Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 2002 11
BOOK REVIEWS
MANAGEMENT FADS
PERSPECTIVES
AND
BUZZWORDS: CRITICAL-PRACTICAL
By David Collins. Routledge, London and New York, 2000, xii + 413 pp.,
$55 (paperback)
M
anagement has become increasingly central to the study of industrial
relations as indicated by the growing number of industrial relations departments which are having to incorporate management-related subjects within their
teaching syllabus. However, one of the continuing frustrations in teaching management from an industrial relations perspective is the uncritical and unitarist
disposition of much management literature. Issues of power, class and conflict
often receive little if any acknowledgment and most management writing relies
upon a naive positivist perspective which advocates normative solutions or ‘best
ways’ to manage. In many cases the distinction between research and consultancybased advocacy becomes blurred as business school academics (many themselves
consultants and ‘gurus’) seek to contribute to the growing juggernaut that is the
‘management advice industry’.
However against this business mainstream a critical perspective has developed,
particularly in Britain where sociology, labour process and postmodernist influences have been strong. Within this literature the management project is seen
as problematic and ultimately contradictory. Indeed the growth of a ‘management advice industry’ is seen as an expression of these internal contradictions.
Management can never attain total control over organisational uncertainty and
the implementation of ‘new’ strategies and practices developed by consultants
and gurus, in turn result in new problems and contradictions, which perpetuate
management demand for new solutions.
David Collins’ book is the latest in a growing number of publications seeking
to debunk the contemporary business mania for fads, fashions and buzzwords.
Indeed, it is somewhat ironic that the growing critical literature on management
fashion has itself become something of a fashion in its own right (a point that
Collins acknowledges at several places in this work). Unlike more popular
expositions such as Eileen Shapiro’s Fad Surfing in the Boardroom (1996) or Hilmer
and Donaldson’s Management Redeemed (1996), Collins’ book places itself
explicitly within a broader critique of management and the management process
which includes insights from the critical management and sociology literatures.
The book is comprised of an introduction and twelve chapters. The introduction and chapters 1 to 3 set out the argument and propose what the author
terms a ‘critical-practical’ perspective to management fads and gurus. Rather than
simply dismissing the tendency within contemporary business towards ‘faddism’
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and a slavish adherence to the latest guru du jour, Collins argues that these
phenomena should be taken seriously because of their impact upon the practice
of management and physical changes in the nature of work (a point that can be
confirmed in the Australian context by reference to the impact of ‘reengineering’ and downsizing upon job security during the 1990s!). In particular, he argues,
management fads and buzzwords are important in the way they reject critical
inquiry and present a ‘ready-made view of the world’. As he stresses throughout
the book, much guru-speak is a ‘grammar of imperatives’ in which ‘change’ is
presented as inevitable and where managers are elevated to the role of change
agents within the framework set out by the gurus. Collins’ major contribution
is to ‘unpack’ the fads and place them within a broader historical and social context which necessarily involves a sociological critique of the management function. Having set out the book’s approach and framework, chapters 4 to 11 then
focus on specific fads and develop a critique of both the ideas that underpin them
and the gurus who have propagated them. These include such usual suspects as
‘culture’, ‘excellence’, ‘total quality management’, ‘empowerment’, ‘reengineering’, ‘downsizing’, ‘knowledge work’, and ‘globalisation’.
As a teaching resource the book is at its strongest in the chapters which review
a specific fad and analyse the language and assumptions underpinning it. In most
of these chapters the specific gurus are identified and Collins highlights the often
woeful lack of empirical research behind the guru tomes as well as the unstated
managerial assumptions that drive the fad. The chapters on ‘culture’, ‘excellence’
and ‘reengineering’ are particularly good in this respect. Indeed, chapter 5 on
‘excellence’ provides an insightful critique of the publishing phenomenon that
is Tom Peters. As Collins highlights, Peters really is the guru’s guru in terms of
the sheer volume of contradictory publications which ultimately dispense with
the pretence of being based on meaningful research. Other prominent gurus who
come in for suitable criticism include Deal and Kennedy (culture), Deming and
Crosby (total quality management), Hammer (business process reengineering),
Drucker (knowledge work), and Kanter and Ohmae (globalisation), amongst
others. A major strength of the book then is the broad range of management fads
and related gurus that are critiqued.
However, the book is not without its faults. In particular, the introduction and
first three chapters which set out the argument and frame of analysis, seem overly
long and convoluted. While Collins argues that the key function of gurus is the
provision of managerial ideologies which justify and reassert managerial authority, the explanation for the recent growth of guru-led management advice is not
clearly presented. Is the explosive growth in the management advice industry (of
which gurus form one part) linked to structural changes in the nature of contemporary capitalism or can it be better understood within changes in the managerial labour process? Another possibility would be to develop the ideological
explanation by drawing on socio-psychological explanations which highlight
managerial uncertainty and anxiety and the way in which fads and buzzwords
provide an appearance of certainty and legitimacy (Gill & Whittle 1992). While
there are hints at such explanations, this could have been better developed through
greater reference to the growing academic debate over management fashion.
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A second limitation is also apparent in the opening chapters which suffer from
a tendency to critique management gurus in the abstract, assuming the reader
has a clear understanding of who the gurus are and what they have said. The
critique here relies upon a review of other critical writers, yet the subject of
the critique––management gurus––receive little direct analysis in these early
chapters. This absence of the gurus in the opening parts of the book becomes
more apparent in chapter 3 (misleadingly entitled “The ‘Guru’ Industry”), which
rather than tracing the parameters of the guru/consultancy industry, reviews and
critiques other writers who, like Collins, have sought to interpret the growing
influence of management gurus. Finally, the author’s writing style is at times longwinded and indulgent. This includes an annoying repetition of key phrases and
examples and a confusing overuse of sub-headings. These stylistic limitations are
likely to distract readers, particularly those who are less sympathetically disposed
to the critical management perspective.
These faults aside, this book does provide a refreshingly critical perspective
on the phenomenon of management fads, buzzwords and gurus and links this
to the broader debates that flow from related academic disciplines such as
sociology, history, anthropology and industrial relations. The coverage of a broad
range of fads and gurus should make this a useful additional resource for those
teaching in management-related subjects, who are looking for a critical reader
to supplement the often woeful texts that exist in mainstream management
subjects.
REFERENCES
Gill J, Whittle S (1992) Management by panacea: Accounting for transience. Journal of Management Studies, 30(2), 281–295.
Hilmer F, Donaldson L (1996) Management Redeemed: Debunking the Fads that Undermine Corporate
Performance. Sydney: Free Press.
Shapiro E (1996) Fad Surfing in the Boardroom: Managing in the Age of Instant Answers. Reading,
Massachussetts: Addison-Wesley
UNIVERSITY OF NEW SOUTH WALES
EMPLOYEE OWNERSHIP, PARTICIPATION
A STUDY OF ESOP’S IN THE UK
CHRISTOPHER WRIGHT
AND
GOVERNANCE:
By Andrew Pendleton. Routledge, London and New York, 2001, xiv + 239 pp., $169
(hardback)
This book has been a long time in the making and, as such, reflects the
long-standing and considerable research effort of the author in the area of
employee share ownership programs. Pendleton has provided us with a valuable
drawing together of theoretical arguments that are applied to this phenomenon
through case study and quantitative analyses of employee buyouts in the UK bus
industry.
Pendleton’s material draws on ‘new forms of ownership’ that are neither workers’ cooperatives nor ‘conventional’ employee share schemes. The material is
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drawn from particular circumstances where employees acquired a substantial
shareholding in the firm of about 15 per cent through a collective company trust
structure, catalysed by the privatisation of the UK bus industry. This ‘new form
of ownership’ does not radically recast management hierarchies as intended in
workers’ cooperatives, but neither are they akin to ‘conventional’ employee share
schemes which are management initiated, and limit employees to a very small
stake, with little or no meaning in terms of the overall governance and structure
of the firm. Conventional employee share schemes are relatively common, and
growing, in Australian firms where employees may hold, at most, 5 per cent of
the issued capital. The conventional wisdom is that employee financial participation forms part of the HRM armoury; it is less about exercising property rights
and more about sophisticated remuneration practices as part of the mantra of
aligning employee interests to that of the firm. This is despite the vicarious link
between individual employee behaviour and the profitability of the firm.
Pendleton’s book is on the exceptionalism of employee share ownership, and
we should not overextend this material by applying it to the common conventional forms. Australia’s case of ‘exceptionalism’ is Lend Lease where employees
currently hold 14.21 per cent of the issued capital and, through the vehicle of a
trust company, form the largest shareholder in the firm. It is not clear though
whether employees at Lend Lease have any impact on the governance of the firm
as collective shareholders, and exercise both property and voting rights.
This ‘new form of ownership’ may occur as a rescue mechanism for a
‘distressed’ firm, where an ailing company requires a capital injection, and
employees collectively provide the medication. Employees can sacrifice some of
their salary to purchase shares in an employee benefit trust. However, over time,
the capital requirements of running a bus company became overwhelming and
ultimately the employees profitably ‘sold out’ to a third party. Ansett employees,
led by the pilots, have twice attempted a buyout of the airline. The lessons
from Pendleton’s studies would point to over-optimism on the part of Ansett
employees, but would not preclude them from garnering a meaningful shareholding in the firm at around 15 to 20 per cent. Such employee buyouts though,
raise the question of whether shifting the capital risk to employees is appropriate
or desirable, and it is notable, in the case of Ansett, that the proposed buyouts
were led by well-remunerated pilots––the most powerful occupational class in
an airline.
