The competitiveness of European companies is largley dependent on their ability to adapt to new social and technical innovations. This often involves major realignments of their business ideas, work organization and technology, and also requires the development of new competencies on the part of production personnel. This text examines the processes which take place within companies undergoing such realignments. It provides a frame of reference for evaluating the character, depth and stability of the changes taking place, and the nature of the competencies which emerge. This framework offers a tool which managment and unions can utilize when dealing with these issues in real life. The application of this framework is illustrated by 11 case studies based on manufacturing and process industry companies from different European countries.