Towards a New Industrial Democracy

Workers' Participation in Industry

Michael Poole

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351391146
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This title, originally published in 1986, explores the political and economic conditions of the 1980s, and reflects the world-wide interest in industrial democracy. Each chapter analyses the main adaptations in policy, theory and experimentation that have occurred in industrial democracy in the 1980s. In particular, the role of managers is examined in depth and detail, since these personnel have been responsible for a number of recent initiatives. The themes covered are vital for all those seeking new directions in the reform of modern industrial relations in the late 1980s and into the 1990s.

1Point of departure

All workers participate in industry, by virtue of producing the substance of human material existence, but since the advent of the industrial revolution all but a few have had no effective voice either in the management of the firms in which they are employed or, at a higher level, in the framing of policies on the allocation of resources within the wider society. To be sure, by consequence of their task-based expertise, the subordinate majority have at times acquired a measure of control over the actual performance of work and this, together with other workgroup practices designed to extend their frontier of control over decisions at shop-floor level, has guaranteed the maintenance of rudimentary expressions of participation in many industrial milieux. But the mode of organization of work today is still incompatible with a condition in which all men and women are reconciled with themselves through productive activities, from which they derive a meaning and a purpose, and through which they can begin to regain control over human institutions and historical situations (Dawe, 1970:211).

By contrast, in pre-industrial societies, although the bulk of the population unquestionably suffered from the consequences of scientific and technical immaturity and, as a result, were by no means well adapted to their natural and physical habitat, the organization of activities was perforce highly decentralized, a situation which encouraged considerable local decision-making autonomy. But in industrial and post-industrial societies, although understanding of natural/scientific laws and control of the environment have proceeded apace with the result that material standards of living have been raised to heights undreamed of by earlier generations, this process has not been matched by a corresponding amelioration of the human social condition. On the contrary, with increasing concentration and centralization of decision-making processes at work, further exacerbated in some cases by many of the new technologies, people have become truly disenfranchised, being unable to determine the shape of their own economic existence and experiencing their lives as a series of traps (Mills, 1959: 3):

They sense that within their everyday worlds, they cannot overcome their troubles, and in this feeling they are often quite correct. What ordinary men and women are directly aware of and what they try to do are bounded by the private orbits in which they live; their visions and their powers are limited to the close-up scenes of job, family, neighbourhood; in other milieux, they move vicariously and remain spectators. And the more aware they become, however vaguely, of ambitions and of threats which transcend their immediate locales, the more trapped they seem to feel.

Considerable alienation and individual passivity are inevitable consequences of lack of autonomy and are incompatible with the notion of people able to realize their ‘full potential and to create a truly human order … freed from external constraint’ (Dawe, 1970: 214). Indeed, to be deprived of any decisive influence within the social environment generates an intense and a seemingly inescapable experience of powerlessness and resort to ‘world views’ of an essentially passive, fatalistic and dependent kind.

But a determination to transform this situation has occasioned a worldwide search for appropriate means to create industrial democracy. Indeed, as a by-product of an enthusiasm for workers’ participation and control, an appropriately persuasive case has been argued for the democratization of social institutions. This is upheld, first, by an appeal to selected values which are widely advocated in most industrial societies; second, by recourse to a body of ethical principles which strengthen this underlying reasoning, and, finally, by reference to abundant, carefully collected evidence, of the substantial socio-economic benefits of effective participation.

In the first place, then, the proponents of participation have been able to found their case on widespread commitment in industrial societies to democratic ideals, one necessary element of which is the inalienable right of the citizen to a voice in his or her own concerns. To be sure, the status accorded to participation in democratic thought is open to debate. Indeed, until recently, it appeared that the term had been successfully exorcized from the vocabulary of democracy by the so-called modern theorists for whom, following Schumpeter (1943), ‘responsible’ government was the essence of democracy. This orientation, incidentally, was in complete contrast to the position taken by those, including Bottomore (1964: 115), who claimed that ‘modern democracy has most often … been defined as the participation of the mass of people in government’, and, what is more, it ignored the retention of this meaning in popular political argument. But as a result of subsequent changes in thinking, participation again came to be represented in the mainstream of social and political thought with the creation of a genuinely participatory society (based in the first instance on participation in the work situation) being viewed as an essential foundation of any successful democratic system (Blumberg, 1968; Pateman, 1970; Poole, 1982b; Warner, 1984a).

A belief in the virtues of democratic control can thus be traced to certain fundamental human values which are commonly held and officially sanctioned in most industrial countries. In addition, participation has been hailed on theoretical grounds as the most appropriate solution to the problems of alienation in modern industrial societies, as the best method of facilitating the development of socially aware and public-spirited people, as a stepping-stone to the fulfilment of certain ‘higher echelons’ of needs which are deemed to be common to all men and women, and finally, as a means of overcoming major social disadvantages which are consequent upon non-democratic modes of decision-making.