The question of corporate governance is the clear theme in Pendleton’s book,
and here he diverges from the usual human resource management and industrial
relations research questions that have been well traversed in Britain, Europe and,
most strongly, in the US. Nonetheless, Pendleton covers this orthodox terrain,
and addresses the familiar research questions through the lens of the ‘new form
of ownership’. Concurrently, he attempts to address the simple but core question of ‘Why are employee share schemes implemented?’. The answer appears
to be that employee share ownership is best considered as a form of employee
investment at the level of the firm.
The pivotal chapters in this book, for this writer at least, were those addressing the question of employee participation and governance, and it is here that
Pendleton draws on new and emerging (North American) literature, which dis-
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tinguishes his work from what has gone before. While employee participation
and the question of governance have generally been considered as distinct and
separate phenomena, there are possibilities of conjunction, contingent on: ‘the
configuration of employee participation and corporate governance in each case
will be a function of the circumstances of ownership conversion and the objectives of those involved in the transition of employee ownership’ (page 118).
Pendleton concludes by drawing a four-fold typology on the possible conjunctions between participation and governance. These include the ‘representative’ form where employee voice contributes to the overall management and
direction of the firm, where this has evolved from pre-existing representative
structures. Conversely, examples of the ‘risk sharing’ category, with lower levels
of employee ownership, were essentially management-driven buyouts, where
employee participation took the form of upward problem solving and information sharing in the absence of any innovation in employee involvement in decision making. The third category––‘paternalistic’ firms––took the form of
succession planning where the owners (as opposed to the managers) actively
sought conversion to employee ownership as a means to protect the firm
from external takeover and because of ‘good old fashioned’ philanthropy. This
category was distinct though from the ‘representative’ form. While there were
examples of shareholder bodies considering issues for the firm, control still lay
with professional managers who ultimately had responsibility for the direction
of the firm. ‘Technical’ forms is the final category at the other end of the employee
participation continuum and confers little or no opportunity for employee participation in the governance of the firm and is merely a relabelling of ‘conventional’ share schemes, initiated to provide ‘innovative’ remuneration practices.
Corporate governance is the buzzword of the ‘noughties’. The numerous and
well-publicised recent corporate collapses have brought corporate governance,
the duties of directors, their accountability to shareholders and their obligations
to employees into sharp relief. The (b)reach of fiduciary duties of directors, the
decisions that are ‘made in the best interests of the company’, and the proprietary
rights of shareholders, as underpinned by Corporations Law, represent an emerging arena for investigation by industrial relations academics, especially as more
employees become shareholders. The convergence of ‘employees as owners’ and
increased proprietary rights is beginning to ferment in the Australian corporate
world. At Telstra, the CEPU backed group ‘Shareholders of Telstra’ (SHOT)
advanced the nomination of an industrial officer as a worker director (who eventually did not get the numbers) and the CFMEU, with some media attention,
raised the flag on international labour standards and independence of directors
at Rio Tinto’s AGM last year. The CFMEU did this, ironically, with little
assistance from Rio Tinto’s ageing employee share scheme.
These nascent activities, by appropriating management prerogatives and
methods, may well represent a locus for employee voice in an environment where
the employment relationship is increasingly individualised. This book then, should
be necessary reading for anyone with these research interests, and should be part
of any library on employee participation and employee investment, however
construed.
MONASH UNIVERSITY
SARAH TURBERVILLE
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POST-FORDISM
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SKILL: THEORIES
AND
March 2002
PERCEPTIONS
By Denise Thursfield. Ashgate, Aldershot, 2000, vii + 224 pp., £39.95 (hardback)
Denise Thursfield approaches the issue of skill trends from a different angle in
this work. Rather than focusing on objective trends in skill development,
Thursfield is principally concerned with how workers define skill in their own
voices. When asked (and they seldom are by academic researchers), what do
workers include under the concept of skill, and how do they perceive their own
jobs in terms of these understandings? To what extent do these perceptions overlap with or deviate from managerial ideas about skill? Using a case study approach
where workers and managers in a glass manufacturing company, a transplanted
Japanese electronics assembly plant and a multi-site chemical works (all in the
United Kingdom) are interviewed, Thursfield attempts to distill employee perceptions of skill and the ways in which they are formed. This information is then
fed back into critical reflections on existing theories of skill.
The first four chapters of the book provide a critical review of the major
traditions in sociological and management theory that have examined the skill
issue. This includes a review of labour process theory, regulation theory, flexible
specialisation and flexible firm theory and Japanese production relations in
chapter 2, while chapter 3 examines differing sociological approaches to the issue
of skill (positivist, neo-Weberian and ethnomethodological), as well as actual managerial paradigms that impinge on workforce skills (Taylorism, human relations
approaches, responsible autonomy and technological control). Finally, chapter 4
provides a sketch of the social realist approach that the author employs for the
remainder of the study as well as the formal model that is informed by this
paradigm.
In a schematic fashion, workers’ skill perceptions are based on the managerial
strategies, the social organisation of work and the technologies that are adopted,
as well as where employees have come from in terms of previous employment,
training and education. In turn the nature of the structures that we are employed
in are determined by the valorisation requirements of capital, and the particular
product markets that businesses operate in, while education, training and employment biographies are all related to the opportunity structures that characterise
the societies we inhabit.
This is an extensive review of the literature that takes up close to half of the
text. As a result the book has a ‘dissertation’ feel to it. The author has an annoying style of referencing the findings of the later substantive chapters in these introductory chapters, which makes for awkward reading. While the ground that is
covered here is broad, the criticisms that are rendered are largely perfunctory. I
would have preferred to see a more sustained critique of the literature that was
most germane to the case studies. As well, this review tended to be excessively
Anglo-centric. Apart from Braverman, and Piore and Sabel, there are few
references to the rich labour process tradition that has developed elsewhere. For
example, researchers such as Hirschhorn and Zuboff have produced studies of
continuous process industries in settings that are very similar to those examined
by Thursfield, but have reached conclusions that are quite at variance with the
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ones presented here. It would have been worthwhile to see her engage some of
this material.
The three case studies and the conclusions that are drawn from them are the
most rewarding sections of the book. The cases were well chosen and the treatment of firms in assembly production (glass and electronic home entertainment
ware), continuous flow (chemicals) and small batch processes (other chemical
products) lends a valuable comparative dimension to the study, as does the selection of a Japanese transplant. Some of the findings are not particularly noteworthy,
while others are definitely worthy of follow-up. Workers who labour in settings
that researchers would consider unskilled, such as the glass bottle checkers in
the study, simply do not possess operant notions of skill. Workers who are
employed in typically Taylorised jobs (for example, assembly line manufacturing) have only narrow, job specific or practical task conceptions of skill, but have
no references to autonomy or job discretion as a component of skill. Maintenance
workers and those employed in the small batch production circuits of the chemical factory, on the other hand, relate discretion and autonomy to a definitional
notion of skill. In other words, most workers, with the exception of the least skilled
glass bottle checkers, have subjective perceptions of skill, but these vary with the
nature of the job held and any upward or downward mobility that the person has
experienced in their working career. Significantly, however, workers are unlikely
to refer to processes of deskilling.
Among the more interesting findings revealed by Thursfield’s research is the
absence of independent effects for gender or employment status (that is, fulltime versus casual) on perceptions of skill. Thursfield also finds that Fordist and
post-Fordist employment attributes are often found in common. For example,
continued Taylorist organisations of work that divide conceptualisation from
execution combined with business strategies are focused around niche market
production using flexible technologies. In the end, it is the division between the
work of conceptualisation and that of execution (that is, old fashioned scientific
management), that best accounts for the subjective perceptions of skill in both
the British and the Japanese manufacturing plants studied.
GRIFFITH UNIVERSITY
IMMIGRATION
AND
BOB RUSSELL
AMERICAN UNIONISM
By Vernon M. Briggs Jr. Cornell University Press, Ithaca and London, 2001, 213 pp.,
£10.95 (paperback)
Organised labour in America has long been concerned with employers substituting cheap, docile immigrant labour for that of incumbent, native-born workers. For decades, in an effort to limit competition for jobs, American unions
aligned themselves with a coalition of groups opposed to mass immigration. As
union membership dwindled in the 1970s–1990s, however, the labour movement
turned an eye towards organising and supporting government initiatives aimed
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at accommodating the interests of workers outside of its traditional base––
workers in direct competition with recent immigrants as well as those immigrants
themselves.
Vernon Briggs’ book, Immigration and American Unionism, focuses on the
relationship between mass immigration and union membership in the United
States. Like Briggs’ 1996 effort, Mass Immigration and the National Interest, this
book traces US immigration from the early stages of nationhood. Unlike Briggs’
early work, though, this book emphasises immigration’s role in union organising
and its impact on union support of efforts to regulate it.
Briggs notes that there are only two periods in American history when union
organising success did not move inversely with the level of immigration: between
1897 and 1905, a period when the US economy was in recovery from a major
depression and was rapidly industrialising; and between 1922 and 1929, an era
of harsh antiunion animus manifest through not only the actions of employers
but also those of policy makers and the courts. This, however, is the only empirical evidence the author offers in support of his thesis that American unions––and,
by extension, American workers––have suffered as a result of mass immigration.
As such, Briggs’ analysis falls short of substantiating his claim that ‘the revival of
mass immigration is likely to be a contributing factor to the decline of unionism’ (page 175). To this end, an equally plausible explanation for the apparent
correlation between these phenomena is that weak unions have contributed to
lack of effective controls on immigration.
