Industrial Democracy and Organizational Change
| Date | 01 January 1977 |
| Pages | 43-49 |
| DOI | https://doi.org/10.1108/eb055327 |
| Published date | 01 January 1977 |
| Author | A.J. Eccles |
| Subject Matter | HR & organizational behaviour |
Industrial Democracy and
Organizational Change
A J Eccles
Professor of Business Policy, Department of Management Studies,
University
of
Glasgow
Introduction
There is a widespread belief that the choices before the Bul-
lock Committee on Industrial Democracy pose a threat to
managements, whilst they signal a major benefit to trade
unionists. It is the purpose of this paper to demonstrate that
the introduction of worker directors poses more problems for
unions than for managements and that the union movement
may be handed a poisoned chalice. The irony is that the
chalice is not a malicious offering by sly capitalists but just
what the union movement asked for when pressing for Gov-
ernment action on industrial democracy.
Fortunately for trade unionists, the movement is robust and
the chalice's contents are not lethal. Furthermore, as the deep
division within the TUC shows, some trade unions (including
the EETPU and GMWU) are alert to the implications of
being forced to drink from it and have vowed abstinence.
How can we start to analyse these claims of the likely effects
of worker directors on the workings of trade unions? There
are worse places to start than the Bullock Committee's terms
of reference.a These may have been widely derided as tenden-
tious,
or as presuming the findings of the enquiry, but they are
not as naive as they might at first appear.
It is helpful to consider the central issues which are implicit in
five key elements in the terms of reference. The five elements
are:
1 'the radical extension of industrial democracy' and what
being 'radical' might require;
2 ' the control of companies' and the implications for power
and responsibility;
3 'the essential role of trade union organization' and the
question of whether there is any alternative;
4 the particular proposals of the TUC and the limitations
and assumptions of its view;
5 'the implications for the efficient management of com-
panies'.
'Accepting the
need for
a radical extension
of
industrial democracy
in
the
control
of
companies
by means of
representation
on the
boards
of
directors,
and
accepting the essential role
of
trade
union
organizations
in this
process,
to
consider
how such
an extension can best be
achieved,
taking into account in
particular
the proposals of
the
Trades Union
Congress report
on
industrial democracy
as
well as experience
in Bri-
tain,
the EEC and
other
countries.
Having regard
to the
interest
of the
national
economy,
employees,
investors
and
consumers,
to
analyse
the
implications
of
such representation
for the efficient management of
companies
and for
company
law.'
The Radical Extension of Industrial Democracy
The first element, that of the 'radical' nature of industrial
democracy, need not detain us for long, though it is worth
discussing briefly in view of the apocalyptic visions of some
critics of worker participation. They have a view that propos-
als to extend industrial democracy represent the end of indus-
trial life as Britain has known it. The prospects seem more
prosaic.
The word 'radical' can be defined as 'fundamental' and as
being a most advanced view of political reform on democratic
lines.1
Modern political democracy has habitually enfran-
chised all the adult participants who are directly involved in
the matters to be decided. In this sense the workers in an
enterprise have not been enfranchised, whilst the sharehol-
ders - whether involved directly or indirectly - have held
nominal or actual control of policy decisions. It has been
argued2 that company managements have usurped the power
of shareholders but that at least the shareholders could con-
trol the enterprise if, jointly, they so chose. It has also been
argued extensively that trade union power is such that the
workers are, to all intents and purposes, enfranchised since
they can decline to cooperate in the execution of unappealing
company plans. However, as numerous analysts have pointed
out, trade union power is patchy and normally negative in
effect since it often consists only of the ability to veto the
proposals of management. Proposals for the extension of
industrial democracy seek to make the role of employees
more positive, and more akin to the role of participants in
other forms of institutional government.
There is a contrast between the present structure of democ-
racy in general society and the authority system of existing
industrial management.3 Clegg4 and Roberts5 have pointed
out that industry is totalitarian and needs an opposition
because it is not a voluntary association. Whilst it would be
wrong to assume that the shareholders and management are
always in agreement, the opposition has tended to come via
Government regulation and advice as a constraint on the
freedom of enterprises to do as they wish. However, it has
proved difficult to transform Governments' role to a positive
form and equally tricky to develop the collective bargaining
system into a less reactive framework. There has been a
further form of opposition to the power of management in the
form of the reactions of the organizations' customers.
(One of the oddities of the 1974 TUC report on industrial
democracy was that words such as 'customers', 'products',
'markets' and 'competitors' were almost wholly absent and it
read as though the world ended at the factory gate. There was
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