

where very low data volumes are involved and the connection of computers by telephone is unwarranted.

‘“A Canadian company has designed a hospital information system

around the smart card. When the patient enters the hospital, a card

is created. Then the card moves with the patient and as each service

and product is dispensed, the memory of the card is updated using a

device built into a microcomputer. When the patient is discharged, the

data that has been captured during the hospital stay is retrieved and

a bill is prepared. It is conceivable that the “smart” card, originally

designed for executing financial transactions, could find significant application as a data capture and storage medium in a number of office

applications that range from systems for prov]ding security to those

that require capturing transaction data.
App. A — The Technology of Office Automation ● 319

Communication

In the present context, communication includes

all technologies that are used to transmit data

between people, people and computers, and computers.

Telecommunication Networks.–The backbone of

office telecommunication is the switched telephone

network. It was designed to handle voice communication passing between individuals, and still

functions primarily in this mode. However, data

comprises a growing portion of the traffic.

For many organizations, the switched telephone

network consists of two relatively distinct parts.

First is the conventional and ubiquitous interorganizational component, the dial telephone service. No operator intervention is required even for

many international calls. Credit card calls can be

initiated using the 10 key TouchTone’h

’, and some

pay stations are now being equipped with devices

for reading billing information from the magnetic

stripe on the back of a credit card.

The repertoire of services available from the

switched telephone network will expand over the

remainder of the century unless legal or regulatory constraints are imposed. Simple services such

as call waiting, call forwarding and three party conferencing are already offered in many areas. Some

code conversion services offerings by local operating telephone companies were recently approved

that would translate the signals from one type of

computer or terminal to a format understandable

by another. Such services will be valuable to offices

that until now had to provide code translation

through their own systems. Not all businesses are

prepared to deal with the code conversion problem and the detailed technical questions of interchange.

The future is likely to see such services as voice

message storage offered through the switched telephone network. Virtually all telephone traffic, including voice, will be transmitted digitally. Organizations will no longer have to maintain separate

networks for voice and data communication. It will

also be technologically possible to deliver processing services through the network, including the

routing of messages based on their information

content. For example, the interchange of financial

transactions (now accomplished by financial institutions) could be a service of the switched telephone

network, and this could include data processing

such as the accumulation and reduction of transaction data and following the enroute status of

shipments.

The opportunity for offering an increasingly

large variety of telecommunication services through

the switched telephone network derives from the

fact that much of the switching capacity now in

place is provided through computers. Eventually,

all switching will be done by computers. Already,

much of the traffic between major switching centers is transmitted digitally; and customers are

able to subscribe to on-site digital transmission

services. They are then able to mix digitized voice

and data traffic. Much attention is now being given

worldwide to the concept of an integrated service

digital network (ISDN) that would make digital

transmission of all data, voice, video, and facsimile traffic universally possible over a common network.

For some years, 1ong distance telecommunication services have been offered by competing providers. However, since the divestiture by AT&T

of its operating companies in 1984, the choices have

become significantly more complex. Organizations

now have the option of using either the switched

telephone service or operating their own telecommunication networks, Most often, a private network is assembled using circuits and support facilities leased from telecommunication providers,

some combination of the local telephone company,

and one or more providers of long distance services. However, some organizations choose to build

and operate telecommunication networks that include privately owned facilities as well as capacity

leased from common carriers. Alternatives include

leasing of transponders on satellites, the building

of microwave systems and the construction of conventional telephone circuits. One problem is that

large users of telecommunication services often

find it in their interest to by-pass public utilities,

depriving them of significant revenues.

A variety of providers offer business telecommunication services. Third-party operators either

build facilities or lease them from another carrier

and use them to offer services to those who cannot justify developing private networks. Packet

switching is used to obtain the high rates of utilization that are needed to justify third-party networks. Messages are broken into data packets that

are individually routed to their destination and

reassembled to constitute the original message,

Network operators can bill users on the basis of

traffic volume rather than time and distance, because the packet switching technique levels the

load across the available network facilities rather

than allowing it to concentrate on the paths be-
320 ● Automation of America’s Offices

tween points with the highest volumes of traffic

flow.

Many localities are wired for cable television, and

many of the newer systems are capable of two-way

communication. Because television requires a

broad channel, cable systems can handle large data

volumes. In some areas, such as New York, cable

operators find it profitable to make some of their

capacity available for transmitting voice and data.

In congested areas, not all telecommunication

options are available. For example, in New York

City it has become very difficult to build private

microwave facilities because buildings often obstruct the proposed path for the signals and facilities already in place cause electromagnetic interference that cannot be neutralized. Routing

communication to a central antenna “farm” located in an area relatively free of these obstructions (the teleport concept) provides one alternative for neutralizing this problem. In some cities

the cable tunnels beneath the streets are so congested that there is no room to run additional cables. Fiber optic circuits provide potential relief

from this problem because they provide substantial increases incapacity in significantly less space

than conventional cables.

Mobile Communications.— For local communications, offices also have the option of using mobile

telephone services. The most common are the

“beeper” services available in many areas. A person is alerted to a call by an audible tone generated in response to a signal sent by the service

operator and received by a carried device. Some

devices can visually display a message, eliminating the need to telephone the office for information.

Telephones in cars have been available for years,

but the technology severely limited the number

that could be used within a geographic area. A new

technology, cellular radio, has eliminated this limitation on the number of mobile telephones. In addition, the quality of the service with the cellular

system is significantly better. Companies requiring constant telephonic communication with people in the field can now have such service at relatively affordable rates. In the future, cellular radio

may also provide an alternative for delivering fixed

point telecommunication services to rural and remote sites more economically than is possible with

conventional telephone lines. Potentially, this technology could also permit the transmission of data

to and from mobile terminals, but not all of the

problems posed by this application have yet been

resolved. 20

PBX and Local Networks.—Managers of offices

are now faced with complex telecommunication

choices. A few years ago, arranging for telecommunication services required only a call to the local telephone company and everything was taken

care of, Today users can tailor services to their

needs and shop for providers who can offer the

required services most economically. However, the

user organization has to devote more resources to

analyzing the costs and benefits of alternative telecommunication services. To an extent, the settlement of the antitrust suit negotiated between

AT&T and the Department of Justice has led to

this increase in complexity. However, even without the divestiture, advances in technology were

increasing the options available to users.

Adding to the telecommunication options available to managers are other technologies available

for in-office communication. At the lowest level

are electronic replacements for the 1920s plug

switchboard to permit intraoffice communication

as well as connection with the external network.

Modern private branch exchanges (PBXs) can provide a variety of services, including the ability to

forward calls from one office to another and to automatically transfer calls to another number once

a predefined number of rings have gone unanswered. PBXs can be programmed to record voice

messages and to select from the alternative services available the most economical routing for each

call as it is placed. Some provide for the sharing

of internal telecommunication circuits for both

data and voice, giving the user organization the

benefit of a shared internal network.

Another alternative for use within an organization is a variety of local area network (LAN) technologies. These provide high-speed data communication for a variety of office machines, including

data-storage devices,21 printers, word processors,

gateways to external telecommunication networks

and professional workstations. Several technol-

“)Cellular radio operates using a number of low-power transceivers;

computers are used to assign traffic to the one of many antennas that

is best able to communicate with the mobile unit. As the mobile unit

moves from cell to cell, traffic is handed from one antenna to another.

This handoff procedure could introduce discontinuities in the signal that

offer no problems for voice communication but could present problems

for data transmissions.

“Most often disks that can be used to store data of interest to a

number of individu~s and/or organizational elements and shared by a

number of workstations,
—

App. A —The Technology of Office Automation ● 321

ogies for implementing LANs are in use; 22 and this

diversity of incompatible technologies using a variety of LAN architectures may present problems.

But most LANs include the ability to carry on communications over the switched telephone network,

so that the switched network becomes a common

facility over which dissimilar LANs are able to

communicate.

To an extent, modern PBX and LAN technologies are competitive. Both provide the ability to

switch data at relatively high speed between office machines. On the other hand, LANs will be

useful for voice transmission only to the extent

that the telephone instruments that are connected

to them can send and receive signals in a digital

format.

An interesting variant in telecommunication lies

somewhere between the public switched network

and intra-office communications facilities; this is

the smart building with which some realtors are

experimenting. These buildings are wired for telecommunications and data processing services so

that multiple tenants can use technologies available in the past only to large organizations. A

smart building may provide outlets that permit

all tenants to connect terminals to a common word

or data processing facility. Other outlets may be

used for telephone connections to a common PBX

that routes calls within the building or complex

without using the public switched telephone network, or routes external calls using the most economical service. High-cost facilities like laser

printers and reprographic facilities can be shared.

Once digital information has to be transmitted

more than a quarter mile over conventional telephone circuits, an instrument called a modulator/demodulator (modem) is required, to convert

digital signals used by the computers to or from

an analog signal that can be handled by the

switched telephone network.23 Commonly available

modems are capable of transmitting or receiving

30 or 120 characters per second over the standard

switched telephone network. Modems capable of

handling 240 characters per second are becoming

widely available. Speeds of 480 and 960 characters per second can be achieved by some premium

instruments.

—

Alternatl\c transmission techniques include broa[ihand and baseband signaling The technologies for managing traffic include token

ring passing and collision detection and retransrnis>ion in th[> c~ent of

a collision between messages.

- Actually, a digital signal can onl}’ be tran~mitted a few hundred

feet without a modem. }[oweyer, limited distance nlt}denls, low c{~st

rnodcls with limited capabrlitl[+, can be usc~d for di~tances under a quar.

ter mile.

Higher speeds require the use of circuits that

are dedicated to a specific customer. These may

be leased from a common carrier or built as a private venture. Commonly, these lines are rated at

19.6 and 56 Kb,24 The highest capacity lines are

called T1 carriers and are rated at 1.544 Mb. 25 Satellite transponders have capacities on the order

of 6 Mb.

Interactive communication that involves people

usually will not challenge the capacity of a circuit capable of handling 30 characters per second.

Higher speed circuits are needed only when large

amounts of data are to be transferred directly between computers.

However, there are technologies for multiplexing many signals over a common line. Thus, many

slow-speed conversations can be combined to take

advantage of the economies attainable when highspeed circuits are used. A company with offices

in two major cities may find it useful to provide

one high-speed circuit between the two points.

Some of the private lines can use the capabilities

of a PBX to connect with any number in the remote city through the local switched telephone network, thus bypassing the long distance dial-up network and its toll charges. This reduces the revenues

to the long-distance carriers, and, indirectly, revenues to the local-operating companies.

Communication Terminals.-The most ubiquitous

communication terminal in the office is the telephone, basically an instrument for accomplishing

voice communication between two people. However, computers have been programmed to accept

the tones created by a TouchTone’” telephone and

respond to them using computer generated voice.

When a customer enters the long string of numbers required to use long-distance services provided by other than AT&T, the data (access code

and number dialed) is received and processed by

a computer. Telephone bill paying also uses the

common telephone as a data terminal.

The telephone is suddenly a rapidly evolving instrument. Display screens are being added that

let the user view a number from an electronic directory before instructing the telephone to dial it automatically, Telephone handsets are being added to

data terminals so that the user can communicate

voice and data interchangeably over a common

circuit. When coupled with the PBX, the office telephone becomes a versatile, multifunction commu-

“Kb is kilohits per wcond or 1,()()0 hits per second A charac[cr

transmitted at [hese speeds n{)rnlallj requirt~~ the transmission of eight

bits.

u Mb is millions of bits per second
322 ● Autornation of America Offices

Photos Courtesy of Bell Labs

In 1877, the first commercial telephone was leased to

a Boston banker. The round, camera-like opening on

this box instrument served as transmitter and receiver.

This example of a 1907 Magneto wall set was in use

from the late 1890s through the 1930s.

By the 1980s, the telephone and display monitor were

integrated. This terminal can access files from other

computers and perform a full range of telephone

management and message functions.

nication instrument for the office. AT&T divestiture has forced businesses to decide whether to

buy or lease the telephones in their offices. The

increased variety of options has forced decisionmakers to carefully match service requirements

with alternative capabilities.