The book’s thoroughly researched material on US immigration over the last
two centuries also fails to consider the importance of immigrants in forming the
rank-and-file of many American Federation of Labor (AFL) locals and the
Federation’s philosophy of ‘business unionism’. As discussed by other historians,
immigrant labour essentially formed the backbone of American industry in the
late 19th and early 20th centuries. For instance, Samuel Gompers, founder of
the AFL and himself an immigrant from Britain, began his career in the labour
movement with the Cigarmakers’ Union, which represented a trade dominated
by German immigrants. Other unionised trades were dominated by Irish, Italian,
Chinese, Polish, Russian or American-born workers, particularly on political
issues. Recognising this, Gompers’ philosophy was ‘pure and simple’ unionism,
a pragmatism based, in part, on his view that adherence to a more political strategy was an untenable approach to unionism in light of the ethnically––and hence,
politically––diverse ‘working class’ in the United States.
In spite of its flaws, publication of Briggs’ latest book could not be more timely.
The US Congress is currently debating the Employee, Family Unity, and
Legalization Bill, which would grant a blanket amnesty to at least six million undocumented illegal aliens who have been in the United States for five years or more.
Support from the AFL-Congress of Industrial Organizations (CIO) and many
of its affiliates has given the Bill a significant boost. Those opposed to this proposed legislation claim it would only add to the country’s immigration problems,
created in part by the last amnesty granted by Congress in 1988. Pro-amnesty
advocates, such as the United Farm Workers, on the other hand, argue that a
general amnesty is the only way to protect immigrant labour from exploitation
by employers.
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Briggs castigates the AFL-CIO for having ‘announced a surrender’ (page 179)
and aligning itself with the likes of the National Association of Manufacturers
in support of a general amnesty for illegal immigrants living in the US––‘the act
of a Judas’ (page 181). He suggests that organised labour in the US is faced with
two options: either seek to organise low-skilled new arrivals ‘specifically because
they are immigrants’ (emphasis added) or seek to add these workers to the
unionised ranks ‘purely on the grounds of the pursuit of their employment wellbeing’ (page 178). Clearly, the author supports the second policy alternative, which
makes no distinction between immigrant and low-skilled native-born workers and
avoids the risk organised labour faces of alienating the latter.
In general, Briggs’ book offers an excellent overview of US political and economic history. The author does an admirable job highlighting the controversies
surrounding enactment of the several legislative measures aimed at restricting
mass immigration in the US. However, some issues––such as the women’s movement, events surrounding the Vietnam War, trade and other aspects of globalisation––are discussed with little, if any, consideration of their impact on unionism
or immigration. Nonetheless, given that this often is a very eloquent elaboration
of events which otherwise would make an excellent exposition of the history of
the American labour movement and of US immigration, one hesitates to criticise this book for its frequent digression.
VICTORIA UNIVERSITY OF WELLINGTON
STEPHEN BLUMENFELD
CHINA’S WORKERS UNDER ASSAULT: THE EXPLOITATION
IN A GLOBALIZING ECONOMY
OF
LABOR
By Anita Chan. M.E. Sharpe, Armonk, New York, 2001, xiv + 249 pp., US$22.95
(paperback)
The first thing that strikes the reader about this book about the abuse and plight
of Chinese workers is the presentational style and format, which is different from
many tomes in the social sciences. This is partly driven by the research approach.
As Chan states, ‘This volume can be used to complement academic articles’ (page
3), almost an admission that it is not within the mould of most academic works.
In contrast, it is based on 50 different Chinese newspapers and periodicals, a few
from Hong Kong and Taiwan. The author was able to use this as a data resource
for several reasons. First, there had been a ‘new’ style of reporting in China, which
was very detailed, partly as it was trying to counter, as Chan puts it, the ‘old
sloganizing’. Second, these reports were available because, despite China’s reputation for tight control, the government was not monolithic, and the Chinese
trade union federation––the ACFTU––published many reports which showed
the ‘workers’ state’ did ‘care’ for its workers. One noted drawback of the method
was that there was often little follow-up to these reports; therefore Chan
supplemented these with some further research with visits and using other
documents.
Following the introduction, the next six chapters outline the kinds of labourrights violations suffered, while the final two chapters cover workers’ resistance
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and the pursuit of labour rights. These chapters are composed of sets of
cases and commensurate comments. Interestingly, there are six pages of related
photographs between pages 136–37, but no page numbers given for these. Each
chapter focuses on an abuse: forced labour and shop floor standards (chapter 2);
corporal punishment and physical assaults (chapter 3); occupational health and
safety (chapter 4); right to work (chapter 5); organisation and collective action
(chapter 6); and indentured labour abroad (chapter 7).
A bleak vision is presented: ‘The millions of peasants roaming the countryside desperately looking for work to earn a hand-to-mouth living make up an
almost inexhaustible pool of human machines. They can be worked to the breaking point, and when they flee these dreadful factories, they are simply replaced
by fresh, vulnerable bathes of workers’ (page 10). It is argued that worker exploitation was common. There were abuses in foreign funded factories, particularly
if they were Asian-funded, but also in privately owned factories and to a lesser
extent in factories owned by local governments in rural villages and townships,
and even enterprises owned by the state. Nevertheless, it was the 80 million
migrant workers (in 1999, almost as many as the urban state-owned enterprises
and collective workforce combined) who were the main victims of the most
serious violations. It was a myth that workers in foreign-funded enterprises earned
high wages as there was a need to distinguish between Western (and Japanese)
ventures, with comparatively high wages and little reputation for mistreatment,
and Asian plants, which paid below legal minimums and had harsh conditions.
What causes such a situation? Abuses were likely due to underpinning by an
architecture of practices. Peasants working in urban areas have very different
status from locals, as they need a ‘temporary residential permit’ and are trapped
if employers take it away. They were not entitled to benefits such as welfare,
schooling, property ownership, family relocation or residency. These migrants
are subject to tight ‘immigration’ controls under the household registration
(hukuo) system, with periodic police roundups of those without permits. Such
transgressors are sent back to the countryside. Therefore, workers need a set of
overlapping permissions: to leave their village, they need to apply for a permit
from the local government; to stay in a city, they need to apply to the police for
a temporary residential permit; to work, they need to secure a contract with an
employer; and their stay needs to be approved by local labour bureaus, which
issue a work permit. This system provides potential to transform ‘free’ workers
into ‘bonded labour’ as factories: (1) pay for temporary resident permits, as the
single lump sum is too large for workers, but then deduct monthly repayments;
(2) charge ‘deposits’ forfeited if workers quit before contracts expire or they are
fired; (3) keep part of wages, promising to return money at the end of year and;
(4) keep permits and papers for ‘safekeeping’.
This plight of Chinese workers is also important as it is part of a ‘race to the
bottom’ or ‘social dumping’, which can spread to other countries with competitive down-bidding in whipsaw fashion. Therefore, to alleviate conditions forced
on Chinese workers requires not just the ‘core’ labour rights (association; collective organisation and bargaining; minimum employment age; forced or slave
labour, discrimination) of organisations such as the International Labour
Organisation, but also others, as highlighted by the cases. So Chan argues for
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these ‘non-core’ labour standards (wages and working hours) to be added in.
In terms of obtaining this, Chan notes the usefulness of the anti-sweatshop
campaign––a prosaic mix of groups from unions, consumers, churches, communities and students––in exposing abuses and focusing media spotlight on
Western multinationals operating in China. Similarly, international organisations
had focused mainly on core rights (freedom of association and collective
bargaining). Now she argues, there is a need to (1) widen the focus from core
rights; (2) treat labour rights as human rights and integrate them into relevant
discourse and practice and; (3) apply pressure on government to persuade it to
regulate labour conditions.
The book raises a few queries. For example, there seems to be some inconsistency with her third proposal above. Chan seems to forget her opening points
about some of the reasons such abuses were out in the open in the first place,
such as the fragmented nature of government. This does not bode well for her
suggestions it now take a role. Also, there is a problem with views that the trade
union movement focused on issues (such as collective bargaining) because of their
importance to organising efforts. There are also other reasons for this. For
instance, in the UK the solution to the ‘two faces’ of the labour problem (sweated
conditions and militancy) from the 19th century was seen as collective bargaining. Indeed, this became the focus for much practical, policy and academic industrial relations during the 20th century.
Of a minor nature, I was not keen on the publisher’s house style with its
voluminous endnotes. For example, the first chapter’s 44 endnotes ran for
4.5 sides. There was also some variability between chapters; for instance,
chapter 5 was under 11 sides of text and very short compared to others.
Nevertheless, these are minor points as overall the book it to be welcomed. It
is an important topic and is dealt with in a refreshing and interesting fashion. In
terms of its readership and suitability, it may find its way onto some of my readings lists for students as background reading. Also, it is a useful resource, and
should be taken by libraries and read by not only academics and researchers in
areas such as sociology, employment studies, human resource management and
business, but also by those involved in public policy, government, trade unions
and even managers. Then next time we see the ubiquitous ‘Made in China’ on
a product, we will begin to grasp and understand some of the labour that went
into it.
CITY UNIVERSITY, LONDON
THE STRUCTURE AND DETERMINANTS
EVIDENCE FROM AUSTRALIA
CHRIS ROWLEY
OF
WAGE RELATIVITIES:
By Alison C. Preston. Ashgate, Aldershot, 2001, xiv + 268 pp., £45 (hardback)
This book is about building a bridge between labour economics and industrial
relations, to ‘reintegrate these two disciplines’, in order to establish the relevance
of both economic and normative forces in wage determination policy. The
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particular bridge chosen is the human capital model, which is described as the
‘dominant framework for the study of wage determination’ in empirical economics
research.
