Industrial and Business Sociology p.

1 / 8

FINAL EXAM
14-06-2019
Prof. Guillermo Gª Díaz-Ambrona CORRECTED
Name: _______________

This exam —graded on a total of 10 points— includes 10 multiple-choice Questions [10 x 0.4 = 4 points]
to be chosen out of a set of 11 questions, and 2 Free-response questions [2 x 3 = 6 points]. Be aware that
in multiple-choice questions one, several or all answers (a to d) may be correct, and that checking one
wrong answer will make the answer fully wrong. In free-response questions, please answer to the point and
try to respect the extension limits when provided. Remember that an exam should meet proper standards of
presentation and tidiness. Answers that do not meet such standards will be penalized, and I will not grade
multiple choice questions with ambiguous answers, nor handwritten answers that are hardly legible and/or
difficult to understand. Please proceed now to write your name on all 7 pages of the exam.

Answer 10 of the following 11 multiple-choice questions [0.4 points each]. Draw a large cross over
the question you want me to ignore (otherwise, I will not grade Q11).

Q1 ⇾ The following statements help describe the notion of precariat :

a) A rapidly growing class of precarious workers that feels empowered to change society, and are
quickly gaining political influence
b) Workers that suffer from chronic job uncertainty and insecurity
c) On top of job insecurity, low salaries and no access to non-wage benefits (pensions, medical
leave, paid holidays), workers develop a sense of existential insecurity
d) Workers that lose any hope of a stable life due to their extremely low qualifications and skills

Q2 ⇾ In the last 3-4 decades, the huge pressure to improve competitiveness has had profound
implications on firms, amongst which we can mention the following:
a) In the context of globalization, firms are forced to improve labour productivity through constant
innovation: e.g., relocating production to low-wage countries, via higher automation
b) A process of constant restructuring of the firm has reshaped how work and work experience are
widely perceived: e.g., higher job insecurity, increasingly flexible work
c) In order to preserve employment most firms have endured a long-term reduction in profits
d) Facing high levels of environmental uncertainty and risk, firms tend to filter the mounting
external pressures down the organization through adjustment of employment policies

Q3 ⇾ In the face of extreme division of labor and the increasing deskilling of jobs, the literature on job
redesign proposes to make jobs “whole” and meaningful by…
a) creating semi-autonomus work-groups that give workers discretion over their work
b) establishing clear work procedures so as to mitigate anxiety for workers
c) the extreme division of labor (typical of Taylorism) and highly repetitive work does not
necessarily lead to alienation as long as workers are properly compensated
d) managers should avoid “fitting” the organization into the existing technology and, instead, aim at
efficient designs that consider the interaction of both (technology and work organization)

 Industrial and Business Sociology p. 2 / 8

FINAL EXAM
14-06-2019
Prof. Guillermo Gª Díaz-Ambrona Name: _______________

Q4 ⇾ World class manufacturing…

a) fosters empowerment and mutual long-term employer-employee commitment, but it usually
results in a significant deskilling of jobs and higher psychological stress for workers
b) leads to the progressive disappearance of procedures and controls as changes are
implemented via the intrinsic motivation of workers
c) entails a corporate culture break from conventional mass Fordist production
d) involves the successful implementation of practices that rely on a shift towards the more high
commitment style of human resource strategy, and is associated to expectations that every
employee should contribute to innovation

Q5 ⇾ The First Industrial Revolution gives rise to industrial capitalist societies…

a) that experience a profound transformation in the way society and productive processes are
organized, but maintain a stable world-order sustained on tradition and religion
b) where labor becomes the most precious asset in society, thus conferring a competitive
advantage to salaried workers over owners of land and capital
c) where the pursuit of economic efficiency and the “sale” of work capacity leads to a progressively
disembedded economy that alters the nature of work and creates new social classes
d) that thanks to the creation of strong unions are able to avoid conflict and class struggle

Q6 ⇾ The following is true about organizations:

a) Although part of the wider social framework of society, organizations are characterized by a
rather deliberate design both in terms of purpose and means-to-ends rationality
b) Can be seen as the equilibrium of a game imposed by those holding power (managers)
c) Can be seen as a “set of contracts” generating a cascade of principal-agent problems
d) Since power is well defined, conflicts of interest within the organization can be avoided