People now communicate with computers, and

computers communicate with computers. It will

become more and more common for computers in

one organization routinely to interchange information with computers of another with little human

intervention. For example, a computer can determine that an inventory level has fallen too low and

send a replenishment order to the supplier’s machine. Alternatively, payments can be queued in

a computer that is instructed to contact the computer in a financial institution and order the funds

transferred at the optimal time for the debtor organization.

The most common way for an individual to communicate with a computer is by means of a terminal that uses a typewriter keyboard for entry and

either an electronic display or a printer for output.

The terminal, in its simplest form, captures input

from the keyboard, transmits it over the telecommunication line, receives data from the computer,
App. A—The Technology of Office Automation 323

and displays it either on paper or a screen. This

kind of terminal has no processing capabilities.

With these “dumb” terminals, the user depends

on a central system for all computational support.

Increasingly, however, the terminals used to

communicate with computers will have significant

processing capabilities in their own right. Some

will have printers attached to them directly, but

in the office, printing will increasingly be done by

printers shared among the terminals that comprise

a network,

Teleconferencing.– Information processing and

telecommunication technologies can be used to

substitute, at least in part, for face-to-face meetings of individuals. Two broad classes of teleconferencing are computer conferencing and videoconferencing, both insensitive to distance. A computer

conference is also insensitive to time, in that people

participate independently on their own schedules.

A computer conference is conducted by providing all of the conferees access through their terminals to a distant computer on which are recorded

their contributions to the conference and from

which they are able to retrieve the comments of

the other participants. The conference may take

place over an extended period, and each individual contributes at times that are personally convenient. Conferees sometimes are allowed to make

their contributions anonymously or using a pseudonym, in order to encourage them to be more

frank than they would be in a face-to-face meeting. Computer conferencing permits the users to

ponder their thoughts rather than react to the dynamics of the group. This can be either an advantage or a disadvantage; the body language and

other forms of nonverbal communication that occur in a face-to-face meeting are absent.

Videoconferencing permits conferees at widely

separated locations to both see and hear one

another via a television link. Several levels of videoconferencing are now available. One provides

only for the transmission of stop frame pictures

where the image seen by the viewers changes only

every several seconds rather than continuously.

At the high end of the spectrum is full-motion color

video transmission that provides a level of quality

at least as good as commercial broadcast television.

As one moves to higher quality of service, however, costs ‘increase markedly.

Some corporations and at least one common carrier have installed videoconferencing facilities. At

best, success as measured by market growth has

been marginal. Although this technology has been

heralded for some time as a way of reducing travel

costs, it has not been well accepted. Some people

may like travel because it is a break in the day-today routine.

Display and Printing

The primary means of presenting information

to users is by means of a display screen. The standard display screen now in use is the cathode ray

tube, a specialized version of the television picture

tube. There has been considerable controversy regarding whether prolonged exposure to the radiation from cathode ray tubes has long-term implications for the health of the user. (See chapter 5.)

The question may well become mute as new display technologies become available that are more

attractive, take up less room, and do not depend

on high-energy beams26 to generate the display.

Liquid crystal displays are used on most of the

lap computers now and plasma displays appear

to be just over the horizon. A by-product of this

display technology will be the flat screen that can

hang on the wall, taking up no more room than

a photograph or painting.

Display technology has improved so that it is

possible to create finely defined images on a terminal screen. Color displays can cost three times

the price of a monochrome monitor; some specialized office users find the benefits worth the additional cost.

Electronic Document Preparation.- The printing

of documents may increasingly take place only at

the last step in the document creation process. Documents will be created and transmitted from pointto-point electronically because of the delays incurred in sending paper.

The trend is toward rapid convergence of printing, copying, and typesetting technology. They

may also incorporate color sensing and image processing in designing and modifying output.

Multibin, multicolor, jetspray and laser printers

are already becoming common in offices and are

likely to increase in capability and decrease in costs

for several years. Reprography (copying) technology is also becoming more sophisticated; print

quality is improving and speed is increasing. Some

of the capabilities already in the market or likely

to be available soon are the ability to store and

‘The display on a cathode-ray tube is created h} a +trt~:im of highspeecl electrons that strike a phosphor on t hc~ face of the screen and

cause it to lumine~ce. At least some of the electrons continue past tht’

face of the tuh[~ for some distance before losing their energy It is the’

electrons that continue past the screen face that gi~”e rise to concern~

about radiation hazard from cat hode-ra}-tuhe d i ~pla}’s.
324 ● Automation of America’s Offices —

25 Years of Xerography in the Office

Xerox 1020 (1983)

.

‘‘preii r(l<ln] In ltlc ot tlcc’

92 c(JpIc+ pcr mlnu[c

m u II I t \I n~t it)n

[ Xerox 9200 (1974)

Xerox 1090 (1985)

Xerox 9700 (1977)

Credit Xerox Corp
App. A —The Technology of Office Automation ● 325

use form overlays, to assemble a composite image

with parts taken from many sources, and to automatically size an image to fit the space available.

As these technologies improve, it is likely that

many organizations will do their printing of forms

and documents as they are needed. The cost savings that are possible by reducing the warehousing of documents is large, and this is augmented

by savings from reduced waste (no stocks of unused documents and obsolete forms to be disposed

of), and reduction of labor time spent in ordering,

unpacking, storing, etc. An additional benefit of

on-demand printing is the ability to provide only

those sections of a document or report that a specific user needs.

Documents that are electronically stored and

transmitted will be complete with diagrams and

illustrations properly inserted in the text. A major company has already demonstrated a printing

device that will combine pictures that have been

stored in a digital format with text on a single page.

Optical storage, because of its large capacity, will

be a key element in making this possible. Relatively small offices will be able to create documents

that will give the impression of having been typeset.

Software

Software, broadly defined, includes all of the procedures, documents and computer programs for

office computer technologies. This discussion focuses primarily on computer programs, Much attention has been directed toward software packages for microcomputers, but as has been pointed

out, the combination of terminals and telecommunication capabilities has made it possible for office workers to interact directly with centrally operated computers. Therefore, the software that runs

on larger machines is of as much interest to the

office worker as that which runs on the smaller

computers.

Software technology consists of two components. The more obvious is the ability to implement and operate computer programs that perform

the operations necessary to produce the results

needed by the end users, Second, and less obvious, is the knowledge needed to design the computer programs and related procedures. This requires the involvement of the user in the design

of information processing and telecommunication

systems, or full benefits of the technologies will

not be realized.

Much of the software being developed today is

designed to minimize the technical knowledge required of the users. At the same time, systems are

coming that will be able to accommodate comparatively unstructured demands. The need for most

users to develop programming skills or use the

services of a trained programmer is diminishing.

Early applications of advanced technologies were

for highly structured procedures such as payroll,

general-ledger accounting and the processing of

financial transactions. They were operated by

highly trained specialists and did not have to be

designed to be used directly by large numbers of

technologically unsophisticated people. As the capabilities of applications software to accommodate

comparatively unstructured demands for information have increased, much of the focus has shifted

to the organization of data and the means of making it accessible to large and diverse user communities. To date, designers of automated systems

have viewed applications in the light of the traditional computers that execute programs one step

at a time, sequentially. Not all of the machines of

the future will execute processes sequentially.

Newer architectures now being developed to meet

the needs of the scientific community for unheard

of volumes of computations emphasize parallel

processing to achieve these capabilities. Supercomputers are not used in today’s offices, but for some

industries they may be the business machines of

tomorrow. At some point there will have to be a

reexamination of the techniques used to design office-oriented systems to make it possible to realize some of the benefits of parallel processing.

During the early 1970s, much attention was given

.to the concept of an integrated management information system (MIS) that would meet all of the

needs for information of an organization. Some

organizations undertook the development of such

systems; none were particularly successful. But

information systems to meet the more limited objectives of specific organizational elements have

been quite successful, These range from complex

systems designed to serve large numbers of users

to personal-information systems for individuals.

One of the challenges for software and system

engineering is to establish effective mechanisms

for interchanging information between automated

systems while preserving the integrity and security of all of the involved data, processing, and communication resources.

Some tools to aid systems engineers already exist. Structured approaches to system design that

emphasize the analysis of functional relationships

have been in use for some time. Rapid prototyping is a newer concept that is meeting with a measure of success. In this technique, demonstrations

that show the intended user samples of system
326 ● Automation of America’s Offices

output and the procedures used for entering data

are developed. The rapid prototype does not include implementation of the internal processes that

will comprise the system. It presents only the facade that can be evaluated by the user in light of

the requirements the proposed system is intended

to meet, just as a wind-tunnel model is used as

a tool for defining the external shape of an aircraft.

Two classes of software are used with modern

computers. The first, support software, creates an

operating environment that provides functions of

value to all users, including resource scheduling

and input/output services. The second, end-user

software, includes application programs for specific users, ranging from spread-sheet processors

run on a microcomputer to complex, tailored analytical programs that require the services of a very

large mainframe.

Support Software. -Support software, in this context, includes language processors, utility programs, database systems and other software resources that are shared by all users of a computer

system.27 The software creates an environment

within which a computer user operates. To an extent, a common operating system is created for

computers that are, in reality, quite different from

one another.

On large systems that are shared by multiple

users, operating systems manage the resources on

the computer, scheduling them for use by specific

applications .28 An application is permitted to become active on a computer system once it has

moved to the front of the line and all of the data

it requires can be made available to it. The operating system on a computer shared among multiple

users also keeps the various users from interfering with one another. On smaller systems that only

support a single user at a time, the operating system lets the user move easily from one application

to another and relieves him/her of some of the routine tasks that would otherwise be required. For

example, a user can establish a series of commands

to perform often repeated multistep tasks, and

they will be executed automatically under the control of the operating system.

‘70ne could argue that the generalized packages such as word processor and spreadsheet programs so widely used on microcomputers

should be included in the category of support software. However, for

the purposes of this analysis, because they are oriented to use by individuals on personal computers, not to be shared by a number of users

of a shared computer system, these types of programs will be discussed

as end-user software.

‘&Some installations may determine that all short jobs will run before long ones. Others may determine that some work, regardless of

the demands it places on computer resources, will receive a higher priority than all others.

All operating systems, regardless of the size of

the computer, provide input and output services

for all applications. The operating system takes

the data that is used by an application and translates it into a form suitable for driving the physical input and output devices.

Generally, the computer manufacturer designs

and implements the operating system.29 In the

past, each manufacturer used a proprietary system, and this made it difficult for users to move

from one brand of equipment to another. Today

the trend is to standardize operating systems. For

the microcomputers most commonly found in offices, MS-DOS is a defacto standard, although competitors exist and some are in relatively widespread

use (e.g., CP/M). The UNIX operating system developed by Bell Labs is becoming a competing

standard, available on a spectrum of hardware

ranging from microcomputers to large-scale mainframes. However, although UNIX is the focus of

substantial attention it is not as yet an established

standard, and in fact may never become one. Competing systems are likely to continue to be a significant factor in the industry at least into the

1990s.

Standardization of operating systems would offer the user several potential benefits. The first

is portability of application programs. An application written to an operating system standard,

in theory, can be run on any computer for which

that operating system is available with little or

no modification. In this sense, the operating system can mask differences among machines from

users, and competing computers take on the attributes of commodities not differentiable from one

another in the eyes of the users. Second, third-party

suppliers of generalized software will tend to prepare products for use with a standard or widely

accepted operating system in order to have the

largest possible base of potential customers. Thus,

using a system for which a standard operating system is available ensures the user of a large and

varied supply of software packages from which to

choose. This availability of generalized packages,

in turn, tends to reduce the need for expensive development of software tailored to needs of a specific organization.

Programming languages, or, more precisely, processors 30 for programming languages, are another

“In the early days of microcomputers, some third-parties created

operating systems that were offered in competition with those created

by the manufacturer. This practice is not widespread, but competing

operating systems are still available for some of the most popular

microcomputers.

“

]

Language processors accept computer programs written by users

and translate them into a form that is understandable as a set of instructions to a computer.
App. A— The Technology of Office Automation ● 327

set of support software. COBOL and FORTRAN

have been the two languages used most heavily

for management information systems. BASIC is

the language most widely available on microcomputers, but the common BASIC interpreter that

is supplied with most microcomputers is not suited

for very large application systems.

