Industry Change and Union Mergers in British Retail Finance
| Published date | 01 June 2001 |
| Author | Timothy Morris,Peter Cressey,Adrian Wilkinson,John Storey |
| DOI | http://doi.org/10.1111/1467-8543.00198 |
| Date | 01 June 2001 |
Industr y Change and Union Mergers
in British Retail Finance
Timothy Morris, John Storey, Adrian Wilkinson
and Peter Cressey
Abstract
This paper investigates the reasons for and implications of the recent merger
between three of the largest unions in the retail finance sector, creating UNIFI.
Recent union mergers have been explained by environmental changes adversely
affecting membership and finances. These prompt leaders to consider merger
as an appropriate organizational solution. Mergers are successfully concluded
when leaders are able to overcome internal resistance and develop acceptable
outcomes. We examine whether these factors are sufficient to explain how the
merger between the national banking union and two large company-based staff
unions was concluded, given longstanding institutional rivalry.
1. Introduction
This paper has two aims. The first is to examine the recent three-way
amalgamation between the Banking Insurance and Finance Union (BIFU)
and the staff unions in Barclays and NatWest banks to create UNIFI.
Union mergers in recent years have generally been explained as a response
to structural changes, notably membership contraction and tougher em-
ployer policies, prompting union leaders to consider merger as a solution.
However, this is only the start of what may end up as a long process, and
not all merger talks are successfully concluded. Merger success depends on
leaders negotiating the discussions effectively and overcoming internal
resistance. We consider the UNIFI case in the light of theories of union
merger and find that success also involved a process of convergence in
values and organization structure beginning even before membership con-
traction and leadership changes. Values and organization structure were of
Timothy Morris is at the Imperial College Management School, London. John Storey is at the
Open University. Adrian Wilkinson is at the Loughborough Business School, and Peter Cressey
is at Bath University.
British Journal of Industrial Relations
39:2 June 2001 0007±1080 pp. 237±256
#Blackwell Publishers Ltd/London School of Economics 2001. Published by Blackwell Publishers Ltd,
108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA.
special significance for the banking unions because of the longstanding
rivalry between the TUC affiliates and staff associations in the industry,
which influenced the way they responded to (and were part of) employer
strategies. We also argue that the relatively equal power balance of the
parties facilitated merger, explaining this power equality in terms of the
smaller staff unions' stronger financial position which counterbalanced
BIFU's greater membership size.
The second aim of the paper is to consider the consequences of the merger
and the prospects for sectoral union monopoly. We argue that this is meant
to be facilitated by UNIFI's formal objectives and structure. Structurally,
the union has a number of features that are derived from the values of
the staff unions Ð notably, an emphasis on autonomy for the company-
based bargaining sections and limited control by the union's centre over
their actions. These may attract potential merger candidates, but monopoly
unionism in the sector is not inevitable. We elaborate the conditions under
which even relatively small company-based staff unions may survive in
competition with UNIFI, emphasizing the critical importance of employer
policies on recognition and support.
2. Union merger and adaptation
Organizationally, unions are concerned to adapt to two linked markets or
domains of activity: that for representation among employers in the chosen
membership territory, and the market for members. The two are mutually
reinforcing (recognition and employer support leads to higher member-
ship) or disabling (employer hostility leads to reduced support for member
servicing, rising costs of representation per member and membership
decline) (Willman et al. 1993). However, in relatively hostile environ-
ments, where the role of unions in firms' governance is limited, there are
strong constraints on unions' scope for action. This means that unions
mostly react to prior decisions taken by the firms in their bargaining
territory and that their activities are concerned mainly with the secondary
effects of business strategies over which they have little influence. These
secondary effects include job changes, skill formation or destruction and
career consequences.
Unions are also concerned with the effects of business decisions on their
own survival and organizing territories, particularly when industry bound-
aries erode as firms exploit opportunities presented by technical change or
acquire other businesses. Not all unions seek to grow beyond their estab-
lished territory, but they are likely to defend their membership against
incursion by competitors and to seek to maximize density, because that
combines the virtues of bargaining power and cost-effective representation
(Willman 2001). As they are highly reliant on subscription income, unions
have to pay great attention to recruiting and maintaining membership in a
cost-effective way, particularly when it is contracting. For instance, piece-
238 British Journal of Industrial Relations
#Blackwell Publishers Ltd/London School of Economics 2001.
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