Q7 ⇾ According to the contingency approach to organizational design…

a) top managers seek the most appropriate shape of organizations in order to adapt to prevailing
situational “contingencies”
b) the technology employed in the transformation of goods/services and the degree of stability of
the environment are considered the two most relevant contingent factors
c) contingent factors (as exogenous constraints) have a similar effect on all activities carried out by
an organization and, thus, require a similar response from all its units / departments
d) high uncertainty tasks are best performed by centralized hierarchies (e.g., a disciplined army),
since this allows for the quickest and most cost-effective coordination

Q8 ⇾ These are some of the main conclusions of the World Bank’s World Development Report 2019
entitled “The Changing Nature of Work”:

a) The number of industrial jobs all over the world keeps declining at ever faster rate
b) Technology reshapes valuable skills: Skilled jobs are created, while unskilled ones destroyed
c) The changing nature of work requires rethinking the social contract: Governments should take
better care of their citizens by insuring a universal, minimum level of social protection
d) Thanks to technology, firms become more autonomous and self-sufficient
 Industrial and Business Sociology p. 3 / 8

FINAL EXAM
14-06-2019
Prof. Guillermo Gª Díaz-Ambrona Name: _______________

Q9 ⇾ The following is true regarding the six strands of thought in sociology of work and industry that
we have considered in this course:

a) The Marxian strand emphasizes the exploitative nature of the capitalist mode of production and
focusses on power relations as factors shaping society and ideas
b) Following the paradigm of complexity and the notion of “triangulation”, these strands enhance
our understanding of social phenomena, even when they offer competing views
c) They all adopt “realist methodologies” and a positive approach to deal with social phenomena
d) The discursive strand focuses on the individual as a tool to engineer efficient organizations

Q10 ⇾ From a diachronic perspective, the following can be said about society’s evolution in the most
advanced Western economies:

a) Changes in the last four decades (e.g., technology, globalization, deregulation) have brought
about an erosion of key values and institutions of modernity (e.g., certainty, rationality,
predictability, social class, nation-state), leading to an increasingly “liquid modernity”
b) The rise of industrialization has transformed the traditional alienation of the exploited feudal
peasants into more cohesive and organic societies
c) Although increasingly rational and efficient, societies have tended ever since the 18th century
towards more personal and direct human relations
d) The Industrial Revolution brought about a transition from the traditional social rules of the
communal society (Gemeinschaft) to the rational and scientific beliefs that sustain the modern,
increasingly urban and large-scale associational society (Gesellschaft)

Q11 ⇾ The following can be said about industrial relations:

a) In the last two decades, the increase in unionization in most developed countries has resulted in
workers gaining bargaining power
b) The various frames of reference used to analyze industrial relations —unitary, pluralist and
radical perspectives— represent de facto ideologies about what's acceptable in a society
c) Many European governments have traditionally followed a corporatist approach to industrial
relations by acting as facilitators in the negotiations between trade unions and employers
d) Industrial relations deal with the activities and institutions that regulate the relationships between
employers and groups of collectively organized employees
 Industrial and Business Sociology p. 4 / 8

FINAL EXAM
14-06-2019
Prof. Guillermo Gª Díaz-Ambrona Name: _______________

Read carefully the following texts —made up of excerpts from various articles and other
information—, and use the proper theoretical framework to answer the questions below. Respect
the suggested length limit when provided, and refrain from blindly copy-pasting parts of the texts.

F1 [3.0 points]

Excerpts from Telefónica-Movistar: a united fight against exploitation by Esther Vivas, online article
published on the Website CADTM on July 1, 2014.

1. The tentacles of Spain’s Telefónica Movistar spread far and wide. I refer not only to the interests of their
shareholders, such as banks BBVA and La Caixa, or close links with political power. In Spain, the company claims to
have 20,000 people on contract. The reality is that 100,000 more work for the company, in the shadows, through
subcontractors. Or the equivalent, in the most precarious conditions. Today, in a historic strike, directly employed and
subcontracted workers together face the multinational.
2. Divide and conquer said Julius Caesar. Telefónica Movistar has done this by splitting its workers: permanent
employees, others in companies providing telemarketing like Atento, or multiple operational and maintenance
contracts such as Cotronic, Elecnor, Abentel, Itete, Cobra … who in turn subcontract to others, some “false self-
employed.” All ultimately accountable to the same company: Telefónica Movistar. But your “enemy” is no longer the
multinational, but that precarious worker who can steal your work and therefore your salary.
3. Employees in the Barcelona area of Telefónica and its outsourced operations and maintenance companies have
been called out on strike. Their main demands are to curtail outsourcing, and where it happens it should not undercut
existing working conditions. The trigger for this rebellion was the battle of the Cotronic workers, one of the companies
contracted by Telefónica to install and repair their lines, and which since 2011 has fired 50% of its workers, to gradually
replace them with bogus self employed, and so even more precarious working conditions.

