Management & Change by IILM Institute for Higher Education

Subhash Sharma

New-Age Management for Competitive Advantage: The Metaphors oflndia Blend, Indica and Indian Management

'Boiko Atanassov

Optimizing the Planning of Company Equipment in Uncertain Conditions

Bhaskar Majumdar

The Global Power Structure and Globalization: Any Choice for the Third World?

K. R. Shyam Sundar

Industrial Conflict and the Institutional Framework of the Industrial Relations System in India A Comparative Study of Perceived Need-Satisfaction Deficiencies ofthe Workers ofthe Private and Public Sectors in Bangladesh An Empirical Comparison of the Predictive Validity of the Self-Explicated, Huber-Hybrid and Traditional Conjoint Models in India

M. Ekramul Hoque

SitaMishra

D.P.Kar& H.R. Tewari Vidhu Mohan, Daisy Chauhan & S. P. Chauhan Debi S. Saini

Assessing Organizational Culture as an Antecedent of Organizational Citizenship Behaviour Managerial Burnout: A Study of Managers from the Government, Public and Private Sectors Human Resource Strategy and Workplace Pluralism BOOK REVIEWS

The Journal of the Institute for Integrated Learning in Management, New Delhi

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Management & Change The Journal ofthe Institute for Integrated Learning in Management (IILM), New Delhi

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Management & Change The Journal of the Institute for Integrated Learning in Management (IILM), New Delhi NUMBER 1

VOLUME 3

JANUARY-JUNE 1999

ARTICLES New-Age Management for Competitive Advantage: The Metaphors oflndia Blend, Indica and IndianManagement

Subhash Sharma

Optimizing the Planning of Company Equipment in Uncertain Conditions

Boiko Atanassov

The Global Power Structure and Globalization: Any Choice for the Third World?

Bhaskar Majumdar

Industrial Conflict and the Institutional Framework of the Industrial Relations System in India

K. R. Shyam Sundar

A Comparative Study of Perceived Need-Satisfaction Deficiencies ofthe Workers of the Private and Public Sectors in Bangladesh

M. Ekramul Hoque

An Empirical Comparison ofthe Predictive Validity of the Self-Explicated, Huber-Hybrid and Traditional Conjoint Models in India

SitaMishra

103

Assessing Organizational Culture as an Antecedent of Organizational Citizenship Behaviour

D.P.Kar& H.R. Tewari

115

Managerial Burnout: A Study of Managers from the Government, Public and Private Sectors

VrdhuMOhan, Daisy Chauhan & s.P. Chauhan

129

Debi S. Saini

151

COMMUNICATIONS

I~;.

REVIEW ARTICLE Human Resource Plualism

Strategy

and Workplace

BOOK REVIEWS Business and Economic Environment 169 I. G. Patel: Economic Reform and Global Change. Reviewed by V. Pandit. Terence J. Byres: The Indian Econumy: Major Debates since Independence. Reviewed by Ashok Lahiri. Philippe Cadene and Mark Holmstrom: Mamkoottam.

Decentralized Production in India. Reviewed by Kuriakose

Bibek Debroy (ed.): Challenges of Globalization. Reviewed by Debi S. Saini. and Mahrukh Engineer: Liberalization and Human Resource Management: Challenges for the Corporations of Tomorrow. Reviewed by Somnath Ghosh. Atul Sarma, Germit Faber and Pradeep Kumar Mehta: Meeting the Challenges of the European Union: Prospects of Indian Exports. Reviewed by Indernath Mukherji. General Management 180' Arun Wakhlu: Managing From the Heart-Unfolding Spirit in People and Organization; and Gerhart Plenert: World Class Manager-Olympic Quality Performance in the New Global Economy. Reviewed by Sami A. Khan. Corporate Governance 183 C. V. Baxi (ed.): Boardroom-200? Reviewed by Y. R. K. Reddy. Organization Theory and Organization Thinking 185 Stewart R. Clegg et al. (eds.): Global Management: Universal Theories and Local Realities. Arun Monappa

Reviewed by Debi S. Saini. John Hassard and Ruth Holiday (eds.): Organization Representation: Work and Organization in Popular Culture. Reviewed by Anand Kumar.

Organizational

Behaviour 189 Stress and Coping-The Indian ExperieRce. Reviewed by Shabir A. Bhatt. J. P. Das: Working Mind: An Introduction to Psychology. Reviewed by Tripti Pande Desai. Business Communication 193 John White and Laura Mazur: Communications Management. Reviewed by Zafar H. Anjum. Entrepreneurship 195 S. J. Phansalkar: Making Growth Happen: Learning From First-Generation Entrepreneurs. D. M. Pestonjee:

Reviewed by R.A. Sharma.

Creativity

in Management

198

Gerald Nadler, Shozo Hibino and John Farrell: Creative Solution Finding; G. P. Gupta: Management by Consciousness-A Spirituo-Technical Approach. Reviewed by Zafar H. Anjum.

Human Resources

Management

200

J. S. Sodhi: Industrial Relations and Human Resources Management in Transition. Reviewed by C. K. Johri. Duncan Chappell and Vittorio Di Martino:

Violence at Work. Reviewed by V. Jha.

Marketing Management

207

Laura Mazur and Annik Hogg: The Marketing Challenge; M. J. Xavier: Marketing in the New Millennium: 36 Trends That Will Change Business and Marketing. Reviewed by M. S. Verma. M. L. Bhasin: Cases in Marketing Management. ReNiewed by Gaulam Bhattacharya. Rick Arons: Euromarketing: Paul Gibbs: Doing Business in European Union. Reviewed by M. S. Verma.

Management

of Banks

Vasant C. Joshi and Vinay V. Joshi: Managing Indian Banks-The Debasis Sanyal.

BOOKSRECEIVED

214 Challenges Ahead. Reviewed

217

NEW-AGE MANAGEMENT FOR COMPETITIVE ADVANTAGE: THE METAPHORS OF INDIA BLEND, INDICA AND INDIAN MANAGEMENT

Subhash Sharma This paper presents afour-way classification framework identifYing the foundations of management theories and concepts. Itfurther develops the idea of Indian management by providing illustrative Indian ideas in management. The paper highlights the emergence of "India blend" and "Indica" as new metaphors of Indian management in a new age of liberalization and globalization. As an illustration, the paper also draws upon an idea from the Arthashastra that has a lot of relevance in the field of strategic management. It argues that the future of Indian management as a distinct field of study would depend on the capacity of Indian managers to unleash Indian creativity. The idea of anti-benchmarking could help us in this direction.

INTRODUCTION

iberalization and globalization have enhanced competitive pressures on nations and their corporate enterprises. This has also led to an increased contact between the East and the West. When the Japanese conceptualized their experience of creating competitive enterprises, the idea of Japanese management was born. Now with the conceptualizing of the Indian experience of creating world-class organizations, the construct ofIndian management is taking shape. The metaphors of "India Blend" and "Indica" are two interesting examples in this regard. In order to appreciate the development of the construct ofIndian management, we provide a conceptual framework on the foundations of management. This framework presented in the frrst part of this paper highlights the major ideas and paradigm shifts in management theories and concepts. The following part of the paper provides an illustration of an Indian management idea from a wellThis is a revised version of the paper presented at the national conference, "In Pursuit of Indian Management," on December J 7 & 18, 1998, held at CSIC Auditorium, Indian Institute of Science, Bangalore, under the auspices of a consortium of leading management institutes and professional bodies. Management & Change, Volume 3, Number I (January-June 1999) @ 1999 Institute for Integrated Learning in Management. All Rights Reserved.

-I

2 New-Age Management for Competitive Advantage

known Indian text viz. Arthashastra. This idea could be viewed as a contribution to strategic management. In the last part of the paper, it is argued that for future development of the construct of Indian management, unleashing Indian creativity assumes importance. It is suggested that the idea of anti-benchmarking could help us to do the same.

FOUNDATIONS OF MANAGEMENT-A FRAMEWORK MANAGEMENT THEORIES AND CONCEPTS

A review of management theories and concepts indicates that the development of the concept of management can be looked at from various conceptuallenses. We provide here a framework of a four-way classification of management theories and concepts. These approaches are based on an understanding of role of managers and the functions of management, understanding the self and inter-personal relationships, evolving appropriate tools for enterprise performance improvement and understanding the cultural context of management. 1. Role of Managers and Functions of Management In the fifties, the popular management abracadabra used to be POSDCORB: known as "principles of management," the knowledge about management and organizations was usually classified under the broad headings of Planning, Organizing, Staffing, Directing, Controlling/Coordinating, Reporting and Budgeting (POSDCORB). In this approach, the focus was on the role of managers and the functions of management. It is interesting to observe that in the nineties, very rarely is a management book organized around these headings. Many consider this classification oldfashioned perhaps because no new conceptual ground was broken within the boundaries of this framework about an enhanced understanding of the "process of management." 2. The Psycho-Philosophical

Foundations

of Management

In this approach, the focus has been on understanding the self/individual and inter-personal relationships. Accordingly, behavioural sciences and related social sciences provided some new management ideas, concepts and jargon. Motivation, communication, leadership, conflict resolution, change, empowerment, learning, etc., became the new buzzwords for organizing Management

& Change, Volume 3, Number

1 (January-June

1999)

.,-_.......,,:,..,...â&#x20AC;˘â&#x20AC;˘ ,

1m_I

Sharma

the concepts and ideas about organizations and their management. In recent years, Indian management scholars drawing upon the Indian psychospiritual heritage have also contributed many new ideas for a better understanding of organizational processes related to motivation, communication, leadership, empowerment and so on. In fact, some of the insights gathered through eastern psycho-spiritual approaches have also entered the corridors of western management thought. An intellectual movement in India broadly known as "Indian ethos in management" provided a foundational premise for the application of eastern psycho-spiritual ideas in corporate management. Indeed, many recent bpoks on management tend to focus on them as originating from a psycho-spiritual understanding of human beings and their purpose in life. 3. Enterprise Performance Improvement

Techniques

This approach to understanding of management came from the focus on enterprise performance improvement. The major idea behind this approach has been to develop tools and techniques to improve the performance of organizations. Under this "approach, old tools were modified or discarded and new ones were innovated. Popular management tools and techniques such as MBO, Cybernetic Control Systems, OD, Re-engineering, TQM, Core Competencies, Enterprise Resource Planning (ERP), etc. evolved in response to the need for sharpening the competitive edge of business enterprises in the market context. Some of these tools and techniques were also found to be useful for improving the efficiency and effectiveness of public institutions and not for only profit organizations. It may also be indicated that many earlier tools and techniques were largely based on a "rational" approach ignoring the intuitive and subjective aspects of reality. Recognition of the reality as "omnijective," i.e., a fusion of objective and subjective is now leading us to the next step in the conceptualization of management theories and concepts as well as the development of new tools and techniques. This next step is taking us towards "new management ideas" based on combinations of the rational-analytic and the intuitive-holistic approaches. 4. The Cultural Context and the Country of Origin This approach to the understanding of management processes emerged Management

& Change. Volume 3. Number

1 (January-June

1999)

4 New-Age Management for Competitive Advantage from the cultural context of management theories and practices. With the success of Japanese economic enterprises, the concept of Japanese management was articulated. While earlier management books talked of American management as the salvation, a new breed of writers started writing about Japanese management. As a result, now considerable literature exists both in relation to American and Japanese management theories and concepts. In the Indian context also, the construct of "Indian management" has been slowly emerging. Consequently, Indian models and concepts of leadership and management are now recognized in international literature. Indeed, the urge to develop the construct of Indian management has come from some interesting empirical observations such as the resilience of Indian society in surviving over the last five thousand years, its ability to adapt, adopt and march onward. India's freedom struggle is another unique historical chapter and an eventful case-study for several management lessons. India also ranks high among the nations which can boast of several, more than hundred years old, surviving business organizations. Now, liberalization and globalization have provided a new impetus to create and develop organizations around flew ideas and businesses. When Americans conceptualized their experience of building business organizations, the idea of American management was born. Similarly, when the Japanese conceptualized their experience of nation-building through business-building, the idea of Japanese management was born. Now Indian scholars have started conceptualizing the Indian experience of building corporate enterprises in terms ofIndian metaphors, models and mantras, hence the idea of Indian management is emerging. From the above discussion, the focus of the four approaches to understanding the concept of management can be identified in terms of emphasis on (i) role, (ii) self, (iii) enterprise performance improvement, and (iv) cultural context. Figure-l presents this conceptual framework for the foundations of management. In "new-age management," we keep our mind's windows and doors open to-learn from all the four approaches to have a better understanding about the functioning of organizations and institutions. THE CONSTRUCT

OF INDIAN MANAGEMENT

When we talk of Japanese management, the idea of quality circles comes to mind and when we talk about Indian management, the idea of yoga for stress management is widely quoted. While Total Quality Management Management

& Change,

Volume 3, Number

I (January-June

1999)

Culture /

.....

/-r;;d".!hip

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Em"o" •••- Oumge Lea",. Communimen! ing cation

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Role Fig. 1: Foundations of Management: A Conceptual Framework

1 6 New-Age Management for Competitive Advantage

(TQM) is a Japanese contribution, TM (Transcendental Meditation) is an Indian contribution and a merger ofTM and TQM could lead to a new idea for improving the efficiency and effectiveness of an organization. It may also be observed that the construct of Japanese management goes far beyond quality circles and the construct ofIndian Management goes far beyond TM. Indeed, developing appropriate combinations of current ideas to create new ideas is the essence of the concept of "India blend." This author's work, Management in New Age: Western Windows, Eastern Doors (1996) is also an effort in this direction. For a deeper appreciation of the idea ofIndian management, it will be useful to take a historical perspective because new models and metaphors can be generated by relying upon the vast reservoir of ideas and concepts hidden in the historical experiences of a nation or civilization as well as in its psycho-spiritual heritage. Indian business and trading acumen is known since the time of the Indus valley civilization which had trading links with far-off places. Concepts such as vanijya, shubh-Iabh, hundi, grahak, krya-vikrya, ayavyaya, labh-haani, etc., which appear in the Arthashastra and other ancient writings formed the foundations for trading management practices. Many such concepts found their way into business management practices e.g., the padtasystem of monitoring financial performance, etc. Similarly hundi was the first idea on forward contracts and today's credit cards. The concept of taxation has been explained through beautiful metaphors such as a bee drawing honey from flowers, etc. Such metaphors are available in the Arthashastra and other ancient writings. A concept of organizations, viz., Sanghas and Chaityas (places of worship), to organize religious activity originated during ancient times. In the Arthashastra we also find the concept of workers' sangha. These ideas later found their manifestations in other space-time contexts also. For example, the lessons for organization and management of places of worship owe much to the concept of chaltyas or the Buddhist monasteries. This may perhaps be a reason for the similarities in management practices between the chaltyas and the church. Another unique idea about business organizations viz., trusteeship also originated in India. The "harmonization paradigm" of industrial relations owes its roots to Gahdhl's thoughts on harmony between workers and management. The idea of loksangraha, i.e., working for the benefit of society provides a framework for the social responsibility of businesses. It may be indicated that during ancient times ~India had vibrant trade Management

& Change, Volume 3, Number

I (January-June

J 999)

, â&#x20AC;˘â&#x20AC;˘

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. _.

Sharma

links with the rest of the world. The story of the flow of Indian spices to other countries and the flow of gold to India is nota myth but a reality. However, during the colonial period Indian contact with others was either completely closed or regulated for the benefit ofthe colonial masters. Lack of contact with the rest of the world led to stagnation of Indian trade and business, as the Indian business class could not get access to technology and ideas. However, after irtdependence, India regained its trade and cultural contacts with other countries and now it has an instant access to the .development of technology and ideas elsewhere. Similarly, now its ideas also experience the "free flow phenomenon." This has led to an increased exchange of ideas. Indeed, with liberalization and globalization, the construct of Indian management has received a tremendous boost just like the construct of Japanese management did with increased g!obal competition. The foundational work for the development of the idea ofIndian management started with a movement known as "Indian ethos in management." This movement concerned itself with management concepts related to motivation, leadership, human values, stress management, corporate applications of yoga and so on. With liberalization and globalization, a new movement for further evolving the idea ofIndian management as a distinct discipline gathered momentum. A search began for ideas that could form a new body of knowledge about management. It was observed that many successful Indian managers have been consciously or unconsciously drawing upon ideas of Indian origin because they had either heard about them or read about them, even though such ideas are not usually taught in formal curriculla. Table-l provides a few such ideas. While many ideas from Indian metaphors and experience have become part of management thought, the construct ofIndian management is evolving further through a synthesis of eastern and western ideas. It is in this respect that the idea of "India blend" from the Indian tea industry provides us a new foundational basis for the future development of Indian management. Similarly, the metaphor of "Indica" from the Indian automobile industry is indicative of the capacity and potentiality ofIndian organizations to effectively respond in competitive situations. In essence, the recent history ofIndian management can be viewed in terms of three distinct eras. During the first__ ~r~ I!J.dianmanagement -ideas originated largely from the domain of trading activity and small businesses. During the second era, "Indian ethos in management" arrived and it made substantial contributions to management thought. Now, Indian manManagement

& Change, Volume 3, Number

1 (January-June

1999)

8 New-Age Management for Competitive Advantage Table-l Illustrative Indian Ideas in Management S. No.

Ideas

Functional Classification

Source

Organization behaviour

Indian ethos in management

performance monitoring

Finance & control systems

Indian trading management systems

Trusteeship organizational

Organization theory

Gandhi's thoughts

Organization theory

Gandhi's thoughts

Strategic management

The Arthashastra

6. Shubh-Iabh

Business ethics

An idealized indian business concept

7. Loksangraha

Social responsibility of business

Indian scriptures

8. Tax metaphors

Finance & public policy

The Arthashastra and other writings

9. Stress management

Organization behaviour

Yoga & meditation

10. Advertising rasa & raga

Marketing

Nav-rasa theory

11. Human values in

Management thought

Indian philosophy

Psycho-spiritual understanding of self

2. Padta system for

Form 4.

Harmonization paradigm in industrial relations

5. Extending corporate frontiers

throughTM

management

agement has entered the third era viz., the era of synthesis between tl\e Management

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1999)

Sharma

tion. Many world-class organizations have emerged in response to new competitive challenges. Further, those who wanted to do business with India needed to know India and the Indian psyche. In fact, many MNCs have been learning to Indianize their appeal by positively responding to the Indian psyche. This can be particularly seen in their advertising approach. The above categorization of the evolution of Indian management in terms of three eras also corresponds to the development ofIndian business entrepreneurship through small business, national-level corporates to the experience of building global corporates. Metaphors of "India blend" and "Indica" are products of the new era in which Indian business entrepreneurship is entering to build world-class organizations. With this evolution, the idea ofIndian management is now entering a stage of being a distinct field of study. THE ARTHASHASTRA FOR STRATEGIC FROM STRENGTH TO STRATEGY

MANAGEMENT-

In new age management, there is no hesitation in looking at the past for new ideas. Accordingly, it looks at the past with curiosity to get clues for some new ideas that are useful for the present and shaping the future. It also takes a creativity view of history and learns from the creativity-inspiring ideas and periods from the history. With the emergence of the service sector as a field of dominant economic activity the "tradition" with intuitive holistic aspects of viewing reality is now recapturing its sway over the human mind in the same fashion as "modernity" or the rational-analytic methods captured the imagination during the industrial revolution. In new age Indian management, we find a new blend of tradition and modernity. In Indian history, there were many periods of intense creativity. Further, there are many sources for creative ideas. The Arthashastra is one such source. It can indeed be considered a foundational source book for Indian management ideas and concepts.' It provides several interesting insights that are useful for improving the competitive advantage of not only the corporate business houses but also small businesses. Here we present an illustration of ideas from the ArthashasJra appearing in Book 9, "The Activity of the King About to March." This idea explained through interesting metaphors, could also be referred to as the "natural strategic advantage." "A dog on land drags a crocodile, a crocodile in water drags a dog," Management

& Change,

Volume 3. Number J (January-Ju~e

1999)

10 New-Age Management for Competitive Advantage "A dog on land drags a crocodile, a crocodile in water drags a dog," "By day a crow kills an owl, at night an owl kills a crow."

(The Arthashastra, Book 9, Ch. 1, Sutra 29 and 31) These observations when used in a business context provide us interesting insights for formulating strategies and in developing a nation's or an organization's "natural strategic advantage." These metaphors also provide us an interesting management lesson viz., strategy should flow from strength. A corporate organization needs to identify its natural strategic advantages and thereby it could either be of "owl" type, "crow" type, "dog" type or "crocodile" type. The dog-crocodile metaphor is indicative of the space (read market space) advantage while the crow-owl metaphor Indicates the timing advantage. These metaphors also indicate another important management lesson viz., creating competition rather than merely facing the competition should be the key driving force for any competitive advantage. In the context of liberalization and globalization, it is imperative for business organizations to identify their natural strategic advantages in terms of being "owi," "crow," "dog," or "crocodile" and also identify the competitors in terms of these metaphors with a view to devise effective strategies. It may be indicated that the well-known BCG matrix in strategic management also uses similar interesting metaphors. Thus, the use of such metaphors is ancient yet modern. We can also apply this lesson from the Arthashastra in the context of a nation. India enjoys natural and acquired strategic advantages in several sectors of its economy. By making a sector by sector analysis we can identify the "owl," "crow," "dog," and "crocodile" sectors of the Indian economy vis-a-vis our competitors. This would help us in making sectorspecific strategies for enhancing Indian competitiveness in the domestic and the world markets. For the purpose of illustration, we can cite the following sectors of the Indian economy where India either already enjoys or has a potential for natural or acquired strategic advantage. India's Natural and Acquired Strategic Advantage Sectors Software Education, particularly higher education Plantations Herbal medicine sector Management

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Sharma

Handloom and handicrafts Space programme Nuclear research programme Indian cinema Human Capital Reserve (HCR) Perhaps the above mentioned list will grow biggerifwe undertake a sectorwise exercise to identify our strategic advantages. India also has a large pool of scientific talent. Because of its brain power re~;ources, India ranks quite high on Human Capital Reserves (HeR). A part of its HeR has been effectively utilized by other nations in building their own strategic advantages. India's pool of brain power resources also represents its "scientific advantage." However, this "scientific advantage" needs to be combined with natural strategic advantage to enhance our competitive edge. Thus, the new age management formula for improving competitiveness can be described as follows: Scientific Advantage

Acquired or Natural Strategic Advantage ~ Competitive

Advantage

Once we identify the sectors where we enjoy strategic advantage, the next question we need to ask is whether government policies are towards enhancing the strategic advantage or towards reducing the same. In essence, the focus of government policies requires to be redefined. Indeed, strengthening the strengths should be the policy objective. In the economic context, it implies facilitating and strengthening the domestic industry. In the corporate management context, it implies that strategy should originate from the strength. The lesson of the strength and strategy linkage is useful not only at the national level but also for the corporates. In essence, the direction of liberalization and globalization should be towards enhancing the natural and acquired strategic advantage rather than towards reducing them. In extending India's corporate frontiers, this lesson from the Arthashastra could provide useful hints to India's entrepreneurs and business houses. Just like Vedanta was globalized by Indian gurus, Management

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1999)

12 New-Age Management for Competitive Advantage

and business houses. Just like Vedanta was globalized by Indian gurus, India's new-age managers not only need to connect the local with the global but also learn to convert local into global. For an illustration of converting the local into global we can cite examples such as the Indian software industry, Indian tea industry and "banking entrepreneurship and the spirit of capital" arising from South Canara and so on. Indeed, ideas from the Arthashastra and other related texts provide us lessons for creating competition rather than merely facing competition. India is a "growing economy," hence, it offers growing opportunities to entrepreneurs and business organizations to convert the local into global.

TOWARDS FUTURE DEVELOPMENT OF INDIAN MANAGEMENT: UNLEASHING THE CREATIVITY OF INDIA The future development of Indian management lies in unleashing the creativity of India. Indeed, the competitive advantage of a nation can be enhanced by unleashing its creativity. With a shift from manufacturing to services, a mind-set shift from rationality to creativity is already occurring. Historical experiences of a country could provide a number of triggers for creativity. Countries with ancient histories contain many "twisters in consciousness" and accordingly provide many clues for opening new "corridors to consciousness." To unleash tIle creative potential, it is necessary to break away from existing methods of viewing reality. The idea of anti-benchmarking can help us in doing so.While the concept of benchmarking is being widely talked about, our idea of anti-benchmarking is in sharp contrast to benchmarking. The path of benchmarking is one of imitation and replication. The path of anti-benchmarking is that of creativity because it forces us to seek new ways (Sharma, 1999). While we can certainly learn from benchmarking, anti-benchmarking provides us a clue for a new path and thus leads to a new competitive advantage. The concept of anti-benchmarking vis-a-vis benchmarking is presented in Figure-2. If a person B/ organization B/ nation B, follows a person AI organization AI nation A along the path of benchmarking, it would remain behind A particularly if the gap between A and B is large. Hence, B takes an anti-benchmarking path and turns out a winner. While it is useful to learn from benchmarking the essence of winning lies in anti-benchmarking. In essence, a benchmarking path would not lead to the emergence of Management

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Sharma

new concepts, ideas and paradigm shifts. This is because there would be a tendency to follow the beaten path to create carbon copies of existing ideas Benchmarking (Path of Replication) PersonB ~ Organization B . Nation B

----------

Person A Organization A Nation A

Anti-benchmarking (path oflnnovation)

Fig. 2: Benchmarking and Anti-benchmarking and concepts. Since new ideas provide new momentum, the antibenchmarking approach represents the key to creating proactive organizations. Thinking, discovering and competing form the three foundations of such organizations. In fact, the essence of anti-benchmarking lies in thinking, discovering and competing rather than merely learning through benchmarking. While the traditional approach suggests the benchmarking path, newage management suggests the anti-benchmarking path to unleash the creativity within organizations. For unleashing the creativity ofIndia, we need this approach. Perhaps we can learn from the experience of good Indian cinema to unleash Indian creativity and create a unique advantage for Indian business enterprises. Indeed with this approach, the construct and the script of "Indian Management" would also get further sharpened. For this to happen, corporate India needs Swami Vivekananda's message, "Arise, Awake, and Stop not, till the Goal is Reached." REFERENCES Karrgle, R. P. (1986) Kautilya 'sArthashastra, Part II. New Delhi: Motilal Banarasidas. Sharma, Subhash (1999) Quantum Rope: Science. Mysticism and Management . .New Delhi: New Age International Publishers. ----( 1996) Management in New Age: Western Windows. Eastern Doors. New Delhi: New Age International Publishers. Subhash Sharma, Ph. D., is Professor and Director of Indian Institute of Plana tation Management

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14 New-Age Management for Competitive Advantage Management, No.8, Cunningham Road, KSCMF Building, P. B. No. 223, Block-III, 4th Floor, Bangalore-560 052. His contributions to management education include evolving a new and innovative "reach-out" model at IIPM. He has also assisted in conceptualization ofIndia's another unique and premier management school viz. Women's Institute for Studies in Development Oriented Management (WISDOM) at Banasthali. His areas of interest combine science, mysticism and management. His publications include Management in New Age: Western Windows, Eastern Doors (1996), and Creation from Shunya (1993).

Management

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3. Number

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1999)

OPTIMIZING THE PLANNING OF COMPANY EQUIPMENT IN UNCERTAIN CONDITIONS

Boiko Atanassov Uncertainty, which often accompanies company decision-making. has led to the establishment of intuitive, purely practical rules, rather than rules based on marginal approaches. In such situations. managers would try to achieve attainable goals rather than maximize benefit. profit or anything else. No doubt the way people. who take part in the running of the company. act is of primary importance to the kind of decisions made. It has to be pointed out that the models outlined in this paper form a reliable basis for optimization of company equipment planning in uncertain conditions. typical of a market economy.

