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Chapter 8

notes for chapter 8 textbook readings for lecture 6

Course Code
Lina Samuel

of 6
Chapter 8 1-800 New Brunswick: Economic Development
Strategies, Firm Restructuring, and the Local Production of
Global Services Ruth Buchanan
-Chapter examines the processes of globalization that are taking place in New
Brunswick in ways that are different from the global centre, like Boston or
New York.
-Themes that were emerging in the local economic news: the implications of
new telecommunications technologies, restructuring and reorganization by
firms and the shifting roles of local, provincial and federal governments.
-Strategies from governments, firms and workers created an attractive
environment for call centres.- have both inbound 1-800 numbers- courier
companies to airlines, hospitality industries and financial institutions and
also outbound telephone services - `survey research and fundraising.
-Reorganizing firms changing into call centres where lots of functions can be
centralized and is much more cost efficient N.B realized that it could
market itself as a cheap location for these call centres
-Between 1991 and 1997, call centres created 6.000 new jobs in NB
-The provincial govt played a role in this by initiating the sectors
growth, soliciting firms and offering incentives for those that
relocate. This also occurred during the same time as many other firms
were consolidating and restructuring
-This was linked to globalization but operated in a distinct logic
-Globalization isnt a single process that comes from a global centre, rather
occurs through a multiplicity of interactions and institutions that are local
and have their own histories, needs and instrumentalities. Workers have
agency. Therefore the chapter looks at the complex ways that global
processes are interpreted and transformed by institutions and local workers
that have agency.
-Transformation and growth within the sectors are crucial
-Now services are the central process in spatial and institutional
restructuring, whereas before it was economic processes that did this
increasing significance of legal, marketing financial and management
expertise so key factors in spatial and institutional restructuring are:
producer services and their consolidation as the economic core.
-This polarization of economic activity is producing agglomeration and
-Through a case study of NB this chapter looks at how uneven development in
capitalist forms of social organization places workers and communities in
relation to these service core areas , and how firms participate in these
changes through spatial restructuring and reorganization of work processes.
-Looking at intersection of forces that are producing current restructuring and
the interaction between: multinational firms, regional government and the
individuals in the local labour market
- “back officing the spatial reorganizing of firms that led to growth
of call centres in NB- lower skilled jobs like telemarketing and data
entry are separated from the firm and relocated to a off shore
location where labour is cheaper as well as other expenses like rent,
and there are few other options for employment
-but gains from relocating production are usually limited because firms
trying to save cost have to eventually either increase productivity somehow
or relocate again for even cheaper labour.
-Two approaches to increase productivity
oSweatshop low road approach which depends on a steady
supply of ready labour, invest little as possible in employees
who tend to burn out quickly and the turn over rate is high
oFlexible firms firms invest in their employees heavily, rely on
internal labour markets, and depend on loyalty, commitment
and productivity from employees
-these ideal types capture the important features of restructuring, but it isnt
always as simple as this especially in current processes of economic
transformation where there are ongoing conflicts and accommodations among
local workers. So the chapter also examines the diffs between the approaches
firms take in order to restruct their operations in order to incorporate their
telephone services. There are also similarities in the way they share basic
forms of organization, information technologies, and geographically oriented
restructuring strategies
-companies only relocate the telephone operations in NB and the
higher paid employees of managerial and marketing functions are in
other locations this physical separation can lead to increasing
skills polarization and disappearance of segregated workers from
career paths in the firm, allows different expectations from the
firms other locations when it comes to shift work, productivity
quotas, salaries and seniority
-the establishment of sophisticated networked databases allows the telephone
rep to be in one location and the customer in another, also firms such as those
in the hospitality centre, airline, banks can claim that they are improving
their services by offering the 1-800 numbers thru extended hours
-advantage of unionized locations are somewhere else it enables the
reduction or elimination of them. Also reduces labour costs by
locating a large number of new employees under one roof
-most call centres require employees to adhere to worded scripts this
conforms all employees to a company directed standard of good service
but this is a poor substitute for interpersonal engagement that is face to
face, employees can be disciplined to deviate from the scripts to improve the
effectiveness of the call but doing so without getting caught is difficult in a
BIG Brotherish call centre environment where it is highly monitors
sometimes supervisors know about this and are okay with it because there
are significant incentives were bonuses for performance make up a large
part of an employees income. For example in one American firm in NB,
scripts were sent and changed in NB because they were highly efficient to sell
to a Canadian public but when the American head office called in to monitor
calls, managers warned employees to return back to the original transcripts
-Employees suggested that productivity requirements and working
conditions were unfavorable compared to other locations
-Factors influencing firms decision to consolidate and relocate to NB : the
telecommunication infrastructure in the province which includes the
technology offered by New Brunswick and support services for call
centre operations. Also the availability of a bilingual workforce,
government incentives, and education of workforce.
-Another factor was the history of NB from the 1970s NB Tel had strong
incentives to make the most advanced digital network and this gave them a