This paper analyzes how organizational restructuring is affecting managerial labor markets. Drawing on field research from several Bell operating companies plus a detailed survey of managers in one company, this paper considers how organizational restructuring affects the employment levels, the nature of work, and the career trajectories of lower and middle level line managers. Does restructuring lead to a loss or managerial power and a convergence in the working conditions of managerial and nonmanagerial workers? Or, conversely, do managers stand to gain from the flattening of hierarchies and devolution of decision-making to lower organizational levels?
The paper's central argument is that a new vision of organization has taken hold – one that replaces "bureaucracy" with "enterprise." This vision, however, entails sharp contradictions because it relies on two competing approaches to organizational reform: one that relies on decentralizing management to lower levels to enhance customer responsiveness; the other that relies on reengineering and downsizing to realize scale economies. While the first approach views lower and middle managers as central to competitiveness, the second views them as indirect costs to be minimized. The central question is whether or how the two approaches can be reconciled. The evidence from this case study shows that restructuring has had the unintended consequence of creating new organizational cleavages: between lower and middle level managers on the one hand, and top managers on the other.