INTRODUCTION

contrast to standard managerial approaches to the company, newer research has attempted to take a deeper look into the process and nvironment of company activity. Especially important is the conclusion that companies are complex organizations, functioning in uncertain conditions (or limited access to information). Uncertainty, which often accompanies company decision-making, has led to the establishment of intuitive, purely practical rules, rather than rules based on marginal approaches. Simon (1978: 1-16), for example, demonstrates that people possess limited cognitive abilities and can thus exercise only "limited rationality" when making a decision in a complex and uncertain situation. In such cases, managers would try to achieve attainable goals rather than maximize benefit, profit or anything else. No doubt the way people, who take part in the running of the company, act is of primary importance to the kind of decisions made. A major weakness, however, is the insufficient number of effective approaches they offer as to estimating aspiration levels and the order of decisions, or, generally speaking, how the company should respond to changing market conditions.

16 Optimizing the Planning of Company Equipment MODELLING TIONS

OF FIRM PLANNING IN UNCERTAIN

CONDI-

Economic research publications discuss a few approaches through which a company may initially get involved in a market investing in production, advertising, brand distribution and product innovations. The main characteristic feature of these aproaches is that the company actually invests in assets, a kind of investment which, once made, is of a low value, should the company look for alternative uses and consumers for it. Consequently, in a number of cases, namely when establishing a new enterprise, when modernizing an existing one (its products, technologies, etc.), or replacing worn-out equipment, it is obligatory that investment projects be developed and assessed. It is on the basis of the technology that has been adopted and the investment project that the company has developed, that planning and specifications of the necessary equipment are done and contracts are signed for a number of interdependent exchange transactions. In such cases, contract negotiation will be a costly process. If multiple transactions are involved, it would be more efficient to make the process profitable. Under such circumstances, the future details of a transaction can only be agreed upon if time helps to overcome uncertainty. The importance of the above-mentioned considerations is confirmed by what Williamson( 1984: 207-208) calls a "fundamental transformation," through which a transaction, the preliminary clauses of which have been set up in a certain environment, is gradually transfonped while being carried out into a transaction in which re-negotiation becomes inevitable at the stage of "contract update." As a result of all these considerations, there arises the issue of effective planning of company equipment in uncertain conditions, for which it is necessary to develop models which are provided in this paper to present a simplified version of an economic and mathematical model of optimized planning and contacting of equipment in a market economy. Such a model should most of all reflect the fact that, while an investment project is being developed together with the planning and contracting of the necessary equipment, the actual range of goods and services to be provided in the future is still unknown. As a result, together with identifying the product range with respect to market conditions, there will have to be changes in the orders specified in the contracts, which would entail changes in the projected investment and the transaction costs and the desire to cut back on original orders. Williamson (1983: 73, 519-540) has shown that transManagement

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action costs and the desire to cut back on those as well as on direct production costs are of tremendous importance to the efficiency of organizations in the world of business. These costs should be minimized. Moreover, within the framework of the technology that has been adopted, the new equipment has to ensure effective utilization of the other production resources in a flexible scheme for the allocation of materials for processing and manufacturing. Thus, in developing a particular model we suppose that a company is planning the purchase of technical equipment for one of its plants and it would be possible for it to supply 'n' different kinds of equipment. Then, let us suppose that "y"J (j = eli) is the unknown quantity _ of the j-th kind of technical equipment which is to be bought, and "a;" (i = I, m) is the quantity of the other production resources the company can afford for the enterprise to be able to function normally. The technical coefficients which characterize the utilization of these resources of the planned equipment are expressed by "ajj" (i = I, m; j = G.). So far it becomes clear that the company can only afford the equipment for which the following expression is satisfied: n

L ajj Yj S aj' i = I,m

(1)

}=1

According to preliminary market research, the re-equipped (or newlyequipped) enterprise is to manufacture "q" different kinds of products. The product range is still unknown at the time of planning and is to be finalized later. Preliminary market research shows that the proportion of the planned kinds of products will be (2) at a probability 'Pk' (k = G), the latter being appraised either by a team of experts or on the basis of practical experience and respective statistical data. The productivity of the j-th kind of equipment at the l?roduction of the sth kind of product is represented by 'bj; (j = G; s = i:<i). In this case, if as an effectiveness criterion we choose the maximum production volume 'F s ' Management

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18 Optimizing the Planning of Company Equipment

from the probability range in (2), it is possible to formulate the following economic and mathematical optimization model: Find the maximum of the linear form n

(3)

bjsYj

)=1 at the following restrictions:

(4)

aij

.:s a

i = I,m

(5)

(6)

)=1

2: 0,

1, n

The model (3-6) is linear and so it will be possible to find the optimal solution Y'" for the necessary equipment set for the company. Any other solution Y may be viewed as possible but not as an optimal equipment plan. It is only natural to assume that it will be possible to find a solution of the model (3-6), otherwise the conclusions that follow would be unnecessary. Let's introduce the following statement

and formulate another restriction n

(7)

2:F~

)=1

Here F* stands for the maximum production volume corresponding to the 2

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optimal equipment set Y*. The introduction of an additional condition allows the set of solutions of the model (3-6) to be increased. Such an increase in the number of possible solutions is very important, not only from the point of view of encompassing the multitude of possible options for the company, but also from the point of view of reflecting mar~ ket dynamics and their effect on the product and service ranges the company is going to provide. In support of such a statement and policy is the fact that a set of the kind (3-6) can be formulated for each possible product range. At the same time it is clear that, as it well may be the case, those sets might not overlap making it impossible to identify an optimum production equipment plan for various market situations. That is why, having in mind the above theoretical implications, the necessary equipment has to be specified in two stages-by placing a provisional order X = (XI' x2' ... , xn) and a final agreement. The final agreement may, for instance, be concluded six months before construction or renovation work has finished (the actual opening of the plant, i.e., at a time when the market situation and the detailed requirements regarding equipment will be much clearer). FINAL DETERMINATION

OF THE SPECIFICATION

As has already been pointed out in the above theoretical analysis, the provisionalorder and the final agreement on specifications require a certain capital investment and incur certain transaction costs. There comes a stage called by Williamson (1984) a "fundamental transformation," through which a transaction, the preliminary clauses of which have been set up in a certain environment, is gradually transformed while being carried out into a transaction in which re-negotiating becomes inevitable at the stage of "contract update." Following this line ofthought, let's introduce the provisional order transaction costs 'c' (j = 1, n). As far as the final agreement on specificaJ tions is concerned, there are two main alternatives. First, a positive change in the provisional order when the need of the jth kind of equipment has been proven -uj 2:0; second, a negative change in the provisional order, i.e., cancellation of a part of the j-th kind, when adverse changes in market conditions have been proven -Vj 2: O. In connection with this the company is to lose some money in covering the additional expenses of the manufacturer-supplier over the changes in the provisional order amounting to f.....J in the first case and ~.J in the second. In this situation any equipment range chosen by the company, will be equal Management

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20 Optimizing the Planning of Company Equipment

to: (8) and we apply to the variables yk = X. J

+ Uk + rk J

(9)

all restrictions provided in the model (3-6) and the additional restriction given in (7). The principal goal here is to minimize the total transaction costs of the provisional order and the final agreement. Therefore, we will have to find

as an optimal equipment range purchase at minimum transaction costs of the provisional order as well as minimum mathematical expectations as regards the final agreement costs. In order to achieve this goal, there arises the need to formulate the following economic and mathematical model: Find the minimum of the function k

L c. X +L

j=l

(Ai 11/ + Ilj r/)

(10)

k=l j=l

at the following restrictions: n

L bj/Xj +

Ilk )

L b. (X.

+ rk) )

j=l

Ilk )

11 j

---------=

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r"} j

Atanassov

L b. (X Jq

(11)

+ r.Jk)

Ilk

j=l

k= 1,K

L a/. (X + .

â&#x20AC;˘

Ilk )

+ rk) < a.' )

i = 1, m; k

1, K

(12)

s = 1, q; k

1, K

(13)

= 1, n; k = 1, K

(14)

j=l n

L bix

uf -

rf) 2: F;;

j=l X.J +

+ r.Jk -> O',

Uk .J

. > 0, XJ-

Uk> .J

0 ' r.Ik> - O',

1, n; k

(15)

1, K

Very often models like this, although utterly simplified, turn out to be too complex and practically inapplicable due to a number of reasons (lack of qualified personnel, impossibility of gathering enough information or no information at all, etc.). Therefore, it might be somewhat useful to apply in economic practice an even more streamlined model like the following one. If we assume that any model of the kind (3-6) and (7) has only one optimal solution Yk= 0t,~k, ... ,y~); k= 1, K, then the model (10-12) can be replaced with a model of the following kind: Find the minimum of the function

LXK+L J

j=l

k (

(16)

A..J.JIlk + Il.J.Jrk)

k=l j=l

as the following restrictions:

x + J

Ilk .I

+ rk )

= /,'

1, n; k = 1, K

(17)

./'

j=l,n;k=l,K Management

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22 Optimizing the Planning of Company Equipment

It has to be pointed out here that in cases where the span of the model (16-18) is small there is no need to use the standard methods of linear optimization, since the optimal equipment plan solution can be found through the use of a substantially simplified algorithm (Karmarkar, 1984: 373-395). In some cases it is the requirement of the producer-supplier that a final order of equipment be negotiated at the beginning, i.e., at the stage of the provisional order. Therefore, transactions involving a one-time exchange cannot be governed by a long-term market contract, which contains a fixed agreement and clauses relevant to any future situation. Comprehensive contracts of the kind proposed by Radner (1986: 1-22) including claims concerning any change in conditions, are simply impossible to carry out, and other approaches have to be used. In such a case where we can assume that the components 'x.' have been set in the fixed order, i.e.x = t the J J J following approach is offered to help find the additional costs ~. and rk of J J the final equipment agreement:

yk J

= yk - Xu, r! = 0, J

ifyk - Xo < 0; J

Finally it should be noted here that the restrictions

are enough to provide a solution to the model (16-18), and at the same time any real situation satisfies these restrictions. TESTING

OF THE SUGGESTED

MODEL

The above theoretical conclusions are the result of the development of an equipment planning strategy of one of the enterprises of Glavbulgarstroy Ltd. Company, Varna branch. According to the project that was developed, the enterprise should produce the following range of products: I. II. III.

Unidev K5 (dry concrete coating compound of up to 5 mm.); Unidev D (dry tile and ceramics adhesive); Unidev G (dry adhesive for concrete and cellular concrete block

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Atanassov

masonry); Unidev SD (dry wall paint); Unidev VM (dry cellular concrete outer coating plaster compound); Unidev VMF (dry outer coating plaster compound-sprayed and multilayer); Unidev X-2 (two-layer water-proofing material); and Unidev K20 (dry concrete coating compound of up to 20 mm.).

IV. V. VI. VII. VIII.

These products are new for the Bulgarian market. So, it is impossible to use statistical data that has been processed in advance. Because of this, experts' appraisals have been used to estimate the probabilities P concerning the relations in (4). In order to verify the results, a correspondence cross-test of the experts' appraisals was carried out. The test was done on the basis of the following scheme (Van Eaton et al., 1998: 40-51). Suppose. that the appraisal was carried out by 'm' number of experts. Their estimates are presented in a matrix II x.11 (Table-I). K

Table-l

XII

X'2

XI5

xln

lSI

lS2

lSs

lSn

X;,

xJ2

XIS

xml

xm2

x_lID

1 2

LXi, LXi2

i=]

The following formula was used to calculate the correspondence coefficients:

p=--

11H1.\

where

i [fXi

j=]

Management

j=]

Y2 In (11

IJ~ J

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24 Optimizing the Planning of Company Equipment

1 Smax

m2 (n3

= --

2 The results for this particular case are given in Table-2. Table-2

Z] 1 2 1 4

1 2 3 x

5 5 4 14

2 1 2 5

4 5 12

3 3

Here we have 3 (1 + 2 + 3 + 4 + 5) =9

5 S = (4-9)2 + (12-9)2 + (14-9)2 + (10-9)2 + (5-9)2 = 76 ; and 1 Smax

=-32

(125 - 5) = 90

12 p= 76 = 0 84 Accordingly, 90 " which allows us to conclude that there is considerable correspondence in expert opinion. The productivity levels for the different products are given in Table- 3.

A B

D E

Management

VII

-4

3 -

3 3

Table-3 Product

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Atanassov 25 If the criterion that has been set is maximum production volume, then corresponding to the product range (4:3:5:2:6:4:5:4) the following will be the economic and mathematical model: (18)

max: 2YI + 3Y4 - 12Y3 + 12Y3

6YI

-15Y1 -4Y1

-15Y2 10Y2 -20Y2 +30Y2

+ 9Y4 - 10Y4 + 12Y4 - 24Y4 - 20Y4 - 25Y4

- 16Y3 +16Y3

- 16ys + 12ys - lOYs + 20ys

=0 =0 =0 =0 =0 =0

(19)

L aijyl:S

aj, (i =

(20)

1, m)

j=] Yj ~ 0, (j

(21)

I, n)

The optimal solution of the model (18-21) can be easily found through well-known methods. Suppose If is the value of the optimality criterion (18) for the optimal solution that has been found. Then the inequality 2y I + 3Y4~ has to be added to the solution set (19-21). The calculations are then made according to the above theoretical framework. Some quantities and the final result of the research have been omitted for obvious reasons. At the time of writing, the enterprise is still being furnished and according to additional agreements it is to start operating in the middle of next year.

FINAL REMARKS AND CONCLUSIONS As far as the feasibility ofthe models outlined here is concerned, it would be necessary to point out the following features: First, these models are in full accordance with all aspects of real life practice and follow its logic, including variations concerning the processing (production) of different kinds of products using the same or different kinds of equipment. The case concerning the manufacturing of only one kind of product using one type of technical equipment here is rather the exception. Management

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26 Optimizing the Planning of Company Equipment

Second, the model (3-6) and the additional restriction (7) are based on maximizing production volume, where to each range there is a corresponding set of the kind (4-6) and (7). Those sets contain certain elements of optimality which may, in some cases, add up in an intersection. Generally speaking, an intersection of these can be said to be an empty set, i.e., optimality elements are hard to combine:. Third, the main reaSon for the above-mentioned situation is that maximizing production volume is insufficient as a goal, since it is the effect, not the efficiency that is actually being maximized. In order to avoid this, along with maximizing production volume, transaction costs also have to be minimized. FQurth, maximizing production volume together with minimizing transaction costs is the aim of model (11-16). It is that very goal that led to the introduction of a real life situation in which a provisional order is subject to additional agreements, and those agreements lead to new transactions entailing a new stage of minimizing costs. Fifth, the model (17-19) is a modified (simplified) version of model (1116) and is meant for companies likely to have trouble in finding solutions of economic and mathematical models of a complex nature. The use of the model (11-16) is recommended here, since it takes most factors into consideration, whereas the model (17-19) deals with only part of them. At the same time, it has to be stressed that there exists a range of software products suitable for finding solutions to models of the kind (11-16). Sixth, a provision has been made for a final agreement on equipment (fixed order X.), which does present some difficulties as regards optimal J equipment planning. However, this does not mean that optimization should be abandoned entirely, since the company itself has a number of opportunities to seek and implement better strategic decisions. Such decisions should be sought mainly in the company's potential to economize on transaction costs through efficient changes in equipment specifications to be agreed upon and contracted. In conclusion, it has to be pointed out that the models outlined in this paper form a reliable basis for optimization of company equipment planning in uncertain conditions, typical of a market economy.

REFERENCES Karmarkar, N. (1984) "New Polynomial Time Algorithm for Linear Programming," Management

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Atanassov

Combinatorica, 4 (4). Radner, R. (1986) "The Internal Economy of Large Firms," Economic Journal, 96 (supplement). Simon, H. A. (1978) "Rationality as Process and as Product of Thought," American Economic Review, 68. Van Eaton, Douglas R. et al. (1998) "On the Optimality of Long-short Strategies," Financial Analysts Journal, 54. Williamson, O. E. (1984) "The Economics of Governance: Framework and Implications," Zeitschrift fuer die gesamte Staatswissenschaft, 140. --(1983) "Credible Commitments: Using Hostages to Support Exchange," American Economic Review, 73.

Boiko Atanassov, Ph. D., is an Associate Professor at Varna State Economic University, Str. "Kniaz Boris,"N 77, Varna 9 000, Bulgaria. He is serving as a Vice Rector at the University and is in-charge of the university curriculum. His research interests include theoretical mathematics and its economic implication. He has published over 70 scientific works, monographs, articles and papers on different aspects of mathematics and its use in solving economic problems. He is a member of an international educational project, funded by European Union, which is to integrate Bulgarian Academic Community into Socrates and Erasmus European Educational Programmes.

Management

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THE GLOBAL POWER STRUCTURE AND GLOBALIZATION: ANY CHOICE FOR THE THIRD WORLD?

Bhaskar Majumdar The international economic order has taken a new shape after the collapse of the USSR and the merger of the two Germanies. US has taken the lead through steering the major international economic blocs. In this context. this paper analyzes the strategy of expansionism of and its extensive globalization design to extend its command beyond its national boundary via penetration into the potential markets of the third world using the Transnational Corporations (TNCs). While the third world countries are taken as a platform by the US to operationaliz.e its strategy, they can look forward to consolidating their position in the global economic order and extracting benefitsfrom their conscious participation in this order.

'he International Economic Order (lEO) shaped by the Developed Market Economies (DMEs) under the leadership of the United States since the end of the Second World War in 1945 has taken a new dimension following the disintegration of the Union of Soviet Socialist Republics (USSR) as well as the reunification of Germany in 1989. It is clear now to the countries in the third world that they are not in a position, separately or unitedly, to alter the dynamics internal to the DMEs nor can they delink themselves from the lEO shaped by them. The context of our analysis is post-Second World War economic inequality of states, inequallocation of economies in the growth trajectory, .and the role of the forward states led by the US. It is known that the postSecond War World economy is showing consolidation of economic power of some countries, high-speed growth of some late-starters and slowing down of the growth of the DMEs. To check this slowing down, the leader, the US, has formed an "imperial system" in the shape of group of seven major industrial countries (G-7), namely, US, UK, Japan, Germany, France, Italy and Canada. The strategy to protect the interests of the imperial system is "extensive globalization." By "extensive globalization," we mean the strategy of the leader to extend her production boundary via penetration Management

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30 Global Power Structure and Globalization

into the potential markets of the TWCs using the Transnational Corporations (TNCs) at her command. The TWCs are taken by the G-7 as the platform where the strategy of "extensive globalization" is to be operationalized. This paper is structured around five sections. The first section briefly discusses the choice of the leader and the shaping of the global power structure. The next section analyzes "extensive globalization" as the strategy of US. The following section shows an exhaustion of the process of "intensive globalization" attempted through the promotion of the newly industrializing countries (NICs). The fourth section focuses on the third world as the platform for "extensive. globalization." Finally, in the last section, we examine if there is any choice for the third world in this structure.

THE GLOBAL POWER STRUCTURE AND THE CHOICE OF A LEADER The global power structure may be understood as a hierarchy of states, with one or a combination of states assuming authority, the criterion of the power of the authority being to exercise control through technology and trade and also through military power, ifnecessary. Power of the authority may be understood as the ability of the unit (individual, organization or institution) to affect the behaviour of other units (Whitmeyer, 1997: 211). Individual power is the leadership quality or the concealed intellectual property of an individual to lead others in the direction one chooses. State power is the power of the people of a territorially sovereign state to exercise its chosen activities and hence, the reciprocal of power exercised by the rest of the world. State power is positive if the state has acquired "the capacity to withstand the pressure of other states" (Vital, 1972: 87). The internal face of this positive state power is the legitimacy of government (Zhong, 1996: 204-205; Taylor, 1980: 127). Legitimacy is the plank for a government to stay in power, the plank resting on two supporting pillars: one being the ability of the government in exercising its right, the other being the duty of the governed to accept the government as the guarantor of their security . .In the hierarchic arrangement of states, or what we call global power structure, during a particular time interval in history, one state or a combination of states, becomes the leader who chalks out the rules of the game for participation of other states in the lEO (Cole, 1947: 1070). By implication, a particular state becomes a leader at a particular historical juncture, while Managemcnt

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Majumdar 31

the other states maintain the position offollowers, the activities of the leader being rationalized by exercise of her own state power and accepted as mandate by the followers. Corresponding to a particular power-structure, the rules dictated by the leader, once legitimized by participation of almost all states, subject to the followers, acknowledgement of actual and potential benefits offered by the leader, show not only how the states are to participate, but also how the international institutions and corporations are to participate (Anell and Nygren, 1980: 119). The countries participating in the post-Second World War lEO have acknowledged US as the leader. The post-Second World War lEO shaped by the leader accommodated not only the allies like UK, France, and Canada, but also the "Axis powers," namely, Japan, Germany and Italy. Thus, the G-7 cam~ into existence. The "Cold War" perhaps was the immediate basis of this accommodation (Cole, 1947: 1071-1072; Nailor, 1980: 171-172). At the level of political management, the leaders could not exclude the Soviet Union, since the "Soviet World power and influence were altogether too great to be ignored" (Cole, 1947: 1073). The remote basis in shaping the post-1945 lEO might have been to rationalize and legitimize the choice of the leader exercised in the games embedded in the global power structure and to obstruct any potential challenge from within. In this context, the leader can exercise her choice in shaping and maintaining the lEO if for the G-7, she can ensure "extensive globalization. " Thus, the lEO, as it exists today, is steered by the leader who masterminds the strategy of globalization. Why do the accommodated states and the followers accept this? The reason may be that in the process, "Catalytic states seek to achieve their goals less by relying on their own resources than by assuming a dominant role in a coalition of states, transnational institutions, and power-sector groups" (Weiss, 1997: 24). Why is this post-Cold War globalization planned by the leader? The basic reason is "the challenge posed by other major powers like Japan and Western Europe to its hegemony" (Kothari, 1995: 1600). In fact, "by the end of the Eisenhower Administration, it was clear that Western Europe (specially West Germany) and Japan were emerging as potential challengers of the US in the world market place" (Petras and Davenport, 1995: 321). How is the choice of the leader rationalized? It is the world superinstitution, viz., the United Nations (UN) which rationalizes the choice of the leader, within a given power-structure (Anell and Nygren, 1980: 121). Essentially, the UN legitimization of the US choice follows the dollar contriManagement

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32 Global Power Structure and Globalization

bution of US to UN (Cole, 1979: 187-188). The exercise of power by the leader, particularly when it is sanctioned and hence legitimized by the UN becomes more relevant when a country becomes "disobedient" or dissident, i.e. violates the rules of the game as imposed and interpreted by the leader (Chomsky, 1993: 38,49,89). In November 1988, the US exercised its power to refuse a visa to Vasser Arafat of PLO who was supposed to address the UN General Assembly, while at the same time "in the 1960s, the US bypassed the UN by never bringing the Vietnam conflict before the Security Council" (Karim, 1996: 111-112). Power exists by its application, rationalized by its legitimization. The power of the US is legitimized by the UN sanction, the latter often shouldering the cost of that legitimization. How does the leader try to seal the fate of an aspirant power outside her ambit? Let us take one recent example. China happened to be the major supplier of missiles and missile technology to Iran, during the 1980s. In 1995, after sustained US pressure, China agreed to "cancel" the sale of the two 300- MW reactors to Iran (Huntington, 1997: 190). Recently, President Jiang Zemin of China, in agreement with President Bill Clinton of the US, decided to halt missile and nuclear co-operation with Iran in exchange for lifting a ban on American nuclear sales to China (The Times of India, October 16, 1997). This is how the leader tries to prevent the proliferation of any budding power. Decolonization and the liberation of countries obviously influence the modus operandi of this power structure. However, it is only the modus operandi, and not the general principles of the lEO as were shaped by the post-1945 global leader, that has changed . ... Decolonization was in reality no more than a convenient change of technique whereby the industrial states sought to escape the political costs of directly controlling colonial territories ~hile at the same time ensuring that their vital economic interests were defended, if not positively entrenched, by the terms on which decolonization was carried through" (Darwin, 1988:22).

