An early attempt to pin down the range of firms’ responses to globalisation was
provided by Bengtsson (1993). He identified that firms could respond in three main
ways in which firms to increased competitive pressure. He did not, however, assume
that these ways constituted a stage of development that every firm would inevitably
pass through. Bengtsson argued that firms could improve their competitive position by:
(i) slanting their skill formation strategies to support the development of their existing
range of products and services (i.e. the ‘product-driven’ stage); chosing to build up a
reserve of skill to assist them to move into new markets through making education and
training a permanent feature of their business development strategy (i.e. the ‘market-
driven’ stage) or (iii) placing a much stronger emphasis upon utilising knowledge and
information in novel ways to either solve organisational problems or to innovate and
create new products (‘knowledge-intensive’ stage). Bengtson acknowledged, however,
that the third phase tended to emerge only in those firms, or parts of firms that were
seeking to become ‘knowledge-intensive’ organisations, since this development
significantly altered product and service strategies and skill formation strategies.
An alternative explanation of firms’ responses has been provided by Schumann (1998).
He argued that European firms have adopted one of two main models of production.
One model is based on an intensification of Tayloristic principles of work organisation.
This may be exemplified by the idea of ‘lean production’, as presented by Womack et
al (1999). According to their analysis, although lean production involves providing
worker with more freedom to control their work, it only provides limited opportunities
for using the ‘work process’ knowledge (Boreham 1999), which is held by
organisational ‘communities of practice’, to solve workplace problems. The other
model, which Schumann refers to as the ‘structurally innovative model’ involved
organisations extending responsibility and a high degree of discretion for self-
organisation of technical and management functions and encouraging workers to use
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