From time to time, new languages appear and

receive some degree of acceptance before disappearing. ALGOL was one of these. It made some

headway in Europe in the 1960s but was not accepted in the United States. The current crop of

computer languages includes ADA, C, and PASCAL,

among others. Whether they will be able to demonstrate real staying power remains to be determined.

In order to use programming languages of this

type, the user must develop a degree of technical

skill. First, the syntax or rules of the language must

be mastered. Second, skill must be developed in

describing a task at the fine level of detail that

must be specified in a computer program. Most

casual users of computers are more concerned with

their tasks in the office than with developing the

skills required to write computer programs. Rather,

when the need to develop a program materializes,

office workers turn to professional computer technicians.

The tendency today is to minimize the need for

any user to develop computer programs, The general assumption is that most of the needs of end

users, office workers in particular, can be met by

program packages available on the open market.

At the time it announced a major new product,

one of the major producers of microcomputers

made no language processor available; in fact, computers developed by suppliers of office machines

are often delivered without a language processor.

The computer languages used for application

systems continue to evolve, and languages available in the future, whether or not they have familiar names like COBOL, will be different from those

available today. Software engineers have recognized some of the limitations of existing language

structures and are developing new ones to overcome the deficiency. One approach is the development of object-oriented languages that focus on

the manipulation of processes and the entities manipulated by those processes rather than the definition of procedures.”

As this evolution continues, it is possible that

comparatively few people will be engaged in the

“See a series of articles in the May 1985, issue of Bj’te Afagazjne,

p, 151, discussing Small Talk, an object-oriented language developed

by the Xerox Corp.

task of application programming as it is understood today. Rather, the language capabilities may

evolve to the point where it is no longer reasonable to make a distinction between the language

that is used to describe a process to a computer

and the application program that is delivering information to the end user.

Support software also includes a variety of programs that are really applications, but fill needs

for such a large portion of the user community that

they are properly included under the heading of

support software. Within this group are housekeeping programs that are used to create copies of files,

prepare diskettes for use, and check copies to see

that they are accurate. Some utilities also permit

modification of existing data; for example, a utility could be used to change all occurrences of the

word “green” to “blue.” Others permit the user

to select from a database some records that meet

specified criteria.

Database management systems also fit in the

category of generalized support software. These

software systems are used to organize, store, and

access data so that it can be shared among many

applications. This concept makes it possible to

manage data as a corporate resource and decouple

specific applications from the databases that they

use. The difficulty of modifying both application

programs and the databases is thus markedly reduced. Changes in the data bases do not necessarily

require corresponding changes in the applications

that use them nor do changes in applications necessarily demand changes in the databases.

Some database management systems are designed

to be used in conjunction with a generalized programming language such as COBOL, Hence, they

are of value only to those with programming skills.

Others provide the end user with a generalized

query language that can be used to specify the criteria to be met by data retrieved in response to

an inquiry. These query languages in general do

not have the versatility that is found in generalpurpose programming languages, but they let a

user have access to data without the intervention

of a programmer. Many of the data-management

systems sold for microcomputers follow the model

of the query languages used with generalized database management systems initially developed for

mainframes.

End-User Software. -End-user software consists

of the application programs that deliver information to users. With mainframe and minicomputers,

end-user software consisted of a relatively well defined class of programs designed to meet the needs

of a user community. Such applications still exist
328 Automation of America’s Offices

and the development of new application systems

will continue, but the class of end-user software

is no longer so precisely defined. Now a variety

of generalized application packages such as Lotus

1-2-3° meet the needs of broad classes of users.

The development of software to meet the needs

of specific users is expensive. The user organization not only incurs the cost of developing the software, but must also maintain it. Maintenance includes correcting errors as they are discovered and

making modifications to operational programs as

requirements change. A mature data processing

organization is likely to devote as much as 80 percent of its programming resources to the maintenance of operational applications, leaving only 20

percent for the development of new applications.

Many organizations are discovering that their requirements for data processing services are not

as unique as they once thought, and are turning

to packaged application programs. This trend is

most clearly evident at the low end of the hardware spectrum where thousands of programs are

being marketed.

There are two broad classes of generalized enduser application programs. One consists of modeling or decision aids oriented to fairly narrow categories of problems; the other includes applications

of general interest.

Application systems designed to run on computers of all sizes have been developed for sets of

problems to which a common methodology can be

applied, such as packages for econometricians,32

engineering specialties, statisticians, accounting,

inventory control, and system-management packages. These applications are not designed for nonspecialists; users are expected to understand the

underlying disciplinary concepts on which they are

based. The command structures are oriented to

the jargon of the professional. For the person not

trained in the discipline, they are not “user

friendly. ”

The second class of generalized user applications

consists of programs designed to meet needs common to most offices, such as data processing,

spreadsheet, and graphics packages. “Thought

processors’ facilitate the creation of outlines and,

thus, help the user organize ideas. “Desk organizers” let the user make notes or maintain a calendar and an automated telephone index. Programs

that let users create personal databases, make in-

“Econometric programs, for example, include procedures for estimating the parameters of an econometric model, access to data useful

in building economic models, and the means for exercising models once

they have been built.

quiries against the data, and prepare summary

reports are also available.

These programs are designed to be used by people with limited understanding of the technologies.

Many are menu driven; the user only has to select

an operation from a list on the screen. Most cannot be operated without sometime referring to voluminous, usually poorly written manuals or documentation; but the number that require only simple

documentation is growing. For some of the more

popular programs, dozens of texts explaining their

operation to the user have been written and are

widely available in bookstores.33

Some packages, because of their popularity, have

become de facto standards of a sort. For example,

word processors and spreadsheet programs will

sometimes note that they are able to accept data

from one or more other widely used spreadsheet

programs.

Series of spreadsheets and word processing programs are available, designed so that their command structure is consistent, thus minimizing the

learning time required to use each program. Also,

the programs in a series are designed to facilitate

the passage of data between them, e.g., a table from

a spreadsheet is easily included in a document being prepared using the word processor.

Integrated, multifunction programs are also being marketed. While some of these have been reasonably well accepted in the market, each one of

these programs has both its strong points and

weaknesses. For example, the spreadsheet capabilities may be powerful but the word-processing

functions weak. Often, integrated packages require

complex command structures that are difficult to

learn. There is some question whether it is more

advisable to acquire a number of single-function

programs that can pass data between and among

themselves or to obtain a single, integrated multifunction package.

Instructions and owners’ manuals, which the industry persists in calling by the intimidating name

‘‘documentation, ” have been a major hurdle for

beginning computer users; they are often incomprehensible to the novice. But competition for the

small computer software market will sooner or later

force software vendors to concentrate on ease of

use, and to emphasize usability, training, customer

service, and software maintenance in order to build

and keep a share of the market.

“’Another explanation for the popularity of the texts for some programs is that they are being used in lieu of manuals by those with pirated copies of the software.
—

App, A — The Technology of Office Automation ● 329

The management information system concept

that has been developing over the last two decades is already evolving into the broader conceptual framework of information resources management, a field that seeks to understand the overall

requirements of an organization for information

and to provide the means for meeting them. Decision-support applications will comprise an important element within information resources

management. These applications will range from

comparatively simple models such as pro forma

financial statements in the spread-sheet format to

comprehensive models of both the internal operations of an organization and its interactions with

the environment. Models for marketing and production management are already in use and will

become increasingly commonplace even for small

firms.

Much attention is now being given to expert systems. Some expert systems are being used, but

they are generally rudimentary; and the ability of

expert systems to deal with some of the more complex problems faced by knowledge workers may

be slow to materialize.

Expert systems attempt to capture the problemsolving knowledge and methodologies used by people who have demonstrated abilities significantly

above those of the large majority of the professionals working in a specific area. Specialized technicians, called knowledge engineers, interview experts and attempt to define in a format processable

by computers, a series of rules of thumb that will

emulate the experts. Users are then asked to provide the parameters of a problem, and the expert

system returns an analysis that is intended to approximate the results that would be arrived at by

the experts whose knowledge was used to structure the decision rules. In theory, if there is a sufficient gap between the abilities of top experts and

the journeymen who would use the systems, expert

systems should significantly improve the performance of the journeymen.

To date, expert systems have found some application in law, medicine, and insurance underwriting. Development work in other areas, including

the management of emergency preparedness and

financial services, is underway. The results of these

efforts have so far been limited, but they offer considerable promise. An understanding of the process of building expert systems is developing and

the computational power required to support them

is available to many organizations.

Summary

System designers and users are only minimally

constrained by the information processing and telecommunication technologies that are available. A

wide variety of telecommunication services is also

available. Capacity can be added in relatively small

incremental steps so that users are not faced with

unused capacity for extended periods.

Management can impose a strongly centralized

structure or substantial decentralization of decisionmaking can be allowed. Regardless of the strategy, technicians have considerable latitude in implementing system designs that are optimal from

the technical point of view while supporting whatever management philosophy is in place. For example, a centralized processing system can serve

a decentralized decisionmaking structure as well

as one that is highly centralized.

The processing and telecommunication technologies that are now available to the office put significant amounts of processing power in the hands

of office workers and managers. The equipment

used to deliver processing services ranges over a

broad spectrum of capabilities, creating for office

managers a wide range of options for configuring

systems and designing the flow of work within an

office. As the applications of the technologies become more widespread and the experience with

them increases, they will have significant effects

on virtually all aspects of office operations and the

ways in which office workers interact with other

elements of their own organizations and the outside environment.
Appendix B

OTA Case Studies

In support of OTA’s study of office automation,

several case studies were performed to supplement

the many found in the management literature. In

choosing contractors to perform these studies, consideration was given to the researchers’ scholarly

qualifications, their access to the proposed study

organization, and the relevance of the study to the

needs of the OTA staff. Those needs involved information on the impacts of office automation on

organizational structure, job content, skill levels,

training and employment levels. In addition, it was

desirable that the studies illustrate a variety of

office settings. Special efforts were made to consult workers at all levels of each organization, because their perspectives were neglected in many

of the case studies examined.

The case studies summarized here were set in

five types of offices–a small Federal Government

agency, the Office of the U.S. Trade Representative (USTR); “XYZ Company, ” the corporate headquarters of a manufacturer of a consumer product;

the production, planning and control department

of ‘Aircraft Instruments Plant, ” a manufacturer;

an international division of a large commercial

bank (“Commercial Bank”); and three agencies of

the New York City municipal government—the

Human Resources Administration (HRA), the Department of Finance (DF), and the Department of

General Services (DGS).

Office Automation in a Manufacturing

Setting’

Introduction and Background

This case study examines the effects of computer-based technology on one of the most common “offices” in American industry—those that

handle ordering, inventory, scheduling, coordination, and control in the manufacturing facilities

of private industry. According to one estimate, the

people working in factory offices make up 10 percent of the clerical work force in the United States.

Clerks take orders for a variety of products, break

the products down into their component parts, then

order parts from a vendor or have them built on

site. As components wend their way through the

‘This section is based on research performed for OTA bv I.eslie

Schneider, Robert Howard, and Frank Emspack, Har\’ard Un~versity,

factory, expeditors and production control clerks

track their progress and position them for final

assembly. Finally, still other office workers make

sure the components meet the appropriate quality standards and ship them to customers.

For the last 15 years, companies have used a

variety of data-entry and computer-printout techniques to create an “after the fact” tracking system. Today, the lowered prices of computer terminals and the greater sophistication of software

makes possible “real time’ scheduling and inventory systems. Usually known by the generic term

of “MRP” (for “Materials Requirements Planning”

or “Manufacturing Resources Planning”), such

systems integrate the various functions of the industrial office and automatically track components

on the shop floor as products are produced; coordinating the entire production process.

The focus of this study was production of gyroscopes, that contain over a thousand components,

involving 14 different levels of assembly. This was

the first product to go “on-line.” With accurate

information on the product structure and how long

it takes to either manufacture or purchase each

component, one can work back from the “due date”

of the customer order to determine what components to order, how many, and when. The MRP

system can also schedule production by matching

customer orders to plant capacity and provide feedback on the work-in-progress. This information system can be extended to the purchasing, marketing, and finance departments.

