This article attributes the declining competitiveness of the British shipbuilding industry from the 1930s to employers' slow and imperfect substitution of bureaucratic for craft conventions of work organization. An explanation is developed for this excess inertia. First, the article maintains that the interdependent nature of British employers' decision-making on matters of training and work organization tended to “lock-in” individual firms to a particular configuration. Secondly, it is shown how the uncertainty over the need for reform perceived by the majority of builders prevented the more progressive minority from using the industry’s collective employers' association to coordinate a timely switch to a more bureaucratic convention. Thirdly, it is argued that once these obstacles were overcome, the process of achieving organizational reform was slowed or even blocked by a lack of trust between labor and management.