Rivista di etica e scienze sociali / Journal of Ethics & Social Sciences

 

Reviewing this book my overall response was emotional rather than intellectual. What I felt mostly was a feeling of solidarity with the authors and the many fine people in industry and the academic world upon whose ideas and experience they drew. Goodwill, dialogue and the belief in not only the need but also the possibility for improvement in the world of employment and business clearly drive this book. The chapters I have chosen to respond to deal with management strategies pdfconcerning employment (ch 5), the question of models for the ownership of business assets and profits (ch 6) and the issues involved in marketing products and services (ch 7). In these chapters the authors Helen Alford and Michael Naughton come to the crunch issues. Without methodologies for the ownership of assets, the selling and distribution of goods and services, and the management of people as if faith matters the whole project of the book would have been seriously compromised.

I shall not dwell very much on what these chapters have to say. I assume anyone reading this piece will already be familiar with the book itself. I want to focus here on where I would like to see the argument taken and developed. There are three important  issues I believe Catholics need to consider further in making a positive response to the work in these three chapters. They are as follows:

1) The implication that flows from the case in ch 5, arguing that the organisation can in some circumstances be justified in paying a wage lower than the criteria set for a living wage.

2) The significance of the free market context, which may create the economic necessity to pay below a living wage.

3) The critical linkages between Catholic Social Thought with regard to trade unions and co-operative societies and the solution to the difficulties that can arise from the realities described in 1 and 2 above.

hrm1

 


                Demands                                Solution:                                      Demands                
forReturn on investment              The least cost option                      for value and quality

The existence of the market mechanism embraces all forms of business activity and ownership. It is after all the operation of the market applied to labour that reduces workers to a dependent commodity. In conditions of labour shortage most of the instrumental strategies of HRM are unworkable and counter productive for the firms strategic needs. In conditions of acute over-supply and governmental deregulation the ground is set for Christian firms to be theologically and economically justified in paying below a living wage (see p. 136). Market forces limit managers. The authors also acknowledge this (see p. 137). It is when we come to the solution as one of integration of justice (Christian purpose) with strategic thinking (see p. 147 to end) that we run up against the market. It is here that customer-defined quality in the retail market and investor-led aspirations concerning expected added-value for investment in the capital market meet in the organisation. They both impact critically and their presence often results in the HRM strategic requirement of the “least cost solution”. Such a solution very often has a detrimental impact on the conditions on labour and the environmental impact of  the operation. The current “over supply” of labour in the contemporary labour market context ensures this least cost solution is generally very easily extracted from labour (see fig. 1).

Workers from a Christian perspective can never be in “over-supply”. That their labour can create greater value than it consumes provides the economic basis for workers to generate their own employment and lies at the base of all work whether conducted in an employment or domestic context. Labour is, as Adam Smith acknowledged, the primary source of value. The social significance of work – the solidarity of labour – goes to heart of the reason we must take the discussion further to explore relationships and purposes in business at the level of the market. The book Managing as if Faith Matters challenges us about the purpose of business at an early stage in its analysis. The central argument I want to propose here is that the more businesses we can encourage into the market place that are not led by investor based capital the greater the chances are that we may establish those purposes in the marketplace that are human and creation centred. A central purpose, (good in itself), for work and for the creation of value through our work is that of solidarity. I mean this in the sense that it is through solidarity in the community of work that we realise so much of our humanity and purpose.

1. Solidarity encourages us to recognise that whatever work does to us has consequences for the wider community of friends, family and neighbours and beyond, to the wider society.

2. Solidarity also enables us to recognise that it is not work in abstract that shapes us but work as manifest in the networks of relationships and exchanges with other workers.

3. Solidarity also requires us to see the importance of the market power of labour in association and its potential to improve the conditions of labour.

4. Solidarity is a key aspect of our relationship with God. When we show solidarity with those who are poor we honour God. When we gather together in solidarity in His Church we become His body on earth. We are a chosen people. Our work can only bear fruit when undertaken according to our relationship with Him.

Co-operation as an idea is a key mechanism for the organisation of labour around this principle of solidarity. It can play a critical part in meeting the workers’ needs for solidarity across all the four dimensions I suggest above. In co-operatives producers own the assets of their business and as either workers, fishermen or farmers combine their labour with their ownership of the assets. In a like manner consumers of services and products can also under the co-operative model own the means of distribution and production of the goods and services they consume. I want to assert here the co-operative significance as a mechanism operating for justice at the level of the marketplace. This is true whether we look at the markets for capital, for labour or for the consumption of goods and services. It is ultimately the behaviour of actors in the capital and consumer markets that sets the standards and constraints for the management of all the human and natural resources along the supply chains for all traded goods and services. On the one hand we have the expectations and behaviour of investors in the global capital markets seeking the very highest returns on their investments. On the other, the demand for the best value for money from products and services informs much of contemporary  consumer behaviour. In these conditions the struggle between justice and HRM will always be an unequal one (see Fig. 1 above).