The study of the MRP II system implementation at the Aircraft Instruments Plant illustrates

some of the dangers that ignoring the organizational dimension of technological change can produce.

It reflects how the demands of a new technological

system can conflict with traditional management

practices and style. It also demonstrates how

worker involvement in and commitment to the new

technology is crucial to success and how new technical systems, far from making traditional work

skills obsolete, can make certain skills and expertise more important than ever before.

The study site is at a medium-sized factory,

known here as the “Aircraft Instruments Plant. ”

At the time of the study, the MRP II system was

being implemented. This was both a disadvantage

and an advantage for the case study; the implementation process was observed as it took place.

330
App. B—OTA Case Studies ● 331

But the full impacts are not yet known, although

participants in the study did speculate on what

those impacts will be,

This plant is part of the Aerospace Business

Group of a major American corporation. Of a work

force of approximately 1,300, some 500 are managerial and professional personnel. The rest are

production and clerical workers represented by a

local union belonging to a large AFL-CIO international. The plant manufactures a wide variety of

high-technology products such as aircraft instruments, engine sensors, displays and monitoring

systems, incorporating some 55,000 different parts.

Much of the work is under contract to the Department of Defense, and military specifications require high quality, strict cost control, and extensive documentation and recordkeeping.

Methodology

The study was based on 75 hours of interviews

with approximately 30 employees, conducted in

December 1984 and January 1985, Those interviewed included a broad cross-section of managers,

systems designers, supervisors, clerks, shop floor

workers, and union officials. However, the study

focuses on the experiences of the clerical workers

in the plant ‘‘Production Support’ department,

in particular, production planning and control supervisors, clerks, and expeditors. This study looked

not only at the technology, but also at the production planning and control, the general manufacturing process, the concept and philosophy of

MRP, and labor-management relations,

Organizational Structure

The plant has five basic product lines: gyroscopes, heat sensors, electromechanical sensing

and display devices, electronic sensing and display

devices, and flow meters. It also has four “contributing areas ’’-machine shop, coil shop, printed

circuit boards, and silk screen. These areas supply

the five production areas with parts and components that are not purchased from outside vendors. There are seven functional areas—finance,

marketing, purchasing, engineering, manufacturing, information systems, and employee relations.

The first product to go on line with the MRP II

system was a gyroscope. The Production Support

Office that handles the gyroscope performs two

functions–production planning and production

control—and consists of a production support manager, two supervisors, and five clerks and expediters. These clerks and expeditors are “graded salary” personnel and receive a yearly salary rather

than an hourly wage, but are members of the union.

There is also a Production Support Office for the

contributing areas with its own managers, supervisors, schedulers, expeditors, and clerks. Finally,

there are people in the shop itself who interface

with these production support personnel—primarily, the shop supervisor, dispatchers, and ~ro

analysts.

Many of the senior salaried workers at the Aircraft Instruments Plant were hired in the years

immediately following the Second World War and

because of union seniority rules, are now concentrated in the highest job classifications, including

the graded salary positions of the Production Support Office. Because of the long tenure of many

workers, there has been little incentive to invest

in explicit documentation of work procedures and

practices. As this generation retires, the plant risks

losing important job skills that have not been

passed onto younger workers. Systematizing and

formalizing work practices in order to counter this

loss was a major objective for the automated inventory control system,

The Old System

For the last 15 years, the Plant used a computerized Inventory Management System ( IMS) run out

of a centralized corporate computer center in another city. Keypunched paper orders were batch

processed monthly to break the orders down into

component parts. This monthly “profile report”

updated all material on hand, on order, and on the

shop floor, and identified shortages. The Production Planning clerks then put out “order action

reports” to Purchasing for outside vendors and

to contributing areas for in-house “make” parts.

In general, this process took a month. 1n addition,

documents were generated setting aside parts for

the manufacture of particular products and listing shortages of parts required to fill current customer orders, Supervisors and expeditors in Production Control followed these orders on the

shortage lists into, through, and out of the plant,

Other Product Support personnel schedule and coordinate the work of the contributing areas.

The above is a description of the formal production planning and control process. Along with the

formal rules, a system of informal negotiations was

necessary to accomplish production goals. The

process was rife with irregularities and conflicting priorities, some resulting from technical limitations of the IMS system. The once-a-month re-
332 ● Automation of America’s Offices —

port quickly became out of date. Accumulated

inaccuracies were difficult to eliminate. As a result, Production Support personnel often did not

know whether the data on the profile report were

accurate and spent much time tracking down inaccuracies. The plant had a number of parallel recordkeeping systems that could not communicate

with each other and that were often in conflict.

The organization of work also caused irregularities because of the multiplicity of smaller competing suborganizations each with its own managerial

hierarchies, priorities, and goals. In order for these

various units to work together, considerable informal negotiation was required, Effectively performing one’s job might mean doing favors for

other departments in hopes of return favors or putting pressure on someone, but not so much pressure as to make an enemy. This kind of informal

negotiation served to smooth the production process and iron out conflicts, but the inefficiencies

were obvious and their elimination was one of the

goals of the new system.

Implementing the System

While the managers recognize that organizational issues and workers’ attitudes are the key

to the ultimate success of the new system, the tendency has been to concentrate on the narrow technical details of getting the system installed; organizational issues have been left for later, and

often either ignored or mishandled.

When the plan for an MRP II system was approved in 1983, a Core Team was created to select

a vendor and oversee implementation. The Core

Team had representatives from all major functional

areas but the two organizations most directly concerned with employee attitudes—Employee Relations and the local union–played only a marginal

role. In order to justify the major investment, the

Core Team had to produce a cost/benefit study.

Estimating the costs of the new system was relatively straightforward-one-time purchasing costs

plus yearly maintenance and servicing fees and labor costs.’ The benefits were considerably more

difficult to estimate. These would include savings

on labor costs, control over data processing operations, reducing inventory, and speeding up the

movement of inventory.

The implementation began with an intensive review of the gyroscope production process. Changes

‘The team estimated the MRP 1 I would cost $2 million for the initial investment (80 percent was for hardware) and $1.7 million in expenses over 3 years. Maintenance and service would amount to $600,000;

the remainder would be training and labor costs.

were planned in the production process, systematizing shop procedures to correspond to the logic

of MRP. The systems designers began writing the

applications software when the hardware arrived

in April 1984.

The MRP 11 system is an elaborate simulation

of the gyroscope production work process. Managers say that increased access to information is

its greatest benefit. However, the computer is not

as yet programmed to correspond to the complexities of the actual work. For example, the system

refuses to release orders if there are missing components. Production could begin without thos e

components if the MRP system were programmed

to handle such exceptions. Much night and weekend time that could be used for certain processes

is lost because the system is closed down. Since

there is no easy way to record a product moving

backward in the assembly process for “reworking,”

which happens frequently with such a complex

product, the MRP often does not know where the

product is.

The problems in the gyroscope division during

the first weeks of implementation had to do with

rigidities created by the shift from an informal production planning and control system to a highly

formal system. With the MRP system, each time

one level of assembly for a product is completed,

the new subassembly goes back to the locked stockroom, where its new status is fed into the computer. There is no general floor stock; every single

component is accounted for, “mortgaged” to a

specific order number and under strict control.

However, amidst the pressures of preparing the

gyroscope division for implementation of MRP,

cataloging general purpose floor stock received

a low priority. When the newly functioning MRP

II system began releasing its first components

many of these parts (yet to be entered into the

computer or even properly organized in the stockroom) were left out. In addition, supervisors were

still responsible during implementation for meeting their normal monthly production quotas, an

impossible situation for them.

Employment Impacts

In order to justify this major investment, the

Core Team produced a cost/benefit study. The team

projected that one-tenth of the plant’s total work

force (130) people could be laid off over a 5-year

period. With attrition, the overall reduction could

approach nearly 20 percent of the current work

force. These potential savings have not occurred

as yet but are expected when the system is operating more smoothly.
App. B—OTA Case Studies 333

Job Content, Skills

The problems experienced during the implementation illustrate that instead of eliminating the

need for traditional product knowledge, MRP

makes that knowledge more necessary, to ensure

that the MRP simulation is as accurate as possible. Supervisors have to have sufficient familiarity with the product to know when to ask that the

MRP system be manually altered. Product knowledge is especially important for the supervisors

of Production Planning and Control, the people

with the authority to manually release orders. This

shift of authority from the shop floor to the Production Support Office has led some production

employees to see MRP as a threat to their own

control, exacerbated by their perception that the

people in Production Support do not know how

to perform their job effectively.

Knowledge of the system is also necessary for

effective use of the MRP. Production Support personnel need to know how and when to perform endruns around the system. For example, parts for

a specific order are released in lots of ten. If only

eight parts of a component are available, the system will not release the order until two more arrive. The current lot size must be manually changed

to 8 and the next lot size to 10 in order to begin

production.

The system has substantially increased the time

that Production Support personnel spend actually

working at computer terminals, by as much as 300

percent; they enter their own data, gather information and perform transactions (e. g., releasing

parts onto the shop floor). The need for accuracy

in data entry becomes very important. This, and

the need to identify and handle exceptions demand

constant alertness and can be extremely stressful. In addition, there are not enough terminals

to handle the work to be done and lighting and

other environmental conditions are poor.

The management is operating under two basic

assumptions—that MRP II will require significantly fewer people to oversee production planning

and control and that because of the centrality of

MRP to the plant organization, those people who

work on the system must be management personnel. Many of the new supervisors occupying newly

created positions are young with almost no experience in production planning and control. They have

often confronted problems that they do not have

the expertise to handle. Unofficially, some experienced employees are still performing the tasks.

One example of shifting work roles is that of the

production control clerk in the contributing areas.

This position

ing materials;

seeing that it

and put back

formerly involved planning; ordersending it out to the shop floor; and

was properly machined, inspected,

into stock. The more accurate and

up-to-date information provided by MRP makes

it unnecessary for the production control clerk to

spend a great deal of time on the shop floor. Many

of their traditional tasks have disappeared—some

into the computer system, others taken over by

the new supervisors in the Production Support Office and by shop coordinators. What is left are clerical tasks that are repetitious and, some say ,

pointless.

When graded salary personnel work with the new

system, it is usually at their supervisors’ discretion and only to perform the lowest level clerical

tasks. The managers claim that this is temporary

and that eventually some additional tasks will be

delegated to graded salary personnel. The union,

however, sees this division of labor between supervisory and union personnel as a contradiction

of the work organization model presented by the

management. This change in the balance of responsibilities puts the union workers most at risk if

the predicted labor savings are achieved.

Trainin g

From the beginning, the MRP training process

encountered serious problems. The Core Team’s

recommendation that a manager be hired and given

full-time responsibility for training on the MRP

project was rejected by top management as too

costly, Preoccupation with getting the system

working resulted in the neglect of training. On the

surface, the quantity of training provided t o

managers and workers seemed considerable. Some

managers, supervisors, and hourly personnel attended a week-long MRP training course at the

nearby factory of the system vendor. The training

for most of the affected work force was a 10-week,

40-hour, in-plant course developed by the Core

Team and the Information Systems Department,

which proved far from adequate. Some key workers did not receive training until well after MRP

was implemented. The vendor training course was

criticized, especially the videotapes, as boring and

a waste of time. Workers were not taught how to

use the paperwork that comes out of the system,

and did not understand the logic of the system.

Managers believed that workers did not understand what production control itself was. Workers from the Production Support Departmen t

tended to see things differently. They felt they

understood how the work process really func-
334 ● Automation of America’s Offices

tioned, but were being asked to learn a highly

formalized system radically different from

what was actually happening.

The superficial training has come back to

haunt the Core Team. The system designers

have had to play a support role that takes valuable resources and time away from implementation of the MRP system in new product lines.

Conclusions

The final organization of work within the MRP

II system is not yet determined. It is still too early

to know whether a work organization based on a

small group of relatively young, new supervisors

can effectively oversee production planning and

control at the plant. The promise of increased decisionmaking for graded salary workers has so far

remained unfulfilled, because of managerial decisions about how technology is used. There may

be a conflict to management as to whether to entrust responsibility for working the system to bargaining unit workers or to reserve it within management.