Notwithstanding the controversy surrounding the concept, the conviction is thus widely shared that alienation, embodied in the estrangement of men and women from the products of their creation, is endemic in advanced industrial societies. To be sure, this tendency had been recognized in the early phases of the industrial revolution, but awareness of the problem has been particularly acute and widespread accompanying the far-reaching technological changes which are currently in train and the massive social dislocations accompanying mass unemployment. And increasingly, involvement in decision-making processes and greater control by workers over their work environment have been recognized as necessary, if partial, solutions to these monumental problems of our era.

The value of participation had, of course, been argued by a number of early political theorists as a means of optimizing individual freedom and self-determination within a collective context. Indeed, the very act of participation was seen to increase willingness to participate on future occasions, and the ultimate ideal to be furthered by active involvement was a society in which social awareness and public-spiritedness were the norm rather than the exception in human behaviour (Pateman, 1970; 1983).

These ideas have been reinforced by the contributions of social psychologists, including Maslow (1954), McGregor (1960) and Likert (1961), who argued that much of human motivation can be explained by the existence of a hierarchy of needs, the ultimate of which is ‘self-actualization’. And although this analysis may be culturally specific (in other contexts ‘collective actualization’ might be a more appropriate term), it is reasonable to argue that, having satisfied their primary physiological, economic and social needs, people will intensify their search for self-expression, self-actualization and creativity within their work environment. It is also logical to hypothesize that, notwithstanding the intractable problems of unemployment, with the progressive evolution of industrial societies and the consequent gratification of primary requirements, certain emergent needs, which are satisfied in participatory environments, take on a new significance.

Furthermore, it has always been recognized that undesirable social consequences can ensue from the concentration of decision-making power. This, in its most general formulation, has been best expressed by Lord Acton (‘power tends to corrupt, and absolute power corrupts absolutely’), but more specifically it has been argued that, under competitive conditions, these problems are magnified by the danger and, indeed, the likelihood of the unscrupulous reaching controlling positions. This is ‘because of the way in which the processes of selection for positions of authority favour ruthless power seekers’ since, with competition, ‘those with too many scruples’ are effectively excluded leaving the prizes to be won by the most ruthless and least humanitarian in the population (Andreski, 1954: 217-18).

This situation is exacerbated by the geographical mobility of the upwardly mobile, a process which has a number of important consequences. First, the highly mobile tend to place only limited value on stable friendship and kinship patterns; second, whenever there is a conflict between achievement and satisfactory human relationships almost inevitably the former is chosen; and finally, the association of the highly mobile with others and, by corollary, any commitment to humanitarian goals, is essentially calculative and associated with a ‘capacity to give up existing social relationships and to form new but superficial (and more profitable) ones at a higher social level’ (Musgrove, 1963: 218). It is a salutary thought, then, that the chances of selecting leaders with genuinely humanitarian sympathies become particularly remote in societies in which recruitment to elites is based on competitive mobility. Indeed, the need for genuine participation and active involvement by the majority becomes absolutely essential if untoward human and social consequences are not to ensue in these circumstances.

The impressive a priori case which may be advanced for the extension of participation has been amply supported on empirical grounds as well, though naturally not all the studies in question have been wholly consistent. The aims of the investigators, the research methods used, the samples selected and even, at times, the results, have been by no means identical but the overwhelming trend in the evidence has given substantial support for the case in favour of democratic control. Hence, after an exhaustive review of these findings, Blumberg (1968: 123) was able to argue that ‘there is scarcely a study in the entire literature which fails to demonstrate that satisfaction in work is enhanced or that other generally acknowledged beneficial consequences accrue from a genuine increase in workers’ decision-making power’, and to make the further point that such a degree of unanimity in findings is rare in social scientific research.

Indeed, despite certain minor inconsistencies, it is possible to make a number of definitive judgments about the effects of various ‘experiments’ in participation. First, in so far as the ordinary worker is concerned, participation at shop-floor level has often had impressive results; second, representative systems involving participation in decisions of a policy nature have been by no means unsuccessful; and third, the attitudes of workers towards industrial participation tend to be positive though other satisfactions are still frequently placed higher on the list of priorities.

And at all events, the evolution of these ideas has provided a backcloth for a worldwide concern to experiment with practices designed to further industrial democracy. The most radical remain the workers’ self-management systems, which have emerged in decentralized socialist economies such as Yugoslavia, and which involve a substantial degree of de jure workers’ participation on the main decision-making bodies. Typical participative channels include workers’ assemblies, workers’ councils and direct forms of worker involvement through basic organizations of associated labour. Producer co-operatives have also attracted considerable interest in recent years and occur in a variety of political economies. In such enterprises, workers typically have ownership rights, participate in management and share in the distribution of the surplus. Moreover, while Móndragón is the most celebrated experiment here, producer co-operatives have attracted considerable attention in a wide range of Third World countries as well as in Western Europe and North America.