The book begins with a summary survey of wage theories going back to Adam
Smith through to the neo-classicists and to the more recent revival of theories
which depart from the competitive models. After a lucid explanation of the human
capital model and its assumptions, the book proceeds to give an outline of the
wage fixing principles of Australian industrial tribunals. It then surveys the
literature dealing with applications of the model to the Australian labour
market. Apart from the relationship between human capital endowments and
earnings, the various studies examine the effects of individual and job characteristics on earnings. The model appears to have performed reasonably well in predicting wage outcomes but the studies deal mostly with the labour market of
20–30 years ago.
The two chapters which follow are based on the author’s own work, updating
earlier human capital results and examining changes over time, and breaking new
ground in analysing female earnings separately. For both genders, the determinants of earnings appear to be similar: education, work experience, family
status, geographic location, public/private sector, industry and occupations; each
and every one is an important determinant. Apart from an unexplained margin,
denoting some form of discrimination against women, the widening gender gap
evident in the 1990s after a period of convergence of male and female earnings,
is attributed mainly to industry structure, greater male labour market experience
and overtime. Further, females appear also to have been disadvantaged in those
States––Western Australia and Tasmania––where deregulation of the labour
market has gone furthest.
Perhaps the most interesting part of the book is the chapter on the operation
of normative (‘fairness’) forces (equitable comparisons and spillover effects) in
Australian wage determination. Here the operation of these forces is tested by
examining the movement in award rates, over two periods of 11 years each, in a
number of industry and occupational groups.
Three types of cases were tested. The first, related to inter-occupational
relativity movements (within the Federal jurisdiction), shows variable movements,
suggesting the weakness of normative forces. The difficulty with this comparison is that some of the awards chosen were minimum rates awards and others,
paid rates awards. The latter in effect embody imputed overaward payments.
Furthermore, the assumption of no change in the work requirements of the different occupational groups is unfortunately difficult to sustain because, to varying extents, work restructuring occurred in the 1980s and the 1990s.
The second comparison was between certain occupations covered by Federal
awards and by Western Australian State awards. Surprisingly, this shows fairly
stable relativities. Surely, there could not have been any conscious attempt at
applying equitable comparisons, given that in the period examined, the Western
Australian industrial relations system had undergone considerable deregulation.
Further, here again the comparison involves minimum rates and paid rates awards.
Thus, while one has sympathy for the author who is aware of the difficulty of
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testing for the role of normative forces statistically, the outcomes of the
above two tests cannot safely be regarded as established. Perhaps laborious case
studies are a more reliable course for such cases.
The third comparison was between occupations in the Federal Metal Trades
Award. Here, not surprisingly, relativities in the period have remained stable. Nor
are the spillover effects from national wage cases established by econometric
methods surprising. Such cases were intended to flow through the system.
The conclusion drawn by the book from the econometric studies, based on a
model which assumes competitive markets, is that these studies leave a significant degree of unexplained and persistent wage differences––between males and
females, between industries, between occupations, between locations, and
between the public and private sectors. The explanation, at least for Australia,
must be found in the operation of normative forces.
It is fair to say that this conclusion does not add much to our store of understanding of the workings of the Australian labour market based on more primitive statistical techniques. But it is good to know that sophisticated techniques
do not change the results of more pedestrian analyses. These days, no labour
economist worth their salt would deny the importance of social factors in wage
outcomes; nor would those focused on industrial relations deny the relevance of
economic forces in wage determination. The more interesting question is what
effect these institutional forces have on employment, prices and the allocation
of resources.
It is, therefore, questionable whether the human capital model originally developed to derive, from life-time earnings, rates of return from expenditure in education, is the best bridge for the purpose. Simpler statistical techniques would
establish the amalgam of economic and social forces in wage determination just
as well. Why then go to such lengths?
Preston is well aware of the limitations of the human capital model for analysing
wage movements; but she has deliberately chosen a model commonly in use by
many labour economists effectively to expose its limitations for explaining what
goes on in the labour market, at least in Australia. The policy implications she
draws from this are the difficulty of trying to legislate normative forces out of
wage determination, as attempted by the Workplace Legislation Amendment Bill
1999; or to secure a safety net by resort to taxation.
However, the reviewer has two quibbles which should not be regarded as denting his admiration for the work. One, in the opening chapter and repeated later,
is where she says that while labour economists emphasise supply side determinants, ‘such as education, training and experience’, industrial relations
researchers focus ‘on demand side determinants such as unions, and wage fixing
institutions’. Surely, unions and wage fixing institutions are also determinants on
the supply side of labour?
The second difficulty is a lack of clarity on the meaning of comparative wage
justice (CWJ). This is categorised as non-economic while work value is put in
the economic category. While Preston recognises that the two are not mutually
exclusive and, indeed, ‘are inextricably bound together’ (page 82), she goes on
to note that ‘Although work value offers an opportunity [to?] link the economic
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fundamentals such as supply and demand more closely to the wage rate such
practices are constrained by the forces of CWJ’. Unfortunately, this falls into the
popular misconception of regarding CWJ simply as a ‘flow-on’ or ‘spill-over’
force, a misconception sometimes fuelled by loose statements from tribunals. CWJ
is properly regarded as such a force only if no changes in relative job requirements have occurred generally. Until recently, tribunals have normally accepted
that, on CWJ grounds, no flow-on is justified from particular occupational
categories which have been properly upgraded on job requirements grounds, to
others where no change in job requirements has occurred. There have been occasions where departures from this approach have occurred for reasons of industrial expediency. But it is important not to confuse CWJ with flow-ons which
are not strictly justified on work value grounds. It is true, as Preston points out,
that in recent years the Commission has been reluctant to apply CWJ, but this
has to be seen in the context of enterprise bargaining.
Further, while CWJ is often perceived as a social principle, it has a respectable
economic basis going as far back as A.C. Pigou’s Economics of Welfare. Although
referred to as the ‘fair wages’ principle, it relates to the minimum supply prices
of various levels of skill or work requirements. Thus it is an appropriate basis for
minimum wage fixation and justifies Australian tribunals’ stand against granting
award increases on what may turn out to be temporary shortages of certain types
of skill.
It will be remembered that Wilfred Salter (in Productivity and Technical Change)
has argued that, for an efficient allocation of labour, comparable labour should
have the same price in expanding and contracting industries, regardless of economic capacity. This is an implicit endorsement of CWJ on economic grounds.
Of course, where locational immobility persists, it may be necessary to override
this principle in the interest of maintaining employment.
UNIVERSITY OF MELBOURNE
DIAMOND MINES: BASEBALL
JOE ISAAC
AND
LABOR
Edited by Paul D. Staudohar. Syracuse University Press, Syracuse, New York, 2000,
xxxii + 188 pp., price not stated (paperback)
During 1994/1995 an event occurred in the United States of America––an event
which seemingly dragged on forever––which triggered a national malaise, a sense
of loss and despair, a questioning of what in fact was happening to the country.
This event did not involve racial tension or riots, discrimination, rape or personal assault, industrial accidents/deaths, child prostitution, homelessness, crime,
drugs, murder, a person (or a child) going on a rampage with rapid fire weaponry,
police/prison or ‘state’ sponsored brutality, corporate crime or any other calamity
you think I should have included. The event in question was the industrial or
labor (as Americans like to call them) dispute which occurred in Major League
Baseball. The dispute lasted 232 days. Amongst other things, it involved a cancellation of baseball’s World Series which had only been cancelled once before
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in 1904. As Karen Koziara says, in the volume to be reviewed here, baseball
players and clubs/owners ‘have one of the most visible and widely discussed
bargaining relationships in the United States’ (page 33).
Why did this dispute occur? Why did these millionaire players––in 1994 the
average salary was US$1 168 000; the median US$450 000 (page 147)––and
billionaire owners decide to destroy the summer of 1994 and the fall ritual of
following the World Series? As the runners following Forrest Gump, after he
decided he had had his fill of jogging around America, exclaimed with a mixture
of puzzlement and despair, ‘what are we going to do now?’
Since 1989 the National Baseball Hall of Fame and Museum, located in
Cooperstown, New York––which myth has it (and it is a myth) was the location
of the first game of baseball––has conducted an annual Cooperstown Symposium
on Baseball and American Culture. The 2000, or twelfth, symposium was devoted
to labor relations in baseball, with its major focus being the 1994/1995 dispute.
Diamond Mines: Baseball and Labor brings together ten papers presented at this
symposium. The various authors have a variety of disciplinary backgrounds––
history, economics, business, law and English. They seek to situate baseball’s
labour relations in its historical, economic, legal and societal contexts. There are
analyses of the 1994/1995 dispute which employ Dunlop’s well known systems
theory (John T. Dunlop, Industrial Relations Systems, Holt, New York, 1958) and
game theory.
An understanding of the business of baseball (or of any professional team sport,
for that matter) involves the linking of the labour market (for players’ services)
and product market (the provision of games) with antitrust, or competition
policy. It is generally acknowledged by the various contributors to this volume
and other commentators that the 1994/95 disputes was connected to the
inability of large (wealthy) and small (less wealthy) city based clubs to resolve the
problem of how to distribute/allocate income between themselves. In seeking to
resolve this product market problem they happened upon a labour market solution. The clubs decided to impose a salary cap on clubs spending ‘too much’ on
players. The Major League Baseball Players’ Association, and all of its members,
did not believe players should be forced to pay the price of solving a problem of
the clubs’ own making. Hence the dispute.