This case study illustrates the fact that technological change is a social process, in which organizational choices that shape not only the effects on

people and organizations but the effectiveness of

the technology itself. Managerial choices were a

major obstacle to the successful implementation

of MRP II; and as MRP 1I was put into operation,

management did not address a variety of sharp

contradictions between the new system and traditional work practices, job categories, and plant incentive systems.

The management staff feel that these problems

will be resolved in time. The problems are not

unique, but represent some of the most common

problems that organizations experience when implementing new office technologies. Their resolution depends far less on narrow technical factors

than on the social processes by which technological change is managed and negotiated.

Office Automation in the Corporate

Headquarters of a Consumer

Product Manufacturer

Introduction and Background

This is a case study of the successful implementation of an office automation system. It suggests

that choices in managing technological change can

‘This section is based on research performed for OTA by Tora 13ikson, Don Man kin, and Cathleen Stasz of The Rand Corp.

lead to positive outcomes for both employees and

for the organizations, if that is a priority in the

planning and implementation process.

The research site is the national corporate headquarters for Company XYZ, a major manufacturer

of a consumer product. In addition to the headquarters office, the company includes four manufacturing plants located throughout the country.

There are approximately 300 employees in the corporate headquarters and approximately 1,000 employees overall. The company is a wholly owned

subsidiary of a larger corporation. The study focused on four departments within the corporate

headquarters-marketing research, planning, the

controller’s office, and product development.

Only one of the four manufacturing plants is

unionized, the pay is high compared to similar

companies, and there is a high degree of career mobility in this company. The company literature

stresses the importance of treating employees well

and giving them the freedom, opportunity, and rewards to perform effectively. A second theme is

the importance of open communications. Productivity is viewed in terms of a total system, embracing employees, equipment, information and

materials. There is a strong emphasis on innovation, risk taking and experimentation, and stateof-the-art knowledge and technology. There is also,

peculiarly, a strong emphasis on punctuality, with

all employees, including the president, clocking in

every morning. Bonuses are linked to both sales

volume and return on assets, providing an obvious incentive for improved performance for the

company as well as for the individual salaried employees.

It is clear from interviews and personnel data,

company brochures and policies, that the corporate

headquarters work force is highly educated, wellpaid, and largely professional. Except for its formalistic policies on punctuality, the company closely resembles the “organic” (i.e., nonmechanistic)

model of organizations that management theorists

have touted for years.

Methodology

Semistructured interviews were supplemented

by researchers’ informal observations and archival

information. Interview data were collected from—2

executive managers, 1 manager from personnel,

3 managers from technical departments, 2 key people involved in the implementation process, 4 department headsf 8 individuals outside the focal

work groups who- ‘were links in the process and 20

employees from focal departments, Where possi-
App. B—OTA Case Studies ● 335

ble, respondents were selected for participation on

the basis of formal position in the organization

chart. Others were identified during the data-collection process.

The interview format used with all respondents

required 1 to 2 hours to complete. Field notes taken

during research visits were used to construct case

reports for each department and for organizational

personnel; these then became the basis for subsequent examination, Preliminary research findings

were reported to the participants in feedback seminars in order to confirm descriptive information,

vaIidate conclusions, and generate discussion of

issues this organization faces as the technological

innovation continues.

Implementation

In 1980, Company XYZ acquired a new chief executive officer who saw a critical role for information systems which permit a business to collect,

store, structure, share, and manipulate information about previous experiences in order to learn

from them and improve business performance.

The segment of the consumer product industry

in which XYZ operates is highly competitive, with

many strong players. In 1980, XYZ, holding fourth

place among its competitors, was facing major

profit-and-loss difficulties; it needed to increase

market share and cut costs. This impetus led to

an investment in computer technology. The goal

was to replace old batch-oriented information systems and manual technology with flexible cuttingedge electronic tools and concurrently, according

to management, to give users a renewed sense of

power, insight, and enthusiasm about their tasks.

A high-level organizational manager (now a Vice

President) was named to lead the planning effort

and put together an implementation team. He

chose employees who had substantial business experience and a strong sense of strategy, and who,

like himself, were not systems professionals but

were comfortable with information technology. In

addition, he recruited for the team an employee

from another firm with recent systems implementation experience. The five-person team produced

a business systems plan by first studying the work

of the firm’s many departments to determine what

information needs they had; this task required substantial input from department employees. Then

the team investigated the kinds of technology that

might fill these needs, relying heavily on technical

advice from an outside consulting firm.

Looking back, the former head of the team emphasizes the importance both of employee participation and technical expertise in the planning. A

direct knowledge of business tasks was critical.

On the other hand, comparing technologies and

assessing their ability to handle the needs required

computer system professionals.

The year-long planning effort yielded an approved plan and those who developed it were

charged with its implementation. Executive management was highly committed and provided solid

budgetary support that was apportioned as

follows:

● 10 percent—hardware,

● 10 percent—software,

● 30 percent—software development, modification,

● 40 percent—implementation, and

 10 percent–training.

The process operated on a project-by-project basis, with the plan partitioned into relatively independent parts. Each project required its own specific plan and justification. The plan established

a very general blueprint and performance criteria

for system development but was indeterminate

with respect to order of projects and details of their

enactment. Projects originate either from user

groups or from the technical consultant perception of a need. The consulting firm operates a centralized computing facility, the use of which provides this mid-size firm with more computing

resources than it could support on its own.

The major architectures include a remote mainframe owned by the consultant firm, another large

computer system on which time is rented, and a

small number of personal computers. The acquisition of personal computers at this point is unsystematic and there is no formal responsibility

for their support. They are purchased by employee

request. Although the company does not want to

discourage personal computer use, there are concerns about data security. Only a few people have

more than read-only access to corporate databases.

Analysts can download data from the larger systems and upload data that they have entered onsite. There are a variety of systems available for

use through time-sharing that provide several programming languages (including a variety of applications software and a fairly high-level matrixstructured language suitable for flexible data manipulation, analysis, and reporting).

In addition to these major applications, word

processing is handled by a small centralized department doing internal and external correspondence for various departments. Electronic mail is

used primarily for external communications to subsidiary companies. For a variety of reasons, it has
336 Automation of America Offices

.

not been fully implemented within XYZ—drawbacks were found in two systems pilot-tested, most

employees do not have their own terminals, and

it is seen as hindering personal communications,

which is an essential element of XYZ’s corporate

culture. The company does, however, use Voice

Mail Exchange (VMX) to better manage telephone

communications. Primary VMX communication

occurs between sales representatives in the field

and the Sales Planning department in the home

office.

The Users

On average, employees had been using computers for at least 3 years at the time of the interviews. Across the four departments, five employees had their own workstations; the remainder

shared workstations with two or more others, and

often found getting computer time to be a problem. In most departments workstation allocation

reflected task demands. In one department, however, status was also a factor. Actual time spent

working on the computer was extremely variable

across the four groups. Since few people use the

computer all day, it seems reasonable that workstations be shared, but the tradeoff of cost v. access has not been wholly resolved,

The users in most departments have a range of

options for guiding and modifying the systems

they employ. There is considerable choice about

how to use the advanced tools, left largely to user

initiative. Some employees envision a split between

“haves” and “have nets, ” based on differential aptitude for information technology.

Users across the four departments were generally enthusiastic about the capabilities of the computer systems, although some had specific complaints

such as poor graphics capability and difficulty

moving between databases. Other complaints concerned the databases themselves—the data were

sometimes inaccurate or unavailable. The disadvantages cited by users have more to do with lack

of systems integration than with individual systems. The integration problem had been expected

as more applications were implemented and accessed by users.

Job Content, Skills

No trends were observed toward mechanization

of work or toward de-skilling of jobs. Most users

reported increased variety, challenge, creativity,

and responsibility. Time savings were universally

reported for individuals and for groups. For example, some vital procedures requiring nearly a

day when done manually now require only 1 hour

and are less likely to contain errors. Most employees use the time gained to take on new tasks and

responsibilities. On occasion, groups have also widened or redefined their missions as a result of computer use. In terms of bottom-line measures, XYZ

has succeeded in increasing its market share and

cutting total costs per unit output, even though

labor costs are higher.

Reported changes in work were generally consistent across all groups. There was increased control over work. Work demands increased for some

and decreased for others, depending on the work

group. Rather than create repetitive data-entry

jobs, the company chose to distribute database

updating tasks among the employees using the

databases. This has caused some dissatisfaction,

There were two important between-group differences. One was a change in management style in

one department-a manager apparently was spending most of his time on-line and less time in typical

management activities. Opinion was mixed as to

whether this change was good or bad. Another

difference was the degree to which users had invented new ways of doing their work. Many reported that they adapted or modified the technology to suit their needs, although most of what they

reported was more appropriately categorized as

a new task.

Most changes in communications resulted from

tool sharing and interactions with others in the

department, rather than increased communication

with people outside their department. Few employees used computer-based communications, and no

one reported that this took the place of other forms

of communication. Because of the strong emphasis on face-to-face interaction, many believe that

electronic communications systems are unnecessary and possibly detrimental to intraorganizational behavior.

Formal job changes were reported in three of

the four groups, but only at the clerk level. Two

clerks believed their recent promotions and pay

increases were due to increased responsibilities and

special assignments resulting from their computer

use. The clerks’ job descriptions in one department

were being updated at the time of the interview,

explicitly because of the new computer-related

higher level skills and responsibilities. The clerk

position in another department has now been upgraded from an hourly to an exempt one.

While the majority of users found satisfaction

and a sense of accomplishment, others were bored,

less motivated, and working below their abilities.
App. B—OTA Case Studies . 337

Among the reasons cited were increased expectations about what the technology could do and,

therefore, frustration when expectations were not

met. Another user felt “locked to the terminal”

when trying to meet end-of-period or other deadlines.

Training

Despite the fact that training was a mixed-bag

of formal and ad hoc procedures, most users were

well satisfied with it. For most employees, learning about the computer system is part of doing

the job. Learning beyond the minimum required

for this purpose is voluntary.

Training varies by department. In R&D, the

tasks are so specialized that general purpose introductory and intermediate courses are of little

help, so training proceeds on an individual basis

with the help of peers. Peer learning also characterized the Planning Department, where only one

person uses the system. Formal classes are offered

by the system vendor. The consultant firm and

the Business Systems Department both provide

training and technical support for users on major

mainframe applications. The amount of time required for users to learn their systems varied widely

by department. In R&D it took 2 to 3 months; in

Planning, some applications could be used in just

a few days; sales forecasting took about 6 months

to master.

Users mentioned a variety of formal help mechanisms, including documentation, local technical

staff, a telephone hot-line, a users’ group, and online help. Some means of assistance, however, were

not entirely reliable. Employees had problems finding some of the manuals they needed, and some

applications were not well documented.

Informal support was crucial to most users. The

learner must find someone who is willing and able

to teach and then find a time when they are both

free. Self-taught “experts” among the employees

performed voluntary support service. While they

seemed to enjoy the teaching role, they believe that

learning support could be more effectively provided

if some resources within the department were formally allocated for that purpose. A resource center was one suggestion.

Conclusions

In Company XYZ, a conscious attempt was

made not only to remove the constraints on innovation, but to encourage it. They view computers

as tools needed by competent and motivated people to perform their jobs effectively. The technology is mission focused, user driven, and can be

guided, modified, and manipulated by users. It is

designed for change as users acquire greater expertise. The organization had a conscious strategy for implementation that had been carefully

planned, staffed, and budgeted, They attempted

to balance centralized and decentralized decisionmaking. The implementation project was characterized by a great deal of user involvement that

promoted a feeling of “ownership” among employees. The system continues to change and individuals keep finding new ways of working with it.

There is no “post implementation” period. Rather

than minimizing the change, the organization has

learned to manage it.

Computer-Mediated Work in

Commercial Banking4

Introduction and Background

The influences that affect the implementation

of automated office systems can be environmental

or institutional. In this study of the automation

of one group in the international department of

a major Commercial Bank, the original reasons for

deciding to implement the system were environmental-the desire to improve world-wide communications in the International Department (ID) and

to become more competitive by offering more or

better services. The factors that contributed to the

success of the implementation were institutional,

the most important being the visible and unwavering support of top management. Key actors were

involved from the beginning and provided their

backing. Users were involved in the feasibility

study and in the actual implementation.