A business community dominated by firms whose shares are tradable on the capital market is unlikely in the future, as it has proved unwilling in the past, to take on board the ideals and values of the enlightened few. The first man reputedly to use the word socialism who became the founder of early attempts at the beginning of the British Industrial Revolution to form communitarian co-operatives and general trade unions was himself a self-made industrialist. Robert Owen only turned to co-operative self-help solutions for the working classes because the ruling class of his age rejected his calls for reform of the labour market. Owen demonstrated at his model factory in New Lanark that utilising the best management methods and latest technologies could produce highly profitable returns for investors without the use of child labour and provide high quality housing and educational facilities for the families of his employees. But his reports to Parliament fell on deaf ears. As a social scientist I can see scant evidence that the experience and examples of the modern “New Lanark” examples mentioned in this book will fare any better than Owen did. 

The British Co-operative Bank

The case study of the British Co-operative Bank is illustrative of my point. It controls merely around 4% of the British retail banking market. Its impact on banking standards has been profound. It was the first bank to introduce charge fee current accounts, the first to give interest on positive balances in current account, and the first to offer a charge free credit card. The other banks have had to followed suit. The Co-operative Bank was the only bank to challenge  the big commercial banks decision to levy charges for the use of their ATMs ( it was supported in this by the Nationwide Building Society – itself a co-operative). Again the big banks had to back down. Now hardly any charge for the use of their ATMs the Co-operative bank has set new standards in ethical banking and is currently rated amongst the top fifty best employers in the UK. I do not know the exact figures for the savings to the retail banking consumer that the British Co-operative bank has ensured but it must be measured in billions over the years. None of these activities has prevented the Co-operative Bank from putting in exceptional financial performances year on year.

The authors Helen and Michael might fairly respond that this is not the issue as they are trying to influence men and women of faith. The problem with this is that the majority of organisations globally, and this is where the nation state’s market is increasingly shaped, are not controlled by women and men of faith and are thus unlikely to be self motivated to ensure justice and strategy are integrated as is called for by the authors. Market forces will ensure that capital-based business, which ultimately is driven by the need to maintain share value and meet investors’ expectations, will continue to treat labour as an instrument, and not as a partner in the creation of value.

The potential market-based advantage the co-operative form of business has lies in its not being based on tradable shares and in the different determination of its central purpose. This makes co-operatives less vulnerable to the pressure to produce the highest returns on capital possible. Co-operatives need just enough capital to ensure maintenance and development of the business to provide continuous and consistently excellent service to customers. A just wage seems more feasible, even in difficult market conditions, in the co-operative organisational context. In their ability to affect the terms of exchange in the labour and consumer markets, the co-operative business plays a wider role in ensuring Christian standards of justice get applied across the whole business community. The co-operative contribution is most significant as a supporting market context for all managers trying to manage as if faith mattered, even when working in businesses competing with the co-operative sector. Co-operatives can help set employment and consumer standards that influence market standards as a whole.

Without this associational leverage in the market context there is no mechanism to drive the idea of labour as more than a resource with a price on its head. We cannot simply assert on theological grounds that labour is something more than just a factor of production. The theological grounds are the justification certainly for the concept of justice and the foundation for the spirituality of work that informs the discussion in the last chapter of this book. But it will not of itself be a sufficient  mechanism for implementation of those standards of justice to which Christian managers of all businesses should aspire. It is in the market place, not simply within the organisation, that we must press the cause of Labour.  Co-operative and Trade Union organisations together provide complementary structures for labour to gain market leverage. Whether that leverage is used for good or ill depends on the leadership in these organisations adopting the purposes outlined in Managing as if Faith Mattered just as much as it does on their counterparts in share-based firms. Improving justice in employment in share-based firms and the opportunities for wider application of the schemes outlined will be more likely in a context where co-operative production and distribution plays a significant role in shaping the marketplace.

