Organizational Changes and Policy Measures in the New Economy

An important tendency, emerged in the last decade with the diffusion of the “new economy” (i.e. the adoption of Information and Communication Technologies), is the introduction in many firms of new organizational schemes (involving job rotation, work teams, quality norms), characterized by multi-tasking. The studies undertaken in order to assess the effects of these new practices on firms performance and on working conditions show, on the one hand, a positive impact on productivity and, on the other hand, an ambiguous effect on workers well-being (with new organizational schemes reducing failures and making work more interesting but also increasing pressure on workers and raising injuries and mental strain). Since this is a crucial aspect that must be taken into account to evaluate the long-run sustainability of the “new economy paradigm”, it is important to investigate, also from a theoretical point of view, the consequences of the adoption of the new organizational schemes. This paper considers a model that studies the effects of multi-tasking in an economy in which individuals devote time both to production and to human capital accumulation (in order to acquire the knowledge necessary to use the new technologies) and in which they perform different tasks. In particular, this model assumes that multitasking not only increases output but it also increases costs for the firms (due to interactions among tasks) and induces disutility for the individuals (due to an increase in work rhythms when an individual is faced with many tasks to be performed). Different specifications of the cost function linked to the presence of multi-tasking are considered (so that these costs can be interpreted both as “coordination costs” or as “polyvalence costs”) and the decentralized solution (where households and firms solve separately their optimization problems) and the centralized solution (where a central planner solves the optimization problem) are compared for this economy. The main result is that the social optimum is characterized by a number of tasks per worker lower than the number obtained in the decentralized economy. Also consumption and production are lower in correspondence of the social optimum than in the decentralized solution, that is therefore sub-optimal (confirming the empirical findings according to which an extensive use of multi-tasking can have negative effects). Some policy measures are then considered, in order to correct such sub-optimality; in particular, the effects of a tax applied on the consumer side, of a tax applied on the firm side and of a form of labour regulation are studied. The conclusion that emerges is that the first two measures have no long-run effects on the number of tasks performed by each worker (that should be reduced), and only the third one can be successfully used to eliminate the sub-optimality that arises in the decentralized economy.