The different financial strength of owners/clubs is seen as being a result of the
special exemption baseball has enjoyed from actions under the Sherman Antitrust
Act 1890. The United States Supreme Court in three separate decisions––Federal
Baseball 1922 (259 US 200), Toolson 1953 (346 US 356) and Flood (407 US 258)
has provided baseball with its exemption. Moreover, Congress has seen fit to not
pass legislation to remove (with one exemption, see below) what the Supreme
Court itself has described as an anomaly. Over the years various economists and
MANAGEMENT FADS
PERSPECTIVES
AND
BUZZWORDS: CRITICAL-PRACTICAL
By David Collins. Routledge, London and New York, 2000, xii + 413 pp.,
$55 (paperback)
M
anagement has become increasingly central to the study of industrial
relations as indicated by the growing number of industrial relations departments which are having to incorporate management-related subjects within their
teaching syllabus. However, one of the continuing frustrations in teaching management from an industrial relations perspective is the uncritical and unitarist
disposition of much management literature. Issues of power, class and conflict
often receive little if any acknowledgment and most management writing relies
upon a naive positivist perspective which advocates normative solutions or ‘best
ways’ to manage. In many cases the distinction between research and consultancybased advocacy becomes blurred as business school academics (many themselves
consultants and ‘gurus’) seek to contribute to the growing juggernaut that is the
‘management advice industry’.
However against this business mainstream a critical perspective has developed,
particularly in Britain where sociology, labour process and postmodernist influences have been strong. Within this literature the management project is seen
as problematic and ultimately contradictory. Indeed the growth of a ‘management advice industry’ is seen as an expression of these internal contradictions.
Management can never attain total control over organisational uncertainty and
the implementation of ‘new’ strategies and practices developed by consultants
and gurus, in turn result in new problems and contradictions, which perpetuate
management demand for new solutions.
David Collins’ book is the latest in a growing number of publications seeking
to debunk the contemporary business mania for fads, fashions and buzzwords.
Indeed, it is somewhat ironic that the growing critical literature on management
fashion has itself become something of a fashion in its own right (a point that
Collins acknowledges at several places in this work). Unlike more popular
expositions such as Eileen Shapiro’s Fad Surfing in the Boardroom (1996) or Hilmer
and Donaldson’s Management Redeemed (1996), Collins’ book places itself
explicitly within a broader critique of management and the management process
which includes insights from the critical management and sociology literatures.
The book is comprised of an introduction and twelve chapters. The introduction and chapters 1 to 3 set out the argument and propose what the author
terms a ‘critical-practical’ perspective to management fads and gurus. Rather than
simply dismissing the tendency within contemporary business towards ‘faddism’
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and a slavish adherence to the latest guru du jour, Collins argues that these
phenomena should be taken seriously because of their impact upon the practice
of management and physical changes in the nature of work (a point that can be
confirmed in the Australian context by reference to the impact of ‘reengineering’ and downsizing upon job security during the 1990s!). In particular, he argues,
management fads and buzzwords are important in the way they reject critical
inquiry and present a ‘ready-made view of the world’. As he stresses throughout
the book, much guru-speak is a ‘grammar of imperatives’ in which ‘change’ is
presented as inevitable and where managers are elevated to the role of change
agents within the framework set out by the gurus. Collins’ major contribution
is to ‘unpack’ the fads and place them within a broader historical and social context which necessarily involves a sociological critique of the management function. Having set out the book’s approach and framework, chapters 4 to 11 then
focus on specific fads and develop a critique of both the ideas that underpin them
and the gurus who have propagated them. These include such usual suspects as
‘culture’, ‘excellence’, ‘total quality management’, ‘empowerment’, ‘reengineering’, ‘downsizing’, ‘knowledge work’, and ‘globalisation’.
As a teaching resource the book is at its strongest in the chapters which review
a specific fad and analyse the language and assumptions underpinning it. In most
of these chapters the specific gurus are identified and Collins highlights the often
woeful lack of empirical research behind the guru tomes as well as the unstated
managerial assumptions that drive the fad. The chapters on ‘culture’, ‘excellence’
and ‘reengineering’ are particularly good in this respect. Indeed, chapter 5 on
‘excellence’ provides an insightful critique of the publishing phenomenon that
is Tom Peters. As Collins highlights, Peters really is the guru’s guru in terms of
the sheer volume of contradictory publications which ultimately dispense with
the pretence of being based on meaningful research. Other prominent gurus who
come in for suitable criticism include Deal and Kennedy (culture), Deming and
Crosby (total quality management), Hammer (business process reengineering),
Drucker (knowledge work), and Kanter and Ohmae (globalisation), amongst
others. A major strength of the book then is the broad range of management fads
and related gurus that are critiqued.
However, the book is not without its faults. In particular, the introduction and
first three chapters which set out the argument and frame of analysis, seem overly
long and convoluted. While Collins argues that the key function of gurus is the
provision of managerial ideologies which justify and reassert managerial authority, the explanation for the recent growth of guru-led management advice is not
clearly presented. Is the explosive growth in the management advice industry (of
which gurus form one part) linked to structural changes in the nature of contemporary capitalism or can it be better understood within changes in the managerial labour process? Another possibility would be to develop the ideological
explanation by drawing on socio-psychological explanations which highlight
managerial uncertainty and anxiety and the way in which fads and buzzwords
provide an appearance of certainty and legitimacy (Gill & Whittle 1992). While
there are hints at such explanations, this could have been better developed through
greater reference to the growing academic debate over management fashion.
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A second limitation is also apparent in the opening chapters which suffer from
a tendency to critique management gurus in the abstract, assuming the reader
has a clear understanding of who the gurus are and what they have said. The
critique here relies upon a review of other critical writers, yet the subject of
the critique––management gurus––receive little direct analysis in these early
chapters. This absence of the gurus in the opening parts of the book becomes
more apparent in chapter 3 (misleadingly entitled “The ‘Guru’ Industry”), which
rather than tracing the parameters of the guru/consultancy industry, reviews and
critiques other writers who, like Collins, have sought to interpret the growing
influence of management gurus. Finally, the author’s writing style is at times longwinded and indulgent. This includes an annoying repetition of key phrases and
examples and a confusing overuse of sub-headings. These stylistic limitations are
likely to distract readers, particularly those who are less sympathetically disposed
to the critical management perspective.
These faults aside, this book does provide a refreshingly critical perspective
on the phenomenon of management fads, buzzwords and gurus and links this
to the broader debates that flow from related academic disciplines such as
sociology, history, anthropology and industrial relations. The coverage of a broad
range of fads and gurus should make this a useful additional resource for those
teaching in management-related subjects, who are looking for a critical reader
to supplement the often woeful texts that exist in mainstream management
subjects.
REFERENCES
Gill J, Whittle S (1992) Management by panacea: Accounting for transience. Journal of Management Studies, 30(2), 281–295.
Hilmer F, Donaldson L (1996) Management Redeemed: Debunking the Fads that Undermine Corporate
Performance. Sydney: Free Press.
Shapiro E (1996) Fad Surfing in the Boardroom: Managing in the Age of Instant Answers. Reading,
Massachussetts: Addison-Wesley
UNIVERSITY OF NEW SOUTH WALES
EMPLOYEE OWNERSHIP, PARTICIPATION
A STUDY OF ESOP’S IN THE UK
CHRISTOPHER WRIGHT
AND
GOVERNANCE:
By Andrew Pendleton. Routledge, London and New York, 2001, xiv + 239 pp., $169
(hardback)
This book has been a long time in the making and, as such, reflects the
long-standing and considerable research effort of the author in the area of
employee share ownership programs. Pendleton has provided us with a valuable
drawing together of theoretical arguments that are applied to this phenomenon
through case study and quantitative analyses of employee buyouts in the UK bus
industry.
Pendleton’s material draws on ‘new forms of ownership’ that are neither workers’ cooperatives nor ‘conventional’ employee share schemes. The material is
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drawn from particular circumstances where employees acquired a substantial
shareholding in the firm of about 15 per cent through a collective company trust
structure, catalysed by the privatisation of the UK bus industry. This ‘new form
of ownership’ does not radically recast management hierarchies as intended in
workers’ cooperatives, but neither are they akin to ‘conventional’ employee share
schemes which are management initiated, and limit employees to a very small
stake, with little or no meaning in terms of the overall governance and structure
of the firm. Conventional employee share schemes are relatively common, and
growing, in Australian firms where employees may hold, at most, 5 per cent of
the issued capital. The conventional wisdom is that employee financial participation forms part of the HRM armoury; it is less about exercising property rights
and more about sophisticated remuneration practices as part of the mantra of
aligning employee interests to that of the firm. This is despite the vicarious link
between individual employee behaviour and the profitability of the firm.
Pendleton’s book is on the exceptionalism of employee share ownership, and
we should not overextend this material by applying it to the common conventional forms. Australia’s case of ‘exceptionalism’ is Lend Lease where employees
currently hold 14.21 per cent of the issued capital and, through the vehicle of a
trust company, form the largest shareholder in the firm. It is not clear though
whether employees at Lend Lease have any impact on the governance of the firm
as collective shareholders, and exercise both property and voting rights.
This ‘new form of ownership’ may occur as a rescue mechanism for a
‘distressed’ firm, where an ailing company requires a capital injection, and
employees collectively provide the medication. Employees can sacrifice some of
their salary to purchase shares in an employee benefit trust. However, over time,
the capital requirements of running a bus company became overwhelming and
ultimately the employees profitably ‘sold out’ to a third party. Ansett employees,
led by the pilots, have twice attempted a buyout of the airline. The lessons
from Pendleton’s studies would point to over-optimism on the part of Ansett
employees, but would not preclude them from garnering a meaningful shareholding in the firm at around 15 to 20 per cent. Such employee buyouts though,
raise the question of whether shifting the capital risk to employees is appropriate
or desirable, and it is notable, in the case of Ansett, that the proposed buyouts
were led by well-remunerated pilots––the most powerful occupational class in
an airline.
