When a machine tried out for her job reading electricity meters earlier this year, Vicki Barsczak hoped it would fail. It didn’t.

So, in April, Kansas City Power & Light Co., her employer, became the first big U.S. utility to begin installing a tiny electronic device in each of its 420,000 meters. The automatic reader, which broadcasts data on electricity usage every few minutes, is dooming Ms. Barsczak’s $15-an-hour job—and probably those of all of the nation’s 35,000 human meter readers.

She admits to feeling “animosity toward this inanimate object.”

The number of people displaced by technology—modern-day John Hen- rys—is becoming legion. Automation has been shrinking manufacturing payrolls for years, hut now it is spreading rapidly into the much-larger service sector. Smart machines and networks born of a marriage of computing and communi¬ cations are raising sendee productivity, but also destroying many jobs, destabi¬ lizing others and constraining growth in new jobs.

Since services provide most of the jobs in any mature economy, the new information networks raise doubts about the commonly held belief that tech¬ nology always creates more jobs than it destroys.

[SOURCE: Adapted from Pascal Zachary, “Service Productivity Is Rising Fast—and So Is the Fear of Lost Jobs,” Wall Street Journal (June 8, 1995), pp. Al, A10. Reprinted by permission of The Wall Street Journal, © 1995 Dow Jones & Company, Inc. All Rights Reserved Worldwide.]

CHAPTER 15 Introduction to Cost Management Systems 705

a. One of the critical success factors of most companies is quality output. Often, new technology is acquired for the sake of improving efficiency and quality. However, when new technology is installed, it often displaces existing em¬ ployees. Knowledge of the impact of technology acquisitions on employment may make employees fearful of new technology and distrustful of manage¬ ment. In turn, the lack of trust may impair quality initiatives, including the veiy quality initiatives for which new technology is sought.

What actions can managers take in acquiring new technology to main¬ tain the loyalty of workers and maintain or improve the overall quality of operations?

b. What are the ethical responsibilities of managers to workers in instances where new technology displaces existing workers?

LO1