These factors, while critical, are not sufficient

for success. If unwise technical decisions are made

or based on inaccurate technical information, the

implementation is likely to be compromised. While

it is felt at Commercial Bank that the original implementation was a success, there have been some

problems. For example, they were not able to “close

more deals, which was one of the goals; the number of functions available on the system was reduced after the pilot project was completed to reduce costs; communications, especially overseas,

have been a problem because of low-speed lines

and lack of sufficient equipment; and at certain

times, the system is heavily loaded which affects

performance and user satisfaction.

‘This section is based on research performed for ()’I’.\ h} ,Jon

Turner, New York Llniversity,
338 ● Automation of America’s Offices —

Commercial Bank has over $40 billion in total

assets and employs some 8,000 people, worldwide.

Since 1977, equity has grown by more than $1 billion, largely through high earnings performance

achieved by taking advantage of capital market

opportunities.

There has been an intense effort to control noninterest expense. Over the past 6 years, operating

expense has increased at an average annual rate

of 11 percent, compared to 16 percent for a composite of the nine largest U.S. commercial banks.

Several tactics have put downward pressure on

expenses, among them, the application of technology in labor intensive areas and internal expense

budgeting.

The International Department (ID) is one of

three groups that make up the banking function.

As part of the ID, the Asia/Pacific Group, which

was the focus of this study, provides commercial

banking services and has well over 60 percent of

its staff located in field offices in Asia and the Far

East.

Most of the 800 information systems personnel

in the bank were part of the Technology Department (TD), which developed and maintained most

of the bank’s computer application systems and

ran the data centers. TD was the builder of large,

transaction processing systems and was viewed

by many as being slow and not responsive.

Almost all of the Asia/Pacific Group’s communication, among the field offices and between the

New York and field offices, took place over an international TELEX System, because of the need

for a hard copy record of the communication on

both ends and because time differences restricted

the time available for telephone conversations during the normal business day. Long (15-20 page)

loan proposals had to be sent between Tokyo, Hong

Kong, New York, and London several times during their preparation. Preparation of TELEX messages was time consuming for the principal and

the secretary, inefficient, and error prone. It discouraged sending messages.

The possibility of using computer and communication technologies to overcome the communications problem in ID was of interest to the head

of the Asia/Pacific Group, who realized that poor

communications was compromising his people’s

performance and his ability to control them.

Implementation

Initially it was thought that communicating

word processors in each location could handle the

job, but this approach was too limited. The Office

Information System (01S) was then planned. It

was intended to be integrated, providing a variety

of functions, for example, electronic mail, coupled

with text editing to deliver information directly

to people in the field.

The concern over controlling expenses meant

that the pilot had to be tied to clear-cut goals. It

was to be a means for increasing revenue and a

catalyst for behavioral change, to improve communications, and to be financially justifiable in

terms of cost savings. Specific goals in customer

service were same day response to 30 percent of

customer Money Transfer Inquiries from field locations and elimination of all routine customer inquiries from the field to the New York division

Customer Service Officer. Other goals included

building a database to assist in identifying customer needs, developing and monitoring market

plans, and permitting broader product requirements’ assessments across units. Finally, the 01S

pilot test was to reduce the amount of time marketing personnel spent on administrative matters

by 15 percent, eliminate 25 percent of the problem

solving workload of the New York based Customer

Service Officer (permitting more time to be spent

in customer contact) and reduce secretarial workload.

Planning for 01S began in the spring of 1982.

Equipment was installed in New York during the

summer and in the field during the winter of 1983.

Evaluation continued into the beginning of 1984.

An employee was hired to implement the 01S

who had experience in implementing a similar system for another financial institution. The bank also

retained a consultant. A two-stage pilot test gave

ample opportunist y to debug and configure the system. A member of the Asia/Pacific Group was the

full-time user representative on the implementation team.

Equipment.- The 01S included word processing,

electronic mail, document processing, desk management with calendar, and calculation abilities,

and forms development in one integrated package.

The system is connected to a time sharing system

and to the bank’s mainframe computers. A 72 line

statistical multiplexer (STAT MUX) tied to a

microwave link is used to connect the equipment

between New York City offices. Terminal transmission speeds are 9,600 baud at the headquarters office, 2,400 baud at another NYC location,

and 1,200 baud on the overseas and dial-up links.

The system can access the time sharing system,

transactions for each customer, commercial loans,

historical records, financial asset inventories, and

all other banking databases.
App. B—OTA Case Studies ● 339

Methodology

This study focused on the individual worker, although some conclusions were drawn about work

group, departmental, and organizational processes,

Semistructured interviews, memoranda, and observation were the primary method of data gathering. Respondents were selected from all levels of

the department studied, ranging from clerical to

department head, based on the participation in the

implementation and on their position in the organization. For purposes of verification, at least two

subjects were selected from each work group and

from each organizational role. They included workers who had been in the field at the time of implementation.

An open ended interview selection process was

used, adding personnel to the list as their roles

were identified. The senior personnel were interviewed last to permit the identification of critical

policy issues.

The Users

One of the goals of the system designers was

that everyone would prepare, send, and receive

their own messages. Officers would read their mail

first thing in the morning and prepare their own

replies. They may check the system 3 to 4 times

additionally during the day. The system is used

heavily by personnel when traveling to field locations. However, the lack of enough terminals in

overseas offices limits access to the system. The

speed of the lines and the need for certain operations offices in New York to be open in order to

use on-line files also restricts the usefulness in the

field offices.

Secretaries make extensive use of word processing and electronic mail. Large documents are prepared off-line, proofed, corrected, and then transmitted over 0IS. The low-speed lines restrict use

of the system interactively.

In New York, most employees in Asia/Pacific

have their own terminals which, along with the

higher speed lines, encourages use. Employees do

much of their own document preparation. Officers

and support staff make extensive use of the connections to other systems, directly accessing the

Money Transfer, Cash Connector, and Historical

Research systems. An active officer in New York

might be continuously logged in to the system,

receiving 10-15 messages per day and transmitting 7-10. Meetings may take place around a terminal while scrolling through a document or list.

Some officers use 0IS to access the time sharing

system where they execute analytic procedures and

route the output back to the terminal or printer.

A spread-sheet function is used for preparing plans

and can be downloaded to a personal computer and

back into OIS.

Job Content and Productivity

The content of secretaries’ jobs has clearly improved. Previously, up to 40 TELEXs per day

would be sent, which meant spending 2 to 3 hours

in a TELEX room and many more hours in preparation. Now principals send most of their own

messages. Because not all offices have 01S, some

TELEXS are still sent, but this is much easier with

the 01S. The secretaries’ typing load has been reduced and now consists mainly of larger manuscripts. This has freed them for other activities

that includes some customer contact and some research. The word processing software helps them

to create more “professional” looking work. Some

secretaries feel that the total amount of paper has

decreased; however, many principals do not agree

with this.

The secretaries feel that they have acquired new

skills and that they are more productive. New career paths have opened up for some secretaries who

showed unusual interest in or skill with the system. Some were promoted to system “expert,” providing consultation and teaching to others in the

group. Some were transferred to the Information

Management Systems group where they are pursuing a systems career. Management appears not

to have anticipated the change in work mix for

the secretaries. Each secretary has been left on

his/her own to work this out.

Some managers feel that the system helps them

establish priorities in their work or that they are

more aware of what is going on in overseas offices.

Because information is easier to transmit, more

is sent. Principals feel more productive because

the number of telephone calls and memos has decreased, messages sent on the system tend to be

brief, there is less time wasted in telephone tag,

and more reports are distributed over the system.

The Monthly Profitability System used in planning, formerly took several days to distribute, Now

it is distributed instantly by electronic mail. Although more useful information is being communicated, the number of trivial messages has also

increased, Communications tend to be among peers

rather than flowing up and down the hierarchy.

For certain people, the system has served as an

excuse not to get out into the field. There is some
340 Automation of America’s Offices

concern that management will see everything

through the machine and will not benefit from exposure to the field offices and customers.

In times of great pressure or emergency, workers at Commercial Bank tend to revert to their old

methods of doing work. They pick up the phone

to relay messages or they may not read their electronic mail for several days.

The effectiveness of the organization as a whole

seems to have increased because of the increased

access to the various databases such as historical

records and customer transactions.

Training

The original concept for training was one-on-one

training. Often an on-site person in each office was

designated as the “expert” in that office, received

special training, and became a “friendly’ source

of information. While there was some “cultural”

resistance to using the system in the field at the

more senior levels, this was a short-term phenomenon and disappeared when the “boss’ began using

it.

Special care was taken to have documentation

prepared and to provide training sessions on the

equipment. The training was staggered to accommodate new users over time. A good portion of

the staff were trained by their colleagues, rather

than in the formal training sessions. The simplicity of the system and its self-help features made

it easy for many of the staff to learn on their own.

Organization

Although there have been no major changes in

structure or social support, the system has facilitated social interaction among levels. Since the secretaries were the first trained on the system, they

later aided in teaching senior officers. This served

to break down social barriers between levels, particularly in the field offices.

The system also permits more time/place flexibility in performing work as managers can do their

work from home or hotel rooms and do not have

to spend as much time on the telephone. Formerly,

all information was sent to New York for entry

into the systems. Some of the data entry is now

done in the field, which better distributes the workload and makes the system more current. Also,

field personnel communicate directly with operations to resolve some problems rather than going

through the Customer Service Officer in New York.

Conclusions

Employees at Commercial Bank feel that there

has been an increase in individual productivity and

more communication with customers. Although

this improvement is difficult to quantify, a 1 day

turn-around on approvals for certain proposals has

made the bank more responsive to customers. Marketing personnel have not reduced the time they

spend on administrative matters and Customer

Service Officers still handle most of the contact

with the field. In the New York offices, the number of secretaries has decreased from 11 to 7. Labor savings figures were not available for the field

offices.

01S will not be fully cost justified on the basis

of electronic mail alone. One of the most important benefits of the system is access to the various application systems such as money transfer,

commercial loan, and collections. The full potential has not yet been realized. The use of leased

lines and satellite communications could increase

bandwidth and make the system much more usable in the field. Local processors in major regions

would reduce traffic on the relatively slow transoceanic links. The real payoffs will occur when the

system is used as a single interface to all written

material and this has not yet occurred, possibly

because of the costs involved, This is an example

of the conflict between controlling operating expenses and taking advantage of office automation

to improve operations.

Development, Implementation, and

Impact of Office Automation at the

Office of the United States Trade

Representative

Introduction and Background

Office automation at the Office of the United

States Trade Representative (USTR) has established extensive system capabilities in a relatively

small agency with wide ranging policy responsibilities. The ratio of terminals to employees is

almost one-to-two, an achievement that is not common at this early stage of development.

This case study reviews the brief 25-year history of the office, its role in international trade

“This section based on research performed for ()’I’A by J$rilliam Neufeld, consultant, Washington, DC.
App, B—OTA Case Studies ● 341

policy, early efforts to automate a number of functions to aid in carrying out its responsibilities, and

how these early efforts served as the beginning

of the present automation system.

USTR is a small agency with a permanent staff

of 122 in 1984 and a total staff including contractors and part-time personnel of 183. Assisting the

USTR with his responsibilities for trade negotiations are three Deputy U.S. Trade Representatives

who also hold the rank of ambassador, two in

Washington and one in Geneva, Switzerland. There

are also assistant representatives in trade policy,

industrial and energy policy, international investment policy, agriculture and commodities, General

Agreement on Trade and Tariffs (GATT) affairs,

and for several specific areas of the world.

Three events contributed significantly to development of office automation—commitment by the

United States to a new round of multilateral negotiations and the need for a method to handle large

volumes of trade data and material, the failure of

the Department of Commerce to assume a leading

role in the creation of a centralized trade database,

and the introduction of microcomputers into the

workplace. Computer technology suggested to

USTR that a database could be developed specifically for international trade, from data that existed in files of many different agencies with responsibility or interest in international trade. A

consolidated base of accurate information was

greatly needed.

