Researchers of industrial relations issues in manufacturing have long recognized that careful study of production has significant implications for laborproductivity. Recent theory and analysis has shown the large influence of organizational forgetting. The authors of this study demonstrate that forgetting by workers in an establishment or line of production as a substantive characteristic of actual production processes is overstated and that alternative, simpler theoretical and empirical explanations have at least as good explanatorypower. Using inside-the-firm analysis, they find that the omitted-variable bias in other studies due to data limitations has the potential for spurious estimatesof large forgetting rates by lines of work. Further, they find that forgetting, although important and interesting, is not as influential as previous work for labor productivity has suggested. Further analysis of the production function and the role of organizational forgetting needs to be fully specified in a model to include internal production and labor relations characteristics, like those in this study, to be a plausible model of the production process withinmanufacturing establishments.
- Firm performance
- Industrial relations