In a sense, it can be seen as a transformation from the UK-led territorial expansionism to the US-fed transnational expansionism (Huntington, 1997: 83). The strategy of "extensive globalization" helps the US to execute this transnational expansionism. How has the global power-structure come to be shaped like this following the Second World War? History shows the answer. By the beginning of the First World War, Britain over-extended h~rselfand paid the penalty of Munugcmcnt

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Majumdar 33

her over-extension (O'Brien, 1990: 12). History confirms the weakening and exhaustion of both Britain and Germany by the end of the First World War (Faria, 1991: 79). By the end of the Second World War, Italy was stripped of her colonies as Germany had already been in 1919 (Cole, 1979: 53). In Syria and Lebanon, France had to terminate her colonial rule because of British initiative (Darwin, 1988: 251). In fact, post-1945 France was trying hard to find out means "to reassert her status as a great power, and to insist that her voice be heard at a time when the post-war international order was in the making" (Holland, 1985: 95). During post-Second World War Canada, "a consensus began to form that the nation's future lay in a regional understanding with the United States" (Holland, 1985: 23). The culmination was the US-initiated formation of the NAFTA comprising of Canada, Mexico and US. If the 19th century belonged to the UK with the inter-war period of the 20th century showing its decline, then the end of the Second World War showed the beginning of Americanization of the second half of the 20th century (Gamble, 1990: 75; Holland, 1985: 55). History gives enough evidence of the elevation of the US to the position of the leader, particularly during the post-Second World War period. First, when in 1947 Britain withdrew its troops from Greece that were meant to fight communist insurgents, the US took over the responsibility and became a natural leader (Holland, 198'5: 119). Second, following the outbreak ofthe Korean war in 1950,Britain framed its foreign policies on the assumption that "Britain's role was to be America's junior partner in a world-wide struggle against communism" (Darwin, 1988: 142-143). In fact, the post-Second World War period showed the "steady expansion of America's global commitments and her entry into regions previously reserved to British or European influence" (Darwin, 1988: 225). The leader had to reorient the powerstructure it took over to suit her interests. The economic dimensions of this re-orientation came to be shaped as the GATT (WTO after 1995 with its Most Favoured Nation Clause), the IMF (with Currency Stability and Convertibility), World Bank (for Reconstruction and Development), etc. It is known that mapping of countries in a power-structure shows a changing location of countries with respect to time (Hettne, 1980: 124; Taylor, 19,80: 125). History gives the lesson that the leader has to consolidate her position and protect it for maintaining her number one position. The leader has also to defend the members under her umbrella against common enemies. This defence mechanism causes sufferings for the leader who has to spend a disproportionately higher share on defence (Hall, 1990: 117Management

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118). Protecting the leader's number one position also requires protecting the "dependent and close allies under her hegemonic umbrella." But as US expenditure on defence expanded, Washington lost its competitive advantage over Germany and Japan. In fact, "by the 1990s, Germany and Japan had displaced US in major trading areas of Europe and Asia" and had become the dominant partners with Russia, China and Eastern Europe in trade and finance (Petras and Davenport, 1995: 322). Power exists when power is displayed. The US displayed it by undermining revolutionary regimes e.g., in Mozambique, Angola, Nicaragua and winning the Cold War. Post-Cold War period has given the leader a "breathing space" though internallatent challertges remain. The US understands it well that in the global power structure no country is her permanent friend. The fact is that Japan and Germany never fought communism, while US did, though they supported the capitalist economic ideology of US. In the process of exercising "military power" the US understands her declining "economic power" relative to Japan and Germany In particular. She also understands that she has won the Cold War at the cost of her exhaustion (Huntington, 1997: 82). So comes the strategy of "extensive globalization" chalked out by the leader for the extension of not only her own production boundary but also for the countries that acknowledge her power, and if possible, be a part of it. Rather than trying to "go alone," the 20th century leader plans to "go global" by forming an inner group, viz. G-7. The strategy of the leader is rationalized through the empowerment of G- 7. TNCs with headquarters in countries in G-7 are the arms for execution of this "extensive globalization." The leader thus plans her consolidation in the global power structure. EXTENSIVE LEADER

GLOBALIZATION:

THE STRATEGY

OF THE

It is known that the share of the "Big Five" (US, UK, Germany, France, and Japan) in world industrial output during the peak of industrial revolution (1870-1938) was more than 60 percent with a falling share of the UK. During the pre-Depression period (1926-1929), it was more than 70 percent excluding Japan. Thus, it was the G-7 (that includes Italy and Canada) that commanded the lion's share of the world industrial output (Anell and Nygren, 1980: 33). This command is a reflection of the industrial revolution that sprouted from Britain and spread to most countries in Europe and America. The beneficiaries were also Japan and Australia. In constitutional terms, Management

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countries like Canada, Australia, and New Zealand had the "dominion status" under the British empire, where Britain was interested in maintaining "good relations with the dominions to avoid potentially damaging political conflicts" (Darwin, 1988: 27). By the 1930s, these dominions became autonomous in both internal and external affairs. For the British, the colonies in Asia, Africa and Latin America were in the list of "use and throw," some of which became formally independent during the 1960s, long after the Second World War. Essentially, the ex-colonial countries came to be clubbed as the third world after the Second World War. The economic problems for the post-war decolonized countries in the third world immediately preceding their demand for a new international economic order (NIEO) in UN in 1974 were not slow or decelerating rates of growth, nor the low per capita incomes nor the absence of natural resources. The problems for them lay in perpetuating their role as suppliers of raw materials to their previous rulers and as purchasers of capital goods and technology from the same (Sauvant, 1981: 17; Bagchi, 1982: 118-119; Darwin, 1988: 14). This may be called the structural deformation of the TWCs centering around production of commodities. The consumption pattern of the TWCs also reflects that of the DMEs, a pattern which is segmented within the TWCs (Hymer, 1990: 201). Once the policy makers in the TWCs came to realize that this structural deformation reinforces their long-term dependency on the DMEs, particularly when this deformation persists in the context of an acute internal inequality at a low per capita income that may lead to loss of confidence of the masses on the governments of nation states in the TWCs, they demanded the NIEO. It is often supposed that the declaration for the establishment of a NIEO, that came on May 1, 1974, in the General Assembly of the UN followed the "Oil Shock" of 1973 and reflected the TWCs pressure on the DMEs through the UN in the light of the power (petrodollar) accumulated by the OPEC (Oppermann, 1986: 23; Faria, 1991: 243; Streeten, 1981: 240). The manifestation of the TWC dissent on accepting the existing model of development of the world economy, however, started much earlier, perhaps from the 1955 Bandung Conference in which a group of 29 Afro-Asian states discussed general socio-political problems and the possibilities of co-operation (Sauvant, 1981: 42, 57). This is not to deny that the "oil shock was an important component of the context for the establishment of NIEO when non-petroleum exporting developing countries (non-OPEC) slipped to the so-called Fourth World" (Esterline, 1979: 25). In fact, even before the 1973 Management

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"Oil Shock," the share of non-OPEC countries in world exports declined monotonically during the 1950s and the 1960s from 24.6 percent in 1950 to 10.8 percent in 1971. During the 1970s, this percentage remained below twelve percent for each year. The TW export structure, that reflects its production structure, aimed at buyers in the DMEs. Since this TW export structure continued to rely on promotion of primary or low-technology goods, the export strategy could not capture the markets ofthe DMEs constituted by high-income people. The TWCs, under pressure from both inside and outside, came to declare the NIEO in the UN for survival. The leader had to contain TW pressure, accommodate close dependents and allies, and contain challenges from within. The leader cannot afford to be outcompeted by the followers. Either she has to block third world growth pressure or has to unfold a wider umbrella. By the end of the 19th century, Britain realized the leap-frogging of Germany and the US that left Britain behind in terms of industrial output and productivity (Gamble, 1990: 74). Now by the end of the 20th century, the US is aware of the leapfrogging of Japan and the potentiality of a United Germany in challenging the world role of the US. This challenge for the attainment of global supremacy of the nation-state, initially concealing but accumulating and then exercising economic power, is logical and historical. The logical offshoot is "extensive globalization," a strategy floated by the leader for maintaining her leadership role and for ensuring hegemonic expansionism. In this plan, some ofthe TWCs see themselves as potential beneficiaries by being in the list of foreign investment, essentially by TNCs, while the potential challyngers within the G-7 at the same stroke get the opportunities for entry into the markets of the TWCs which suit them. The leader, thus, forms an "imperial system" that minimizes her over-exhaustion. During the entire inter-war period (1914-1938), the DMEs contributed to the whole of foreign direct investment (FDI) of which theG-7 had a share of nearly 90 percent. The post-Second World War period did not change this scenario much excepting the relative positions of the UK, the US and Japan. With the declining power of the UK, the US captured the vacuum by 1960. In 1960, e.g. the DMEs contributed 99 percent of the FDI of which the US alone contributed 50 percent and G-7, 80 percent. In 1978 this command of G- 7 came to be 77 percent with the DMEs command at 97 percent; while Japan could raise her contribution in the FDI from 0.7 percent in 1960 to 6.8 percent in 1978, the contribution of the US declined to 41.4 percent (Dunning, 1990: 5). However, the contribution of the DMEs in FDI happened to rely on markets Management

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Majumdar 37 which were "close knit" as viewed by the contributors. Thus, it was essentially an exercise confined to the DMEs and not aiming at the TWCs, e.g., even in 1991, "81 percent of world stock of the FDI was located in the high wage-and relatively high tax--countries: principally in US, followed by UK, Germany and Canada" (Weiss, 1997: 10). But now the DMEs led by US need expanding global space beyond their own territories. This is the reason why they have now started redirecting a rising percentage of this the FDI towards the TWCs. It seems, both donors and receivers find the prospects of growth in this process of "extensive globalization."

EXHAUSTION OF INTENSIVE GLOBALIZATION The NICs are the export-dependent small economies who had developed a peculiar economic structure by the mid-1990s. In world population, they share now less than one percent, in world output around two percent (WB, 1997: 214-215,236-237,242-243). Their import-GDP ratio (excluding Taiwan) in 1995 was as high as 76 percent while export-GDP ratio was 81 percent (Box-I). Of these NICs, namely, Hong Kong, Singapore, Korea and Taiwan, the first two were essentially "city states" or the "trading stations for the Imperial Power." Darwin (1988: 310) presents: Hong Kong was originally a colony of conquest, taken from China by the Treaty of Nanking (1842) and the Convention of Peking (1960). Its function was to serve as a naval base from which the China coast could be policed. Hong Kong developed first into a major commercial centre and after 1950 into a great industrial city-state ranking by the 1970s, sixteenth in world trade.

Hong Kong was transferred from the UK to China on July I, 1997. The population of Hong Kong happens to be 100 percent Chinese. Singapore separated herself from Malaysia, became independent in 1965 and became dependent on the TNCs for entrepreneurship and technology (Lee, 1997: 58-61, 68). In the eighteenth and early nineteenth centuries, the island of Singapore came under British possession to be used as her "trading station." By exercise of political authority, Singapore came within what may be called the "British Malaya," a federation-type network (Darwin, 1988: 106-107). Upto the 1950s, Singapore essentially worked as a "city-state," a "trading-station" as well as a "client state" for the British. In 1988, foreign Management

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38 Global Power Structure and Globalization

firms (the mCs) commanded 88 percent of gross sales within Singapore and 88 percent of her export while accommodating 88 percent of the total employment oflabourers (Rasiah, 1994; 209). Such domination of foreign capital has converted the city-state into a "Transnational City State." Box-1 Description of E;conomic Variables of the G- 7, the L- 7 and the NICs, 1995 (Total in Million $)

GDP

Exports Imports

G-7

L-7

18774095 3874210

2024469 294319 284193

NICs 682840(excludingTaiwan) 665093(553508,excludingTaiwan) 650072 (523446,excludingTaiwan)

Ratios (in percentage) Imports ofthe L-7 = 14.04% of its GDP Imports of the NICs = 76.65%* of its GDP Imports of the G-7 = 7.33% of Exports Exports of the NICs = 81.05%* of its GDP ofG-7 Imports of the NICs = 16.78%** of Exports ofG-7

* Excluding Taiwan ** Including Taiwan Source: World Bank, 1997: 236-237, 242-243.

Singapore had shown its exhaustion to the imperial system by the 1980s apart from her vulnerability to communist influence. For Taiwan, a narr-ow home market with a lack of foreign exchange earnings induced the Gov~rnment of Taiwan to "pursue an oppressive export-oriented policy in the late 1950s. In addition, the government lured foreign investments into manufacturing, the outputs of which were usually destined overseas" (Hung, 1996: 153). Taiwan is also vulnerable by being a bone of contention between China on one hand and the imperial system on the other . . In fact, mainland China aspires for the inclusion of the "breakaway province" Taiwan, for a "reunification." Also, "in the 1990s the Taiwanese government declared itself to be the inheritor of Confucian thought and President Lee Teng Hui identified of the roots of Taiwan 's democratization in its Chinese cultural heritage" (Huntington, 1997: 106). It is thus China, Managem-ent

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and not Singapore or Taiwan, in which the imperial power should be interested. Both Korea and Taiwan were colonies of Japan. "Since the liberation from Japanese occupation in 1945, the Taiwanese Government enforced an import substitution policy. However, for some industries the domestic market became saturated with leading to a surplus for exports" (Okuda, 1997: 361). Since the late 1950s, Taiwan decided to follow an export-oriented policy. Economic growth in Korea did not depend on the domestic market, but became increasingly dependent on exports ... on the US consumer market. In fact, the US share of Korean exports in the 1990s reached its peak at 40 percent, in 1986 while for Taiwan, the US share came to reach the peak at 48.8 percent in 1984 (Hattori and Sato, 1997: 3.44). After the Plaza Accord in 1985, the competitiveness of Korean exports improved greatly vis-a-vis Japan, and Korea entered the unprecedented era of current account surplus. However, the Korean exports caused trade frictions in various overseas markets, including the United States and European Countries. In this phase, Korea was compelled to abandon its export promotion policy which had continued for about three decades (Okuda, 1997: 360).

While the close NICs as such have already been cited by the US and the IFIs as examples of export-led growth, the leader understands the forces that may lead to the exhaustion of the possibility of further extension of markets in the NICs. In addition to the actual and probable loss of a separate identity for some of which, these NICs have small populations and narrow resource bases. It may be a fact that global production operations controlled today by the TNCs do not depend only on the internal market of a single country or a combination of countries when these TNCs continuously search for the cheapest producer of components and commodities (Burbach, 1997: 58). But then for the country to be the cheapest producer it has to have the "scale economy" which is dependent, to start with, on the size of the home market (Vital, 1972: 42; Hymer, 1990: 195). The competence of the TNCs in "assembly line" production across countries or the "flexible production" strategy of the TNCs cannot be accepted as an argument for relying on an absence of the basis of flexible production strategy adopted in addition to the fact that it is the nation-state which allows such operations. apart from the reality that flexible production by the TNCs is Management

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40 Global Power Structure and Globalization relevant for some types of high-tech commodities that cannot be generalized for commodities needed at present by the masses in the TWCs. At the given import ratio, the four NICs we considered can absorb 17 percent of the G-7 exports, if NICs import only from the G-7. But in addition to the factors we considered as economic parameters, for the great power in the political space "the small state is either irrelevant to its purpose, a marginal factor of support, or an impediment (but not a barrier) to the pursuit of its interests. It may be an opponent, but not a rival" (Vital, 1972: 36). Following history, the failure of countries like Sri Lanka (after 1977 when she 9pted for the "Open Door" policy), Chile (after the removal of Allende), Jathaica (after the defeat of Manley in the 1980 elections) who tried to emulate the NIC-type strategy, confirm that NIC success cannot satisfy the G- 7 for long for the expansion of the latter (Hettne, 1990: 121, 141-142, 144.). The leader thus has to go beyond the NICs for her own existence and expansion. This is where the context of "extensive globalization" comes in. THIRD WORLD: THE PLATFORM FOR EXTENSIVE GLOBALIZATION European decolonization does not mean a decline of hegemonic expansionism. It only means a different path and a different set of rules planned by the new hegemony. The strategy for such expansionism may be called "extensive globalization" that is planned to serve the major industrial countries. The instruments to execute this plan are primarily the TNCs with headquarters in those major industrial countries. The chosen areas for entry of the TNCs are the TWCs. Let us see why. A stable three-fourth of the world population lives in the TWCs with the DMEs share at one-sixth. The distribution of the world output (GDP) shows three-fourth share of the DMEs and one-sixth for the TWCs (UN, 1989: 7; UN, 1992: 11). As an analytical category if we consider the seven large economies in the world (L-7), viz., China, India, Indonesia, Brazil, Nigeria, Pakistan and Bangladesh, each having a size of population greater than 100 millions, we find the group covers more than two-thirds of the population in the TWCs and more than half of the world population. while the G-7 covers a little over one-tenth of the world population with the share of the leader sufficiently below one-twentieth. Three fourth of the world population surely cannot be ignored when "extensive globalizatIOn" IS the Management

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strategy. Table-l Distribution of World Population (Percentage Share ofG-7 and L-7) during 1991-1995 G-7

1992

1991

1993

1994

1995

Japan Germany France Italy Canada

4.72 1.07 2.48 1.49 1.06 1.08 0.51

4.69 1.06 219 1.48 1.05 1.06 0.50

4.68 1.05 2.26 1.46 1.04 1.04 0.52

4.65 1.04 2.23 1.45 1.03 1.02 0.52

4.64 1.03 2.21 1.44 1.02 1.01 0.52

lOTAL

12.41

12.13

12.01

11.94

11.87

L-7

1991

1992

1993

1994

1995

China India Indonesia Pakistan Bangladesh Brazil Negeria

21.48 16.19 3.39 2.16 2.07 2.83 1.85

21.37 16.24 3.39 2.19 2.10 2.83 1.87

21.42 16.32 3.40 2.23 2.09 2.84 1.91

21.26 16.31 3.39 2.25 2.10 2.84 1.93

21.15 16.38 3.40 2.29 2.11 2.80 1.96

lOTAL

49.97

49.99

50.23

50.08

50.09

World Population in Millions 5351.0

5438.2

5501.5

5601.3

5673.0

In 1991, Nigeria is the only country in L- 7 to have population marginally below 100 millions. It was 99 Millions. Source: World Bank, 1993: 238-239; 1994: 162-163; 1995: 162-163; 1996: 188-189; 1997:214-215.

Note:

It is known that trade among the DMEs accounted for two-third to three-fourth of their total trade with the rest of the world during 1980-1990 (UN, 1991: 329; UN, 1992: 198). It is also known that exports by the G-7 to the rest of the world exceeded the GDP of all the L- 7 countries taken

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together during any year during 1991-1995. Intra G- 7 trade has reached its limit for the sale of the output they produce, thus requiring markets beyond their national boundaries. In other words, trade within the G-7 is inadequate to sustain the uninterrupted growth of the G-7. While GNP per capita in the G-7 has stabilized at a high-level combined with positive rates of growth, Table-2 Percentage Share of CountriesJRegions in IMF Quota (As on 31st January, 1996) G-7

1996

L-7

US lK Japan Germany France Italy Canada

18.25 5.10 5.67 5.67 5.10 3.15 2.97

China India Indonesia Pakistan Bangladesh Brazil Nigeria

2.33 2.10 1.03 0.52 0.27 1.49 0.88

TOTAL

8.62

45.91

TOTAL

1996

Source: CME, 1996, India's Balance of Payments, July, p. 75.

these rates are far behind those attained by the developing world (WB, 1995: 162-165; WB, 1996: 208-209; WB, 1997: 234-235). Why is the leader concerned for the growth of output and its marketing or trade-expansion? The leader expects to maintain it or his dominance in the global power structure through the IFIs and the TNCs. It is known that each member country in the IMF has a quota determined by the country's GNP, foreign trade and currency reserves. Voting rights of each country and its borrowing facilities are determined by this quota (Anell and Nygren, 1980: 42; Hoogvelt, 1982: 83-84). For the DMEs, including the US, this voting share (dollar vote) declined over time; for the DMEs as a whole it fell from 78.5 percent in 1950 to 66.5 percent in 1980 while for the US alone it fell from 34.7 percent to 21.5 percent (Sauvant, 1981: 293). The leader has to maintain her voting power in the IMF. Thus, there is a compulsion for the leader to grow. Market expansion is a necessary prerequisite. How does the leader ensure this? The vehicle seems to be the TNCs with their

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headquarters in the countries in the G-7, most ofthem in the US. The whole world is supposed to be integrated by the global vision of the TNCs (Dunning, 1990: 17). Why is the leader concerned for the growth of large economies? Does she like the "uninterrupted" and "independent" growth of the large economies? Let us try to answer these questions. While the close NICs, Hong Kong, Singapore, Korea, Taiwan, have already been cited by the leader and her allies in the G-7 as examples of export-led growth, the leader understands the forces that lead to the exhaustion of the possibility of further extension of markets for the G-7 in the NICs, apart from the NICs possibility of acquiring higher economic power to pose problems for the leader. The first eventuality, viz., "exhaustion" may be essentially because of the small sizes of the population and the narrow resource base of these NICs. It is possible that global production operations controlled today by TNCs do not depend only on the internal market of a single country or a combination of countries when these TNCs continuously search for the cheapest producer of components and commodities (Burbach, 1997: 58). But then for the country to be the cheapest producer, has to have the "scale economy" that is dependent, to start with, on the size of the home market (Vital., 1972: 42; Hymer, 1990: 125). The competence of the TNCs in "assembly line" production across countries or "flexible production" strategy of TNCs cannot be accepted as an argument for relying on an absence of the basis of flexible production strategy adopted when it is the state which allows such operations, apart from the fact that flexible production by the TNCs is relevant for some types of "high technology" commodities that cannot be generalized for commodities needed at present by the masses in the TWCs. The leader and her allies in the G-7 thus calculate the possibilities of capturing the markets oflarge economies, rather than trying to manipulate and manage a large number of small economies in the developing world. The implication at first glance seems to be ensuring a trade-link between the G- 7 and the L- 7. In 1995, the import GDP ratio for the L- 7 stood at 14 percent. At the present level of output and imports, the L- 7 can capture only around seven percent of the G- 7 exports, if the L- 7 does not import from sources other than the G-7. For the NICs (excluding Taiwan) this import-GDP ratio stood at 77 percent and at this rate the NICs could import 17 percent, of exports from the G-7 in 1995 on the assumption of imports by the NICs only from the G-7 (see Box-I). Thus, it is not trade possibilities that makes the L-7 attractive for the G-7. If the import-ratio of the L-7, Management

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inflexible at 14 percent is increased, then the G-7 can expect to expand its export to the L-7. If this importtratio cannot be increased then there has to be an increasing size ofGDP, so that 14 percent of higher GDP can offer a higher potential export market for the G-7. The share of the NICs on the contrary in world population is less than one percent, with a share in the world output of around two percent and in the world exports between seven percent and ten percent. Given their high rate of participation in trade and entry in areas competitive, for the leader and the G- 7, it is rational for the latter to promote growth-l~d-import of the L-7. Growth of the L-7 thus is a necessity for the G-7 to operationalize the "extensive globalization" strategy. Left to themselves, the L-7 at present .can generate only a small percentage of the world output that is hardly adequate to generate purchasing power and a consumption level that can absorb a significant, if not a rising, percentage of output produced by the G-7 within their national boundaries. Table-3 Economic Power of Countries and TNCs, 1994 (Figures in Billions $) L-7

GDP

TNCs-7

Sales

China India Indonesia Brazil Nigeria Pakistan Bangladesh

522.1 293.6 174.6 554.5 35.2 57.1 26.1

General Motors Ford Toyota Exxon Royal Dutch-Shell ffiM Unilever

168.8 137.1 111.1 110.0 109.8 72.0 49.7

lOTAL

1663.2

Power Balance*

2.19:1

lOTAL

758.5

Note:

TNCs-7 are top seven transnational corporations ranked by Corporate Sales, 1994; L-7 are seven largest countries in the developing world by the size of population, each having a population more than 100 millions. Source: UNDP, Human Development Report, 1997: 92; World Bank, 1996: 210-211

The ratio between the sales of the top seven transnational corporations (TNCs) affiliated to the G-7 and the output (GDP) produced by the L-7 for Management

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1994, taken as an index of relative economic power, comes to be 2.19 : 1. Thus, countries in the L-7 are not much ahead ofTNCs in economic power. More than half of the world population living in the L-7 now commands less than ten percent of the world output (GDP). Growth is thus a compulsion for the L-7. In general, the way the TWCs are locked in the lEO makes it clear that growth in the economies of the third world is dependent on "international trickle down", i.e., derived from growth in the G-7 and the corporations and institutions under their umbrella. The G-7 is anxious for growth in the TWCs for a different reason. The G-7 thinks that it grows via "inverse international trickle down," i.e., deriving the benefits of growth from growth of the the TWCs. The TNCs affiliated to the G-7 are assigned the task of impregnating directly the potential markets ofthe TWCs through utilization of resources internal to the TWCs (Alejandro, 1981: 233). This gives a new dimension to the lEO. Even if the TWCs experienced accelerating growth by this process, in the short- to medium-term, the very nature of growth will show its limit by being "dependent" on the G-7. The contradiction in this process of global development is that the G-7 has to ensure growth of the TWCs but upto the point beyond which the very position of the G-7 may be' threatened by these TWCs. Thus, G-7 has to ensure "go slow growth" and "dependent growth" of the TWCs for the maintenance of their hegemony over the world order. What then, is the basic strategy of the leader? The leader seems to ensure her hegemony via (1) inclusion of big powers and hence containing challenges within the G-7, (2) accommodating the TWCs, by direct investment through the TNCs and indirect control through the IFIs, (3) "extensive globalization" and camouflaging it by selecting countries already "close" to her, thus adopting the path of preferential discrimination among countries and keeping some countries in queue, and (4) rationalization, in the UN and other supra-national bodies, of the strategy of "extensive globalization." Implementation of this strategy is a compulsion for the leader. In fact, no leader in the lEO ever has the opportunity to relax, even ifit is the post-cold war era. US as the leader is no exception. THIRD WORLD: ANY CHOICE? It can be easily understood that only a few among the TWCs who are closer to the leader and the G-7 as a whole, and within them the elite-cumeducated section of the population, can take advantage of this globalization. Management

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46 Global Power Structure and Globalization

This proximity can be understood by a similar commodity technology-demand structure or by political-ideological homogeneity. The leader is concerned about these close TWCs. However, after a point of time the policy of the leader may be self-defeating if these close TWCs fail to expand the size of the elites and/or intra-elite per capita consumption to ensure at least the same growth rate of old products produced in countries of G- 7. Why does the leader need to be concerned for her o\vn hegemony when the old order perpetuates? One answer is to check any threat from within (Burbach, 1997: 57; Esterline, 1979: 23; Kothari, 1995: 1600; Hoogvelt, 1982: 90) and that can be ensured by creating a "safe base" for maintaining the old order for the imperial system under her leadership. But this safe base cannot rest on a static set of commodities produced at a point of time in an era of technological revolution. If new products do not come from the leader and cannot get their market (created or captured), the position of the leader is endangered. This necessitates "extensive globalization" particularly via inclusion oflarge economies when "intensive globalization" via inclusion of the NICs gets exhausted. This necessity of the G-7 gives the third world a chance to consolidate its position. The interesting point is that the countries in the third world already having intense relationship with the G-7 may be reluctant to identify their interest with other TWCs. In addition, these "close" countries may develop themselves internally more than the other TWCs so that they could come out from the shell of "low production" syndrome in the TW. On one hand, this may imply an end of the TWas a homogeneous category, on the other this may also imply a stronger plank for the consolidation of the position of the G-7. In addition to such inner conflicts among the TWCs to catch up with the global leader, problems emerge for the TWCs who host TNCs for their economic elevation often as a consequence of the same ambition. Once the TNCs start controlling the production structure of the economies in the TW, not only does the structure become oriented to "high technology" (Paolo and Carlo, 1995: 229), but also becomes a replica of the existing demand-pattern of the G-7, corresponding to a per capita income in the G-7 which is several times that of the TWCs. This production structure incorporated in the TWCs by international technological integration obviously aims at a market for higher order industrial products, when the size of the market internally is constrained by the demand-structure of the top wellofflayer of the population, and ignores the demand-structure of the middle deciles and the needs of the bottom deciles. Management

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Majumdar 47

How do people in the TWCs accept and absorb this market-constrained growth shock or technology-constrained enclave-type growth? The answer perhaps lies in the role of the "middle class" that takes shape on the basis of cultural homogeneity and hence carries the ideology for the rationalization of a regime (Mills, 1977: 259). In the TWCs, the power of the middle class derives from the DMEs. This middle class echoes same taste patterns and consumption norms as followed in the DMEs and depend on the DMEs for capital, technology and often military support for their position (Hymer, 1990: 201). Given the effective power of making decisions at the hands of the "intellectual elite" who feel more comfortable with western technologycum-ideology, it does not seem surprising that the governments in the TWCs welcome the TNCs as carriers of market-tested latest technology (tested in the G- 7) which at a time point is mythologized in the TWCs. Such an "enclave-type growth" developed (or imposed) inside the TWCs, leaves a large section of the population in the TWCs excluded from the benefits of the process. It seems "extensive globalization" has become a compulsion for the TWCs in a situation where: the TWCs have no weight proportional to their number in the process of global decision-making; the TWCs' own interests are non-identical, and even antagonistic; the TWCs' common interests, whenever these exist at least temporarily, are sharply different from those of the DMEs; the TWCs' internal problems in terms of ethnicity, religion, language, culture perpetuate; the TWCs are often unable to understand or implement their commitment to fulfil their long term goals, if any. How long, if at all, can the TWCs afford to accept the "dictated growthparadigm" as a compulsion? Economic growth occurs in a socio-political space. A basis of growth that excludes the majority of the population in a nation state fails to form a viable internal market in the economic space and loses internal legitimization in the political space and hence cannot succeed. Such a growth process becomes export-dependent and/or dependent on the production ofluxuries for the selected minority within the national economy whether or not associated with dependence on import of technology to proManagement

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48 Global Power Structure and Globalization duce luxliries (Amin, 1981: 541-542). The large economies in the third world have no compulsion to be export-dependent or dependent on the production and import of luxuries. Within the foreseeable future, the TWCs may be unable to withdraw themselves from the network of the IFIs and the TNCs and hence from the network of capitalist globalization shaped by the US led-G-7 at least for two reasons: (1) accumulated external debt that is to be repaid, and (2) role of the middle class. This non-delinking of the TWCs from the lEO does not obstruct them from developing their-own production structure meant for the masses and technologies for producing those. This also does not obstruct them to form product-specific cartels. These two choices, if exercised, will enable each of the countries in the third world to develop simultaneously an autonomous (as distinct from "autarkic") and a cooperative growth path. Two-third of the world population settled in the TWCs is surely a potential power, whatever shape the global power structure takes. The TWCs are in a position to reveal that potential power to restructure the lEO. ABBREVIATIONS DMEs FDI GATT GDP lEO