Initial efforts by USTR to centralize trade data

used contracted computer and programming time.

A plan was outlined utilizing the hardware and

programming capability of the Central Intelligence

Agency (CIA), including the development of communications capability between the USTR Washington and Geneva offices by high-speed data link.

The program was eventually transferred to the Department of Commerce computer facility and to

a computer system at the National Institutes of

Health.

In 1977, USTR formally proposed development

of a centralized computer system for the trade community to eliminate duplication of effort. It would

require each agency to contribute data to an information pool. A major goal was to give trade professionals direct access via computer terminals to the

data. The system became known as the Trade Policy Information System (TPIS). The NIH, Division of Computer Research and Technology was

chosen as the main computer support facility because many agencies already used the system and

it was cost effective. By 1979, the data system

was working and in 1984, it was renamed, Trade

Policy Staff Committee (TPSC) TradeNet. Office

automation followed development of the large

system.

Methodology

Personal interviews were conducted with 37 people, including 10 senior staff, 15 professional staff,

and 13 secretarial staff members. (Secretarial staff

at the agency currently number 46, including 3 confidential secretaries.) Four of the ten senior staff

interviewed had terminals on their desks; the others did not have direct access to computer terminals. All but three of the professionals interviewed

had computer terminals at their desks.

Terminals had been available to most of those

interviewed for 1.5 to 2 years. Few USTR staff

used the system directly before that. Office automation is a recent development, and work patterns,

habits, expectations, and performance are still

changing. In spite of this it was difficult for some

respondents to recall how they worked previously,

and conversely, difficult for senior staff to notice

significant change because they have not participated as fully.

Implementation

The computerized trade database has become

a major component of the tools used at USTR and

was the forerunner of the office automation system that eventually developed. The interagency

trade database and some additional electronic capabilities evolved over the course of 15 years. Introduction of a more fully integrated and comprehensive office automation system took place in only

5 years.

There was as much planning and consideration

on the part of the Computer Group and senior management as time and budget allowed. The first features to be developed were systems for sending

messages between offices electronically and for

keeping track of incoming mail to assure timely

response. This system, although not unique, was

ahead of many other such programs in government.

Since most of the agencies participating in the

shared data network had some terminals allowing

direct access to the computer facility, an electronic

mail system was introduced in 1980 using the existing elements of the TradeNet system. It allows

users to send and receive messages and completed

documents, and enables members of the Trade Policy Staff Committees to transmit unclassified

documents. The system serves nine agencies, in-
342 Automation of America’s Offices—

eluding the Office of Management and Budget;

Departments of Agriculture, Commerce, Interior,

Justice, Labor, State, and Treasury; and the International Trade Commission. A telemail system

is available for communication 24 hours per day

between Washington, Geneva, USTR Ambassadors, and staff members on travel. It is also possible to use this system to transfer documents into

the word processing systems in Washington and

Geneva.

USTR had only begun to purchase terminals for

those outside the computer operations group in

1980 and electronic mail was not available to all

staff. To use the electronic mail or database systems, it was necessary to use one of the few terminals available through the computer operations

group. To encourage users to sign on to the system frequently despite the inconvenience, a calendar was published electronically of daily meetings

and events held at USTR. The International Trade

Commission added a calendar showing trade decisions being considered by the Commission each

week. A system designed to keep track of the increasingly large amount of correspondence directed

to the agency was developed at the same time.

By 1980, the agency had acquired a computer

to do data manipulations and communicate with

the NIH system, and a minicomputer with capability of supporting 128 users. A needs study recommended that the ultimate configuration be a

combination of stand-alone units and shared logic

terminals that would use the same software, be

linked through telecommunications, could access

electronic mail and files, and could share common

resources such as printers. Terminals were placed

in only a few offices at first, but as professionals

gained experience using the system, others asked

for terminals. By the end of 1983, more than 50

terminals had been installed. All secretarial staff

will eventually receive stand-alone machines. There

were 36 more microcomputers on order at the time

of this study.

Training

Organized training activities for users of the

trade data system expanded in 1981. A USTR Computer Users Manual was issued. Formal group

training and orientation sessions were held. Individual training sessions and ongoing technical

assistance was provided on demand to new users.

A staff of six “information counselors” was hired

within the Computer Group. Additionally, six parttime student workers were added to assist with

the increasing workload of the Computer Group,

including maintenance and updating of the systems, updating training manuals, and preparing

the daily newsclip service.

A vendor provided training for secretarial staff

members after acquisition of 18 microcomputers

in late 1983. Training by outside sources of both

professional and secretarial staff was cited often

as one of the least attractive experiences with

USTR automation thus far. All found it to be unsatisfactory because of the use of ‘‘computer language” to describe operations and lack of explanation of technical details. The agency has found

it more satisfactory to use in-house staff for training because it is more useful to the employees and

because it is more cost effective.

As the agency and the system grew, computer

operations personnel were engaged almost full time

in system construction, maintenance, and responding to requests for assistance, leaving little time

for organized training. A “control desk” has been

recently established to assure that someone is

available to answer questions or help solve problems, releasing the Computer Group staff for other

tasks including advanced training sessions.

Job Content, Skills

About one-half of the senior staff, including the

agency’s top official, uses the terminal in their office infrequently. The reasons most, often cited are

that they do little creation and revision of documents or data retrieval and analysis. Because the

agency is so small, use of the calendar function

is not crucial. They do not use electronic mail internally or between agencies because either they

or their counterparts in other agencies do not have

terminals available. They do not use the word processing capabilities, preferring to rely on their subordinates to produce required documents or data on

request. They use the telephone or short memos

and letters to conduct business. Negotiating trade

issues, or discussing policy options, duties primarily reserved for senior staff, requires face-to-face

contact with counterparts in other countries or

government agencies. “Diplomatic niceties” would

preclude the use of teleconferencing technology for

conducting trade talks or other negotiations. As

a result of not having a need to use a terminal,

half of the senior staff interviewed expressed some

reluctance about learning to operate the equipment.

The opposite was true of most professional staff.

They use their terminals frequently. In the absence

of time or opportunity to participate in formal

training sessions, all said they learned the most

about how the system worked by “playing with
it. ” Each interviewee suggested that it had taken

some time to become comfortable with the idea

of typing rather than writing, or with the technical aspects of the equipment.

Most professionals described increased self sufficiency in document production as the greatest time

saving, as well as adding greater satisfaction to

the job. Without the need to rely on secretarial

support to do drafts, rewrites, or make copies, the

process became not only faster but less stressful,

Secretaries commented that they believed there

was less anxiety on the part of professionals, who

used to wait for typing, and less stress on secretaries as a result.

Professionals noticed that deadlines on occasion

had moved up as the ability to meet them had improved. Senior staff said that they had become

more conscious of time saved, and as a result, delayed making assignments knowing their staff

members were able to meet shorter deadlines.

Professionals described significant changes in individual writing style; word processing capability

enables them to spend more time thinking about

their subject. Senior staff, again without exception, suggested they were more likely to send a

document back to correct small errors or to add

clarification because they knew it would take much

less time with the automated equipment.

Several professional and secretarial staff members were more satisfied with their jobs because

automation let them do their work better. Some

secretaries performed more typing in the same

amount of time; others spent less time typing the

same amount of work. Some were dissatisfied because the job was uninteresting, especially those

whose workload had been drastically reduced. In

a few instances, secretaries had been able to take

on new responsibilities such as research and writing. If that becomes general, the secretarial staff

may seek increased pay to reflect these responsibilities. But because USTR is a small agency, opportunities for advancement may be limited.

Productivity

USTR has a growing workload and the need to

keep up with changing conditions. The “product”

of the agency is, at the broadest level, advice to

the President regarding trade policy options and

choices, and serving as “honest broker” between

the many groups with an interest in trade policy.

When measuring the effect of office automation

at USTR therefore, one must evaluate fairly intangible products—coordination of discussion, interpretation of facts, analysis, and thought. More

App, B—OTA Case Studies ● 343

and better databases have contributed greatly to

effectiveness in carrying out this mission.

Increased productivity at the professional level

was achieved by the use of the electronic mail system. The ability to send and receive documents

by electronic mail has improved the process of comment and clearance. The time for review and clearance of trade policy positions and papers had been

cut in half in some cases.

Professionals felt that they could get their work

done much faster, which allowed them to clear up

backlogs, Without exception, respondents described

a decrease in real time of 50 percent in completion

of projects.

Organization

As yet it is impossible to relate hierarchical organizational changes within USTR to the introduction of office automation, No major organizational changes have taken place since 1979.

However, a number of established office relationships have been affected, especially between professional and secretarial staff members, As many

professionals become adept at performing their

own word processing, some secretarial staff have

begun devoting more of their time to other work

while others have become dissatisfied with their

jobs and the lack of challenge.

The increased knowledge and contact with others

in the trade community may change the career expectations of the junior staff. When senior staff

become more familiar with the potential of the system, they may assume more direct responsibility

for day-to-day conduct of operations.

Conclusions

The agency has a better understanding of issues

under negotiation because of their automated system that provides more pertinent information on

a wide variety of issues. Staff productivity has increased, the number of meetings required for document clearance has been reduced, and the time

savings allow them to keep up as issues develop.

The professional staff are faster to act and react,

have been able to adapt to expanded responsibilities and have better data to support their analytic

work. The secretarial staff produce work of higher

quality and the office runs more smoothly.

The system is appreciated by all of the employees in this agency, although to varying degrees.

The senior level employees do not have much occasion to use it, the professional employees are

innovative and interested in their use of it, and
344 Automation of America’s Offices

the support staff’s experiences range from boredom to hope for advancement.

The results of this study, while not unexpected

or dramatic, provide indications of the types of

personal and organizational changes that have

occurred with office automation and also provide

points of departure for speculation on future

changes that might occur as personnel become

more familiar with the system capabilities.

The Impact of Office Automation on the

Municipal Work Force of New York City’

Introduction and Background

The primary theme evolving from a study of the

office automation process in three agencies of the

New York City Government is that management

strategies and agency goals play a fundamental

role in determining the effectiveness of public sector as well as private sector office automation. Improved productivity in terms of increased output

was achieved in these agencies. However, two

different methods of automating services had

different effects on output, worker satisfaction, and

quality of service. The assembly line style often

used for processes which can be mass-produced

and processed repetitively, resembles the industrial assembly line in its effects. Customized services that enable creation of databases for new analytical purposes were generally more successful in

increasing output, worker satisfaction, and quality of service.

This study looked at four occupational categories—clericals, paraprofessionals, professionals,

and managers. The principal findings were—an increase in work output; a perceived increase in the

quality of output; and under certain circumstances,

evidence of the creation of new work. Reduced employment has been an objective of the New York

City Government since fiscal problems of the mid1970s and the cost-justification of acquiring automated equipment has included a reduced work

force.

The three agencies studied in New York City

were the Human Resources Administration (HRA),

the Department of General Services (DGS), and

the Department of Finance (DF).

The HRA is the largest municipal agency in this

city, with 24,000 employees and a budget of $4.1

billion. It serves over 1.5 million poor and elderly

‘This sec~ion is based on research performed for ()’f’A b}’ Joan

(lreenbaum of (’ity IJniversity of New York, an{i (’ydney Pullman and

Sharon %ymanski, The I,abor Institute, New }’ork (’it}’.

through public assistance, food stamps, Medicaid,

day care, shelters, protective services, and job

placement and training. Before 1979, all typing

was done manually. The massive paperwork and

spiraling costs caused HRA to develop a plan to

automate. Today, 23 office systems serve 39 of

the 52 program and administrative support areas,

providing word processing, data processing, and

communications in a single system.

The DGS provides support services to other city

agencies, such as distributing and maintaining municipal supplies and services, producing all city

publications, constructing and maintaining the

park and street lighting systems, providing all construction services, maintaining city vehicles, and

managing the public radio station. DGS had 2,500

full-time employees and a budget of $350 million

for fiscal year 1984. In order to improve its service

delivery, productivity, cost containment, and revenue enhancement, DGS setup a Technology Task

Force made up of technical managers from various units. All employees were encouraged to take

part in the selection and implementation of office

systems. Word processing was first introduced in

1980. Two systems with 23 terminals in two buildings performed straight word processing tasks.

The first users were volunteers. In a short time,

the demand from workers resultecl in more rapid

introduction of the systems. The system has been

upgraded twice since 1980, evolving from a word

processing system to a hybrid system, which includes data processing applications. The system

is also linked to the city’s central mainframe computers to further integrate word and data processing applications.