(a) How has Telefónica’s environment changed since the 1980s (when it was a State-owned operator
with a monopoly on fixed telephony services in Spain)? (5 lines max) [0.5 points]

P2, Due to globalization, ↑deregulation and ↑technological disruption —vividly felt in the telecom
Slides industry—, firms face a more competitive and uncertain environment (↑VUCA): E.g., more low-
cost operators, ever declining prices, new entrants (Google), new technologies (5G). In order to
35 & 36 grow (or survive), firms must be innovative and flexible, and ↑cost-effectiveness of labour through
constant restructuring: e.g., outsourcing (or relocating) ↓value-added tasks, ↑labor flexibility

(b) Taking into account that the author of the article is an anti-globalization movement activist, what
main (optimistic) arguments could use to defend the positive effects of technology and deregulation
on future work conditions and employment quality (5 lines max) [0.5 points]

P3, The optimist view is sustained on the following arguments: (i) Despite causing disruption,
Slide 17 historically, innovation has created more prosperity than it has destroyed; (ii) it leads to work
upskilling based on advanced cognitive skills; (iii) despite ↑uncertainty and ↑anxiety for workers,
the resulting ↑productivity benefits the whole of society (e.g., public services, cheaper goods). In
the telecom industry this is shown by always ↑range of services and ↓cost of communications.
 Industrial and Business Sociology p. 5 / 8

FINAL EXAM
14-06-2019
Prof. Guillermo Gª Díaz-Ambrona Name: _______________

(c) From the perspective of Telefónica’s top management, why would such an organizational
design make sense? In crafting your answer, (i) briefly introduce and apply the contingency
approach, and reason in terms of low vs high uncertainty tasks. (ii) Introduce the two types of
flexibilities that firms require to thrive in a VUCA environment, and apply it to Telefónica. (iii) What
could Telefónica’s CEO argue against the idea of “curtailing outsourcing”? (12 lines max). [1.5 points]

P2, (i) According to the contingency approach, organizational design must adapt to changing situational
contingencies: exogenous constraints such as technology, degree of stability of environment, etc. Thus,
Slides
uncertain, critical & innovative tasks are performed by ↑skilled core staff at Telefonica’s HQ and main
26 & 27 offices worldwide, while ↓uncertainty, repetitive tasks are outsourced (as in the text) or relocated.

P2, (ii) Since in a VUCA environment, flexibility and responsiveness confer a crucial adaptive advantage,
Telefónica must insure: (a) Flexibility for short-term predictability to implement rapid changes via
Slides
employment in non-core, ↑repetitive jobs: e.g., outsourcing to low-cost firms that typically follow a
47 & 48 ↓commitment HR approach (often with precarious working conditions); (ii) Flexibility for long-term
adaptability to insure rapid innovation (organizational, technical, marketing) via ↑skilled core staff that
follow a ↑commitment HR strategy to allow Telefónica to remain competitive in a VUCA environment.

(iii) To survive in a competitive, changing environment, curtailing outsourcing is not an option for
Telefónica, unless the labor market became much more flexible to allow for “short-term predictability”.

(d) Could we expect the Spanish government to introduce in a near future a universal rent to mitigate
the “transition costs” (precarity) incurred by Telefónica’s outsourced labor? Explain why, and briefly
introduce the notions of flexicurity and universal rent (6 lines max). [0.5 points]


P3, The European welfare state provides a balance between flexible job arrangements and secure
Slides transitions between jobs via “flexicurity”: The unemployed receive cash subsidies, training and
25 & 26 active support to find new jobs. In recent years (due to ↑liquid society), there is much debate about
establishing a universal basic income (universal, unconditional, and with cash payments). However,
several factors —the crisis, the fiscal strain faced by governments, and the ageing of society— make
it increasingly unlikely, and even threaten the flexicurity of the European welfare model.
 Industrial and Business Sociology p. 6 / 8

FINAL EXAM
14-06-2019
Prof. Guillermo Gª Díaz-Ambrona Name: _______________

F2 [3.0 points max]

Excerpts from “Disgruntled [irritated] drivers and 'cultural challenges’: Uber admits to its biggest risk
factors”, article published in The Guardian on April 12, 2019.