USED

Developed Market Economies Foreign Direct Investment General Agreement on Tariffs and Trade Gross Domestic Product International Economic Order International Financial Institutions International Monetary Fund North Atlantic Free Trade Association Newly Industrializing Countries New International Economic Order Organization of Petroleum Exporting Countries Transnational Corporations Third World countries United Nations World Trade Organization

IFI IMF NAFTA NICs NIEO OPEC TNCs TWCs

UN WTO

REFERENCES Alejandro, Carlos Diaz (1981) "The Less-Developed Countries and Transnational Management

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Majumdar 49. Enterprises," in Sven Grassman and Eric Lundberg (eds.) The World Economic Order: Past and Prospects. London: Macmillan. Amin, Samir (1981) "Some Thoughts of Self-reliant Development, Collective Selfreliance and the New International Economic Order," in S. Grassman and E. Lundberg (eds.) The World Economic Order: Past and Prospects. London: Macmillan. Anell, L. and B. Nygren (1980) The Developing Countries and the World Economic Order. London: Methuen. Bagchi, A. K. (1982) The Political Economy 0/ Underdevelopment. Cambridge University Press. Burbach, R., O. Nunez and B. Kagarlitsky (1997) Globalization and its Discontents. London: Pluto Press. Chomsky, Noam (1993) Year 501, The Conquest Continues. London: Verso. Cole, G. D. H. (1947) The Intelligent Man's Guide to the Post-War World. London: Victor Gollanez Ltd. Cole, 1. P. (1979) Geography o/World Affairs. England: Penguin Books. Darwin, John (1988) Britain and Decolonization, The Retreat/rom Empire in the Post-War World. London: Macmillan. Dunning, John H. (1990) "Changes in the Level and Structure of International Production: The Last One Hundred Years," in Peter J'-Buckley (ed.) International Investment. England: Edward Elgar Pub. Ltd. Esterline, John H. (1979) "Multinational Corporations and the Political Process: Looking Ahead," in ForestL. Grieves (ed.) Transnationalism in World Politics and Business. New York: Pergamon Press. Faria, Carlos Ramirez (1991) The Origins o/Economic Inequality Between Nations. London: Unwin Hyman. Gamble, Andrew (1990) "Britain's Decline: Some Theoretical Issues," in Michael Mann (ed.). Hall, John A. (1990) Will the United States Decline as did Britain? in Mann, Michael (ed.) Op.Cit. UK: Oxford. Hattori, Tamio and Yukihito Sato (1997)"A Comparative Study of Development Mechanisms in Korea and Taiwan: Introductory Analysis," Developing Economies, XXXV (4). Hettne, Bjorn (1990) Developmenal Theory and the Three Worlds. England: Longman Scientific and Technical. Holland, R. F. (1985) European Decolonization /918-1981, An Introductory Survey. London: Macmillan. Hoogvelt, Ankei (1982) The Third World in Global Development. London: Macmillan. Hung, Rudy (1996) "The Great U- Turn in Taiwan: Economic Restructuring and a

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50 Global Power Structure and Globalization Surge in Inequality," Journal of Contemporary Asia, 26 (2). Huntington, Samuel P. (1997) The Clash of Civilisations and the Remaking of World Order. India: Viking, Penguin. Hymer, Stephen (1990) "The Multinational Corporation and the Law of Uneven Development," in Samuel Bowles and Richard Edwards (eds.) Radical Political Economy, Vol. II. England: Edward Elgar Publication Ltd. Karim, Mohammad A. R. A. (1996) "The Arab's Ideas on Shaping a New World Order and Their Concepts about UNO," Indian Journal of Politics, XXX (1-2). Kothari, Rajni (1995) "Under Globalization, Will Nation State Hold?" Economic and Political Weekly, XXX ( 26). Lee, Wilham, K.M. (1997) "Foreign Investment, Industrial Restructuring and Dependent Development in Singapore," Journal of Contemporary Asia, 27 (1). Mann, Michael (ed.) (1990) The Rise and Decline of the Nation State. Oxford, UK: Basil Blackwell Ltd. Mills, C. Wright (1977) The Power Elite. London: Oxford University Press. Nailor, Peter (1980) "Military Strategy," in Trevor Taylor (ed.). 0' Brien, Patrick K. (1990) "The Imperial Component in the Decline of British Economy Before 1914," in Mann, Michael (ed.). Okuda, Satoru (1997) "Industrialization Policies of Korea and Taiwan and Their Effects on Manufacturing Productivity," Developing Economies, XXXV (4). Oppermann, Thomas (1986) "A New International Economic Order and International Economic Law," Law and State, 33. Paolo, G. and M. Carlo (1995) "Changes and Trends in the World Trade in HighTechnology Products," Cambridge Journal of Economics, 19 (1). Petras, James and Christian Davenport (1995) "Winning the Cold War and US Industrial Decline, 1960-90," Journal of Contemporary Asia, 25 (3). Rasiah, Rajah (1994) "Capitalist Industrialization in ASEAN," Journal ofContemporary Asia, 24 (2). Sauvant, Karl P. (1981) (ed.) Changing Priorities on the International Agenda: The New International Economic Order. England, Oxford: Pergamon Press. Streeten, Paul (1981) Development Perspectives. London: Macmillan. Taylor, Trevor (1980) "Power Politics," in Trevor Taylor (ed.). Taylor, Trevor (1980a) Approaches and Theory in International Relations. London: Longman. The Times of India (1997) October 16, India: Lucknow. United Nations (1989) World Economic Survey. New York: UN. United Nations (1991) World Economic Survey. New York: UN. United Nations (1992) World Economic Survey. New York: UN. Vernon, Raymond (1990) "The Product Cycle Hypothesis in a New International Environment," in Peter 1. Buckley (ed.). Management

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._-

1999)

â&#x20AC;˘â&#x20AC;˘ _,ma,=:I&,

Majumdar 51

-------------------=-

Vital, David (1972) The Inequality of States . England, Oxford: Clarendon Press. Weiss, Linda (1997) "Globalization and the Myth of the Powerless State," New Left Review, 225. Whitmeyer, 1. M. (1997) "Mann's Theory of Power-a (Sympathetic) Critique," The British Journal of Sociology, 48 (2). World Bank (1993) World Development Report. Oxford University Press: New York. ---(1994) World Development Report. Oxford University Press: New York. ---( 1995) World Development Report. Oxford University Press: New York. ---( 1996) World Development Report. Oxford University Press: New York. ---( 1997) World Development Report. Oxford University Press: New York. Zhong, Yang (1996) "Legitimacy Crisis and Legitimation in China," Journal of Contemporary Asia, 26 (2). Bhaskar Majumdar, Ph. D., is Reader, G. B. Panth Social Science Institute, Allahabad211019. He has published a good number of research papers in journals of repute. His current research interests include third world industrialization, political economy of globalization, trade and industrialization, India's current economic reforms, and economic theory.

Management

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INDUSTRIAL CONFLICT AND THE INSTITUTIONAL FRAMEWORK OF THE INDUSTRIAL RELATIONS SYSTEM IN INDIA

K. R. Shyam Sundar

Industrial conflict in India used to be viewed negatively and was sought to be eliminated by an institutional framework characterized by the dominance of state intervention. Two questions sought to be answered in this paper are: whether such an institutional framework has been successful in eliminating conflict as was intended, and whether such excessive concern for conflict was necessary andjustified. The analyses here clearly point out that the institutional framework failed in the elimination of conflict, and the excessive concern over conflict was both unnecessary and unjustified. The institutional framework was based on a faulty normative stance on industrial conflict.

INTRODUCTION verysocial system defines the place and the role of industrial conflictl by itself and decides the methods of its management. The historical factors, ideological stance of the polity, the stage of economic development are some of the factors that influence the decision. No system glorifies conflict. Similarly, every system seeks efficient methods of conflict resolution. Differences exist between the systems in the normative perceptions of conflict, role of conflict, and the methods of managing it. The legacy ofthe colonial model of industrial relations, the preference for pluralistic-democratic polity, the ideology of the Congress party, the compulsions of economic planning are some of the factors that influenced the labour policy in general and the policy on industrial conflict in particular, in India. Containment, even elimination of industrial conflict, became the dominant concern of the government, which influenced the institutional framework of the industrial relations system (IRS).

The author acknowledges with thanks the useful comments made by the faculty members of the Indian Institute of Management, Calcutta on some of the issues raised in this paper. Management & Change, Volume 3, Number 1 (January-June 1999) ~ 1999 Institute for Integrated Learning in Management. All Rights Reserved.

54 Industrial Conflict and the Institutional Framework A few questions arise here. Has the institutional framework of the IRS in India been successful in eliminating or even containing conflict (the "efficiency"2 aspect)? Secondly, how serious, really, is the "problem" of work stoppages? Are the work stoppage incidence and its burden significant 'enough to justify the excessive concern that has been shown (the "necessity"aspect)? This paper attempts to answer these questions through statistical analyses of work stoppage data forthe period 1958-90. This study is timely; as on several occasions in the past, presently there has been an attempt to recast the industrial relations law! The political compulsions apart, conceptual issues and empirical findings should also playa role in such an attempt. The official perception of industrial conflict is explained in Section I, followed by a brief description of the institutional framework of the IRS in Section II. Statistical analyses constitute the next five sections (Section III to Section VII). The final section sums up the findings and weaves the argument. OFFICIAL PERCEPTION DIA

OF INDUSTRIAL CONFLICT IN IN-

The basic premise of official thinking was that "industrial conflict was abnormal and should be kept to the minimum" (Sherlock, 1990:177). Industrial conflict was abhorred and was sought to be eliminated, not merely contained. Strikes were compared to the "law of the jungle." Conflict was also considered to be "costly," "undesirable" and "unnecessary." Thus, the official thinking on conflict, recognizing only its disruptive role, was negative. Its approach, as the National Commission on Labour (NCL) (1969), summed up was the "quest for industrial harmony." The NCL argued that industrial peace is "somewhat negative and restrictive," as it means merely the absence of strikes; industrial harmony is a more meaningful and positive approach since it postulates, "the existence of understanding, cooperation and a sensei of partnership between the employers and the employees" (NCL, 1969(53). It was a rejection of the conflictual perception of employment relatioAship. The influence of the Gandhian approach on official thinking was evident (Kennedy, 1966). According to this philosophy, economic progress is bound up with industrial peace. Thus, there exists an organic link between the two. Cooperation, consensus and harmony were the normative ideas that formed the basis of official thinking. Management

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Sundar 55 The official perspective was influenced by several factors. The years following and preceding Independence3 witnessed tremendous industrial unrest-frequency, worker mobilization and volume lost, all reached record levels in this period. The labour unrest combined with the social turmoil caused by the partition was acutely disturbing. Naturally conflict became a source of concern. Secondly, the political consequences of industrial conflict were after all known to the Congress leadership, the experienced campaigners they once were! The leadership which did not hesitate to use industrial conflict in its agitation against colonial rule became critical, even intolerant of industrial conflict, as it assumed power in free India (Parekh et ai., 1991). Thirdly, the Congress leadership was naturally anxious about the Communist challenge4; the militant and disruptive acts and strategies pursued by the leadership of the CPI demonstrated amply the dangers of unrestrained conflict. Fourthly, industrial relations issues were viewed as against the requirements of a planned economy (NCL, 1969: 327). Success of economic planning, which was expected to secure speedier and broadbased economic development, required labour management cooperation. Finally, it was argued that in a society committed to "socialist objectives" as in India, commonality of interests of classes existed, conflict had no place in it. The official perspective contained contradictions. Industrial conflict was abhorred in the moral sphere but the government could not wholly legally suppress it. More importantly, the government did not recognize two things: that industrial conflict was inevitable in a pluralistic system such as ours and that it could perform some positive social functions (Kornhauser et ai., 1954; Sheth, 1994). How to prevent (even preempt) industrial conflict and secure industrial harmony? The logical extension of the government perspective was to rule out "voluntarism"-independent union movement, primacy of collective bargaining and freedom of industrial action-and opt for government intervention; it indeed, became the dominant feature ofthe institutional framework of the system. There existed other reasons to justify it (Shyam Sundar, 1997). THE INSTITUTIONAL

FRAMEWORK

OF THE IRS

Four institutions were created to deal with industrial conflict, viz., interventionist labour laws, tripartite and federal consultation, industrial democracy Management

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56 Industrial Conflict and the Institutional Framework and moral codes. State intervention was the domin~nt feature of the framework, complemented by the consultative, democratic and moral institutions. The legal framework of the system was primarily defined by three labour Acts, namely, the Trade Unions Act 1926; Industrial Employment (Standing Orders) Act 1946; and the Industrial Disputes Act 1947 (ID Act)5. Of the three, the ID Act is the most crucial piece oflegislation. This Act (a) provides for (compulsory) conciliation6 and compulsory adjudication7 of disputes, (b) determines the procedural rules for industrial action, (c) prohibits industrial actions not conforming to the rules, (d) determines the rules for changing the terms and conditions of employment, (e) decides the rules for labour separation and closure of the establishment; and (f) provides for the establishment of works committees. The important objectives of the Act are to preempt and prevent the incidence of disputes, ensure that disputes do not result in work stoppages and settle them expeditiously. For a good measure, voluntary methods of resolution of disputes like collective bargaining and voluntary arbitration were also encouraged; they were, the governrtent tirelessly pointed out, in fact complementary to compulsory adjudication (Ramaswamy, 1984). State intervention was sought to be complemented by consultative machinery (bipartite and tripartite) at all levels. These processes were expected to reduce the scope for conflict by providing ideal communication channels, both at the macro and the micro levels. What the formal system did not legislate was sought to be achieved through the moral codes, viz., the Codes of Conduct and Discipline (lohri, 1992). The formal institutional framework was comprehensive and was expected to preempt and prevent the incidence of conflict. The informal system was to provide the normative basis to create amity and goodwill in the system. Inspite of these, if disputes arose, the government machinery was there to tackle them. Further, disputes could not result easily in work stoppages, as the procedural rules for initiating them made their legal incidence well-nigh impossible (Ramaswamy, 1984). Even if work stoppages occured miraculously(!), the government machinery would settle them quickly. So, conflict was checkmated everywhere; peace, more meaningfully, harmony should have prevailed in the system. Whether it did or did not, we shall see in the next section.

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---------------------TRENDS IN STRIKES AND LOCKOUTS

IN INDIA

The conceptual problems involved and the limitations of the official data on strikes and lockouts (henceforth strikes)8 in India have been extensively dealt with elsewhere (see Shyam Sundar, 1994; Rao, 1985). To recapitulate, not all strikes that occur are covered by official statistics; only those involving at least ten workers need to be reported by the employer; not all the eligible strikes are reported; and moreover, the reliability and accuracy of the reported figures compiled are doubtful. Data on various measures of strikes for the period 1958-90 are given in Table-I. Table-l Strikes in India, 1958-90 WDLIWS

WSIN

WDUN

WIIWS

WDLIWI

42.1 1958-60 34.8 1961-63 47.1 1964-66 1967-69 57.5 1970-72 57.6 56.4 1973-74 1975-76 29.0 1977-78 49.1 40.2 1979-81 1982-84 31.5 23.3 1985-87 21.7 1988-90 % Change: 1988-90 over -48.5 1958-60

1813 11.54 2025 3735 3740 5479 2982 4176 4850 7913 4163 3678

562 412 520 (j)6 583 856 553 651 749 691 825 721

07.7 08.0 08.3 10.7 11.1 11.3 18.6 13.6 16.1 36.4 21.7 23.5

43.5 3315 4298 6496 6490 9710 10298 8512 12053 25124 17848 16934

28.3

205.2

293.4

Period

102.9

Note:

WSIN No. of strikes and lockouts per one lakh workers. WDLiN : Workdays lost per one thousand workers. WI No. of workers involved. * includes the workdays lost due to the Bombay Textile Strike. Source: Data on strikes for this paper unless indicated, are taken from the following publications of the Labour Bureau: Indian Labour Year Book (ILYB), Indian Labour Statistics (ILS), Rev{ewof Industrial Disputes (published till 1978 in the Indian Labour Journal and since then seperately). Factory employment from /tYB, ILS and Pocket Book of Labour Statistics. Management

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58 Industrial Conflict and the Institutional Framework

The frequency of strikes after the spurt in the post-emergency period, had been declining since the late 1970s9-trends in annual data discussed elsewhere show that the frequency started declining well before the imposition of the Emergency and was at higher levels in the post-Emergency period and started declining from 1979 but trends in annual data discussed elsewhere show that the frequency started declining well before the imposition of the Emergency and was at higher levels in the post-Emergency period and started declining from 1979 but trends in other measures tell a different story. Though volume lost was on the decline in the post-textile period, it was still higher than that in 1958-60. Measures involving volume lost, therefore, showed an impressive increasing trend-averages. Magnitude (WDLIWS) of strikes increased in most of the sub-periods, as did their average duration (WDLIWI); both in 1988-90 were more than 200 percent higher than that in 1958-60. By contrast, average participation in strikes showed a mixed trend, though average participation in the 1980s was higher than that in the 1960s. Thus, it appears that the parties in later times took the decision to stop work less often than in the earlier periods; but once they did, the stoppage involved more workers and lasted longer, and thereby, was more voluminous. These results are corroborated by the trend regressions, the results of which are given below. Table-2 Trends in Measures of Strikes 1957-90 (N Measure WSIN

Constant 53.0888

WDLIN

1579.3316

WlIWS

468.7861

WDLIWS

257.4011

WDLIWI

3.4187

B -0.7089 (-3.741)* 122.2399 (4.330)* 9.6626 (4.382)* 576.8880 (7.921)* -0.6932 (5.917)*

= 34)

R(-2)

13.9922*

0.2825

18.7492*

0.3497

19.2036*

0.3551

62.7361 *

0.6517

35.0081*

0.5075

Note: *Significant at one percent level, t-values in parentheses.

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It is well-known that workdays lost is a composite measure; its components are frequency (WS), average size (WI/WS) and average duration (WDLIWI); symbolically, WDL WI x WDL= WS x WS WI The regression results in the following table give the importance of the three components.

Determinants Measure

Table-3 of Workdays Lost, 1948-90 (N =43) B

11016.42 (3.911)* 46986.81 (3.233)* 1564392.80 (11.851)*

WS WIlWS WDlJWI

R (-2)

15.30*

0.2540

10.45*

0.1837

140.44*

0.7685

Note: Same as for Table-2. Of the three, average duration (WDLIWI) was the most significant contributor. Duration is an important indicator of the efficiency of the interventionist institutional framework-to recall, expeditious settlement of disputes was one of the important objectives or concerns, even justification of the interventionist framework. To further examine this aspect, the distribution of strikes by duration is given below. Percentage Distribution Period

One day

Table-4 of Strikes by Duration, 1960-89 (in days) 2-5

5-10

10-20

30 +

20-30 /'

1960-64 1965-69 1970-74 1975-79 1980-84 1985-89

32.2 28.9 252 24.9 23.5 17.6

30.2 27.7 24.6 25.2 22.5 20.1 Management

12.7 13.8 14.5 13.8 12.7 12.9

11.5 12.4 13.7 11.7 11.7 13.4

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60 Industrial Conflict and the Institutional Framework

The thesis of the prolonged duration of strikes is confirmed by the statistics in this table. The share of one-dayers or what are called as "demonstration stoppages" consistently decreased-their share in 1985-89 was almost half of that in 1960-64. The other shorter version of strikes, i.e., lasting between two and five days too showed a decrease. At the other extreme, the share of long stoppages (lasting for more than a month) increased in comparison to the one-dayers. Strikes in modem times are, one. may say, "trails of strength." Thus, we find that despite the presence of an institutional framework (or as some would say, because of it!), strikes flourished in all but one respect. Strikes had grown unmanagably longer, slightly larger and more importantly, more voluminous; the saving grace for the interventionist machinery was the declining frequency of strike incidence. The institutional framework of the IRS in India has clearly failed on the "test of industrial continuity"lo (Foenander, 1957). The major justification for intervention was to prevent economic waste by settling disputes quickly; the intervention machinery's failure is reflected in the lengthening of strike time-in fact, as will be seen a little later, Indian strikes lasted much longer than strikes in most other countries. So far we have been concerned with strike experience in the Indian system. It is of interest and instruction to know how worse or better was our strike record as compared with those of other countries. This will enable one to make a firmer judgement on the efficiency of the institutional framework. INTERNATIONAL

COMPARISONS

OF STRIKE ACTIVITY

It is not unusual to make a comparison of the strike record of one country with that of the others to assess the effectiveness of its institutional framework or the intensity of the problem of strikes (See, for example, Beggs and Chapman, 1987; Kelsall, 1959; Foenander, 1957; Whittingham and Towers, 1971). The limitations of such an exercise are well-known and need not bear repitition here. Briefly, the differences in the "inclusion"criteria, extent of coverage, collection methods between the countries are significant enough to effect strike statistics; hence, the comparative exercises (see Fisher, 1973; Walsh, 1983). Though fraught with difficulties, it is a useful way of knowing, "where do we stand in a global context."

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The appendix (Tables-A3 to A6) presents strike data (workdays lost due to strikes deflated by some indices of employment) for selected countries for various periods, estimated by using different methodologies by various researchers, they are not strictly comparable, but enable one to get a rough idea of the relative position ofIndia in a global context. The striking point that emerges from the tables is that India had always been among the high strike-prone countries of the world; indeed, by each decade, it had been "improving" its relative position! This dismal record of India is surely disturbing. The United States, Canada and Italy which had a worse record in the 1960s and the 1970s managed to have less industrial turbulence in later times. On the other hand, the corporatist countries like Austria, Norway always enjoyed industrial quiescence; social harmony is the typical objective of a corporatist system (Crepaz, 1992) and has been successful in achieving it but more importantly, Australia and New Zealand, the two countries with compulsory arbitration systems till recently (see for changes in New Zealand, Boxall, 1990) always had a better record than India. They were in the past unfavourably placed as compared to the voluntarist systems, which sparked off assessments of and comparisons between the two polar systems. But in the recent past, Australia had an improved labour relations partly owing to a corporatist incomes policy (Morris and Wilson, 1995). Two sources of concern then, here, are: the compulsory arbitration system which was primarily designed to ensure industrial peace should ever fail at all; and that it has always failed to contain conflict, as in India. The poor show of the institutional framework ofIndia becomes embarrassingly clearer by the comparative data onthe average duration (WDLI WI) of strikes given in Table-A6. Barring France, though exceptional, the average duration was highest in India. Compulsory arbitration, as seen earlier, was expected not only to eliminate strikes but also to settle them quickly; the duration of strikes in Australia and New Zealand conforms to the latter expectation. I I The compelling conclusion of these comparative exercises is that India's strike recordl2 had been consistently worse than most countries, despite being armed with an institutional framework designed to eliminate ~onflict. SPREAD OF STRIKE INCIDENCE It is common knowledge that analyses at disaggregate levels throw light on Management

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62 Industrial Conflict and the Institutional Framework

the behaviour seen at the aggregate level. The patterns of incidence at the disaggregated levels would also reveal the "spread" of strike incidencefor example, whether strikes exhibit concentrated or diversified incidence. Here, I analyze strike incidence by (a) region, (b) industry, and (c) size of establishment.

STRIKE INCIDENCE BY REGION I use here the workdays lost measure for the main reason that deficiencies and inconsistencies in the data collection system, which are prominent in ours, affect this measure less than they do the frequency measure (Shyam Sun&r, 1997 and forthcoming). Volume lost deflated by employment in states is used as an indicator of strike-proneness, as is usual in comparative exercIses. The percentage shares of the top four states in total workdays lost in India in 1967-69 and 1986-88 are given below. . The top four states together accounted for nearly three-fourths of volume lost; strike incidence was highly concentrated in a few states. Secondly, their share remained almost the same; in fact, it increased slightly. Thirdly, the constituents of the top four remained almost the same--only Kerala gave way to Andhra Pradesh in 1986-88. Fourthly, the states retained their positions-West Bengal was first, Maharashtra and Tamil Nadu were third and fourth respectively in both periods but the most striking feature of the table is that West Bengal's share was greater than the combined share of the other threeY West Bengal, in modem times has become a prominent . centre of working class struggle as Bombay was in the past, especially, in the colonial tim~s (Shyman Sundar, forthcoming). Table-5 Percentage Share ofthe Top Four States in Workdays Lost in 1967-69 and 1986-88 1986-88 1967-69 % Share Top Four States % Share Top Four States West Bengal Kerala Maharashtra Tamil Nadu lUfAL Management

43.3 12.0 9.7 7.8 72.8

& Change, Volume 3, Number

West Bengal Andhra Pradesh Maharashtra . TamilNadu lUfAL I (January-June

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41.0 12.0 11.9 8.7 73.6

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Sundar

It is more appropriate to evaluate the strike record of regions by taking into account the differences in employment between them. Workdays lost per 1000 employees for the two periods for the top six states are given in Table-6. Table-6 Strike Proneness of the Top Six States During 1967-69 and 1986-88 1986-88

1967-69 WDLIN

Top Six States

3386 3053 1047 960 785 729

West Bengal Kerala Bihar Tamil Nadu Karnataka Maharashtra

Top Six States West Bengal Andhra Pradesh Kerala Tamil Nadu Maharashtra Bihar

WDLIN

5542 2459 1870 1347 1137 1007

The average of workdays lost for 1967-69 is deflated by employment in the organized sector in 1968 and that of 1986-88 by 1987-88 employment figures, owing to difficulties in obtaining data for all the three years of the latter period. Source: 1968 employment data from Employment Review (DGE & T), 1987-88 figures from Statistical Abstract of India, J 990 (CSO, Government oflndia).

Note:

West Bengal tops the list. The big gap between the strike-proneness value of West Bengal and the second-ranked Andhra Pradesh indicates the extent of the former's strike-proneness. Secondly, the composition of the top six remained almost unchanged--only Karanataka gave way to Andhra Pradesh. Two points strongly emerge from these analyses: strike incidence was highly concentrated in a few regions'4 ("concentration" thesis). But more disturbing is the fact that the same regions continued to be significantly affected by strikes ("persistence" thesis). STRIKE INCIDENCE

BY INDUSTRY

First, the evaluation of industries' strike record I 5 using broad industry-groups ofNIC 1970 (single digit) is done. Management

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64 Industrial Conflict and the Institutional Framework Table-7 Strike Record of Major Industry Divisions, 1987-89 IndI. Code Nos. (b)

o 1 2-3 4 5 6 7 8 9

Description

% Share

Agriculture, Hunting, Forestry and Fishing Mining and Quarrying Manufacturing Electricity, Gas and Water Construction Wholesale and Retail Trade and Restaurants and Hotels Transport, Storage and Communications Financing, Insurance, Real Estate and Business Services Community, Social and Personal Services

296 2074 4542 94 134

0.6 1.3

496

1.1 1.2

265 38

135

100.00

TOTAL Note:

1.3 6.6 87.1 OJ 0.5

WDLper 1000 Employees (a)

(a) Employees in the organized sector. (b) NrC, 1970 code numbers.

The manufacturing sector, perhaps suffering from the "satisfactory coverage" by the strike data collecting official agencies(!), accounted for a lion's share of the total workdays lost in 1987-89. The remaining industrygroups shared among themselves the meagre residue of about thirteen percent. Of these, the mining and quarrying group's share was the highest (6.6 percent). Even after taking into account the differences in employment between them, manufacturing sector remained the most highly strike-prone industry, followed again by mining and quarrying. The big gap between the strikeproneness values of the first- and the second-ranked industries suggests the unchallenged dominance of the manufacturing sector. It is clear that strike incidence was a restricted phenomenon, affecting significantly just one segment of the non-agricultural operations, i.e., the manufacturing sector. It may then be profitable to study the strike records of industries co~prising the manufacturing sector (see Table-8).

