Strategy in Digi Company

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OXFORD REVIEW OF ECONOMIC POLICY. VOL. 7, NO. 1

THE REDISCOVERY OF THE MANAGEMENT PREROGATIVE: THE MANAGEMENT OF LABOUR RELATIONS IN THE 1980s JOHNPURCELL
Templeton College, Oxford

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I. INTRODUCTION
Restructuring and the process of deregulation has been especially marked in the field of labour relations. Institutional changes in the scope and level of collective bargaining, in union recognition, and in dispute resolution procedures have been the hallmark of the decade closely associated with the rediscovery of the management prerogative. Words such as 'transformation', 'the new industrial relations', and 'productivity miracle' were commonly used towards the end of the decade to describe the process of change and the marked break with the past (e.g. Bassett, 1986). It is not the purpose of this paper to assess the extent to which changes have occurred, or to predict how permanent they may be. Nor is it proposed to debate the relative contribution of legislative change, international competi-

tive pressure, changes in the domestic economy, and shifts in managerial and union attitudes to the achievement of change. A familiar list of authorities provide evidence and counter evidence on the degree and type of change (Maclnnes 1987,1989; Metcalf, 1989; Brown and Wadhwani, 1990; Nolan and Marginson, 1990; Oulton, 1990; Beardwell, 1990; Kelly and Richardson, 1989). The aim of this paper is to describe and assess the underlying changes in large companies in management thinking and strategic intentions towards the management of labour in the 1980s. This concerns primarily the development of the firm-specific labour market and organization-based employment systems in contrast to the traditional reliance on the external labour market for labour supply, and on industry-wide wage-fixing institutions for the determination of basic terms and conditions of em-

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OXFORD REVIEW OF ECONOMIC POLICY, VOL. 7, NO. 1

ployment. Although these trends began decades ago in many sectors, it is only in the 1980s that deregulation of much of the labour market can be said to have been achieved. It will be argued that this move to firm-specific labour markets, especially in large companies, has been associated with marked changes in priorities from concern with industrial relations and collective bargaining to the flexible deployment and utilization of labour under the management prerogative. This is associated with an emphasis on individualism away from what many see in retrospect as an undue focus on collectivism in the 1970s. This shift away from collectivism and towards deregulating labour markets is associated with the marginalization of trade unions. The change in priorities may be illustrated by anecdotal evidence from one of the major, heavily unionized, manufacturing companies in the UK. At a two-day meeting in 1990 of all the personnel specialists in the company, numbering over 100, each was asked to specify in writing the major points of concern in managing employee relations over the next few years. The subjects of skills shortage, flexible utilization of labour, team working, reward systems, and performance appraisal headed the list. Industrial relations, defined as relations with trade unions, collective bargaining, and shop stewards were hardly mentioned. This was despite the fact that the company had suffered from industrial action in some plants in the previous 12 months when it decentralized collective bargaining. The personnel director noted that 15 to 20 years earlier the prime task of personnel was 'to keep the peace; keep the factory running; and we were bloody good at it, but it was entirely negative'.' This may grossly exaggerate the extent of conflict and the primacy of industrial relations in the past, and the views of the personnel specialists...
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