1. When Uber filed the paperwork for its initial public offering (IPO) on Thursday, in a letter to potential investors, the
CEO, Dara Khosrowshahi, promised to act with “passion, humility, and integrity”.
2. The company acknowledges the “challenges related to our culture and workplace practices” including well-known
problems as Uber’s “focus on aggressive growth and intense competition”. The company claims that its reputation
has also been harmed by “events outside of our control”, such as a series of suicides by New York City taxi drivers.
3. The giant elephant in the room with Uber has been its treatment of drivers. Classified as “independent contractors”,
they are ineligible for minimum wage, overtime, worker’s compensation insurance and other benefits.
4. The company acknowledges that many of its drivers are unhappy. And it points out that it is likely to make the drivers
even more unhappy in the future, both because it is investing in autonomous vehicles to reduce the numbers of
drivers it needs, and because it plans to reduce payments to drivers in order to increase its chances of turning a profit.
5. Other data: Uber CEO earns $43 million per year; Most employees at the San Francisco corporate HQ (e.g.,
programmers, business analysts, financial staff) have yearly salaries above $100.000, while an average driver makes 9$
an hour, working up to 60 hours a week to make ends meet.

(a) Introduce the various elements that define the core-periphery divide and analyze Uber from both
(i) an organizational design (focus on the perspective of the top management facing environmental
constraints) and (ii) an occupational/employment standpoint (from the subjective perspective of
employees). Remember the summary included in the “cube” slide. [2.0 points]

(b) Despite differences between core and periphery, what general trends have a similar effect across
both sides of the core-periphery divide? Think of Uber to illustrate your answer. [0.5 points]

(c) Think about an accountant clerk and a business analytics R&D expert, both working at Uber
corporate HQ. How would their (i) job design and (ii) work experience most likely differ? (iii) Do you
think their wages, their perception about job security, and their power (influence) within the
organization would be the same? Briefly justify your answer. [0.5 points]

(d) Uber CEO stated that “if forced to classify drivers as employees [as opposed to independent
contractors], Uber will have to fundamentally change its business model”. Keeping the taxi industry
as a reference, offer your critical assessment of such a statement. [0.5 points bonus]

P3, (a) Since the 1980s, in response to an ever increasingly competitive VUCA environment, the
Slides flexible firm adopts a dual pattern of employment that divides the workforce into (i) high-
commitment core elements and (ii) low-commitment peripheral elements.
25 & 26
The highly skilled core labor provides Uber with the innovate capabilities needed to insure long-
term adaptability: e.g., develop new business models (e.g., Uber Eats), optimum organizational
design, render production more efficient.

On the other hand, the low commitment peripheral workers —both in-house or outsourced— are
expendable and provide short-term predictability to react to demand cycles and shocks. This
mainly involves low-skilled workers for repeatable tasks that can be treated as a “commodity”.
 Industrial and Business Sociology p. 7 / 8

FINAL EXAM
14-06-2019
Prof. Guillermo Gª Díaz-Ambrona Name: _______________

P2, (a) Continued

Slides
45, 47 In analyzing Uber’s core-periphery divide, we can focus on the following:

(i) Organizational design standpoint: focus on the how top managers and organizational
designers react to environmental contingencies (↑competitiveness and VUCA)

• Core (mainly HQ and main offices in different countries) ⇾ Uber implements a high
commitment human resourcing strategy that encourages core employees to innovate to achieve
L-T adaptability. This strategy is based on (1) indirect controls, (2) high trust and
empowerment, (3) a decentralized structure with flexible procedures. Core workers are offered
good salaries and benefits (pensions, insurance, holidays) and stable employment (as long as
they perform). They are expected to follow intrinsic incentives (motivation, creativity).

• Periphery (mainly applying to outsourced drivers working as “independent contractors”) ⇾

Uber implements a low commitment human resourcing strategy that allows rapid changes via
employment policies regarding outsourced drivers in order to achieve S-T predictability. This
strategy is based on (1) direct controls, (2) low trust and close supervision, (3) centralized and
tightly bureaucratic structure with prescribed procedures. This strategy is supported by IT tools
(the mobile app that allows to tightly control drivers). These precarious independent
contractors face declining salaries, are self-employed (thus obtain no non-wage benefits), and
are expected to follow extrinsic incentives (monetary rewards). Furthermore, the prospects for
the future is to ↑precarity since it is easy for new drivers to enter the Uber platform, and there
is a looming risk of autonomous vehicles entering the market and making drivers redundant.