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Jute (25) and cotton (23) textile industries were the two "major" contributors-together they accounted for 60 per cent-to total workdays lost in 1974-76. Non-metallic mineral products (32) and basic metal (33) industries were the "minor" contributors-their combined share (13 percent) was nowhere near to the share of either of the major contributors. These four industries together accounted for nearly three-fourths of the volume lost in this period, indicating a high level of concentration of strike activity. The same top four industries' aggregate share was a little less than two-thirds of the workdays lost in 1985-87. The diminution in the share of the top four was due to a decrease in the share of the major contributor, jute. But still they accounted for a significant amount of the workdays lost. More importantly, the members of the top four club remained almost the same in the two periods--Dnly non-metallic mineral products was displaced by tobacco (22), whose share incidentally was higher than its fellow minor contributor, basic metals. Table-S Percentage Distribution

of Workdays Lost in Industries,

1974-76 and 1985-87

1974-76

1985-87

20-21 22 23 24 25 2fJ 27 28 29 30 31 32 33 34 35 36 37 38

1.8 30.0 24.1 2.9 35.9 1.7 0.2 1.4 1.1 1.1 203 6.9 6.1 2.9 3.4 3.5 1.3 0.4

1.3 11.2 23.5 4.0 21.0 1.7

TOTAL

100.0

99.9

Industrial Code Nos.

OJ 2.8 0.5 3.1 2.8 4.6 7.6 2.7 503 4.9 2.2 0.4

Note: 1. The aggregate shares of the textile (23-26) and engineering (33-37) indus-

tries for the two periods respectively are: 64.6 and 50.2; 17.1 and 22.7. 2. Industrial coding system in NIC = 1970 .. Management

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66 Industrial Conflict and the Institutional Framework

It is interesting to note that as aggregates, the textile (23-26) and engineering (33-37) industries together accounted for at least about three-fourths of the total workdays lost in either period, textiles having a larger share. The strike-proneness of industries is assessed hereafter, and workdays lost per 1000 workers in factories for the same periods are given below. The highly strike-prone industries in 1974-76 were: jute (25), tanneries (29), cotton (23), non-metallic minerals (32) and wool and silk textiles (24), in that order. It is interesting to note that three of the five high strike-prone industries belonged to the textile industry, none from engineering figured. After a decade, the three textile industrial groups (23, 24, 25) retained their dominant positions, rubber (30) and electrical machinery (36) joined the club of the high strike-prone industries. Table-9 Strike-proneness

oflndustries,

wnL PER

Industrial Code Nos.

1974-76 No.

414 366 4289 3657 24861 3369 407 4514 1580 1285 4248 2861 2659 1529 2557 671 1151

20-21

22 23 24

25 26

27 29

30 31

32 33 34 35 36 37

38 Note:

* Workers

Management

1974-76 and 1985-87 1.000 Workers 1985-87 Rank No. Rank 16 18 3 5 1 6 17

2 10 12 4

7 8 11 9 15 13

I (January-June

18 12

5406

21836 2896 524 1983 3968 1507 2499 3639 2713 2905 3745 1291 1466

employed in working factories.

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340 2013 6083

1999)

2 1

8 17 13 4 14 11

6 9 7 5 16 15

Sundar

But the continued dominance of textile industrial groups, especially jute and cotton is the striking result of this analysis. The high correlation of the rank for all industries suggests that the ranking in both the periods remained in the same direction. These analyses bring out two features of the industrial distribution of strike incidence. One, there is a high concentration of strike incidence in a few industries ("concentration" thesis); two, the same industries continued to be significantly affected by strikes ("persistence" thesis). The finding that the same regions or the same industries continued to be strike-prone is disturbing; it could be taken to reflect the failure of the intervention machinery. The official machinery of intervention, being always under-equipped to deal with the various aspects of labour administration and justice dispensation, is organized in such a manner so as to pay special or more attention to dispute-prone centres. It is costly, even impractical to maintain a comprehensive machinery covering the universe of the IRS. Secondly, the officials' increasing exposure to the dynamics of industrial relations could be expected to create intervention expertise. The combined effect of these two "persistence" phenomenon of strike-proneness seems to imply the failure ofthe intervention machinery. It is possible that even within the high strike-prone industries, strike activity may not have been widespread. I rely here on two studies on ree gion-industry incidence of conflict. Rudraswamy (1974: 23), in his study of strike activity in the member mills of South India Textile Research Association (SITRAj found that, "about one-eighth ofthe mills were responsible for more than half the strikes in the textile industry." He further notes that the strike-prone establishments experienced at least one strike and a maximum of six strikes in a year; these units experienced, on an average, four strikes in a year. Kathiresan (1987: 434) finds that twenty dispute-prone units accounted on an average for about 72 percent of the disputes in the textile industry in Madurai during 1974-83. Thus, it is clear that strike incidence is limited not only to a few industries, but also to a few firms in those industries. They also experience repetitive incidence of strikes. STRIKE INCIDENCE FECTED

BY SIZE OF ESTABLISHMENTS

AF-

The percentage distribution of the number of strikes and workdays lost by Management

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68 Industrial Conflict and the Institutional Framework

size of establishments affected is given in the table below. Table-l0 Percentage Distribution of Strikes and Workdays Lost by Size for the period 1960-90 Period Less than 50 1960-64 1965-69 1970-74 1975-79 1980-84 1985-87 1988-90

21.8 23.5 23.7 22.4 20.4 21.2 18.0

WS 50-99

100 and over

Less than 50

63.2 (fJ.7 62.4 64.3 66.9 62.3 67.6

1.8 1.7 1.6 1.3 1.2 1.9 1.3

15.0 15.8 13.9 13.3 12.7 16.4 14.3

WDL 50-99

3.1 2.4 2.0 1.8 1.7 3.2 2.7

100and over 95.1 95.9 96.4 96.9 97.0 94.0 95.9

Large establishments (those employing more than one hundred workers) accounted for a high share of the total number of strikes as well as of . workdays lost. They were responsible for at least 95 percent of the workdays lost in any period excepting 1985-87. The small establishments (those employing less than 50 workers) and the establishments belonging to the intermediate group size (those employing more than 50 but less than 100 workers), shared between themselves the meagre residue. The dominance of large-sized establishments is also seen intheir high shares of the total number of strikes (at least 60 percent in any period). To have a better idea of the strike-proneness of different types of establishments, differences in the number of factories and workers between the size, classes need to be taken into account. I use two measures of strike-proneness, number of strikes per thousand working factories and workdays lost per thousand workers (see Table-II). Judged by either measure, we find that as size increases, the strikeproneness also increases. There is another way of assessing the strike-proneness of establishments in each size class. I assume that (a) all strikes reported in the table were single establishment strikes, i.e., strikes did not affect more than one establishment, (b) no establishment was affected by strike more than once in a year, (c) each count of strike represents the establishment, thus, Management

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Table-ll Strike-proneness by Size, 1986-89 Class Intervals Less than 50 50-99 100-499 500-999 1000 and over Note:

Source:

31 243 465 190 331

376416 10888 8527 1250 876

4.1 22.3 54.5 152.0 377.9

1489607 2776611 14579553 11108254 63582357

1048 640 1604 778 1737

1421 4338 9089 14278 36605

The factories and employment data (ASI) relate to 1986-87. 1 = Average no. ofWS 4 = Average WDL 2 = No. of factories 5 = Employment ('000) 3 = No. ofWS per 1000 factories 6 = WDL per 1000 workers Factories and employment data from CMIE, Basic Statistics Relating to the Indian Economy, Vol. I, All-India, August 1991.

the total numbers of strikes in a year would stand for total number of establishments affected by strikes, and (d) all strikes occur in establishments in the factory sector. These assumptions might result in an overestimation of the number of establishments affected by strikes but the overestimation is likely to be off-set owing to two realities. One, strikes affecting more than one establishment might not have been included or might have been aggregated into one count of a strike. Two, not all strikes that occured might not have been reported to the Labour Department by the employers. The table below reports the proportion of factories affected by strikes for each size class. It is interesting to note that almost all of the small establishments were strike- free in 1986-87. Whereas, more than a quarter of the establishments employing more than 1000 workers were affected by strikes. Secondly, the proportion of factories affected by strikes increases as size increases. These analyses confirm the "concentration of incidence" thesisstrike incidence was highly concentrated in one size class, i.e., large establishments. Secondly, the positive size effect of size incidence is very much evident. Finally, it is interesting to note from Table-12, that less than two percent of the establishments were affected by strikes in the manufacturing sector in 1986-87; this could be a pointer to a few more interesting Management

& Change, Volume 3, Number

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70 Industrial Conflict and the Institutional Framework Table-12 Strike Incidence by Size, 1986-87 Class Intervals (1) Less than 50 50-99 100-499 500-999 1000 and over

TOTAL

No. of WS (2)

No. of Factories (3)

(2) as % of (3)

333 278 542 215 254

76416 10888 8527 1250 876

0.4 2.6 6.4 17.2 29.9

1622

97957

1.7

(4)

results on the extent of strike incidence, to which I tum next.

EXTENT OF STRIKE INCIDENCE Applying the same assumptions made for Table-12, I present here the statistics, for proportion of working factories affected by strikes for various years, in the table below. I have rather intentionally chosen the years which witnessed high strike activity. It is interesting t9 note that at the most, only three percent of the factories were affected by strikes (in 1967, 1968). In any year, 97 percent of the working factories were strike-free. If we extend the analysis to include the non-manufacturing sector, this estimate would be much less than this. Admittedly, this is a crude estimate, but something that may not be far from the reality. The labour departments which have access to the list of establishments in operation will be better placed to match them with the strike-affected establishments to arrive at the extent of strike incidence; such estimates worked out by official agencies in Britain (Behrend, 1984; Smith et aI., 1978: 88) also showed a similar picture. I estimate the proportion of employees involved in strikes, again for the years in which workers involved were higher (Table-14).

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Table-13 Extent of Strike Occurence for Selected Years Year

(1) 1967 1968 1969 1970 1971 1972 1974 1977 1979

No. of Strikes in the Manufacturing Sector (2) 1883 1838 1695 1878 1833 2184 2034 2200 2021

No. of Working Factories (3) 67582 68599 72343 77218 80996 86300 97066 119714 126238

(2) as % of (3)

(4) 2.8 2.7 2.3 2.4 2.3 2.5 2.1 1.8 1.6

Before looking at the statistics in Table-14, it will be helpful to keep in mind the limitations of the workers-involved statistics. They suffer from the problem of "double counting." That is, if the same ten workers participate in five strikes in a year, the total workers involved would be counted officially as fifty, not ten. Secondly, an accurate estimate of workers involved in strikes is never possible. At best, this statistic is an estimate and at worst, a poor indicator of the dynamics of strikes (see Shyam Sundar, 1994 for other limitations of this measure). The general assumption made relating to data collected in an ill-developed and imperfect data collection system is that omissions and commissions cancel out each other, so that ironically, the system produces an acceptable estimate! Even in the years of high worker participation, the proportion of employees involved in strikes did not exceed 15 percent; this estimate was the highest in 1974 (14.8 percent), the year which witnessed the railway strike. In years of normal strike activity, this estimate is likely to be around ten percent, or even less. Thus, contrary to popular perception, we find that most establishments and a vast majority of workers do not normally experience strike but critics argue that it is the adverse impact of strikes that is socially relevant, an argument that needs some assessment, which is done in the next section.

Management

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72 Industrial Conflict and the Institutional Framework Table-14 Share of Strikers in Total Employment in the Organized Sector for Selected Years Year (1)

No. of Workers Involved (OOOs) (2) 1672 1828 2546 2855 2874

1968 1970 1973 1974 1979

Employment* (OOOs) (3) 16322 17050 18820 19274 21884

(2) as % of (3) (4) 10.2 10.7 13.5 14.8 13.1

Note: * Employment in the organized sector. Source: Employment data from CMIE, Basic Statistics Relating to the Indian Economy, August 1994, Bombay, CMIE.

IMPACT OF STRIKES One of the considerations that prompt government intervention in strikes is their perceived or real negative economic impact. It is often alleged that the negative impact of strikes is considerable, even avoidable, which affects the prospects of economic growth; the damage is held to be more severe and of greater consequence in a developing, planned and interdependent economy. The workdays lost measure is taken to be a crude indicator of the economic impact or cost of the stoppages. There are problems in the construction of this measure, as shown elsewhere (Shyam Sundar, 1994). But the argument that workdays lost represents production lostl6 is questionable. This ignores two possibilities, even realities: (i) preparations made before the onset of a strike, especially in the case of big strikes, and (ii) increase in production on resumption of work (attributable to compensation efforts and improved morale and efficiepcy). In such instances, workdays lost statistics "will almost certainly be an overestimate" (Jackson, 1987: 192). Secondly, workdays lost, influenced by a few "big" stoppages may not represent reality-a few "large-long" stoppages are sufficient to inflate the workdays lost in a year considerably.

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Table-IS Impact of "Big" Stoppages on the Workdays Lost for Selected Years Year

1950 1974 1975 1982

Workdays Lost Due to Big Stoppages

Total Workdays Lost

12806704 40626417 22299971 74614764

No.

WDL

9211117 19473291 9700000 41401000

3 1 1

% Share

71.9 47.9 43.5 55.5

Note: 1950: Textile industry strike in Bombay. 1974: 1. Railway strike (91, 99, 268); 2. Textile industry strike in Bombay (53, 62,036); and 3.62 jute mills strike in West Bengal (49, 11,987). 1975: Jute mills industry strike in West Bengal (97, 00, 000). 1982: Textile industry strike in Bombay (41,401,000). Source:

For figures of workdays lost due to big stoppages: for 1974, 1975"Details of Major Work stoppages" Indian Labour Journal, 1975, 1976, respectively; for 1950, Kamik (1967: 343); for 1982, Indian Labour Year Book, 1982.

It is clear from the table that a few, even one, work stoppage(s) could influence the level of the volume lost figure in a year; unaware of these facts, users of the data could commit the folly of passing adverse remarks on the state of industrial relations; worse still, these fantastic figures could figure in the international comparisons! Let us for the moment, assume that the workdays lost do represent fully the economic waste and see it as a proportion of workdays scheduled to work (called the "strike rate") in a year, an indicator of damage caused by strikes. Statistics on the "strike rate" for selected years are given in the Table-16. Even in the high-strike years, less than three percent of the potential workdays were lost due to strikes, surely, an insignificant loss of worktime. The estimate would be much less, if one took into account the measures earlier, and discount the impact of big stoppage(s). More over, in normal times, the estimated loss of potential work-time would be much less.

Management

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74 Industrial Conllict and the Institutional Framework

TabIe-16 Strike Rates for Selected Years Year

Strike Rate (%)

1977 1978 1979 1980 1981 1983 1985 1986

116 1.39

214 0.96 1.65 2.19 1.22 1.49

Note:

The Strike Rate is the proportion of workdays lost, due to the strikes in the workdays scheduled, to work done. The denominator is arrived at by multiplying average daily employment with 300 calender days. Source: Labour Bureau's, Labour: Master Reference Book, 1984, 1989.

It is a simple postulate that strikes disrupt production and in the final analysis affect industrial performance and prices (Kabra et al., 1981; Ranadive, 1982). But the workdays lost due to strikes and the index of industrial production (an indicator of industrial performance) have rarely been negatively correlated; researchers have noted positive significant correlation between the two (ibid). On the other hand, the supposition that industrial peace aids better industrial performance does not receive support either even during the internal emergency period (Shyam Sundar, 1997). These suppositions cannot and should not form the basis for introducing strike-prohibiting legislation (Kabra et al., 1981). As has been tirelessly pointed out by researchers, the production lost due to reasons other than strikes, say, absence, official holidays, power and raw material shortages, unemployment, inclement weather far exceeds the production that is lost due to strikes (Behrend, 1984; Evans and Creigh, 1977). Here, I attempt to compare the loss of potential work-time lost due to absence and strikes, though crudely. The Labour Bureau, following different methodologies, publishes data on potential work-time lost due to absences (absenteeism rate, ASI data) and that lost due to strikes (strike rate) by industries. It is important to note that the denominator for calculating both statistics is workdays scheduled to work, though arrived at differently;

Management

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thus, the percentages of the strike-rate and absenteeism rate do not derive from the same denominator. Still, some idea can be had on the economic impact of two industrial actions (Table-l 7). Table-17 Comparison of work Time Lost Due to WS and Absence, 1985 Industrial Code

Nos.

Strike Rate (SR) (%)

Absenteeism Rate (AR)

09.3 14.5 13.9

0.19 3.24 1.94 0.53 7.99 1.63 0.06 0.64 0.50 1.09 0.42 0.83 1.02 125 0.49 1.32 0.34 0.35 1.22

20-21

22 23* 24 25**

26 27 28 29 30 31 32

33 34

35 36 37 38 02-3***

14'{)

10.4 13.0 10.8 13.6 11.8 13.5 13.0 13.1 14.6 14.2 13.6 12.2 14.7 13.0 12.5

Note:

SR % WDL due to strikes in workdays scheduled to work (average daily employment x 300 days). AR Workdays lost due to absence as percentage of workdays scheduled to work (ASI data). • The strike rates for high-strike years 1979 and 1983 were 3.30 and, 4.66 respectively . •• In exceptional years, the strike rate exceeds the absenteeism rate for this industry: 1977 5.91; 13.60, 198423.64; 19857.99 ••• The Strikes rate for 1977-86 are: 1977 -1.26; 1978-1.39; 1979 - 2.24; 1980 - 0.96; 1981- 1.65; 1983 - 2.19; 1984 - 2.45; 1985 - 1.22; 1986 - 1.49. Source: As for Table-16. Management

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76 Industrial Conflict and the Institutional Framework It is interesting to note that the absenteeism rate exceeded the strike rate in the case of all industries in the manufacturing sector in 1985; in many cases, it was much higher than the strike rate. However, in the case of the jute industry, in the years of exceptionally high-strike activity, as in 1984, for example, the strike rate exceeded the absenteeism rate, but it can be safely said that in general absence turns more potential work-time idle than strikes. If quantitative estimates of work-time lost due to other factors could be worked out, I am sure, the comparison may not be unfavourable to strikes. These observations and analyses should make it amply clear that the alarmist perception about the negative impact of strikes is surely misplaced. The overwhelming conclusion of the studies, bravely attempting to overcome the problems of estimating the economic impact of strikes, has been that talks of the negative impact of strikes on economic performance are vastly exaggeratedl7; it is by no means significant enough to cause concern. To argue that strikes have no impact at all, is to question the very logic of their exercise-strikes are effective and act as threats because they entail some loss at least to the bargaining parties but to exaggerate their negative impact is neither warranted nor desirable. More importantly, any talk of the cost of strikes, should also attempt to estimate the cost of alternative institutional procedures created to make strikes unnecessary. Such an estimation should include not only the monetary cost, but also the real cost in terms of inefficiency, and adverse impacts of the alternative institutional procedures. Though the monetary cost of the interventionist procedures has not been estimated, the inefficiencies and the adverse impact of them have been discussed for long and by many (see Shyam Sundar, 1997 and 1998 for the list of studies), which are conclusively against the interventionist procedures and institutions. CONCLUSION Industrial conflict for various reasons was abhorred by policy makers, viewed negatively, it was sought to be eliminated. This became the dominant concern and served as the basis for structuring the institutional framework of the IRS. It is essential to evaluate the "efficiency" of the system in achieving the principal objective of industrial peace; it is even pertinent to ask whether such an overwhelming concern over conflict was necessary and justified. This paper attempted to find out answers for these queries.

Management

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r Sundar

The institutional framework of the IRS in India clearly failed on the test of "industrial continuity" (Foenaneder, 1957). All measures of strikes excepting frequency showed evidence of the flourishing of strikes. The prolongation of strikes and the consequent inflation of volume lost is the severest possible adverse commentary on the failure of the institutional framework. Secondly, India was found to be consistently among the high strike-prone countries. The average duration of strikes in India was incomparably longer than that of strikes in most countries. India's strike record is notorious! Thirdly, despite the existence of an intervention machinery and the special attention it bestows on the strike-prone segments, the same regions, the same industries and possibly the same firms have continued to be strike-prone. The compelling conclusion of this evidence is that the institutional framework of the IRS in India failed to eliminate, let alone contain, strikes; it was "inefficient." The second issue is: was the overwhelming concern over conflict necessary and justified? Strike activity was found to be concentrated in a few centres-seen regionally, in a few regions, seen industrially, in a few industries; these were highly strike-prone areas. Similarly, large establishments were responsible for a significant amount of strike activity and were clearly more strike-prone than the smaller ones. Thirdly, only a small number of factories in the manufacturing sector, and a small section of employees, at the worst, struck even in years of high-strike activity. Strikes are then not universal in incidence; they are a restricted phenomenon. They are, in fact, a "minority" behaviour. . What is the impact of the strikes? A few big stoppages were found to inflate considerably the volume lost data, which not realized, causes great hue and cry about the days rendered idle. Even otherwise, an insignificant share of potential work-time was lost, even in years of high strike activity. Strikes were not found to adversely affect production. Finally, strikes caused, less potential work time to be lost than absence. So, strikes do not cause havoc as is often rather unthinkingly alleged, even accused. Then what is all this fuss about? Surely, the policy makers made a mountain of a mole-hill. The two basic propositions which the analyses in this paper make are: one, the present institutional framework of the IRS is inefficient in containing industrial conflict; two, the enormous, if excessive, concern over industrial conflict is both unnecessary and unjustified. It, then, logically follows that it was a mistake to have designed the institutional framework on the faulty normative stance on industrial conflict. It would be a graver mistake to Management

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78 Industrial Conflict and the Institutional Framework

persist with it. These, combined with the weighty evidence on the other inefficiencies of the intervention machineryl8 (like dilatoriness) and on the harmful effects of it (like the politicization effect,juridification effect) provide a powerful case for recasting the present institutional frameworkl9 of the IRS. Suggestions have been made by several researchers (e.g., Ghose, 1996; Johri, 1996; Ramaswamy, 1987; Shyam Sundar, 1997), the assessment of which would require a separate paper but will the miracle of recasting the industrial relations law ever take place!

NOTES 1.

Being aware of the wider nature of the term "industrial conflict" (see Kerr, 1964), I use it loosely here to cover primarily its major forms of manifestation, strikes and lockouts. 2. "Efficiency" and "equity" are the two criteria that are used to evaluate the performance of a sÂĽstem. Here, I am using the former. 3. In the years 1946, 1947 and 1948, the number of work stoppages crossed the one thousand mark, the worker mobilization ten lakh mark; volume lost in 1947 reached a level (16,526 thousands) which was to remain unsurpassed for another 20 years. Several helpful factors like the inflationary spiral and the resultant fall in real wages (Sen, 1997) and the political freedom contributed to escalation in work stoppages. 4. The government, especially the Government of Madras used all possible repressive measures like banning the CPI, arresting union leaders, sealing its offices to quell the challenge (see Padmanabhan, 1981; Sen, 1997 for the CP1' s policy in 1948-50 and the details of government response). 5. The policy makers merely borrowed the compulsory arbitration provision from the Defence ofIndia Rules (Rule 81-A) which was introduced during the Second World War to prohibit work stoppages to ensure uninterrupted production; what was intended to be a pure war-time measure, as in the West, became the cornerstone of the "peace" model ofIR (see Saini, 1995: 22). 6. Conciliation is compulsory in the case of disputes in public utilities and optional in others; but as the NCL (1969: 323) has observed, the optional provisions in course of time "appear to be acquiring compulsory status in non-public utilities also." 7. Compulsory adjudication is a powerful instrument of government intervention. Apart from disputes in public utilities which the government is duty-bound to refer for adjudication, it enjoys "wide and sweeping discretionary power" to refer or refuse to refer disputes in others; it is even empowered to refer disputes apprehended also (Kothari and Kothari, 1987; Ram, 1980). The state Management

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Sundar 79 through compulsory adjudication not only purports to resolve disputes but also in the process supplies "rules" to the system (Barot, 1994: 154). Legislation, conciliation, adjudication, judge-made laws, are powerful external institutions which have supplied "rules" to the IRS which are normally determined through collective bargaining process in the West (See Desphande, 1992). 8. The distinction between strikes and lockouts has in the Indian context become more significant owing to the increased incidence of the latter. But I do not distinguish between the two, because I am interested in knowing the impact of the institutional framework on the incidence of work stoppages, irrespective of their origin. 9. Sengupta (1993: 3) analyzing the trends in strikes and lockouts fmds, "the overall declining trends of both the frequency of disputes and of the number of workers involved in disputes from mid 70's ...." In fact, this trend, he found, contradicted with the "unmistakable rising trend over the entire period, i.e., 1975-84" (ibid), found by Ghosh (1988). Decline from mid 70s is clearly untenable, when we see data for the period 1972-80 (Table A. 1). Even if one ignores the post-emergency spurt, the decline would begin from 1973, which cannot be deemed to belong to mid-70s. 10. In the post-liberalization period, both frequency of and workdays lost due to strikes declined considerably. However, this cannot be attributed to the efficiency of the intervention machinery, as the government claIms (Economic Survey, 1997-98: 111). The efficiency of the intervention machinery can be partly a~sessed by its influence on the termination of strikes. Government machinery settled a mere one-third of the strikes in 1991-95, the remaining by other methods. In fact, the relative efficiency of this institution declined in this period as compared to the earlier period. In a large number of cases, the parties returned to work, unaided by either government machinery or bipartism. These statistics cannot be said to reflect the "proactive role" of the government machinery (ibid). 1L Strikes in Australia and New Zealand, characterized by compulsory arbitration, constitute signaling devices to demonstrate the seriousness of the conflict and influence the course of arbitration (Beggs and Chapman, 1987: 48). In fact, this was the saving grace of compulsory arbitration (see Isaac's comments cited in Ross and Hartman, 1960: 149). 12. It is interesting, even disturbing to note that India was one of the peripheral countries that regularly witnessed general strikes in the 20th century (Kowalewski, 1998: 89). 13. The query that what would happen to the regional distribution if West Bengal's figures are excluded from the All-India figures of workdays lost (raised by Debashish Bhattacherjee) is surely of statistical interest; but the existing picture is adequate to what I seek to establish, that is, concentrated strike incidence. Management

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80 Industrial Conflict and the Institutional Framework 14. It is interesting to note that a few regions in these strike-prone states are strikeprone ones-for example, Coimbatore, Madras, and Madurai were the three dominant strike centres in Tamil Nadu; together, they accounted for around 80 percent of the workers involved in strikes in 1960-69 or in 1984 in Tamil Nadu (Shyam Sundar, 1998). The "minorityness" of strike incidence is very much evident. 15. There are problems in presenting comparable data covering the three decades, the 1960s, 1970s and 1980s due to changes in the coding of industries data. The NIC (1970) coding system was followed for both sometime in the 1970s (1974 for strike data). The Labour Bureau adopted its own system of coding (different from SIC 1958 for strike data. Owing to the difficulties in establishing "correspondence" between the two coding systems and then matching it with the coding of employment data, the analysis is restricted to data using NIC system. 16. The loss due to stoppages are often exaggerated, especially by the media and the government-not surprising because both are prone to sensationalizing issues! Strikes in essential services, all encompassing strikes which do not leave any alternative source of supply, e. g., strikes in industries supplying perishables goods could be said to affect the consumers. In other cases, as Deshpande (1984: 7) observes, "Strikes shift the production over space and time." For example, the long Bombay textile strike benefited other production centres (powerloom sector, mills in other regions). 17. Reddy's (1993) estimate shows that on an average, less than one percent (0.78) of the GDP was forgone due to strikes during 1980-87. The evidence from other countries is not dissimilar: the conclusion of Hameed and Lomas of their exercise to estimate the economic impact of strikes in Canada in 1967 could be taken as representative ofthejudgements:" ... even ifall economic effects ofa strike, both within the industry itself and in related industries, are taken into account, the result would still be extremely small, probably not exceeding 1 percent of the GNP" (quoted in Jackson, 1987: 199). 18. More damaging is the evidence found by Saini (1995) in his study of adjudicated and conciliated disputes that occurred in the industrial units in Faridabad. The intervention system by juridifying, bureaucratizing and professionalizing the processes ultimately rendered the workers helpless; the state, the management and the professionals exercise tremendous control. Such a system aided the legitimation of the structures and processes of power dispensation which were against the interests of the workers-a severe indictment of and a scathing attack on the intervention system (see also Saini, 1994, and Saini, 1991). 19. No system can be wholly bad or good. The adjudication system surely has several achievements on its credit side e.g., establishment ofs.ome semblance of parity between labour and capital, promotion of social justice, creation of worker-oriented jurisprudence and so on (see the volume edited by Saini, 1994; Management

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Pavani, 1985).