The question of corporate governance is the clear theme in Pendleton’s book,
and here he diverges from the usual human resource management and industrial
relations research questions that have been well traversed in Britain, Europe and,
most strongly, in the US. Nonetheless, Pendleton covers this orthodox terrain,
and addresses the familiar research questions through the lens of the ‘new form
of ownership’. Concurrently, he attempts to address the simple but core question of ‘Why are employee share schemes implemented?’. The answer appears
to be that employee share ownership is best considered as a form of employee
investment at the level of the firm.
The pivotal chapters in this book, for this writer at least, were those addressing the question of employee participation and governance, and it is here that
Pendleton draws on new and emerging (North American) literature, which dis-
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tinguishes his work from what has gone before. While employee participation
and the question of governance have generally been considered as distinct and
separate phenomena, there are possibilities of conjunction, contingent on: ‘the
configuration of employee participation and corporate governance in each case
will be a function of the circumstances of ownership conversion and the objectives of those involved in the transition of employee ownership’ (page 118).
Pendleton concludes by drawing a four-fold typology on the possible conjunctions between participation and governance. These include the ‘representative’ form where employee voice contributes to the overall management and
direction of the firm, where this has evolved from pre-existing representative
structures. Conversely, examples of the ‘risk sharing’ category, with lower levels
of employee ownership, were essentially management-driven buyouts, where
employee participation took the form of upward problem solving and information sharing in the absence of any innovation in employee involvement in decision making. The third category––‘paternalistic’ firms––took the form of
succession planning where the owners (as opposed to the managers) actively
sought conversion to employee ownership as a means to protect the firm
from external takeover and because of ‘good old fashioned’ philanthropy. This
category was distinct though from the ‘representative’ form. While there were
examples of shareholder bodies considering issues for the firm, control still lay
with professional managers who ultimately had responsibility for the direction
of the firm. ‘Technical’ forms is the final category at the other end of the employee
participation continuum and confers little or no opportunity for employee participation in the governance of the firm and is merely a relabelling of ‘conventional’ share schemes, initiated to provide ‘innovative’ remuneration practices.
Corporate governance is the buzzword of the ‘noughties’. The numerous and
well-publicised recent corporate collapses have brought corporate governance,
the duties of directors, their accountability to shareholders and their obligations
to employees into sharp relief. The (b)reach of fiduciary duties of directors, the
decisions that are ‘made in the best interests of the company’, and the proprietary
rights of shareholders, as underpinned by Corporations Law, represent an emerging arena for investigation by industrial relations academics, especially as more
employees become shareholders. The convergence of ‘employees as owners’ and
increased proprietary rights is beginning to ferment in the Australian corporate
world. At Telstra, the CEPU backed group ‘Shareholders of Telstra’ (SHOT)
advanced the nomination of an industrial officer as a worker director (who eventually did not get the numbers) and the CFMEU, with some media attention,
raised the flag on international labour standards and independence of directors
at Rio Tinto’s AGM last year. The CFMEU did this, ironically, with little
assistance from Rio Tinto’s ageing employee share scheme.
These nascent activities, by appropriating management prerogatives and
methods, may well represent a locus for employee voice in an environment where
the employment relationship is increasingly individualised. This book then, should
be necessary reading for anyone with these research interests, and should be part
of any library on employee participation and employee investment, however
construed.
MONASH UNIVERSITY
SARAH TURBERVILLE
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SKILL: THEORIES
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March 2002
PERCEPTIONS
By Denise Thursfield. Ashgate, Aldershot, 2000, vii + 224 pp., £39.95 (hardback)
Denise Thursfield approaches the issue of skill trends from a different angle in
this work. Rather than focusing on objective trends in skill development,
Thursfield is principally concerned with how workers define skill in their own
voices. When asked (and they seldom are by academic researchers), what do
workers include under the concept of skill, and how do they perceive their own
jobs in terms of these understandings? To what extent do these perceptions overlap with or deviate from managerial ideas about skill? Using a case study approach
where workers and managers in a glass manufacturing company, a transplanted
Japanese electronics assembly plant and a multi-site chemical works (all in the
United Kingdom) are interviewed, Thursfield attempts to distill employee perceptions of skill and the ways in which they are formed. This information is then
fed back into critical reflections on existing theories of skill.
The first four chapters of the book provide a critical review of the major
traditions in sociological and management theory that have examined the skill
issue. This includes a review of labour process theory, regulation theory, flexible
specialisation and flexible firm theory and Japanese production relations in
chapter 2, while chapter 3 examines differing sociological approaches to the issue
of skill (positivist, neo-Weberian and ethnomethodological), as well as actual managerial paradigms that impinge on workforce skills (Taylorism, human relations
approaches, responsible autonomy and technological control). Finally, chapter 4
provides a sketch of the social realist approach that the author employs for the
remainder of the study as well as the formal model that is informed by this
paradigm.
In a schematic fashion, workers’ skill perceptions are based on the managerial
strategies, the social organisation of work and the technologies that are adopted,
as well as where employees have come from in terms of previous employment,
training and education. In turn the nature of the structures that we are employed
in are determined by the valorisation requirements of capital, and the particular
product markets that businesses operate in, while education, training and employment biographies are all related to the opportunity structures that characterise
the societies we inhabit.
This is an extensive review of the literature that takes up close to half of the
text. As a result the book has a ‘dissertation’ feel to it. The author has an annoying style of referencing the findings of the later substantive chapters in these introductory chapters, which makes for awkward reading. While the ground that is
covered here is broad, the criticisms that are rendered are largely perfunctory. I
would have preferred to see a more sustained critique of the literature that was
most germane to the case studies. As well, this review tended to be excessively
Anglo-centric. Apart from Braverman, and Piore and Sabel, there are few
references to the rich labour process tradition that has developed elsewhere. For
example, researchers such as Hirschhorn and Zuboff have produced studies of
continuous process industries in settings that are very similar to those examined
by Thursfield, but have reached conclusions that are quite at variance with the
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ones presented here. It would have been worthwhile to see her engage some of
this material.
The three case studies and the conclusions that are drawn from them are the
most rewarding sections of the book. The cases were well chosen and the treatment of firms in assembly production (glass and electronic home entertainment
ware), continuous flow (chemicals) and small batch processes (other chemical
products) lends a valuable comparative dimension to the study, as does the selection of a Japanese transplant. Some of the findings are not particularly noteworthy,
while others are definitely worthy of follow-up. Workers who labour in settings
that researchers would consider unskilled, such as the glass bottle checkers in
the study, simply do not possess operant notions of skill. Workers who are
employed in typically Taylorised jobs (for example, assembly line manufacturing) have only narrow, job specific or practical task conceptions of skill, but have
no references to autonomy or job discretion as a component of skill. Maintenance
workers and those employed in the small batch production circuits of the chemical factory, on the other hand, relate discretion and autonomy to a definitional
notion of skill. In other words, most workers, with the exception of the least skilled
glass bottle checkers, have subjective perceptions of skill, but these vary with the
nature of the job held and any upward or downward mobility that the person has
experienced in their working career. Significantly, however, workers are unlikely
to refer to processes of deskilling.
Among the more interesting findings revealed by Thursfield’s research is the
absence of independent effects for gender or employment status (that is, fulltime versus casual) on perceptions of skill. Thursfield also finds that Fordist and
post-Fordist employment attributes are often found in common. For example,
continued Taylorist organisations of work that divide conceptualisation from
execution combined with business strategies are focused around niche market
production using flexible technologies. In the end, it is the division between the
work of conceptualisation and that of execution (that is, old fashioned scientific
management), that best accounts for the subjective perceptions of skill in both
the British and the Japanese manufacturing plants studied.
GRIFFITH UNIVERSITY
IMMIGRATION
AND
BOB RUSSELL
AMERICAN UNIONISM
By Vernon M. Briggs Jr. Cornell University Press, Ithaca and London, 2001, 213 pp.,
£10.95 (paperback)
Organised labour in America has long been concerned with employers substituting cheap, docile immigrant labour for that of incumbent, native-born workers. For decades, in an effort to limit competition for jobs, American unions
aligned themselves with a coalition of groups opposed to mass immigration. As
union membership dwindled in the 1970s–1990s, however, the labour movement
turned an eye towards organising and supporting government initiatives aimed
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at accommodating the interests of workers outside of its traditional base––
workers in direct competition with recent immigrants as well as those immigrants
themselves.
Vernon Briggs’ book, Immigration and American Unionism, focuses on the
relationship between mass immigration and union membership in the United
States. Like Briggs’ 1996 effort, Mass Immigration and the National Interest, this
book traces US immigration from the early stages of nationhood. Unlike Briggs’
early work, though, this book emphasises immigration’s role in union organising
and its impact on union support of efforts to regulate it.
Briggs notes that there are only two periods in American history when union
organising success did not move inversely with the level of immigration: between
1897 and 1905, a period when the US economy was in recovery from a major
depression and was rapidly industrialising; and between 1922 and 1929, an era
of harsh antiunion animus manifest through not only the actions of employers
but also those of policy makers and the courts. This, however, is the only empirical evidence the author offers in support of his thesis that American unions––and,
by extension, American workers––have suffered as a result of mass immigration.
As such, Briggs’ analysis falls short of substantiating his claim that ‘the revival of
mass immigration is likely to be a contributing factor to the decline of unionism’ (page 175). To this end, an equally plausible explanation for the apparent
correlation between these phenomena is that weak unions have contributed to
lack of effective controls on immigration.
