The New Old Economy: Networks, Institutions, and the Organizational Transformation of American Manufacturing

The rules of engagement in the global economy and the fragmentation of mass markets have led many manufacturing companies to close down operations in the U.S. Those that survive have done so by focusing on their core competencies in design, marketing, and assembly, subcontracting the manufacture of components to smaller contractors, many still in the U.S. The emerging production regime in these companies is often viewed as consisting of the diffusion of “high performance work organizations” within firms and of collaborative relationships across firms, especially between the major manufacturers—the original equipment manufacturers, or OEMs—and the multiple tiers of suppliers with whom they contract. Skeptics note that old-fashioned, often hostile, arm’s-length contracting between OEMs and suppliers continues to prevail.