REFERENCES Barot, G. S. (1994) "Role of Labour Judiciary: Rationale and Application of the Concept of Quasi-Judicial Functions," in Debi S. Saini (ed.) (1994). Beggs, 1. 1. and B. 1. Chapman (1987) "An Empirical Analysis of Australian Strike Activity," Economic Record, 63. Behrend, H. (1984) Problems of Labour and Inflation. London: Croom Helm. Boxall, P. (1990) "Towards the Wagner Framework: Change in New Zealand Industrial Relations," Journal of Industrial Relations, 32. Crepaz, M. M. L. (1992) "Corporatism in Decline?," Comparative Political Studies,

25. Deshpande, L. K. (1984) "Role of Trade Unions in India," S. D. Punekar~emorial Lecture, Bombay, Tata Institute of Social Sciences (Mimeo). ___ ( 1992) "Institutional Interventions in the Labour Market in Bombay's Manufacturing Sector," in T. S. Papola and G. Rodgers (eds.) Labour Institutions and Economic Development in India. Geneva: IlLS. Evans, E. V. andS. W. Creigh(1977) "Introduction,"inE. V. EvansandS. W. Creigh (eds.) Industrial Conflict in Britain. Fisher, M. (1973) Measurement of Labour Disputes and their Economic Effects. Paris: OECD. Foenander, O. de R. (1957) "The Achievement and Significance of Industrial Regulation in Australia," International Labour Review, 75. Ghose, A. K. (1996) "Current Issues of Labour Policy Reforms in India," Indian Journal of Labour Economics, 39. Ghosh, S. (1988) "Industrial ConflicVin India: Trends and Features," Decision, 15. ILO (1997) World Labour Report: }ndustrial Relations, Democracy and Social Stability: 1997-98. Geneva: ILO. Jackson, M. P. (1987) Strikes-Industrial Conflict in Britain, USA and Australia. Sussex: WheatsheafBook. Johri, C. K. (1992) Industrialism and Employment Systems in India. New Delhi: Oxford University Press. __ ( 1996) "Industrial Relations as Regulated by Law: Suggestions for Change," Indian Journal of Industrial Relations, 31. Kabra, K. N. et al. (1981) "Manday Losses, Wages, Profits and Prices," Mainstream, 19. Kamik, V. B. (1967) Strikes in India. Bombay: Manaktalas. Kathiresan, K. (1987) "Dispute Proneness: A Statistical Analysis," Indian Journal of Industrial Relations, 22. Kelsall, E. P. (1959) "Industrial Conflict in Australia," Economic Record, 35. Management

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82 Industrial Conflict and the Institutional Framework Kennedy, V. D. (1966) Unions, Employers and Government: Essays on Indian Labour Questions. Bombay: Manakta1as. Kerr, C. (1964) Labour and Management in Industrial Society. New York: Anchor Books. Kornhauser, A. et al. (1954) "Problems and Viewpoints," in A. Kornhauser et at. (eds.) Industrial Conflict. New York: McGraw Hill. Kothari, G. M. andA. G. Kothari (1987)A study of Industrial Law. Bombay: N. M Tripathi Pvt. Ltd. Kowalewski, D. (1998) "General Strikes in the Periphery: A Clio metric Analysis, 1909-1985," Indian Journal of Labour Economics, 41. Morris, A.and K. Wilson (1995) "Corporatism and Australian Strike Activity," A ustralian Bulletin of Labour, 21. National Commission of Labour (1969) The Report, Government ofIndia. Padmanabhan, V. K. (1981) "Leftist Politics in Tamil Nadu, "Ph. D. thesis submitted to the University of Mactras. Parekh et at. (1991) Nehru and India's Labour Movement. New Delhi: Oxford and IBH. Pavani, P. (1985) "Indian Supreme Court and Worker-oriented Industrial Jurisprudence," Journal of the Indian Law Institute, 27. Poole, M. (1986) Industrial Relations: Origins and Patterns of National Diversity. Routledge and Kegan Paul. Ram, S. (1980) "A Note on Government's Discretion to Refer Industrial Disputes for Industrial Adjudication," Journal of the Indian Law Institute, 22. Ramaswamy, E. A. (1984) Power and Justice: The State in Industrial Relations. Delhi: Oxford University Press. -(1987) "Labour vs Management: A Free Fight is Fair," Business India, June 14. Ranadive, K. R. (1982) "Accumulation, Employment, Labour Aristocracy," Dr. S. D. Punekar Memorial Lecture, Tata Institute of Social Sciences, Bombay. Rao, B. S. (1985) "Some Methodological Aspects of Strike Statistics," Indian Journal of Industrial Relations, 20. Reddy, Y. R. K. (1993) "International Trends, Differentials and Economic Impact of Strike Activity in the Eighties," Indian Journal of Industrial Relations, 29. Ross, A. M. and P. T. Hartman (1960) Changing Patterns of Industrial Conflict. New York: Wiley. Rudraswamy, V. (1974) "Industrial Unrest in Tamil Nadu in the Sixties-A Study of Strikes and Lock-outs," SITRA Research Report, 19(4). Saini, Debi S. (1991) "Compulsory Adjudication ofIndustrial Disputes: Juridification of Industrial Relations," Indian Journal of Industrial Relations, 27. --( ed.) (1994) Labour Judiciary, Alijudication and IndustrialJustice. New Delhi: Oxford & IBH. --(1995) "Compulsory Adjudication Syndrome in India: Some Implications for Management

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Sundar 83 Workplace Relations," in Debi S. Saini (ed.) Labour Law, Work and Development: Essays in Honour of P. G. Krishnan. New Delhi: Westvill. Sen, S. (1997) Working Class of India: History of Emergence and Movement, 19301990. Calcutta: K. P. Bagchi & Co. Sengupta, Anil K. (1993) Trends in Industrial Gonflict in India, 1961-87. New Delhi:FES. Sherlock, S. (1990) "The National Commission on Labour and Its Quest for Industrial Harmony, 1967-69," in 1. Masselos (ed. ),India: Creating A Modern Nation. New Delhi: Sterling. Sheth, N. R. (1994) "Dynamics ofIndustrial Conflict," in Debi S. Saini (ed.). Smith, C. T. B. et at. (1978) "Strikes in Britain," Department of Employment, Manpower Paper No. 15, HMSO, London. Shyam Sundar, K. R. (1994) "Strike Statistics: Conceptual Issues," The Economic and Political Weekly, January, 29. --(1997) "Internal Emergency and Industrial Relations," Management and Change, 1. , 1998) "Industrial Conflict in Tamil Nadu: 1960-80," Ph. D. Thesis, Mumbai University. --(forthcoming) Strikes and Lockouts in the 20th Century. Walsh, K. (1983) Strikes in Europe and the United States: Measurement and Incidence. London: Frances Printer Publishers. Whittingham, T. G. andB. Towers (1971) "Strikes and the Economy," National West Minister Bank Quarterly, November.

--{

K. R. Shyam Sundar, Ph. D., 1,Vishnu Kunj, 14 Street, Chembur, Mumbai-400 071, is Lecturer in Economics at Guru Nanak College affiliated to Mumbai University. He has published several articles in learned journals including The Economic and Political Weekly. His areas of special interest include labour studies, strikes, and industrial relations.

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84 Industrial Conflict and the Institutional Framework APPENDIX

Table-AI Strikes During 1972-80 Year

NO.ofWS

No. of WI

WS/N

WIIN

18.0 17.9 15.2 9.9 7.2 15.1 15.0 13.9 12.8

135 148 58 37 106 ~ 131 85

(in lakhs) 1972 1973 1974 1975 1976 1977 1978 1979 1980 Note:

3243 3370 2938 1944 1459 3117 3187 3048 2856

17.4 25.5 28.5 11.5 7.4 21.9 19.2 28.7 19.0

WS/N = No. ofWS per one lakh employees. WI/N = No. of WI per one thousand employees.

Table-A2 Percentage Distribution of Strikes by Methods of Termination, 1985-89 and 1991-95 Termination Methods Government Intervention Mutual Settlement Voluntary Resumption Others TOTAL

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1985-89

1991-95'

41.7 23.6 33.5 1.2

32:3 21.7 43.3 2.6

100.0

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Table-A3 Workdays Lost per 1000 Persons Employed (WDLIN) for Selected Countries, 1960-69 WDLIN

Country Italy Ireland Canada United States India Denmark Australia France Finland United Kingdom Japan New Zealand Belgium Norway Netherlands Federal Republic of Germany Sweden Switzerland Note: Source:

1397 1018 1008 977 737 409 403 303 273 268 250 198 160 108 37 22 17 1

Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Industries covered are mining, manufacturing, construction, and transport. Whittingham and Towers (1971: 39).

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86 Industrial Conflict and the Institutional Framework Table-A4 Workdays Lost per 100 Wage and Salary Earners (WDL/N) for Selected Countries, 1972-81 Country Italy Spain Canada India Peru Ireland Australia United Kingdom United States Denmark New Zea}and France Sweden Japan Norway Federal Republic of Germany Netherlands Austria Singapore Korea Switzerland Indonesia

WDLIN 1382 956 880 856 855 706 660 531 382 292 289 187

1 2 3 4 5 6 7 8 9

10 11 12 13 14 15 16 17 18 19 20 21 22

144

96 47 31 22 9 8 4 2 1

Source: Poole (1986)

â&#x20AC;˘ Managemel)l

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Rank

1999)

Sundar Table-AS Workdays Lost per 1000 Employees (WDLIN) in Manufacturing Countries, 1980-87 WDLIN

Country

8624 5407 4959 2334 1519 1352 865 674 670 661 627 484 301 230 203 187 185 88

Peru India Philippines Italy New Zealand Canada Denmark Sweden Australia Finland Ireland United Kingdom Korea United States Norway France Israel Germany Japan Austria Switzerland

3 2

for Selected

Rank

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Source: Reddy (1993: 28).

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88 Industrial Conflict and the Institutional Framework Table-A6 Average Duration (WDLIWI) and Workdays Lost per 100 Union Members (WDLfUM) for Selected Countries, 1991-93

WDLIWI

Countries France India United States Canada Korea Indonesia Norway Belgium Hongkong Sweden United Kingdom Germany Finland Denmark Netherlands Australia Italy Austria

Countries

24.9 22.0 13.4 12.2 10.4 9.9 8.7 7.6 6.3 4.8 2.7 2.4 2.2 1.9 1.6 1.3 0.9 0.8

India Israel Spain Republic of Korea Italy Canada Finland Thailand United States Chile France Australia Pilippines Netherlands Indonesia New Zealand Sweden Denmark United Kingdom Norway Belgium Germany Japan Hongkong Austria

Source: Based on data given in ILO (1997).

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WDIJUM 314 2087 2050 658 401 379 342 329 301 300

264 230 173 169 137 105 91 71 61 57

47 38 12 11 3

A COMPARATIVE STUDY OF PERCEIVED NEEDSATISFACTION DEFICIENCIES OF THE WORKERS OF THE PRIVATE AND PUBLIC SECTORS IN BANGLADESH

M. Ekramul Hoque

The study focuses on the extent of deficiencies existing in individual need-satisfaction of the workers in both the private and public sectors in Bangladesh. The relative importance which the workers attached to the needs was also investigated. Data were provided from a questionnaire. A sample of 200 production workers from private and public sector textile mills were selected randomly using random numbers table. The results showed: (a) private sector workers tended to have significantly less deficiencies in the satisfaction of their desirefor recognition for better work than the workers of public sector; (b) perceived need satisfaction deficienciesfor other factors between the workers of the private and public sectors were not significant; and (c) recognition for better work, job security and sympathetic supervision were the most crucial factors for the motivation of the workers in both the private and public sectors of Bangladesh.

INTRODUCTION istorically speaking, Bangladesh has lagged behind other countries in industrialization. Although some measures were taken during the sixties for industrialization in this part of former Pakistan, substantial progress could not be achieved. After liberation, the Government of Bangladesh has been endeavouring to industrialize. However, it faces manifold major problems, one of which is how to motivate its workforce. Problems of motivation continue to plague our country like other developing countries, despite heavy borrowing of capital and technology from industrially-developed countries. In Bangladesh, different industries are being run under both private and public sectors. The two sectors differ in at least three important aspects: orientation, job security, and pay. The public sector is service-oriented. Private enterprises are essentially motivated by private profit. Besides, employees of the public sector enjoy greater job security but less pay com-

90 A Comparative

Study of Perceived Need-Satisfaction Deficiencies

pared to their counterparts in the private sector. In other words, the two sectors possess different motivational characteristics. So, it is assumed that the perceptions of the workers of the two sectors differ with regard to the need-satisfaction deficiencies for different factors related to their motivation. But this statement needs empirical evidence. To investigate motivation thoroughly, the management should know (i) what aspects of job the workers consider important, and (ii) the extent of need satisfaction deficiencies for different factors related to workers' job. A review of the past studies on motivation revealed that a number of studies conducted in Bangladesh (E, 1989; Begum, 1988; Hossain, 1991; Khaleque and Hossain, 1992; Khan and Yunus, 1977) and elsewhere (Gluskinos and Kestelman, 1971; Jurgensen, 1978; Machungwa and Schmitt, 1983; Rice et al., 1991; Sheridan et al., 1975) have been concerned with what workers want from their jobs. Except for a few studies on the management personnel concerning need-fulfillment deficiencies (Habibullah, 1974; Johnson and Marcrum, 1968; Porter, 1961; 1962; 1963) no work is available on the need-satisfaction deficiencies of workers, particularly in Bangladesh. Lack of substantive data demands a study in this area. A study in this field is expected to be a valuable aid in designing arid revising HR policies and practice in industries to enhance workers' motivation, which is extremely important for performance, worker-management relations, labourturnover and the overall well-being of any industrial organization.

OBJECTIVE The objective of the study was to assess and compare the extent of needsatisfaction deficiencies ofthe workers of the private and public sectors for different factors related to their jobs. An investigation was also made of the relative importance which the workers attached to different factors used in this study.

METHOD Selection of the Sample The sample consisted of a total of 200 production workers selected randomly from two textile mills (l00 from each mill) located at Tongi, near Dhaka city in Bangladesh under the private sector and the public sector. In Management

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selecting the samples a list of the production workers of each mill was prepared with the help of the time offices of each mill. Serial numbers were assigned to the names of the workers in the list of each mill and 200 workers, taking 100 from each mill, were drawn out of this list using random number table. Thus, 200 workers were sampled out from a total number of 974 production workers of these two mills.

Demographic

Age (Years)

Experience (Years)

Range 22-52

Range 1-34

Mean 33.1

Mean 11.83

Questionnaire

Table-1 Variables of the Sample of Workers (N Education (percent) illiterate Primary Secondary Higher Secondary

Total Wage (Rs. per month)

11.5% 51.0% 37.0% 00.5%

= 200)

Workers (married)

Range 1400 3300 Mean 2433.98

Workers (trained)

92%

3.5%

Instrument

The data for the present study were obtained by the administration of a questionnaire. The questionnaire consisted of three parts: part-I contained personal information schedule, part-II contained the need satisfaction deficiency scale and part-III contained the relative importance measurement scale. Need satisfaction deficiency scale contains twelve items related to twelve aspects of the workers' jobs. To assess the deficiencies in need satisfaction of the workers, two questions were asked about each aspect of the job. They first asked how much of the desired aspect of the job was there in the work situation. The second question asked was how much of the desired aspect of the job should have been there. A sample item, as it appeared in the scale was as follows: 1.

JobSecurity

(Max.)

(Min.)

(a) How secure is your job? (b) How secure should it be?

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3 3

4 4

5 5

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92 A Comparative

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For each of the twelve items, the respondents were asked to answer the above two questions by giving a rating ranging from 1 to 5, where "low numbers" represented smaller magnitudes and "high numbers" represented greater magnitudes. Deficiencies in satisfaction of the desired aspects of the job were assessed by subtracting the responses to the question-a from the responses to the question-b of each item. With this method, we see that the larger the difference between responses b and a, the greater the deficIency. The scale was developed partially on the basis of a review of available literature (Porter, 1961; Porter and Lawler, 1968) and partially on the basis of a pilot survey of the opinion of the workers. Experts' opinion was also sought in this regard. Test retest reliability coefficient of the scale was r = 0.75 which was highly significant (p < .001). To measure the relative importance of job facets, 13 items were selected from related literature (Hossain, 1991; Nadler and Lawler, 1977: 36-38). The respondents could indicate the importance of job factors to their motivation on a 5-point scale ranging from "not at all important" (1) to "extremely important" (5). Test retest reliability coefficient of the scale was r = 0.70 which was highly significant (p < .001). Procedure Data for the present study were collected from the sample of workers on a person to person interview basis. All the respondents were contacted in the factory during working hours and the purpose of the study was explained to them. Every effort was made to build proper rapport with them. They were told that the study was an academic exercise and had nothing to do with their company management or any other external agency. They were taken into confidence and were convinced that their response would be kept secret. The sittings were arranged in suitable rooms provided by the authority of the mill. Because of the illiteracy or poor literacy of the workers, who could hardly read or write, the questionnaire was treated as an interview schedule. Items of the scales were elaborately explained to them in their vernacular. In case any respondent felt difficulty in understanding a particular item or point, it was clarified by the researcher at the time of the personal interview.

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RESULTS

AND DISCUSSION

It appears from the findings (Table-2) that the largest deficiency in need satisfaction of the subjects was in the area of recognition of better work. The areas of job security and sympathetic supervision produced the next largest deficiencies in need-satisfaction. However, smaller deficiencies in need-satisfaction appeared in the areas oflearning new things, co-workers' friendship and freedom of work. Table-2 Mean Deficiencies in Satisfaction of Needs for Different Aspects of Job of the Workers ofthe Private and Public Sectors Taken Together (N = 200) Job Factors

Mean Deficiencies Scores

Recognition for Better Work Job Security Sympathetic Supervision Chances for Promotion Opportunity for Development of Skills and Abilities Knowledge of Results Open Communication Chances for Doing Worthwhile Work Opportunity for Participation in Decision-making Chances for Learning New Things Co-workers' Friendship Freedom of Work

2.65 2.45 2.37 2.34 2.33 1.79 1.77 1.55 1.44 1.28 1.24 1.12

In Table-3, need-satisfaction deficiencies of the workers in the private sector were compared with those of the workers in the public sector for each of the 12 items (i.e., job security, recognition for better work, sympathetic supervision, open communication, chances for promotion, co-workers' friendship, knowledge of results, opportunity for development of skills and abilities, opportunity for participation in decision-making, chances for learning new things, freedom of work and chances for doing worthwhile work) related to workers' job. It appears from the results of Table-3 that the largest deficiency in need-satisfaction of the workers of the public sector was in the area of recognition for better work. The areas of sympathetic supervision and job security produced the next largest deficiencies in need satisfaction. The areas oflearning new things, co-workers' friendship and Management

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94 A Comparative Study of Perceived Need-Satisfaction Deficiencies

freedom of work produced smaller deficiencies in need-satisfaction of the workers of both the sectors. Table-3 Difference Between the Mean Scores of Deficiencies in Satisfaction of Needs for Different Job Factors of the Workers ofthe Private and Public Sectors Job Factors

Job Security Recognition for Better Work Sympathetic Supervision Chances for Promotion Opportunity for Development of Skills and Abilities Open communication }(nowledgeofResulu Opportunity for Participation in Decision-making Chances for Doing Worthwhile Work Chances for Learning New Things Co-workers' Friendship Freedom of Work Note: NS

Private Sector Public Sector SD SD Mean Mean Scores Scores

t-ratio

2.55 2.44 2.36 2.35

117 1.16 1.03 0.70

2.35 2.85 2.38 2.33

1.18 1.09 1.05 0.77

1.15 -2.58 -0.14 0.19

2.32 1.86 1.71

0.71 1.08 0.87

2.33 1.67 1.87

0.68 .90 0.90

-0.10 1.35 -1.28

NS NS NS

1.49

0.63

1.39

0.78

1.00

1.45 115

0.82 0.78

1.65 1.30

0.76 0.94

-1.79 -0.41

NS NS

113 1.01

0.80 0.81

1.25 112

1.04 0.87

-0.15 -1.76

NS NS

<.01 NS NS

= Not Significant

The results in Table-3 further show that the mean values of deficiencies in satisfaction of need for four factors (i.e., job security, promotion, open communication, participation in decision-making) of the workers in the private sector are greater than those of the workers in the public sector. On the other hand, the mean values of deficiencies in satisfaction of needs for eight factors (i.e., recognition for better work, learning new things, co-workers' friendship and freedom of work, etc.) of the workers in the public sector are greater than those of the workers in the private sector. However, the differences between the mean values of the deficiencies in satisfaction of need for different factors of the workers of the private and public sectors Management" & Change, Volume 3. Number

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were not found significant except for the factor of recognition for better work. Workers of the private sector were found to have significantly less deficiency in the satisfaction of their desire for recognition for better work than the workers of the public sector. The results support the findings of the studies by Akhilesh and Pandey (1986), Hossain (1995), Rahman (1992) and Solomon (1986) indicating that better recognition was enjoyed by the private sector employees than the public sector employees. Table4 Mean Ranks and Rank Orders ofthe Workers' Ratings of Different Job Factors in Terms oftheir Relative Importance to their Motivation (N = 200) Job Factors Wages Job Security\' Recognition for Better work Sympathetic Supervision Open Communication Chances for Promotion Co-workers' Friendship Knowledge of Results Opportunity for Development of Skills and Abilities Opportunity for Participation in Decision-making Chances for Learning New Things Freedom of Work Chances for Doing Worthwhile Work

Mean Ranks

Rank Orders

4.74 4.66 4.58 4.31 4.15 4.13 4.06 4.04

1 2 3 4 5 6 7 8

3.92

3.40 3.23 3.18

10 11 12

3.14

The results (Table-4) of the ratings of relative importance of specific aspects of job to the motivation of the workers of the private and public sectors taken together, show that the workers perceived wages as the most important factor for their motivation to work and next in order of importance were job security, recognition for better work, sympathetic supervision, open communication, chances for promotion, co-workers' friendship, knowledge of results, opportunity for development of skills and abilities, opportunity for participation in decision-making, chances for learning new things and freedom of work. Chances for doing worthwhile work was rated by the Management

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subjects as the least important factor for their motivation to work. Table-5 Mean Ranks and Rank Orders ofthe Ratings of Different Job Factors in Terms of Their Relative Importance to Motivation as Perceived by the Workers of Private and Public Sectors Private Sector Mean Rank Ranks Orders

Job Factors

Job Security Wages Recognition for Better Work Sympathetic Supervision Open Communication Chances for Promotion Co-workers' Friendship Knowledge of Results Opportunity for Development of Skills and Abilities Opportunity for Participation in Decision-making Chances for Learning New Things Chances for Doing Worthwhile Work Freedom of Work

Public Sector Mean Rank Ranks Orders

4.82 4.66 4.54 4.31 4.19 4.15 3.99 3.97

1 2 3 4 5 6 7 8

4.50 4.81 4.61 4.31 4.10 4.11 4.12 4.11

3 1 2 4 8 6.5 5 6.5

3.75

4.09

3.39

3.40

3.23

3.18 3.00

3.10 3.36

The results in Table-5 reveal that job security was rated by the workers of the private sector as the most important factor and freedom of work as the least important factor for their motivation. The other items were assigned ranks in between those of the two factors. On the other hand, workers of the public sector considered wages as the most important factor and worthwhile work as the least important factor for their motivation. The other items were given ranks in between the two factors. The results (Table-6) indicate that there is significant positive rank order correlation (0.92) between the ratings of the workers of the private and public sectors regarding the relative importance of different factors to their motivation. Management

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Table-6 Spearman's Rank Order Correlation Coefficient of the Ratings of Relative Importance of Job Factors by the Workers ofthe Private and Public Sectors Number of Respondents

rho:

Level of Significance

Private Sector (N = 100) p < .001

0.92

Public Sector (N

100)

To assess the impact of need-satisfaction deficiencies, not only the size or amount of the deficiency must be taken into account, but also the importance of the particular need area to the individual involved (Porter, 1961). Combining the results for deficiency with those for importance presents a picture which is summarized in Table-7 (the terms used in the body of Table7 represent the approximate relative degree of deficiency and importance for different factors related to the workers' jobs). Table-7 Summary of Relative Need-Satisfaction Deficiencies and Need Importance ofthe Workers of the Private and Public Sectors Taken Together (N = 200). Job Factors Recognition for Better Work Job Security Sympathetic Supervision Chances for Promotion Opportunity for Development of Skills and Abilities Knowledge of Results Open Communication Opportunity for Participation in Decision-making Chances for Doing Worthwhile Work Chances for Learning New Things Co-workers' Friendship Freedom of Work

Relative Deficiency

Relative Importance

Large Large Large Moderate

Moderate Moderate Moderate

Moderate

Moderate Small Small Small

Small Small Moderate Small

Table-7 shows that the most crucial of the factors related to workers' Management

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jobs for their motivation are the factors of recognition for better work, sympathetic supervision and job security because the workers considered them to be of prime importance and because these were the areas where there were the greatest deficiencies in need-satisfaction. Moderate crucial factors were chances for promotion, opportunity for development of skills and abilities, knowledge of results, open communication, opportunity for participation in decision-making, co-workers' friendship and chances for doing worthwhile work. The least crucial factors were chances for learning new things and freedom of work because the workers considered these two factors of little importance. These were the areas where there .s very little deficiency in need-satisfaction. This means that the higher order needs are the least crucial factors for the motivation of the workers. Perceived need-satisfaction deficiency with respect to the pay of the workers was not assessed, because the perception of need-satisfaction deficiencies of pay seemed to overlap with the need-satisfaction deficiencies of other needs. The amount of pay one receives in one's work would seem to satisfy physiological, security and esteem needs. The sample of workers regarded pay as the most important factor for their motivation (Table-4). Thus, pay seems to be a crucial factor for the workers' motivation. CONCLUSION In summary, (a) workers of the private sector were found to have significantly less deficiencies in satisfaction of their desire for "recognition for better work" than the workers of the public sector; (b) perceived needsatisfaction deficiencies for other factors between the workers of the private and public sectors were not found significant, (c) recognition for better work, job security and sympathetic supervision were found to be the most crucial factors for the motivation of the workers in both the private and public sector. In an effort to enhance motivation ofthe workers, the management should: (i) examine the policies toward recognition for better performance as a means of increasing motivation of the workers. Recognition for good work leads to high motivation among the workers and makes them more committed to their work; (ii) create a feeling among the workers that they will not lose their jobs because of no fault on their parts and will be able to remain in their jobs Management

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as long as they like. Workers lack motivation if their jobs are temporary in nature or depend upon the whims of the management. When workers feel uncertainty and fear of losing jobs they get disheartened and lose encouragement and inspiration in their works; (iii) develop within the supervisors, the approach of concern for people, that is, supervisors will hear workers' grievances sympathetically and will treat them in a supportive manner. The workers should be recognized as resourceful human beings with emotions and sentiments rather than treating them as economic entities. Ifthis approach renders more production without any increase in cost to the enterprise, there is every reason for the management to take the advantage. Although adequate precautionary measures have been taken in selecting samples and collecting data for the present study yet the study suffers from some limitations such as the sample was Tongi-based and was selected from the production workers only. It would have been better ifboth production and non-production workers could have been included in the study and the sample could have been taken from different parts of the country. In spite of the limitations, the findings of the present study may be a useful guide for the management in enhancing the workers' motivation, which is extremely important for performance, labour-management relations and the overall well-being of any organization.