The book’s thoroughly researched material on US immigration over the last
two centuries also fails to consider the importance of immigrants in forming the
rank-and-file of many American Federation of Labor (AFL) locals and the
Federation’s philosophy of ‘business unionism’. As discussed by other historians,
immigrant labour essentially formed the backbone of American industry in the
late 19th and early 20th centuries. For instance, Samuel Gompers, founder of
the AFL and himself an immigrant from Britain, began his career in the labour
movement with the Cigarmakers’ Union, which represented a trade dominated
by German immigrants. Other unionised trades were dominated by Irish, Italian,
Chinese, Polish, Russian or American-born workers, particularly on political
issues. Recognising this, Gompers’ philosophy was ‘pure and simple’ unionism,
a pragmatism based, in part, on his view that adherence to a more political strategy was an untenable approach to unionism in light of the ethnically––and hence,
politically––diverse ‘working class’ in the United States.
In spite of its flaws, publication of Briggs’ latest book could not be more timely.
The US Congress is currently debating the Employee, Family Unity, and
Legalization Bill, which would grant a blanket amnesty to at least six million undocumented illegal aliens who have been in the United States for five years or more.
Support from the AFL-Congress of Industrial Organizations (CIO) and many
of its affiliates has given the Bill a significant boost. Those opposed to this proposed legislation claim it would only add to the country’s immigration problems,
created in part by the last amnesty granted by Congress in 1988. Pro-amnesty
advocates, such as the United Farm Workers, on the other hand, argue that a
general amnesty is the only way to protect immigrant labour from exploitation
by employers.
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Briggs castigates the AFL-CIO for having ‘announced a surrender’ (page 179)
and aligning itself with the likes of the National Association of Manufacturers
in support of a general amnesty for illegal immigrants living in the US––‘the act
of a Judas’ (page 181). He suggests that organised labour in the US is faced with
two options: either seek to organise low-skilled new arrivals ‘specifically because
they are immigrants’ (emphasis added) or seek to add these workers to the
unionised ranks ‘purely on the grounds of the pursuit of their employment wellbeing’ (page 178). Clearly, the author supports the second policy alternative, which
makes no distinction between immigrant and low-skilled native-born workers and
avoids the risk organised labour faces of alienating the latter.
In general, Briggs’ book offers an excellent overview of US political and economic history. The author does an admirable job highlighting the controversies
surrounding enactment of the several legislative measures aimed at restricting
mass immigration in the US. However, some issues––such as the women’s movement, events surrounding the Vietnam War, trade and other aspects of globalisation––are discussed with little, if any, consideration of their impact on unionism
or immigration. Nonetheless, given that this often is a very eloquent elaboration
of events which otherwise would make an excellent exposition of the history of
the American labour movement and of US immigration, one hesitates to criticise this book for its frequent digression.
VICTORIA UNIVERSITY OF WELLINGTON
STEPHEN BLUMENFELD
CHINA’S WORKERS UNDER ASSAULT: THE EXPLOITATION
IN A GLOBALIZING ECONOMY
OF
LABOR
By Anita Chan. M.E. Sharpe, Armonk, New York, 2001, xiv + 249 pp., US$22.95
(paperback)
The first thing that strikes the reader about this book about the abuse and plight
of Chinese workers is the presentational style and format, which is different from
many tomes in the social sciences. This is partly driven by the research approach.
As Chan states, ‘This volume can be used to complement academic articles’ (page
3), almost an admission that it is not within the mould of most academic works.
In contrast, it is based on 50 different Chinese newspapers and periodicals, a few
from Hong Kong and Taiwan. The author was able to use this as a data resource
for several reasons. First, there had been a ‘new’ style of reporting in China, which
was very detailed, partly as it was trying to counter, as Chan puts it, the ‘old
sloganizing’. Second, these reports were available because, despite China’s reputation for tight control, the government was not monolithic, and the Chinese
trade union federation––the ACFTU––published many reports which showed
the ‘workers’ state’ did ‘care’ for its workers. One noted drawback of the method
was that there was often little follow-up to these reports; therefore Chan
supplemented these with some further research with visits and using other
documents.
Following the introduction, the next six chapters outline the kinds of labourrights violations suffered, while the final two chapters cover workers’ resistance
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and the pursuit of labour rights. These chapters are composed of sets of
cases and commensurate comments. Interestingly, there are six pages of related
photographs between pages 136–37, but no page numbers given for these. Each
chapter focuses on an abuse: forced labour and shop floor standards (chapter 2);
corporal punishment and physical assaults (chapter 3); occupational health and
safety (chapter 4); right to work (chapter 5); organisation and collective action
(chapter 6); and indentured labour abroad (chapter 7).
A bleak vision is presented: ‘The millions of peasants roaming the countryside desperately looking for work to earn a hand-to-mouth living make up an
almost inexhaustible pool of human machines. They can be worked to the breaking point, and when they flee these dreadful factories, they are simply replaced
by fresh, vulnerable bathes of workers’ (page 10). It is argued that worker exploitation was common. There were abuses in foreign funded factories, particularly
if they were Asian-funded, but also in privately owned factories and to a lesser
extent in factories owned by local governments in rural villages and townships,
and even enterprises owned by the state. Nevertheless, it was the 80 million
migrant workers (in 1999, almost as many as the urban state-owned enterprises
and collective workforce combined) who were the main victims of the most
serious violations. It was a myth that workers in foreign-funded enterprises earned
high wages as there was a need to distinguish between Western (and Japanese)
ventures, with comparatively high wages and little reputation for mistreatment,
and Asian plants, which paid below legal minimums and had harsh conditions.
What causes such a situation? Abuses were likely due to underpinning by an
architecture of practices. Peasants working in urban areas have very different
status from locals, as they need a ‘temporary residential permit’ and are trapped
if employers take it away. They were not entitled to benefits such as welfare,
schooling, property ownership, family relocation or residency. These migrants
are subject to tight ‘immigration’ controls under the household registration
(hukuo) system, with periodic police roundups of those without permits. Such
transgressors are sent back to the countryside. Therefore, workers need a set of
overlapping permissions: to leave their village, they need to apply for a permit
from the local government; to stay in a city, they need to apply to the police for
a temporary residential permit; to work, they need to secure a contract with an
employer; and their stay needs to be approved by local labour bureaus, which
issue a work permit. This system provides potential to transform ‘free’ workers
into ‘bonded labour’ as factories: (1) pay for temporary resident permits, as the
single lump sum is too large for workers, but then deduct monthly repayments;
(2) charge ‘deposits’ forfeited if workers quit before contracts expire or they are
fired; (3) keep part of wages, promising to return money at the end of year and;
(4) keep permits and papers for ‘safekeeping’.
This plight of Chinese workers is also important as it is part of a ‘race to the
bottom’ or ‘social dumping’, which can spread to other countries with competitive down-bidding in whipsaw fashion. Therefore, to alleviate conditions forced
on Chinese workers requires not just the ‘core’ labour rights (association; collective organisation and bargaining; minimum employment age; forced or slave
labour, discrimination) of organisations such as the International Labour
Organisation, but also others, as highlighted by the cases. So Chan argues for
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these ‘non-core’ labour standards (wages and working hours) to be added in.
In terms of obtaining this, Chan notes the usefulness of the anti-sweatshop
campaign––a prosaic mix of groups from unions, consumers, churches, communities and students––in exposing abuses and focusing media spotlight on
Western multinationals operating in China. Similarly, international organisations
had focused mainly on core rights (freedom of association and collective
bargaining). Now she argues, there is a need to (1) widen the focus from core
rights; (2) treat labour rights as human rights and integrate them into relevant
discourse and practice and; (3) apply pressure on government to persuade it to
regulate labour conditions.
The book raises a few queries. For example, there seems to be some inconsistency with her third proposal above. Chan seems to forget her opening points
about some of the reasons such abuses were out in the open in the first place,
such as the fragmented nature of government. This does not bode well for her
suggestions it now take a role. Also, there is a problem with views that the trade
union movement focused on issues (such as collective bargaining) because of their
importance to organising efforts. There are also other reasons for this. For
instance, in the UK the solution to the ‘two faces’ of the labour problem (sweated
conditions and militancy) from the 19th century was seen as collective bargaining. Indeed, this became the focus for much practical, policy and academic industrial relations during the 20th century.
Of a minor nature, I was not keen on the publisher’s house style with its
voluminous endnotes. For example, the first chapter’s 44 endnotes ran for
4.5 sides. There was also some variability between chapters; for instance,
chapter 5 was under 11 sides of text and very short compared to others.
Nevertheless, these are minor points as overall the book it to be welcomed. It
is an important topic and is dealt with in a refreshing and interesting fashion. In
terms of its readership and suitability, it may find its way onto some of my readings lists for students as background reading. Also, it is a useful resource, and
should be taken by libraries and read by not only academics and researchers in
areas such as sociology, employment studies, human resource management and
business, but also by those involved in public policy, government, trade unions
and even managers. Then next time we see the ubiquitous ‘Made in China’ on
a product, we will begin to grasp and understand some of the labour that went
into it.
CITY UNIVERSITY, LONDON
THE STRUCTURE AND DETERMINANTS
EVIDENCE FROM AUSTRALIA
CHRIS ROWLEY
OF
WAGE RELATIVITIES:
By Alison C. Preston. Ashgate, Aldershot, 2001, xiv + 268 pp., £45 (hardback)
This book is about building a bridge between labour economics and industrial
relations, to ‘reintegrate these two disciplines’, in order to establish the relevance
of both economic and normative forces in wage determination policy. The
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particular bridge chosen is the human capital model, which is described as the
‘dominant framework for the study of wage determination’ in empirical economics
research.
