Management: caught between competing views of the organisation

Keith Sisson

Manchester Industrial Relations Society 17/2/11

Starting points

in search of ‘high performance working’ etc

‘permanent restructuring’ acquisition and divestment ‘centralisation’ and ‘decentralisation’ ‘outsourcing’ and ‘insourcing’

universal models of management ‘systems actor’ ‘strategic actor’ ‘agent of capital’

  

Nexus of contracts  

Resource-based  

Role of the organisation  Role of managers Responsibilities Main focus Basis of competition  Performance measures Scope for coordinated action Horizons  Relationship between management and employees View of labour  Methods of securing commitment

vehicle for contracting  coordinate contacts shareholders only capital market external (M&A)  share price limited short term purely market  

commodity whose cost is to be minimised  financial 

providing goods and services  direct and support  multiple stakeholders product market internal (process and product development) market share  significant  medium/long term market and managerial  

resource to be developed  training/development/’voice’/ participation and involvement 

The competing views

Why ‘nexus of contract’ thinking so dominant (1): the ‘variety of capitalism’

privileged position for shareholders and an overwhelming emphasis on shareholder value as the key business driver

high concentration of institutional share ownership which encourages a focus on short-term profitability as the key index of business performance, rather than long-term market share or added value,

relative ease of take-over that reinforces pressure on short-term profitability to maintain share price and encourages expansion by M&A rather than by internal growth

a premium on 'financial engineering' as the core organisational competence, the domination of financial management over other functions and ‘numbers driven’ as opposed to ‘issue driven’ planning

Why ‘nexus of contract’ thinking so dominant (2): recent developments

deregulation of finance markets in the 1980s (‘big bang’)

‘light touch regulation’

growth of a global capital market

emergence of new investment vehicles (‘hedge funds, ‘private equity groups’, ‘sovereign investment funds’)

‘financialisation’ (ie shift in basis of competition to financial results in the form of current and projected cash returns on investment regardless of product or service)

focus on lost cost rather than high quality

‘traditional’ work organisation

‘hollowing-out’ of employment structure

traditional model of the employment relationship under threat

growing insecurity

growing inequality

growing poverty

assumptions about role of work organisations in human and social capital development in doubt

reliance on debt to ensure ‘confident consumers’ (‘house-price Keynesianism’)

Wider implications

Policy issues

banking reform

a (global) tax on financial transactions

role of hedge funds

corporate governance

‘flexicurity’

strategic approach to NMW

greater transparency

more employee ‘voice’

‘joined-up’ policymaking

Final thoughts

The employment relationship has enduring significance

Understanding of it cannot be extracted from consideration of the wider political economy – approaches that focus exclusively on the organisation and, narrower still, on the individual ‘psychological contract’ simply don’t cut the mustard.

None of the traditional disciplines is in a position to shed much light on unfolding developments and their considerable implications – partly because none of them is centrally concerned with the employment relationship and partly because they are essentially methods- rather than issue-based

A focus on the employment relationship, a distinctive multi-disciplinary approach grounded in critical social science and a mix of quantitative and qualitative research methods means that employment relations is uniquely qualified to do the job