REFERENCES Akhilesh, K. B. and S. Pandey (1986) "A Comparative Study of Organizational Climate in Two Banks," Indian Journal of Industrial Relations, 21. Ali, M. O. (1989) "Employee Motivation in Bangladesh with Special Reference to Nationalized Industrial Units Located in Rajshahi and Khulna Zones," in M. Ahmad and G. Mclean (eels.) Bangladesh Business Research Reports, I. Dhaka: University Grants Commission of Bangladesh, 88-93. Begum, 1. A. (1988) "Job Satisfaction ofIndustrial Workers: A Study in Rajshahi Jute Mills (in Bengali)," Management Development, 17( 1). Gluskinos, U. M. and B. 1. Kestelman (1971) "Management and Labour Leaders' Perception of Worker Needs as Compared with Self-reported Needs," Personnel Psychology, 24. Habibullah, M. (1974) Movtivation Mix. Dhaka: Bureau of Economic Research, University of Dhaka. Hossain, M. M. (1991) "Industrial Employees' Attitudes Towards Various IncenManagement

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Study of Perceived N~ed-Satisfaction Deficiencies

tives Related to Motivation: A Case Study in Bangladesh Private Sector," Management Development, 20 (3&4). Hossain, M. M. (1995) Job Satisfaction of Commercial Bank Employees in Bangladesh, Unpublished Doctoral Dissertation, University of Dhaka, Dhaka. P. V. and R. H. Marcrum (1968) "Perceived Deficiencies in Individual Need Fulfillment of Career Army Officers," Journal of Applied Psychology, 52. Jurgensen, C. E. (1978) "Job Preferences (What makes ajob good orbad?)," Journal of Applied Psychology, 63. Khaleque, A. and M. M. Hossain (1992) "Perceived Importance of Different Factors Related to Motivation," Pakistan Journal of Psychological Research, 7 (1&2).E Khan, A. A. and M. Yunus (1977) "Workers' Motivation: A Case Study of Manufacturing Concerns in Chittagong," Chittagong University Studies, Part 1 (1). Machungwa, P. W. and N. Schmitt (1983) "Work Motivation in a Developing Country," Journal of Applied Psychology, 68. Nadler, D. A. andE. E. Lawler III (1977) "Motivation: A Diagnostic Approach," inJ. R. Hackman, E. E. Lawler III, and L. W. Porter (eds.) Perspective on Behavior in Organizations. New York: McGraw-Hill Book Company. Porter, L. W. (1961) "A Study of Perceived Need Satisfactions in Bottom and Middle Management Jobs," Journal of Applied Psychology, 45. __ (1962) "Job Attitudes in Management: Perceived Deficiencies in Need Fulfillment as a Function of Job level," Journal of Applied Psychology, 46. __ ( 1963) "Job Attitudes in Management: Perceived Deficiencies in Need Fulfillment as a Function of Line versus Staff Type of Job," Journal of Applied Psychology, 47. Porter, L. W. and E. E. Lawler III (1968) Managerial Attitudes and Performance. Homewood: Irwin. Rahman, A. (1992) "Job Anxiety, Job Satisfaction and Organizational Climate as Perceived by the Public and the Private Sector Bank Employees," The Dhaka University Studies, Part-E, 7, 1. Rice, R. W., D. A. Gentile and D. B. McFarlin (1991) "Facet Importance and Job Satisfaction," Journal of Applied Psychology, 76. Sheridan, J. E., J. W. Slocum Jr., and B. Min (1975) "Motivational Determinants of Job Performance," Journal of Applied Psychology, 60. Solomon, E. E. (1986) "Private and Public Sector Managers: An Empirical Investigation of Job Characteristics and Organizational Climate," Journal of Applied Psychology, 71. M. Ekramul Hoque, Ph. D., is Associate Professor, Department of Management, Faculty of Business Administration, Islamic University, Kushtia-7003, Bangladesh. Prior to that he was Assistant Director of Bangladesh Rural Electrification Board. His areas of interest include organizational behaviour, human resource management and industrial relations. He has to his credit several research articles (related Management

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to employee motivation and industrial relations) published in reputed journals at home and abroad such as Indian Journal of Industrial Relations, Pakistan Journal of Psychological Research, Journal of Business Administration (DU), Management Development, and Islamic University Studies. Besides teaching and research, he conducts training courses on research methodology in management and business, and training methodology and entrepreneurship development.

Management

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AN EMPIRICAL COMPARISON OF THE PREDiCTIVE V ALIDITY OF THE SELF-EXPLICATED, HUBER-HYBRID AND TRADITIONAL CONJOINT MODELS IN INDIA

Sita Mishra To assess the relative relevance of varied buying preference measurement models in developing countries like India, an attempt has been made to compare their predictive validity. The results, despite methodological limitations, revealed a superiority of the traditional conjoint model over the Huber-hybrid and self explicated models in predicting buying preferences. As the models differed in their overall ranking of attributes, the study raised a serious question concerning consumer research which relies on a single measure for inferring attribute importance.

INTRODUCTION he measurement and modelling of consumer preferences have been subjects of utmost interest and concern to marketing-researchers. The modelling of consumer preferences among multi-attribute alternatives has received considerable attention in literature in the past two decades. The modelling process generally involves the estimation ofthe structure of consumer preferences (e.g., part-worths and attribute importance weights) and the specification of representational models which best reflect their evaluations of multi-attribute alternatives (Green and Srinivasan, 1978; Green and Wind, 1973). In spite of its usefulness, consumer preference research has not gained due acceptance in developing countries. Indeed, if properly used, marketing research directed at measuring consumer preferences can playa vital role in these countries (Malhotra, 1988). Therefore, it would be plausible to assess the relative relevance of varied consumer preference models used in the developed world for application in the developing countries. An examination of available literature indicates that the modelling of consumer preferences has followed three main approaches: compositional

The author wishes to express her gratitutde to Professor William L. Moore, Department of Marketing, David Eccles School of Business, the University of Utah, USA, for his professional support in the analysis of data and interpretation of the findings of this study. Management & Change, Volume 3, Number I (January-June 1999) it' 1999 Institute for Integrated Learning in Management. All Rights Reserved.

104 An Empirical Comparison of the Predictive Validity (Lutz and Bettman, 1977: 137-49; Wilkie and Pessemier , 1973) , decompositiona1 (Green and Srinivasan, 1978; Green and Wind, 1973) and two versions ofhybrid. One version of the hybrid approach is the category of utility models examined by Huber and his colleagues (Hoepfl and Huber, 1970: 408-16; Huber, 1974: 1393-1402; Huber, Deneshgar and Ford, 1971; Huber, Sahney, and Ford, 1969), while another version is the hybrid conjoint class of models proposed by Green and his colleagues (Goldberg, 1980; Green, Carroll, and Goldberg, 1981; Green and Goldberg, 1981; Green, Goldberg, and Montemayor, 1981; Green, Goldberg and Wiley, 1981). Although the available literature abounds with predictive validity studies, particularly of different types of traditional conjoint models, relatively few reports have compared the predictive performance of models spanning all the three modelling approaches. Several of these have focused on the predictive validity of the self-explicated versus the traditional conjoint models (Green, Carmone and Wind, 1972; Heeler, Okechuku and Reid, 1979; Leigh, Mackay and Summers, 1984; Neslin, 1981; Wiley, MacLachlan and Moinpour, 1977). Others have examined the predictive validity of the selfexplicated versus the Huber-hybrid models (Hoepfl and Huber, 1970; Huber, Daneshgar and Ford, 1971; Huber, Sahney and Ford, 1969). Only few authors have examined the predictive validity of the three different types of models with respect to each other (Akaah and Korgaonkar, 1983; Cattin, Hermet and Pioche, 1982; Green, Goldberg and Montemayor, 1981; Green, Goldberg and Wiley, 1981). As the above review of the available literature indicates, the predictive validity of the three approaches has been examined only in developed countries. Therefore, it is relevant to undertake a study to assess the predictive validity10f the models, which spans the three modelling approaches, in a developing country like India. However, the hybrid-conjoint model could not be incorporated for evaluation because oflack of complexity in the problem of the present study. Specifically, an attempt was made to compare the predictive validity of the self-explicated, the Huber-hybrid and the traditional conjoint models. These models were further compared on the basis of the equivalence of their estimated relative attribute importance weights. To accomplish the above purpose, the following questions were posed: (i) Do different models have varying extents of effectiveness in predicting buying preferences? (ii) Do different buying preference models yield divergent relative attribute importance weights? Management

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Correspondmg to each of the above questions, the follQwwg null-hypotheses were formulated: (i) Different models do not have varying extents of effectiveness in predicting buying preferences (HaJ (ii) Different buying preference models, do not yield divergent relative attribute importance weights (Haz) METHOD To test the above hypotheses, a random sample of n=72 women was selected using multi-stage sampling procedure from the household unit populatIon (N ~ 19,269) ofKurukshetra, a north Indian ltity. Sa/war kameez (an Indian dress) was selected as the product of interest because of its obvious relevance to the female population in northern India. Five attributes were selected for inclusion in the study on the basis of their perceived importance as evaluated by a convenience sample ofn = 30 fashion designers. On the basis of pretests, each of the five attributes was further conceptualized at four levels. Table-l shows the attributes and their levels used in the study. Keeping in view, the data requirements for the preference models compared, an attempt was made to use the full-profile method in synthesizing sa/war kameez profiles for the study. A subset of 16 profiles was selected using the orthogonal array experimental design [OAI6 (45)] (Logothetis and Wynn, 1989), for respondent evaluations. However, this design did not permit the estimation of interaction effects. The data for the study were collected with the aid of a questionnaire consisting of three parts. In the first part, respondents were shown five sets of attribute levels (i.e., the four levels of each of the five attributes of Table1 composed a set). For each set, the respondents were shown an II-point scale and asked to rate the attribute levels in terms of their desirability. After rating all five sets of attribute levels, they were asked to rate the relative importance of the five attributes on a constant sum allocation of 100 points so as to reflect the overall importances of the attributes to them. Finally, they were shown the 16 profile descriptions and asked to evaluate each profile on a II-point scale. The questionnaire was also accompanied by colour photographs of sa/war kameezes from fashion magazines to operationalize different attributes and their levels.

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I I

Table-l Attributes of Salwar Kameez used in the Study

I I

Style

Fabric

FOlmal

2. 3. 4.

Semi-formal Casual Traditional

1. 2. 3. 4,

Cotton Terrycot Silk Synthlltic

Colour Pattern

1. 2. 3. 4.

Multi-colour Dark contrast matching Light contrast matching Combination of dark and light

Design

1. 2. 3. 4.

Embroidered Printed Built-in-weaving Tie and dye

Price

Rs. 250 and below

Rs.251-Rs. 500

3. 4.

Rs.501-Rs. 750 Rs. 751 and above

I I I I II

I I

DATA ANALYSIS

Before describing the functional forms of the different types of models examined, it would be useful to list some preliminary notations as follows:

(a) The h1h (h = 1, H) stimulus profile (e.g., product description) is represented by the vector

X(h)

, X(h)

...............â&#x20AC;˘.

X(h)

I I

X(h)

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Where X(:)j denotes level k (k = 1, ki) of attribute i (i = 1, I) used in profile h. (b) ,..t.\h~ = Self-explicated desirability rating for attribute level k (k = 1, 2, 3, 4) of attribute i (1,2, ... ,5) which corresponds to profile h. (c) W. = Self-explicated importance weight for attribute i (i = 1, 2, ... , 5) (d) Vh = Respondent's overall evaluation ofprofileh(h= 1,2, ... ,16) I

Self-explicated

Model

This model (Green, Goldberg, and Montemayor, 1981) can be represented as:

5 ~=

w. 1

u(h) ik

i=]

Where ~ is the total computed utility for profile h (h = 1,2, ... , 16). Traditional Conjoint (main-effects-only)

Model

The Conjointmain-effects-only model (Akaah and Korgaonkar, 1983) can be given by the equation: 5 4 Vh V' X(h) k

= I

i=]

k=]

Where Vikis the part-worth associated with level k (k = 1, 2, 3, 4) of attribute i (i = 1,2, ... , 5); x~kisa zero-one dummy variable representing level k of attribute i which corresponds to alternative hand denotes least square approximation. As Vh'Sare known, the ordinary least square (OLS) procedure is used to solve Vik'S.To determine the relative importance of the attributes, Vik'S are transformed by the following equation (Jain et al., 1979):

W = [max (v.k)- min (v.k)] for each i I

Additive Huber-Hybrid

Model

This model (Akaah and Korgaonkar, 1983) can be represented as:

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108 An Empirical Comparison of the Predictive Validity

Vh= a +

bi uj(:J

i=]

Where a is an intercept term, bi is a coefficient which reflects the relative contribution of attribute i to Vh' all other terms are as defined earlier. Because Vh's are known, the intercept term a and bi's are estimated by multiple regression analysis. The bi's are corresponding to Wi (importance weight of attribute i). Multiplicative

Huber-Hybrid

Model

This model (Akaah and Korgaonkar, 1983) can be formulated as: Vh

5 IT i

a u~h~bi

Where bi (corresponding to W) is an exponent which reflects the relative contribution of attribute i to Vh' the other terms are as defined before .. To solve the above equation, natural logarithm of both sides is taken so that the above equation becomes: log V h

log a + b. log U(h) ik I

As Vh'S are known, a and b;'s are estimated via multiple regression analysis. Addilog Huber-Hybrid

Model

The equation for this model (Akaah and Korgaonkar, 1983) can be represented as follows: 5

Vh = a +

bilog ui~J

i=]

where all terms are as defined before. Because Vh'S known, a and bi's are solved by multiple regression analysis. , Management

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The above models were fitted to the data at the individual consumer level. RESULTS As dictated by the statement of the problem, the results of this study can be described in two parts (i.e., corresponding to the two hypotheses) as follows: Predictive

Validity

This section assessed the predictive effectiveness of each model by comparing mean product moment correlations. The product moment correlation was computed independently for each respondent and preference model between the observed and predicted evaluations for the 16 profiles; then, their mean was computed for each preference model across the 72 respondents. The F-ratio was obtained by calculating the analysis of variance . (one-way) for comparing the means of these coefficients of correlation to test the first null hypothesis (HaJ The test rejected the null hypothesis at the 0.01 level. It means that the five models possessed significantly different extents of effectiveness in predicting buying preferences. Table-2 shows mean product moment correlations between observed and predicted evaluations. As shown in Table-2, the means in their decreasing order were found to be: 0.998,0.785,0.777,0.771 and 0.518 for the traditional conjoint, additive, addilog, multiplicative and self-explicated models, respectively. Thus, the traditional conjoint model was the most effective one while the self-explicated model was the least effective in predicting preferences. The three Huber-hybrid models yielded comparable results. Table-2 Mean Product Moment Correlations Between Obsen'ed and Predicted Evaluations Preference Model Traditional Conjoint (main-effects only) Additive Huber-hybrid Addilog Huber-hybrid Multiplicative Huber-hybrid Self-explicated Management

Mean Product Moment Correlation 0.998 0.785 0.777 0.771 0.518

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110 An Empirical Comparison ofthe Predictive Validity

Equivalence of Attribute Weights The equivalence of the relative attribute importance weights was assessed by Wi'S and/or bi's for each of the five models. The F-ratios were obtained by calculating analysis of variance (one-way) for comparing mean of each model for each attribute to test the second null hypothesis (Ha2). The test rejected the hypothesis at 0.01 level, thus suggesting that the five preference models yielded different relative attribute importance weights for each of the five models was computed and rank ordered (shown in Table-3). Table-3 Ranks of Attribute Importance Across Preference Models Attribute Selfexplicated

1. Style Fabric Colour pattern Design Price

2. 3. 4. 5.

5 2 1 3 4

Preference Models* Addilog Traditional Additive MultiplicConjoint Huberative lHuber- Huberhybrid (main-effects) hybrid hybrid 4 3 1

4 2 1

4 1 3

4 2 1

5 2

3 \ "-

Note: * A lower rank value reflects greater relative importance of the attribute.

An examination of Table-3 indicates that the Huber-hybrid models yielded identical ranks for three attributes but differed with respect to the remaining two. The traditional conjoint and Huber-hybrid models yielded identical ranks for two attributes but varied in the context of the remaining three. The self-explicated model differed most in comparison with the other four preference models. To support it further, the Spearman rank order coefficients of correlation between each pair of models were computed independently for each respondent and the resulting coefficients were then averaged across the 72 respondents. Table-4 presents mean rank order coefficients of correlation for each pair of models. As can be observed from Table-4, comparisons involving the Huber-hybrid models were significant at the 0.05 level. This indicates that the Huber-hybrid models yielded identical ranks. Management

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Table-4 Mean Rank Correlation Coefficients on Comparability of Attribute Importance Weights Preference Models

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Mean Rank Correlation Coefficient

Conjoint (main-effects) vs. Self-explicated Conjoint (main-effects) vs. Additive Conjoint (main-effects) vs. Multiplicative Conjoint (main-effects) vs. Addilog Additive vs. Multiplicative Additive vs. Addilog Additive vs. Self-explicated Multiplicative vs. Addilog Multiplicative vs. Self-explicated Addilog vs. Self-explicated

.105 .577 .456 .451 .879 .895 .228 .882 .219 .170

* * *

Note: "'Significantat the 0.05 level.

CONCLUSIONS The study was designed to examine the following simultaneously at the individual consumer level: (a) the predictive validity of different types of models, and (b) the equivalence of their estimated relative attribute importance weights. The conclusions from this empirical study are: 1. The five models reveal significantly differing extents of effectivenss in predicting buying preferences. The traditional conjoint model appears to be the most effective model, while the self-explicated model the least effective. The three Huber-hybrid models reveal almost equal extents of effectiveness. 2. Different models yield significantly divergent relative attribute importance weights. The self-explicated model differ most in comparison with the other four preference models. The findings of this study concerning the predictive validity of various models, with some exceptions, compare favourably with those of other researchers (Akaah and Korgaonkar, 1983; Huber, Daneshgar and Ford, 1971). Thus, it provides additional cross-cultural evidence for the better predictive power of the traditional conjoint model. In the present study, however, only Management

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112 An Empirical Comparison of the Predictive Validity internal validity (goodness-of-fit) ofthe model was considered, which forms one of its limitations. It is hoped that cross-validation (internal as well as external) will receive attention in future. As the predictive effectiveness of the Huber-hybrid and the self-explicated models was not very high, serious consideration of these models for practical applications in developing countries like India must await further empirical testing. The need for such testing is especially pronounced due to the fact that the results are based on a single sample, a single product and a single data collection procedure. The findings concerning relative importance weights yielded by different models indicate that the five models tend to differ in their overall ranking of attributes. However, some level of agreement was found among different models for the attribute which was perceived as the least important (except by the self-explicated model). This result raises a serious question concerning consumer research which relies on a single measure for inferring attribute importance. As each of the models evaluated in this study has a substantial theoretical base as well as is widely used in applied research, it is a truism that conclusions made about attribute importance weights may be quite different depending upon the model used to assess them.

NOTES 1.

In the present study "goodness-of-fit" (i.e., the correlation between the values predicted by the model and actual data from which the model's parameters were estimated) has been used as a measure of predictive validity.

REFERENCES Akaah, I. and P. K. Korgaonkar (1983) "An Empirical Comparison of the Predictive Validity of Self-Explicated, Huber-Hybrid, Traditional Conjoint, and Hybrid Conjoint Models," Journal of Marketing Research, 20. Cattin, P., G. Herrnet and A. Pioche (1982) "Alternative Hybrid Models for Conjoint Analysis: Some Empirical Results," in Analytical Approaches to Product and Market Planning: The Second Conference, Cambridge, M. A. : Marketing Science Institute. Goldberg, S. M. (1980) An Empirical Comparison of Hybrid and Non-Hybrid Utility Estimation Models, Working paper, The Wharton School, University of Pennsylvania. Green, P. E., F. 1. Carrnone and Y. Wind (1972) "Subjective Evaluation Models and Management

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Conjoint Measurement," Behavioral Science, 17. Green, P. E., J. D. Carroll and S. M. Goldberg (1981) "A General Approach to Product Design Optimization Via Conjoint Analysis," Journal of Marketing, 45. Green, P. E. and S. M. Goldberg (1981) A Nonmetric Version of the Hybrid Conjoint Analysis Mode. Paper presented at the Third ORSA/TIMS Market Measurement Conference, New York University, March. Green, P. E. and S. M. Goldberg and M. Montemayor (1981) "A Hybrid Utility Estimation Model for Conjoint Analysis," Journal of Marketing, 45. Green, P. E., S. M. Goldberg andJ. B. Wiley (1981) "A Cross-Validation of Hybrid Conjoint Models," Working paper, The Wharton School, University ofPennsylvania. Green, P. E. and S. Srinivasan (1978) "Conjoint Analysis in Consumer Research: Issues and Outlook," Journal of Consumer Research,S. Green, P. E. and Y. Wind (1973) Multiattribute Decisions in Marketing: A Measurement Approach. Hinsdale, Illinois: The Dryden Press. Heeler, R. M., G. Okechuku and S. Reid (1979) "Attribute Importance: Contrasting Measurements," Journal of Marketing Research. Vol. 16, February, pp. 60-3. Hoepfl, R. T. and P. Huber (1970) "A Study of Self-Explicated Models," Behavioral Science, 15. Huber, G. P. (1974) "Multiattribute Utility Models: A Review ofField and Field-like Studies," Management Science, 20. Huber, G. P., R. Daneshgar andD. L. Ford (1971) "An Empirical Comparison of Five Utility Models for Predicting Job Preferences," Organizational Behaviour and Humar Peiformance, 6. Huber, G. P., V. Sahney and D. L. Ford (1969) "A Study of Subjective Evaluation Models," Behavioral Science, 14. Jain, A. K., F. Acito, N. K. Malhotra and V. Mahajan (1979) "A Comparison of the Internal Validity of Alternative Parameter Estimation Methods in Decompositional Multiattribute Preference Models," Journal of Marketing Research. 16. Leigh, T. W., D. B. Mackay and J. O. Summers (1984) "Reliability and Validity of Conjoint Analysis and Self-Explicated Weights: A Comparison," Journal ofMarketing Research, 21. Logothetis; N. and H. P. Wynn (1989) Quality Through Design Experimental Design, Off-Line Quality Control, and Taguchi 's Contributions. Oxford Science Publications, Oxford: Clarendon Press. Lutz, R. J. and J. R. Bettrnan (1977) "Multiattribute Models in Marketing: A Bicentennial Review," in A. G. Woodside, J. N. Sheth and P. D. Bennett (eds.), Foundations of Consumer and Industrial Buying Behavior. New York: North Holland. Malhotra, N. K. (1988) "A Methodology for Measuring Consumer Preference in Developing Countries," International Marketing Review, 5(3). Neslin, S. A. (1981) "Linking Product Features to Perceptions: Self-Stated Versus Management

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114 An Empirical Comparison of the Predictive Validity Statistically Revealed Importance Weights," Journal of Marketing Research,

18. Wiley, J. B., D. L. MacLachlan and R. Moinpour (1977) "Comparison of Stated and Inferred Parameter Values in Additive Models: An Illustration of a Paradigm, in W. D. Perreault, Jr. (ed.) Advances in Consumer Research, 4 Association for Consumer Research. Wilkie, W. L. and E. A. Pessemier (1973) "Issues in Marketing's Use of Multiattribute Models," Journal of Marketing Research, 10.

Sita Mishra is Marketing Officer at Malvika Steel Ltd., Usha Puram, UPSIDC Industrial Estate, Jagdishpur-227 817 (UP). Prior to that she qualified UOC test for Junior Research Fellowship (Management) and joined as a research scholar at the Institute of Management Studies, Kurukshetra University, Kurukshetra. Her areas of interest include consumer behaviour, total quality management. She has authored several articles on buying preference, negotiation skills, creative orientation and theoretical assumptions.

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COMMUNICATIONS ASSESSING ORGANIZATIONAL CULTURE AS AN ANTECEDENT OF ORGANIZATIONAL CITIZENSHIP BEHAVIOUR

D. P. Kar

H. R. Tewari

It has been observed that there exist some aspects of job peljormance that go beyond theformal job description orjob specification. Still, this performance has significant contributions to the overall organizational effectiveness. Researchers term this extra-role behaviour as organizational citizenship behaviour (OCB). This behaviour is argued to be discretionary and is beyond the purview of organizational action or sanction. During the last decade, attempts were made to formulate a sound, theoretical as well as empirical framework of this construct and to find clear causal relationships with possible antecedents as well. The present study is an attempt to assess organizational culture (OC) as an antecedent ofOCB. The authors also explain the impact ofOC on individual dimensions ofOCB.

INTRODUCTION

ob satisfaction and job performance are two important concepts in the area of organizational effectiveness. The varied and wide availability of research material pertaining to these two concepts is not free from controversy. While some researchers (Petty et aI., 1984) hold the opinion that overall organizational effectiveness can be enhanced by promotingjob satisfaction which, in tum, will increase job performance, other researchers (Iaffaldano and Muchinsky, 1985) argue that, though it seems to be a logical and rational conclusion that job satisfaction and job performance are correlated, empirical evidence does not support this view. This tempted researchers to explore the other mediating factors which lie between these two concepts. As a partial explanation to identify the mediating factors, Organ (1988) is of the view that job performance has not been comprehensively defined in the related studies. Job performance, as usually understood, is the quantity of output produced or the quality of craftsmanship applied in the process of production. Thus, job satisfaction does not consistently or appreciably cause job performance. Instead, he suggested Management & Change, Volume 3, Number I (January-June 1999) @ 1999 Institute for Integrated Learning in Management. All Rights Reserved.

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116 Assessing Organizational Culture as an Antecedent that there might be some other conceptions of job performance which may exhibit a stronger relationship with job satisfaction and in some cases may even be produced by it. Organ termed this job performance as "Organizational Citizenship Behaviour" (OCB). Organizational citizenship behaviour is the "supra-role" behaviour, i.e., the behaviour which goes beyond the formal job description and job specification but which is very important in organizational effectiveness (Organ 1988a; 1990). Examples of such behaviour include helping fellow employees and workers at work or outside the workplace, volunteering for things which do not figure within the purview of the job conditions, making innovative suggestions to improve the department, not wasting time, accepting orders without any fuss, accepting temporary work assignments without any complaint, helping fellow workers to keep the work area clean and uncluttered, avoidance of personal conflict and protecting and conserving organizational resources, etc.