Giving other stakeholders shares and making them shareholders may be good for industrial relations and improve equity (see ch 6). It will not solve the issue of labour in the economy. It may even add to the polarisation of society and the fragmentation of labour solidarity. Firms who protect their labour with strong internal labour markets will form an elite. Those in the majority, operating in the less secure sectors of industry, will operate employment conditions reflecting the marginal nature of the firms that employ them. The solidarity of labour beyond that of the organisation in Trades Unions has been the most effective defence workers have so far evolved. Rising share values help those who own them. The dual labour market (which many see as a feature of the global economy and post- war capitalism in general) will be reinforced as some workers benefit and others loose in the ups and downs of the share capital market. Whereas institutional investors spread their risks the ESOP concept means that savings from wages are all sunk into one single risk. If the ESOP firm fails workers loose their source of income and a substantial proportion of their savings just when they need them most.

In both the consumer market and the labour market a wider range of choice in terms of the forms of ownership and the definition of the purpose of organisation by which business is conducted will lead to the opportunity for standards to be set as if faith matters. Co-operatives provide one significant and tried mechanism. Their community and human-centred values and principles facilitate a creation and human-centred business, which could be managed as if faith mattered. Co-operative membership is rewarded   through the provision of member services, not return on capital. At the level of the market place the existence of co-operative business can tip the market in the consumers’ favour and establish just employment by providing a popularly-owned business. Such business forms are more likely to recognise community interests and social and environmental issues. They will not have to always seek the least cost options but can seek the most sustainable ones. This creates a market awareness in consumers that can force the general range of companies competing to adopt higher standards than they might otherwise have done, to both worker and consumer advantage. It is not a case of denying the investor a fair return. It is a case of co-operatives existence giving a better balance of market power across all stake-holders.

Management needs principles to guide it and an organisational purpose and culture to support it. Management operating in market conditions which are not dominated by share based businesses are much more likely to sustain a management strategy evolved as if faith matters. The book Managing as if Faith Matters makes a convincing and important case that Faith does matter. By focusing on the organisation and managers in the organisation it emphasises the important ethical and social role of management. It demonstrates how important it is for us to recognise the role of purpose and values in determining management culture.

It also points to the limitations on management as well as their importance. The discussion amongst Christians now needs to broaden on the basis of the principles in this book to discuss the importance of alternative forms of business and their role in creating a market for faith rather than simply an organisation of faith. I am not arguing that only co-operatives can be Christian or that co-operative principles are the same as Christian principles when applied to business. My point is that the existence of strong co-operatives based in the community and focused on service delivery can create the kind of competitive pressure that will make it important for other forms of business to adopt similar standards. Their presence can lessen the market pressure for shares with its emphasis on profit maximisation rather than stakeholder equity, environmental sustainability and the dignity of labour.

In such a situation, the opportunity for managers and business leaders who want to operate as if their faith matters will be enhanced. The victory of Christian values in business will not be inevitable but with prayer and the habits of faith and service to guide Christian managers, workers and business leaders, the conditions will be more favourable in all forms of business organisation for the establishment of the Christian agenda. Managing as if Faith matters is about how we create value and how we consume it. Consumer values, attitudes and behaviour will be shaped by patterns of consumption and production. To this writer it seems inconceivable to have a spirituality of work which did not inform a spirituality of consumption and recreation. Marketing is part of the struggle for the soul as well as for the custom of the consumer. It is not just about the purchase or choice of a commodity/ service but also about the adoption of a culture. Marketing as if faith mattered is not simply about responding to consumer needs. It is about recognising consumer concerns – consumer solidarity with producers, with other consumers and their collective responsibility for God’s creation.

The way in which we manage our consumption is just as significant as how we manage our production. Managers at various stages in the supply chain and in the PR and Marketing Functions must listen to consumers and workers to establish not simply a learning community but a learning community of faith. Then the multi-dimensional aspects of human labour will be better understood and better practised. Domestic work will be recognised as an equal partner to paid employment and the transitions between them mutually supporting and rewarding rather than sources of stress, conflict, lost opportunities and broken relationships.

 

Fig 2. Co-operatives, Solidarity, and Market Behaviour

 

Modified behaviour                                                     Modified behaviour

smb

The tide of individualism and materialism seems to be sweeping across the globe. There could not be a more opportune moment for this book. What it urges us to reflect upon is how to bring about a reversal of this tide? How do we commence the management of business as if it were God’s business?

1. Prayer for change must be the starting point. Prayer for reform and innovation towards more human-centred strategies in all forms of business.pdf

2. Prayers for Managers to receive grace for ingenuity, courage, vision and integrity.

3. Prayers for Co-operative and Trade Union development. Prayers for Managers committed to service to enter these movements and provide the leadership needed for them to change the balance of power from capital to people in the marketplace.

4. Prayers for ourselves to receive the grace to act, in whatever capacity God has placed us, as if our Faith matters.

 

 

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