Meanwhile, in predominantly private enterprise economies, co-determination and works councils have featured prominently in the emergent company structure of the post-war period. Co-determination encompasses the right of workers’ representatives to joint decision-making on actual enterprise boards and, while West Germany has provided the key experiment, such practices have for some time been obligatory in countries such as Austria, the Netherlands, Norway, Sweden and Spain. Moreover, works councils and similar institutions involve representative bodies in regular meetings with management and, indeed, amongst current participants in the EEC, Great Britain and Eire are the only countries where such practices are not yet mandatory. Third World nations with similar arrangements include India, Indonesia, Tanzania, Tunisia and Zambia (ILO, 1976; Poole, 1979).

The trade union channel has also been a time-honoured means for achieving a measure of influence by representatives of workers over decisions in their places of employment. The disjunctive or oppositional form is through collective bargaining and, arguably, this is still the most common form of participation in pluralist societies such as Australia, Canada, Great Britain, New Zealand and the USA. But in state socialist societies (e.g. USSR and many Eastern European countries) the arrangements are of an integrative form and, despite changes in recent years (Ruble, 1981), typically involve the rights of trade unions to determine various issues within a framework of harmoniously conceived interests of the various parties to the employment relationship.

There have also been a series of experiments at shop-floor level including autonomous workgroups, quality of work-life programmes, quality circles and an array of workers’ initiatives to extend the frontier of their control over decision-making processes. More generally, too, the debates on participation have been extended recently to embrace the notions of financial and economic democracy to cover the respective rights of the workforce to a stake in ownership and in the broader processes of planning (Meidner, 1981; Brannen, 1983a).

In an endeavour to create a more systematic approach to these procedures, a series of important proposals have also stemmed from the institutions of the European Community. Indeed, in January 1974, the Council declared increased participation of employees in the life of their companies to be a central goal of community policy. The upshot is that there are currently a series of interlocking initiatives, covering diverse areas of participation, modes of involvement and types of undertaking.

The first of these stems from a directive in February 1975 and covers the case of collective redundancies. The second, the important Vredeling Proposal, is on information disclosure and embraces procedures for informing and consulting employees. The third, the so-called fifth directive, submitted to the council in October 1972, is designed to ensure that employees are represented in the governing bodies of large-scale public companies. However, the original proposal here for a two-tier supervisory and management board in all undertakings with fifty or more employees and with workers’ participation on the higher tier has been modified by the European Parliament to cover four options (the original proposals backed by statute, a unitary board with employee representation, the creation of a further, separate, employee representation body, and collective agreements). Finally, there are the far-reaching proposals for a system of employee participation for the European company. These have three interconnected parts (European works councils, collective agreements and a major role for employee representatives on supervisory boards in the appointment, supervision and dismissal of management). However, the last stipulation has been latterly amended to embrace a structure which consists of one-third representatives of shareholders, a further one-third comprising the representatives of employees and the final third consisting of members co-opted by the first two groups (for a detailed review see Pipkorn, 1984).

For their part, the main political parties in Great Britain have gradually taken up distinctive positions on industrial democracy and their respective policies must surely at some time be reflected in at least a nominal transformation of the rights of workers to participate in the decision-making processes in the companies in which they are employed.

On the face of it, the British Labour Party has been broadly committed to industrial democracy for a longer period than any of its rivals, since Clause 4 of the party’s constitution calls not only for the common ownership of the means of production, distribution and exchange, but also for ‘the best obtainable system of popular administration and control of each industry or service’. But until the 1960s its enthusiasm for industrial democracy had been circumspect and confined largely to extensions of bargaining and consultative machinery in nationalized industries. However, a more positive commitment could be detected in the publication, in 1974, of the Green Paper, The Community and the Company, which established the basis for comprehensive legislation in this area. Moreover, the concern of the Labour Party to ensure joint control by unions and management at all levels of decision-making, using existing trade-union machinery and shop stewards’ organizations, formed the reference point for the central proposals of the Bullock Committee. Indeed, the home policy committee of the Labour Party gave this report its full backing, placing emphasis on the desirability of worker directors sitting on the main policy board of the company with powers over pricing, sales, export policies, productivity, product development, personnel and employment and the appointment and supervision of senior management. Moreover, in 1976, the Industrial Common Ownership Act came into force designed to extend co-operative manufacturing in small-scale enterprises.

To reaffirm this commitment, the Labour Party produced a further major report to the 1982 Trades Union Congress and Labour Party Conference, entitled Economic Planning and Industrial Democracy: The Framework for Full Employment, in which a strong consultative and participative element was envisaged as being integral to a planning system for the economy as a whole. In detail, the role of collective bargaining and other forms of ownership such as co-operatives were seen as of only partial relevance to the solution of current problems, with ‘widespread and rapid progress’ requiring ‘the availability of new statutory rights to information, consultation and representation’ (TUC-Labour Party Liaison Committee, 1982:24). Specifically, extensive legally based provisions on disclosure of information are now proposed (including statutory backing to the right of access by unions in one country to ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Preface and acknowledgments
• 1 Point of departure
• 2 Power in industrial relations
• 3 Proposals by management
• 4 Workers’ initiatives
• 5 Trade unions, their officials, and workers’ participation
• 6 Politics and participation
• 7 Conclusions and prospects
• Bibliography
• Author index
• Subject index