The DF administers and collects all taxes, real

estate assessments, and other city revenue. It

manages and invests city finances and administers the payroll. Office automation systems have

contributed to the department’s efforts to reach

its revenue goals. Before 1980, 90 percent of the

work at the DF was batched, typed. and handwritten. Over 1,500 installment agreements for tax payments were tracked on 3x5 cards. The quality of

letters mailed to taxpayers and the productivity

of the workers was low. There were few production reports or controls and a general lack of management control. Since 1980, a centralized word

processing pool and a microcomputer center for

tracking of tax records and producing reports has

been created. In 1984, the DF had 34 micros, 20

word processors, and 40 to 50 terminals connected

to the mainframe. The agency is requesting 80

more microcomputers.
App, B—OTA Case Studies 345

—

Methodology ing that there is a trend towards more administrate approach for this case study was to locate tion and supervision, which mirrors trends in the

a number of distinct mini-case sites within the mu- private sector.

nicipal government in which to conduct data

gathering workshops. A matrix was developed of

the following variables—type of office automation,

date of system introduction, and agency service

type. Interviews were conducted with appropriate commissioners, city directors, department managers and supervisors, and union officials to gather

background information and to gain acceptance

for the study.

Data gathering workshops were conducted for

each group of employees (clerical, paraprofessional,

professional, and managerial), except in the case

of managers using personal computers, where it

was more appropriate to carry out individual interviews, Participants were selected on the basis

of the length of time in the department, with priority given to employees who had been in the

agency before the introduction of the new system.

Participants in the workshops filled out activity

sheet/questionnaires on background and education, job content, work organization, history of

work site, health and safety, and their recommendations. Discussions then facilitated an interchange

of information about each subject area and greatly

enhanced the information gathered.

Employment Effects

The increase in output has resulted in some reduction in staff and there are plans for future reductions. City officials must cost-justify their requests for additional automation and clerical work

is usually targeted for cost savings, because it is

easy to demonstrate that data-entry and wordprocessing functions can be performed with fewer

workers. The Financial Plan: Fiscal Years 1984-

1988 for the three agencies studied projected reduction of 13 administrative positions in HRA, 36

staff positions in DF, and 15 clerical positions in

DGS. These reductions would be achieved by

means of attrition.

As a percentage of full-time city workers, office

and clerical workers declined from 19.7 percent in

1982 to 18.6 percent in 1983, although there had

been increases between 1980 and 1982. The percentage of professionals has declined while paraprofessionals increased, The most consistent increase

is in the category of ‘‘Officials and Administrators , which increased from 4.8 percent in 1979

to 8.9 percent in 1983. The total number of city

employees did not increase nearly so much, indicatWork Organization, Job Satisfaction

and the Working Environment

The overall response towards office technology

by workers participating in this study was favorable. Clerical workers tended to define their satisfaction in terms of release from tedious manual

work. Word processing operators found automation “more fun” than previous work and perceived

that work quality was improved. Professionals’

favorable rating is related to the amount of information that technology makes available, the speed

and control it provides and the potential for new

uses of information.

Worker participation in the introduction and use

of office automation was most limited in work units

in which the tasks were previously rationalized.

The automation intensified the rationalization of

these tasks. Agencies that had more flexibility in

the services they offered, experienced greater

worker involvement in the planning and implementation process.

Dissatisfaction was expressed by clericals, specifically with increased amount of work, routine

and boring tasks, lack of promotional opportunities and physical problems such as eye strain,

headaches, backaches, and stress, In a centralized

work organization in the DF, the process involved

moving the typists and support staff in 30 work

units to a windowless basement room with inadequate ventilation, lighting, and noise control. Typewriters were removed from work units so that all

correspondence would flow through the central

pool. Correspondence was standardized to include

boiler-plate paragraphs. Management sees the benefit as a more integrated work process that can

respond to set quotas, increased quality of work

that elicits more confidence from the public, and

increased tax collections. The women in this unit

felt that they were doing more work for which they

were not being compensated, that the work was

boring and that learning new skills was thwarted.

An unintended side effect was that to overcome

lack of an adequate supervisory system, the women

had to work together to coordinate and organize

their work; this provided them with a feeling of

‘‘running the show’ albeit without adequate training and supervisory assistance.

The DGS reorganization resulted in small clusters of women working as a team with consider-
346 ● Automation of America’s Offices

able control over all facets of their job. The microcomputers were introduced as a resource and tool

for those who chose to use them. Training was provided to all employees by an agency-wide training

center, with no segregation by level of employees.

The managers of this agency see the lines between

clericals and managerial workers blending such

that a clerical worker is not “only a clerk” and

that managers increasingly take on more clerical

duties.

A correspondence was found in this study between the number of hours clericals spent on the

equipment and complaints of eye strain, backache,

stress, and fatigue. Paraprofessionals overwhelmingly linked increased stress with an increase in

workload and to an increase in supervision in the

form of more required reports. The poor quality

of the working environment contributed to health

and morale problems. In most instances, clerical

and paraprofessional workers were not consulted

about how the introduction of office automation

would affect the design of the work process and

work areas.

Unlike clericals, professionals tend to use micros

for inquiry that is immediately job specific. All

of the professionals liked the equipment, but the

amount of work they do has increased. Caseworkers in HRA expressed frustration with having to spend additional time checking on the information that is generated by the automated forms

system. Before automation, they were responsible for determining what basic information was

needed and what forms would be sent out to obtain it, Now, a new clerical position and a paraprofessional position are responsible for these procedures. The caseworkers feel that these workers

do not understand what information is important

to the process and tend to make more mistakes,

increasing the workload of the caseworkers.

Tax auditors in the DF, question the effectiveness of the automated system since their procedures have become fragmented and, according to

the auditors, more clerical in nature. They acknowledge that the computer generates more information quicker and provides more control over the

status of each case, but feel there is less need for

their professional training and judgment.

Analysts in the DGS quickly discovered the

speed and wider range of reliable information that

was available to them. They cited two results—a

power shift in their favor (they had more data on

the various work units they visited) and an enlargement of their jobs to include providing more technical support. Analysts felt peer pressure and self

pressure to become more computer literate. Spending so much time on the system caused one analyst to say, “I need to pause occasionally to remember that I’m a human being. ”

Job Content and Occupational Mix

Whether skills increase or decrease with the introduction of office automation did not seem so

pertinent in this study as did a redefinition in the

meaning of skill. The traditional view of clerical

work sees it as a series of routine, highly repetitive tasks that must be incorporated into machines

to improve efficiency and productivity. However,

there are “invisible skills” that cannot readily be

discerned by an observer but are crucial to the

smooth functioning of the organization. For example, coding and entering information from the

mail into a CRT terminal requires knowing a vast

number of current codes and numerous outdated

codes which must be updated. The process is also

dependent on the worker’s sequential decisionmaking and actions. Since the information entered by

clerical workers instantaneously becomes part of

the database from which other information, conclusions and actions will be generated, the responsibility of the position has increased. The clericals

organized into pools and clusters found an increased need for communication with many different work units and for judgments as to the meaning of the job orders. These “invisible skills” tend

to be used for job descriptions, evaluations, and

salary decisions only for professionals.

Tax auditors felt that their jobs were being redefined by “clerical” tasks. With the new system,

their tasks involve checking various forms generated by the computer, reviewing other auditor’s

work for errors and lack of clarity, and screening

batches of tax returns.

The changed nature of the work has not changed

either the job descriptions or salary level for auditors, but such a possibility is reflected in the history

of the change in the job content of caseworkers,

classified as professionals. During a restructuring

in 1971, the information gathering portion of the

caseworkers’ jobs was removed and assigned to

lower paid positions. Many caseworkers were reassigned as lower paid “Income Maintenance Specialists’ and ‘Eligibility Specialists. As a result,

the 10,000 caseworkers in the city have been reduced to 4,000. No caseworkers have been hired

since 1972 and there have been virtually no promotions.

Job mobility for clerical workers was dramatically changed in the 1970s when steps in the clerical career ladder were eliminated by collapsing
App. B—OTA Case Studies 347

some job titles and eliminating others. Because

the city is in the process of adapting to office automation, job titles, and job lines are in flux and continue to be “worked through” by the city and the

union.

Productivity y

Some managers in the New York City offices feel

that to increase efficiency in the production of their

services, as many clerical procedures as possible

must be standardized and automated. Other managers see no reason to focus on developing word

processing skills, much less job ladders, because

they believe fewer word processing clericals will

be required when more managers learn to use

microcomputers.

All workers perceived an increase in work due

to a combination of factors including work intensification, creation of new work, reorganization of

work and need for more error correction. For clericals and most paraprofessionals, the increase in

output came when automated systems were used

to incorporate large amounts of previous manual

work into preceded forms and standardized letters. This meant the elimination of handwriting

and typing hundreds of forms and letters per week

and a reduction in the time spent hunting for files

throughout the work unit, which spans several

floors. But although clerical workers were enthusiastic about being released from the manual

processes, many of them now spend almost their

entire day in front of VDT screens, In centralized

work units, the integration of the process gives

the manager more control through the establishment of work quotas.

In a decentralized reorganization, the change in

workload resulted from a unique set of circumstances—managers were performing their own

writing and editing to such an extent that the secretaries were bored from lack of work, They requested extra work from other groups inside and

outside the agency.

Training

Clerical workers who primarily performed dataentry functions were given only a few days training in entering codes into the system. They felt

frustrated about their lack of knowledge of the system and had a low level of motivation. They received no word processing training and there were

no plans to offer them further training. Another

group of clericals whoc) were former secretaries had

been sent to training class when they were placed

in the word processing pool. Informally they exchanged information to solve problems collectively

and learn new word processing procedures, but

they felt better training would have reduced the

time spent in problem solving. Secretaries in a third

group, who had organized their own word processing cluster and participated in the decision about

system purchases, were satisfied with the training they had received.

Training in DGS encompassed a broad spectrum

of courses for all employees; introductory classes

were available for both clerical and managerial personnel. A great deal of on-the-job informal training took place. The training center for this agency

was funded in part by outside grants and also operated a retraining program for public assistance

women, who were trained in word processing and

given temporary trainee jobs within the agency.

The program is apparently very successful and the

access of clerical workers to a wide range of courses

seemed to enhance their motivation and self-esteem.

While professionals complained most about lack

of time to learn new applications, they were generally pleased with their training. Complaints centered around their reliance on a minicomputer network and a mainframe database which kept them

dependent on the technical staff to solve problems.

“Downtime” due to an expanded communications

system exacerbated this problem.

Managers, like professionals, said that they were

too overworked to take advantage of formal training programs but felt some peer pressure to do

so. In order to overcome this problem, courses

would have to be acknowledged as having priority

over some work.

Conclusions

This case study paid particular attention to the

interaction of office automation and changes in job

content, work organization, and the physical environment. An overall increase in the output per

worker was found; however, this was not necessarily followed by an increase in the quality of services produced.

Job content was changing; the redefinition of

skill caused an increase in the number of definable

tasks performed and a shift in the type of tasks.

Office automation enhanced the need for conceptual knowledge and abstract thinking at all occupational levels. Changes in job content are affecting

job ladders and promotional opportunities. There

are few promotional paths that could be used to

encourage clerical workers to use their invisible

skills to gain entry to high-level jobs.
348 Automation of America’s Offices

—

Departmental reorganizations accompanied of- These Municipal Government agencies are suffifice automation with some centralizing of clericals ciently large and complex to serve as a microcosm

into pools and some decentralizing into clusters for identifying office automation issues in the Fedand small project teams. The technology did not eral Government as well as other large city and

dictate one form of organizational structure. State governments and corporations.

Complaints of greater stress have been heard

at all occupational levels, most notably from clericals and paraprofessionals.

o