The book begins with a summary survey of wage theories going back to Adam
Smith through to the neo-classicists and to the more recent revival of theories
which depart from the competitive models. After a lucid explanation of the human
capital model and its assumptions, the book proceeds to give an outline of the
wage fixing principles of Australian industrial tribunals. It then surveys the
literature dealing with applications of the model to the Australian labour
market. Apart from the relationship between human capital endowments and
earnings, the various studies examine the effects of individual and job characteristics on earnings. The model appears to have performed reasonably well in predicting wage outcomes but the studies deal mostly with the labour market of
20–30 years ago.
The two chapters which follow are based on the author’s own work, updating
earlier human capital results and examining changes over time, and breaking new
ground in analysing female earnings separately. For both genders, the determinants of earnings appear to be similar: education, work experience, family
status, geographic location, public/private sector, industry and occupations; each
and every one is an important determinant. Apart from an unexplained margin,
denoting some form of discrimination against women, the widening gender gap
evident in the 1990s after a period of convergence of male and female earnings,
is attributed mainly to industry structure, greater male labour market experience
and overtime. Further, females appear also to have been disadvantaged in those
States––Western Australia and Tasmania––where deregulation of the labour
market has gone furthest.
Perhaps the most interesting part of the book is the chapter on the operation
of normative (‘fairness’) forces (equitable comparisons and spillover effects) in
Australian wage determination. Here the operation of these forces is tested by
examining the movement in award rates, over two periods of 11 years each, in a
number of industry and occupational groups.
Three types of cases were tested. The first, related to inter-occupational
relativity movements (within the Federal jurisdiction), shows variable movements,
suggesting the weakness of normative forces. The difficulty with this comparison is that some of the awards chosen were minimum rates awards and others,
paid rates awards. The latter in effect embody imputed overaward payments.
Furthermore, the assumption of no change in the work requirements of the different occupational groups is unfortunately difficult to sustain because, to varying extents, work restructuring occurred in the 1980s and the 1990s.
The second comparison was between certain occupations covered by Federal
awards and by Western Australian State awards. Surprisingly, this shows fairly
stable relativities. Surely, there could not have been any conscious attempt at
applying equitable comparisons, given that in the period examined, the Western
Australian industrial relations system had undergone considerable deregulation.
Further, here again the comparison involves minimum rates and paid rates awards.
Thus, while one has sympathy for the author who is aware of the difficulty of
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testing for the role of normative forces statistically, the outcomes of the
above two tests cannot safely be regarded as established. Perhaps laborious case
studies are a more reliable course for such cases.
The third comparison was between occupations in the Federal Metal Trades
Award. Here, not surprisingly, relativities in the period have remained stable. Nor
are the spillover effects from national wage cases established by econometric
methods surprising. Such cases were intended to flow through the system.
The conclusion drawn by the book from the econometric studies, based on a
model which assumes competitive markets, is that these studies leave a significant degree of unexplained and persistent wage differences––between males and
females, between industries, between occupations, between locations, and
between the public and private sectors. The explanation, at least for Australia,
must be found in the operation of normative forces.
It is fair to say that this conclusion does not add much to our store of understanding of the workings of the Australian labour market based on more primitive statistical techniques. But it is good to know that sophisticated techniques
do not change the results of more pedestrian analyses. These days, no labour
economist worth their salt would deny the importance of social factors in wage
outcomes; nor would those focused on industrial relations deny the relevance of
economic forces in wage determination. The more interesting question is what
effect these institutional forces have on employment, prices and the allocation
of resources.
It is, therefore, questionable whether the human capital model originally developed to derive, from life-time earnings, rates of return from expenditure in education, is the best bridge for the purpose. Simpler statistical techniques would
establish the amalgam of economic and social forces in wage determination just
as well. Why then go to such lengths?
Preston is well aware of the limitations of the human capital model for analysing
wage movements; but she has deliberately chosen a model commonly in use by
many labour economists effectively to expose its limitations for explaining what
goes on in the labour market, at least in Australia. The policy implications she
draws from this are the difficulty of trying to legislate normative forces out of
wage determination, as attempted by the Workplace Legislation Amendment Bill
1999; or to secure a safety net by resort to taxation.
However, the reviewer has two quibbles which should not be regarded as denting his admiration for the work. One, in the opening chapter and repeated later,
is where she says that while labour economists emphasise supply side determinants, ‘such as education, training and experience’, industrial relations
researchers focus ‘on demand side determinants such as unions, and wage fixing
institutions’. Surely, unions and wage fixing institutions are also determinants on
the supply side of labour?
The second difficulty is a lack of clarity on the meaning of comparative wage
justice (CWJ). This is categorised as non-economic while work value is put in
the economic category. While Preston recognises that the two are not mutually
exclusive and, indeed, ‘are inextricably bound together’ (page 82), she goes on
to note that ‘Although work value offers an opportunity [to?] link the economic
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fundamentals such as supply and demand more closely to the wage rate such
practices are constrained by the forces of CWJ’. Unfortunately, this falls into the
popular misconception of regarding CWJ simply as a ‘flow-on’ or ‘spill-over’
force, a misconception sometimes fuelled by loose statements from tribunals. CWJ
is properly regarded as such a force only if no changes in relative job requirements have occurred generally. Until recently, tribunals have normally accepted
that, on CWJ grounds, no flow-on is justified from particular occupational
categories which have been properly upgraded on job requirements grounds, to
others where no change in job requirements has occurred. There have been occasions where departures from this approach have occurred for reasons of industrial expediency. But it is important not to confuse CWJ with flow-ons which
are not strictly justified on work value grounds. It is true, as Preston points out,
that in recent years the Commission has been reluctant to apply CWJ, but this
has to be seen in the context of enterprise bargaining.
Further, while CWJ is often perceived as a social principle, it has a respectable
economic basis going as far back as A.C. Pigou’s Economics of Welfare. Although
referred to as the ‘fair wages’ principle, it relates to the minimum supply prices
of various levels of skill or work requirements. Thus it is an appropriate basis for
minimum wage fixation and justifies Australian tribunals’ stand against granting
award increases on what may turn out to be temporary shortages of certain types
of skill.
It will be remembered that Wilfred Salter (in Productivity and Technical Change)
has argued that, for an efficient allocation of labour, comparable labour should
have the same price in expanding and contracting industries, regardless of economic capacity. This is an implicit endorsement of CWJ on economic grounds.
Of course, where locational immobility persists, it may be necessary to override
this principle in the interest of maintaining employment.
UNIVERSITY OF MELBOURNE
DIAMOND MINES: BASEBALL
JOE ISAAC
AND
LABOR
Edited by Paul D. Staudohar. Syracuse University Press, Syracuse, New York, 2000,
xxxii + 188 pp., price not stated (paperback)
During 1994/1995 an event occurred in the United States of America––an event
which seemingly dragged on forever––which triggered a national malaise, a sense
of loss and despair, a questioning of what in fact was happening to the country.
This event did not involve racial tension or riots, discrimination, rape or personal assault, industrial accidents/deaths, child prostitution, homelessness, crime,
drugs, murder, a person (or a child) going on a rampage with rapid fire weaponry,
police/prison or ‘state’ sponsored brutality, corporate crime or any other calamity
you think I should have included. The event in question was the industrial or
labor (as Americans like to call them) dispute which occurred in Major League
Baseball. The dispute lasted 232 days. Amongst other things, it involved a cancellation of baseball’s World Series which had only been cancelled once before
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in 1904. As Karen Koziara says, in the volume to be reviewed here, baseball
players and clubs/owners ‘have one of the most visible and widely discussed
bargaining relationships in the United States’ (page 33).
Why did this dispute occur? Why did these millionaire players––in 1994 the
average salary was US$1 168 000; the median US$450 000 (page 147)––and
billionaire owners decide to destroy the summer of 1994 and the fall ritual of
following the World Series? As the runners following Forrest Gump, after he
decided he had had his fill of jogging around America, exclaimed with a mixture
of puzzlement and despair, ‘what are we going to do now?’
Since 1989 the National Baseball Hall of Fame and Museum, located in
Cooperstown, New York––which myth has it (and it is a myth) was the location
of the first game of baseball––has conducted an annual Cooperstown Symposium
on Baseball and American Culture. The 2000, or twelfth, symposium was devoted
to labor relations in baseball, with its major focus being the 1994/1995 dispute.
Diamond Mines: Baseball and Labor brings together ten papers presented at this
symposium. The various authors have a variety of disciplinary backgrounds––
history, economics, business, law and English. They seek to situate baseball’s
labour relations in its historical, economic, legal and societal contexts. There are
analyses of the 1994/1995 dispute which employ Dunlop’s well known systems
theory (John T. Dunlop, Industrial Relations Systems, Holt, New York, 1958) and
game theory.
An understanding of the business of baseball (or of any professional team sport,
for that matter) involves the linking of the labour market (for players’ services)
and product market (the provision of games) with antitrust, or competition
policy. It is generally acknowledged by the various contributors to this volume
and other commentators that the 1994/95 disputes was connected to the
inability of large (wealthy) and small (less wealthy) city based clubs to resolve the
problem of how to distribute/allocate income between themselves. In seeking to
resolve this product market problem they happened upon a labour market solution. The clubs decided to impose a salary cap on clubs spending ‘too much’ on
players. The Major League Baseball Players’ Association, and all of its members,
did not believe players should be forced to pay the price of solving a problem of
the clubs’ own making. Hence the dispute.
The different financial strength of owners/clubs is seen as being a result of the
special exemption baseball has enjoyed from actions under the Sherman Antitrust
Act 1890. The United States Supreme Court in three separate decisions––Federal
Baseball 1922 (259 US 200), Toolson 1953 (346 US 356) and Flood (407 US 258)
has provided baseball with its exemption. Moreover, Congress has seen fit to not
pass legislation to remove (with one exemption, see below) what the Supreme
Court itself has described as an anomaly. Over the years various economists and