P3, (ii) Occupational standpoint (subjective perspective of the employee)

Slides
• Core ⇾ “Rich” or “whole” jobs —↑skills applied to creative “innovation”— that give
35-37
employees intrinsic satisfaction. Work is challenging and has expressive meaning (it is
fulfilling). Following a diffuse implicit contract (psychological tacit agreement) and with a
career orientation, for these core employees (at Uber’s HQ and country offices) work is central
in life as it provides excellent material rewards, but also social identity. This is consistent with
the high salaries earned by staff at the San Francisco corporate HQ, as mentioned in the text.

• Periphery ⇾ “Fragmented” jobs —↓skills applied to routine “production” (e.g., to drive)—

that only give employees extrinsic satisfaction, and where work has instrumental meaning (a
means to an end). Following a restricted type of implicit contract, and with an instrumental
orientation to work, for these peripheral employees (mainly drivers that join the Uber platform
as independent contractors) work must be endured in exchange for little “security”, basically to
survive. Drivers seek satisfaction in private life, not at work. This is consistent with the article:
drivers feel mistreated, are unhappy with working conditions and make little money per hour
of work, leading in some cases even to suicide.
 p. 8 / 8

FINAL EXAM
14-06-2019
Prof. Guillermo Gª Díaz-Ambrona Name: _______________

P3, (b) Given the extremely competitive and uncertain environment, some universal trends affect both
Slide sides of the core-periphery divide. This becomes clear in the case of Uber.
53
• Constant pressure to ↑productivity and perform in a result-oriented setting, what entails hard
work and personal sacrifice (availability). This applies both to core and peripheral employees.
Only the control method changes: from indirect control based on intrinsic motivation for core staff,
to direct control mechanisms for drivers.

• Increasing work insecurity, not only for the “peripheral” drivers, but also for the cores employees
working at the HQ and in the international branches. Uber’s “focus on aggressive growth and
intense competition” (e.g., Cabify in Spain) explains why it is not yet turning a profit. In some
cases, due to regulatory changes, Uber must abandon whole markets (e.g., Barcelona), and this
naturally creates insecurity for core staff that must get results or eventually leave the company.

(c) Even though both the accountant clerk [AC] and the business analytics R&D expert [BA] are
formal employees of Uber, the former is non-core, and can be considered “secondary labor”: A
first peripheral group of less critical full-time employees with ↓salaries, benefits, and job security.
As opposed to the BA, the tasks performed by the AC are rather repetitive and can be outsourced
or even eliminated by automation (IT tools). As such, (i) job design and (ii) work experience
would follow all the features of the core (BA) - periphery (AC) divide described in point (a).

P2, (iii) This would be reflected in substantial higher wages and perception of job security for the BA
Slide as compared to the AC. Furthermore, according to the “strategic contingency theory of power”,
firms value more the critical staff that is able to cope with key organizational uncertainties and
31 provide long-term adaptability. For that reason, the BA would yield more power and influence in
a company needing constant innovation like Uber.

(d) Uber is under a lot of pressure to make its business model work, and even while filing the
paperwork for its IPO, the firm is not yet making a profit. In essence, the Uber model provides a
very conventional service —hiring a driver to take people somewhere, just like a taxi—, but in a
very innovative way: Using a virtual platform (app) that just about anyone with a car can join.

However, taking the taxi industry as a reference, it is easy to see that all Uber advantages are easy
to replicate by associations of taxi drivers (e.g., to call a taxi via an app, to rate the drivers, to
have a fixed price, to offer some water, for drivers to be polite), except for one: To rely on low
cost part-time independent contractors (self-employed). But this competitive advantage is only
possible whenever deregulation allows Uber to outsource driving to precarious workers and to
play by different rules as compared to the taxi sector. If regulators forced Uber to pay drivers
overtime, compensation insurance and other benefits, costs would increase and, as its CEO states,
the business model would have to change. A soft way to say that Uber’s business model would
become even more unsustainable, given that even today the firm makes no profit as it faces
↑competition from equivalent platforms (e.g., Cabify in Spain) and the reorganization of the taxi
industry to upgrade their service and be more competitive (probably by also ↑job precarization).

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