ORGANIZATIONAL CULTURE AND OCB In recent years, the term organizational culture (Oe) has been increasingly in vogue in studies of organizational behaviour because of the growing realization among organizational scientists and management conslutants that the culture of an organization has as much influence on corporate effectiveness as the formal structure of jobs, authority and the technical and financial procedures (Amsa, 1986). In organization theory literature, culture is often treated as an undefined important characteristic of any system, as yet another contingency factor with a varying and little understood incidence on the functioning of organizations. A substantial amount of work has been done to establish that organizations have purpose and survival goals, they go through life cycles, are plagued with problematic health and are subject to implacable selection processes (Allaire and Firsirotu, 1984). Numerous claims have been made in popular and professional literature regarding the importance ofOC. Wilkins and Ouchi (1983) advocated the knowledge of organizational culture for useful planning of acquisitions and mergers and for strategic planning. Many times the failure of acquisitions and mergers is attributed to culture-clash. It has also been observed that the knowledge of organizational culture is helpful to organizations in selection, recruitment and career planning (Deal and Kennedy, 1982; Sathe, 1983). Knowledge of organizational culture helps in developing strong orgaManagement

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nizational culture which in tum increases benefits like increased member identification, commitment and cooperation within the organization (Martin et al., 1983; Pettigrew, 1979), greater behavioural clarity and individual sensemaking (Deal and Kennedy, 1982; Louis, 1980), greater consistency in decision-making and performance (Sathe, 1983), enhanced individual socialization and acculturation (Louis, 1980) and more successful succession planning. In organizations, the categories of meaning that organize perceptions and thoughts, thereby filtering out the unimportant and focusing on the important become not only major means of reducing overload anxiety but also a pre-requisite for coordinated action (Sachein, 1986). These meanings which are largely determined by the clear understanding of organizational culture result in behaviour which may be included within the dimension of OCE. There is research evidence to state that culture per se will be positively associated with high organizational performance (Deal and Kennedy, 1982). Taking this finding as a base, and being satisfied with adequate support from the available literature that OCB is a performance itse1fby nature, the authors try to establish a causal relationship between organizational culture and OCE. THE STUDY The present study is an attempt to explore organizational culture as an antecedent which, in tum, fosters citizenship behaviour. The area is very sparingly covered under research in other countries and relatively untouched in India. There is certainly a dearth of empirical and scientific research at the grassroot level that can explain the influencing factors or antecedents of citizenship behaviour. The present study would be an attempt to find out the practical implications of this performance in our organizational set-ups. In the present study, in an attempt to analyze the overall organizational culture of the organization as the antecedent variable of organizational citizenship behaviour, the main emphasis of the study will be to test: (a) How does organizational culture (OC) affect OCB as a whole? and, (b) What is the impact ofOC on individual dimensions ofOCB? THE METHOD The present study is based on a sample of 400 employees drawn from two manufacturing units (200 from each unit) from eastern India. Both the units Management

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are located in the same district (Keonjhar, Orissa) and are engaged almost in a similar line of production. Data were collected through the questionnaire method. Employees (not officers) were asked to express their views on organizational culture (OC). The supervisors/managers of these respective employees were requested to assess the citizenship behavioutofthese employees. After that the responses of the employees and their respective supervisors were matched. ' MEASURES OCB is measured with the organizational citizenship behaviour scale used and validated by Podsakoff, MacKenzie, Moorman and Fetter (1990). The items included in this scale were based on definitions of the five dimensions ofOCB namely Altruism (ALT), Conscientiousness (CONSC), Sportsmanship (SM), Courtesy (CT) and Civic Virtue (CV) described by Organ (1988a). The psychometric properties of this scale have been tested by Podsakoff et al. (1990) and have been found to be highly satisfactory. They reported a reliability of each factor ranging from 0.70 to 0.85. Confirmatory factor analysis showed reliance for a five factor model with a Tucker-Lewis fit index of 0.94. The Chronbach's alpha has been found to be 0.84 for the present study. Though it is always better to obtain ratings of OCB from a variety of sources, supervisors' ratings have been the widely used source of choice (Bateman and Organ, 1983; Organ and Konovsky 1989; Podsakoff et al., 1990; Smith et al., 1983). Williams (1988) specifically addressed the question of the source ofOCB measures. He found that as compared to t~e co-workers, supervisors were able to provide a relatively accurate and concrete picture of an employee's OCE. The supervisors' ratings are more likely to distinguish between in-role and extra-role behaviour and exhibit less variance in the factor structure ofthe citizenship behaviour dimensions. He also found very little measurement difference between supervisors' ratings and self-reported ratings. However, when relationships between job attitudes and OCB are tested, self-reports may contaminate the relationships with common method variance. Therefore, the responses of supervisors for measurement ofOCB seem to be the most reasonable alternative. To measure OC, the questionnaire developed by Parida, Mathur and Khurana (1991) was used. This scale has 53 items. The reliability and validity of this scale has been tested and found satisfactory. The Chronbach' s alpha of the dimensions of OC ranges from 0.68 to 0.88 and the overall Management

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value for the scale is 0.73. The original scale taps 11 dimensions. However, after the pilot study, the inter-item correlation was tested and in the final scale 46 items were retained. These items cover 10 dimensions namely Support (SUP), Structure (STR), Performance Reward (PRRD), Individual Autonomy (AUT), Conflict Tolerance (CNTL), Risk Tolerance (RSKT), Identification (IDFN), Individual Responsibility (INRS), Belief (BEL) and Norms (NORM). For the analysis of the data SPSSPC + was used. RESULTS AND DISCUSSION The first part of the result consists of descriptive statistics and correlation results. Correlation coefficients between the independent variable OC and dependent variable OCB were computed. For further analysis, cOlTelation between the independent variable OC with all the dimensions ofOCB was computed. Table-l shows the correlation between the independent variable and the dependent variable along with its dimensions. It is evident from Table-l that OC is positively and significantly correlated with OCB as well as all its dimensions (p < 0.001). The correlation results offer partial support for the hypothesis in this study as significant correlation between OC and OCB along with its dimensions is found. The second part of the result deals with the regression analysis showing the degree of impact and significance of OC on OCB as well as its dimensions. Table-l between Independent and Dependent Variables

Inter-correlation aJLT aJLT OCD

ALT 8M CON8C CV

CT CT •• p< .01

1.00 0.6744 0.4643 0.4149 0.4066 0.2444 0.4195 0.4195

OCD

ALT

CON8C

•• 1.00 •• 0.6236" 1.00 •• 0.5980 •• 0.2657" 1.00 •• 0.6348 •• 0.4214 •• 0.3019 •• 1.00 0.0210 •• 0.3769 •• 0.1293. 0.0342 •• 0.6078 •• 0.3513 •• 0.1243 • 0.0342 •• 0.6078 •• 0.3513 •• 0.1243 • 0.1915

1.00 1.00 0.2244

** 1.00

• p<.05 Management

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120 Assessing Organizational Culture as an Antecedent The result of simple regression as shown in Table-2 shows that independent variable OC has a positive and significant influence on OCB as well as on all its dimensions. It is seen that a 100 percent increase in OC leads to a 54 percent increase in OCB and its coefficient of determination (R2) shows that 45 percent of the variation in OCB is explained by oc. To know the impact ofOC on the fi~e dimensionS'ofOCB, simple regression, with all these dimensions individually was run. The result obtained from the above analysis shows that all these dimensions are signjficantly influenced by the independent variable OC in a positive direction. It further shows that a 100 percent increase in OC leads to a 55 percent increase in AL T and 21 percent of the variation in the same has been explained by oc. Similarly, it can be seen that a 100 percent increase in OC results in 45,86,56 and 47 percent increase in CONSC, SM, CT and CV respectively. It can be deduced that OC has a greater positive influence on SM and CT than on CONSC and CV (Table-2). Table-2 Effect oflndependent Variable OC on OCB and its Dimensions Independent Variables OCB ALT CONSC SM CV

13 value

0.54 (18.214)** 0.55 (10.22)** 0.45 (8.44)** 0.86 (8.66)** 0.47 (4.65)** 0.56 (8.00)**

Constant (t)

(DF)

0.82 (12.743) 0.17 (1.42) 0.37 (3.135) -0.64 (-2.93) -0.02 (-.09) 0.15 (1.09)

331.75 (398) 104.42 (398) 71.22 (398) 75.05 (398) 21.66 (398) 79.28 (398)

0.45 0.21 0.15 0.16 0.05 0.17

**p<.01

The results of the present study lead us to conclude that there is a causal relationship between OC and OCE. The correlation matrix showing the correlation coefficients between OC and OCB (as a whole); OC and Management

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the components of OCB (Table-I) give partial support for this generalization. As an explanation to this correlation, it can be said that in organizations, the categories of meanings that organize perceptions and thoughts of the people at work are very important as they help them to perform in a coordinated way (Schein, 1986). The understanding of these meanings is very often determined by the understanding ofOC in particular. It is also established through research findings that OC is positively associated with high organizational performance (Deal and Kennedy, 1982; Bhatia, 1985). It is argued in these research works that OC has the potential to give meaning' and purpose to an employee's organizational life over and above just domg one's job for his salary (Bhatia, 1985). In organizations, people inculcate ideas and beliefs (like focus in productivity improvel1).ent and innovation, making innovative suggestions on different work-related areas, a belief that problem-solving and team-spirit are important, etc.) through OC which in tum provides more commitment ultimately leading to higher performance and effectiveness. A careful analysis of the above discussed behaviour (inculcated through OC) will reveal that it is identical to the typical behaviour in OCB. For the above mentioned reasons it seems very likely that positive significant correlation coefficients between these two concepts (OC and OCB) along with all ofOBC's dimensions will be obtained. In the second part of the result of the present study, satisfactory statistical affirmation is obtained to generalize that OC does have a positive influence on OCB. Table-2 shows that 45 percent of the variation in OCB is explained by OC which can be treated as a satisfactory predictor variable. The possible explanation for this result could be that OC obviously provides many more things than the social glues that hold the organization together. As explained earlier, it is quite evident that OC through the insisting pressurization of norms, beliefs and internalized values helps employees to increase (or at least try to increase) their work-effort. This very often would lead employees to put more effort by ways over and above the job requirement. People may not expect any tangible/economic reward out of it, on the contrary, may take pride and feel satisfied out of the process. This would enable workers to increase their loyalty and commitment towards the organization. Effective OC also provides organizations the ability to grow rapidly through directing more effort towards implementing plans, programmes, objectives and other constructive avenues and less effort towards fire-fighting, plug&ing holes, constantly resolving conflicts, debates on how and why things should be done and so on. It provides the employees a better work environManagement

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122 Assessing Organizational Culture as an Antecedent ment as well as helps in the improvement of organizational health which is highly conducive for organizational effectiveness. This behaviour, in some way or the other, can be explained as a manifestation of different types of organizational citizenship behaviour caused by oc. It is evident from the result that OC has a positive significant influence on all the dimensions of OCE. While it explains 21 percent of the variation in the case of ALT, 15, 16, 17 and five percent of the variation of CONSC, SM, CT and CV respectively are explained by it. We can get some explanation for this relationship from the above discussion. Furthermore, it can also be added that it has been substantiated by research evidence that OC determines cooperation in an organization. Even though some structural factors in the organization sometimes lead to conflict, a well-established culture, especially when it determines/influences the belief of cooperation would substantially reduce the occurrence of conflict. After some years over time, cooperation may be legitimized and sustained in the process of the organization. In organizations, it is very often seen that people cite past precious instances and take pride in repeating them. In this process, employees may find it difficult to behave non-cooperatively towards fellow workers. They would regard cooperation as not merely a good way but rather as a superior and ideal way of being related to each other. Consequently, they would continue to interpret experiences and recognize their own conduct on the basis of their strong belief in cooperation, a highly significant and widely shared component of the cultural system. Cooperation which has been explained by Katz (1964) can easily be extended as a synonym behaviour of altruism. So it is very usual that OC which helps employees in fostering cooperation will also help in fostering altruistic citizenship behaviour. It can also be deduced from the results (Table-2) that OC influences CONSC in a positive direction. This result goes in line with some other important works in the area ofOC (Martin et al., 1983; Pettigrew, 1979; Deal and Kennedy, 1982; Louis, 1980; Sathe, 1985). It has been emphatically recommended in these works that a sound knowledge of OC will help in developing a strong culture in the organization which in tum will increase member identification, commitment and loyalty. Extending the above findings in the line ofOCB, the findings and results of the present study can be further substantiated. Factors like member identification, commitment, loyalty, whistle blowing, etc. which are determined by OC are nothing but the behaviour within CONSC in some slightly different form/head. Taking the above view into account, it can be substantiated that OC will have a positive Management

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significant influence on CONSC citizenship behaviour. It is evident from Table-2 that SM, CT and CV are also positively and significantly influenced by OC (p < 0.001). Here, we find that the beta value ofSM is very high (0.86). The probable reason for the same may be attributed to the operational definition of the concept of SM. SM is defined as behaviour which is involved when a person refrains from complaining, filing petty grievances or when he/she does not grouse about all the things that go wrong in the organization (Moorman and Blakey, 1992). A good sport is one who rolls with the punches and accepts the fact that sometimes bad things may happen in the organization. This does not, however, suggest that employees who identify compelling organizational problems should not raise those issues in order to be good sportsmen. On the contrary, the contention is, a good sportsman should try to avoid and ignore irresponsible complaining which directly or indirectly would not result in a beneficial change in the organization. In organiZations with a strong OC, people may be expected to foster this behaviour. OC which taps a factor like conflict tolerance (in the present study) will imbue its employees to be more considerate and compromising on genuine issues. So it may not be illogical to expect that OC influences SM citizenship behaviour significantly. We also observe from Table-2 that OC is having a positive significant influence on CV and CT. CV refers to the behaviour which shows one's participation in and support of the organization as a whole. This behaviour describes an employee who is active and concerned in supporting the organization in its endeavours. Identity dimension of the OC which explains the degree to which employees like to identify with the organization as a whole and take pride out of it can be ascribed as a probable reason for this behaviour. When people of any organization feel proud of being the employees of that particular organization they would always prefer to plead in favour of the organization before others. Once this behaviour is internalized as a norm through OC, it is very natural that this behaviour will be expressed through CV citizenship behaviour. Similarly, the reason for OC influencing CT would be that it facilitates help and cooperation amongst the people inculcated through Oc. It has been explained earlier that OC will result in better cooperation and help in making people aware of their duties and responsibilties towards productivity (effectiveness). This concern for the organization would induce them to anticipate possible work-related problems and take initiative to prevent/solve these problems. It may not be unusual to argue that employees who would be more committed towards the organizational goals/ Management

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124 Assessing Organizational Culture as an Antecedent objectives would be also considerate about their own work assignments as well as that of the fellow workers. This awakened awareness about how their respective jobs are affecting the job of others would encourage them to foster courtesy citizenship behaviour which explains behaviour like taking action to prevent problems from occurring by respecting others' needs.

CONCLUSION The key contribution of the present study focuses on the fact that organizational culture (OC) significantly influences organizational citizenship behaviour (OCB) as a whole and its dimensions as well. As it is very difficult to manipulate OCB directly, managers and policy makers have to adopt indirect means to impress employees to foster this behaviour. At this juncture, OC can be treated as of paramount importance in attaining the above objective. The findings of this study support the view of Wilkins and Ouchi (1983) that the development and maintenance of organization-specific culture are potentially significant and must be taken into account for the efficiency/effectiveness of the organization. With our operational definition of the key concepts of organizational culture (for the purpose of the present study), we do not support the contention that organizational culture can hardly be changed nor do the data collected from the organizations under study. It may be the case that the changing process in organizational culture would not be very fast as compared to the management style and policy, but it can never be treated as negligible either. The onus of the entire process lies in the kind and amount of change in organizational culture. It is observed that employees in the organizations are remarkably adaptive to some specific activities like acceptance of new technology, taking personal initiative, giving suggestions through suggestion schemes, etc. They also show their concern towards the managers and supervisors when they feel the former to be supportive and considerate. When they are consulted about the organizational goals and framing of policies, they show their loyalty and willingness to adapt to changes. However, the problem in accepting the changes may come when organizational conditions would radically force the employees to alter and violate their basic assumptions about organizational culture. The same problem may also arise when the changes occur in goal congruence or equality. But when people believe that they will be treated fairly, they will have time and scope to experiment with new ideas and Management

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Kar and Tewari 125

paradigms and accept the changes in organizational culture for a better future.

REFERENCES Allaire, Y. and M. E. Firsirotu (1984) "Theories of Organizational Culture," Organization Studies,5(3). Amsa, P. (1986) "Organization Culture and Work-group Behaviour: An Empirical Study," Journal of Management Studies, 23(3). Bateman T. S. and D. W. Organ (1983) "Job Satisfaction and the Good Soldier: The Relationship between Affect and Citizenship," Academy ofManagemenrt Journal,26. Bhatia, S. K. (1985) "Organizational Culture: Meaning and Purpose," The Management Review, 1. Deal, T. E. and A. A. Kennedy (1982) Corporate Culture: The Rites and Rituals of Corporate Life. Reading, M. A.: Addision-Wesley. Iaffaldano, M. T. and P. M. Muchinsky (1985) "Job Satisfaction and Job Performance: A Meta-analysis," Psychological Bulletin, 97. Katz, D. (1964) "The Motivational Basis of Organizational Behaviour," Behavioural Science, 9. . Louis, M. R. (1980) "Surprise and Sense Making: What New Comers Experience in Entering Unfamiliar Organizational Settings," Administrative Science Quarterly, 25. Martin, J., M. S. Feldman, K. 1. Hatch and S. Sitkin (1983) "The Uniqueness Paradox in Organizational Stories," Administrative Science Quarterly, 28. Moorman, R H. and G. L. Blakely (1992) A Preliminary Report on a New Measure of Organizational Citizenship Behaviour, Proceedings, Southern Management Association, November. Organ, D. W. (1988) Organizational Citizenship Behaviour: The Good Soldier Syndrome. Lexington, M. A.: Lexington Books. -( 1988a) "A Restatement of the Satisfaction-Performance Hypothesis,"Journal of Management, 14. -( 1990) "The Motivational Basis of Organizational Citizenship Behaviour," in B. M. Staw and L. L. Cummings (eds.) Research in Organizational Behaviour. Greenwich, C. T.: JAIPress. Ouchi, W. G. and Wi1mins, A. L. (1985) "Organizatioal Culture," Annual Review of Sociology, 2. Padsakoff, P. M., M. MacKenzie, R H. Moorman and R. Fetter (1990) "Transformational Leader Behaviours and Their Effects on Trust, Satisfaction and Organizational Citizenship Behaviours," The Leadership Quarterly, 1. Parida, P., P. Mathur and A. Khurana (1991) "Development of the Organizational Culture Questionnaire," Indian Journal of Industrial Relation, 26.

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126 Assessing Organizational

Culture as an Antecedent

Petty, M. M., G. W. CcGee and 1. W. Cavender (1984) "A Meta-analysis of the Relationship between Individual Job Satisfaction and Individual Performace," Academy of Management Review, 9. Pettigrew, A. (1979) "On Studying Organizational Culture," Administrative Science Quarterly, 24. Sathe, V. (1983) "Implications of Corporate Culture: A Manager's Guide to Action," Organizational Dynamics, 12 (2). Sathe, V. (1985) Culture and Related Corporate Realities. Homewood, IL: Irwin. Smith, C. A., D. W. Organ and 1.P. Near (1983) "Organizational Citizenship Behaviour: Its Nature and Antecedents," Journal of Applied Psychology, 68, Schein, E. H, (1986) Organizational Culture and Leadership: A Dynamic View, San Francisco: Jossey-Bass. Wilkins, A. L. and W. G. Oucm (1983) "Efficient Cultures: ExploriiJ.gthe Relationship Between Culture and Organizational Performance," Administrative Science Quarterly, 28. D. P. Kar, Ph. D., is Deputy Manager, HRD, Rajshree Cement, Adityanagar, Gulbarga (Kamataka). Prior to that he was Assistant Manager (Corporate) in McNally Bharat Engineering Co, Ltd., Calcutta and SWIL Ltd., Calcutta. His areas of interest inelude: human resources, industrial relations, diversity manageiiil'lIit, negotiation skills and organizational citizenship behaviour. H. R. Tewari, Ph. D., is Professor, Department of Humanities and Social Sciences, Indian Institute of Technology, Kharagpur. Prior to that he taught at M. D. University, Rohtak (Haryana) and Banaras Hindu University, Varanasi. He was also associated with the Institute of Development Studies, University of My sore, Mysore and Indian Institute of Technology, New Delhi, in different capacities. His areas of interest include: sociology of organizations, sociology of economic development and urban and rural sociology. He has completed several sponsored research projects in the areas of sociology and organizational behaviour and has published several papers on different aspects of cultural and social life.

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KarandTe'wari 127 APPENDIX Operational definitions of some of the key concepts used in the present study: Organizational Citizenship Behaviour The set of types of behaviour which are discretionary (not mandated by the job description), not directly or explicitly recognized by the formal reward system but in aggregate promote the effective functioning of the organization. Altruism Behaviour which is directly and intentionally aimed at helping some specific person(s). Generalized Compliance Behaviour pertaining to a more impersonal form of conscientiousness that does not provide immediate aid to anyone specific person, but is rather helpful to all involved in the system. Conscientiousness Carrying out role behaviour well beyond the minimum required level. Sportsmanship Behaviour which is involved when a person accepts minor frustrations without complaint. Courtesy Taking action to prevent problems from occurring by respecting others' needs. Civic Virtue Behaviour designed to increase one's participation in and support of the organization as a whole. Organizational Culture A pattern of basic assumptions invented, discovered or developed by a given~roup as it learns to cope up with its problems of external adaption and internal integration-that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think and feel in response to those problems (Schein: 1986). Management

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Support The degree of warmth and support provided by managers to their subordinates. Structure The degree to which rules, regulations and direct supervision are used to oversee and control employee behaviour. Performance Reward The degree to which reward allocations in the organization such as salary increases and promotions are based on employee performance criteria. Individual Autonomy The degree of responsibility, independence and opportunity for exercising initiative that individuals in an organization have. Conflict Tolerance The degree of conflict present in the relationship between peers and work groups as well as the willingness to be honest and open about differences. Risk Tolerance The degree to which employees are encouraged to be aggressive, innovative and risk-seeking. Identity The degree to which members identify with the organization as a whole rather than with their particular work group or field of professional expertise. Individual Responsibility The degree of freedom enjoyed by employees in handling their jobs without frequent interference. Beliefs The degree of shared beliefs regarding the style of supervision. Norms The degree of acceptance of a code of appropriate on-the-job behaviour by employees.

Management

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MANAGERIAL BURNOUT: A STUDY OF MANAGERS FROM THE GOVERNMENT, PUBLIC AND PRIVATE SECTORS

S. P. Chauhan

VidhuMohan Daisy Chauhan

Liberalization and globalization have put an end to the days of protection and captive marketsfor the Indian Industry. Pressures are mountingfor not only to increase production, but also to remain competitive through quality products and services. Thus, managers at various levels work under great stress to bring out the best results. High levels of stress can ultimately lead to burnout which is a state of physical, mental and emotional exhaustion. Managerial burnout can manifest itself as low productivity, lack of initiative, rapid employee turnover and low motivation. Thus, it affects both the managers and the organizations as a whole. A study was conducted on middle-level managers from the three sectors (Government, public and private sectors) tofind the extent of burnout, the'relationship between burnout and performance (role efficacy) and tofind the effect of locus of control on burnout. The results of the study showed that there were no significant sectoral differences among the managers either on overall burnout, locus of control or role efficacy. However, there were significant differences on some of the sub-dimensions of role efficacy i.e., helping relationship, superordination and confrontation where the managers of the public sector scored higher as compared to their counterparts from the government and private sectors. A nother finding of the study was the moderating effect of the locus of control on burnout and role efficacy. Middle managers need to develop an internalorientation and take advantage of the challenging opportunities available to them and find a new role for themselves as change agents so that they can take up leadership roles in the coming years.

INTRODUCTION he world over, t~e pressure. for c01?petitiveness in all walk.s of life has bee.n mountmg. In the mdustrIal sector, the emphaSIS IS much more on production,-qu~l~ty and competition with others. The managers at various levels have to work under great stress to bring out the best

T .<.

130 Managerial Burnout: A Study of the Managers results. The days of protection and captive markets are over. Competitiveness is the cry of the hour. It is important that a middle-level manager understands and realizes the gravity and dimensions of this requirement., and be equipped with the necessary knowledge and skills. To be able to survive in the fast-changing environment, managers need to keep pace with the advancements in their sphere~ The effectiveness of the managers will, to a great extent, depend on how they cope up with pressures and stress. High levels of stress can ultimately cause exhaustion and breakdown. Excess stress can lead to burnout. THE CONCEPT OF BURNOUT More and more research is being undertaken to study burnout. Individual burnout has received considerable attention (Adams, 1978; Lauderdale, 1982). Kim (1990) defines burnout as an index of the organizational quality of life. According to Leatz and Stolar (1993), burnout is physical, emotional and mental exhaustion caused by long-term involvement in stressful and emotionally demanding situations, combined with high personal expectations for one's performance. It happens when work loses its meaning, aridthe ratio of stress to rewards increases. Several studies (Etzion, 1984; Maslach and Jackson, 1984: 227-251)have raised the question of the vagueness of the terms burnout as well as of job stress. However, several definitions and models have emerged to serve as bases for further research attempts. Maslach and Jackson (1982) and Etzion (1984) have defined burnout as a syndrome or a state of physical, emotional, and mental exhaustion, as well as cynicism towards one's work in response to chronic organizational stressors. The emotional exhaustioi:i;. one of the most extreme varieties of work-related strain, manifests itselfin employees as a general loss of feeling, concern, trust, interest, and spirit (Maslach, 1982). Etzion (1984) relates the emotional exhaustion dimension of burnout to "feeling depressed, trapped, hopeless." Etzion (1988) has further elaborated on the concept ofthe burnout syn-drome by emphasizing its dynamic aspects. She views it as a process of energy depletion and deterioration of performance caused by continuous daily pressures, rather than discrete critical events in one's life. In this process, enthusiasm wanes while previous involvement, initiative, seriousness, and sense of responsibility are gradually replaced by patterns of routine and indifference. Clearly, this definition goes beyond the early research on Management

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burnout (i.e., Maslach, 1976, 1982; Maslach and Jackson, 1982), which was based mainly on people employed in care or service professions. STAGES OF BURNOUT Burnout is a long-term process. It does not happen overnight. A person's performance does not decrease in a few weeks' time. Burnout occurs over a long period of time and passes through different stages (Matteson and Ivancevich,1987): 1. The first stage of burnout is "stagnation" in which some signs of strain like fatigue and depression appear. They are, however, hardly noticeable publicly. 2. The second stage is "detachment" when some signs of burnout becomes apparent. It is characterized by psychological and physical withdrawal, apathy, and below average performance. 3. The final stage is a situation where an individual is completely "burned out and emotionally exhausted." He is depersonalized, apathetic, doubtful about his self-efficacy, devoid of a sense of accomplishment, and becomes a poor performer. SYMPTOMS OF BURNOUT Leatz and Stolar (1993) have explained burnout in terms of physical, emotional, and mental exhaustion: (i) Physical Exhaustion It is characterized by fatigue, nausea, muscle tension, and sleeping habits, and generally a low energy-level. symptom most sufferers notice is a general malaise with Sometimes people say, "I don't know, I just get tired afternoon" (Leatz and Stolar, 1993).

changes in eating Probably the first no apparent cause. by lunch or early

(ii) Emotional Exhaustion This is expressed as feeling frustrated, hopeless, trapped, helpless, depressed, sad, and apathetic about work. People say they feel that their "soul Management

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132 Managerial Burnout: A Study ofthe Managers

is dying" or report feeling frequently irritated or angry for no specific reasons. The scariest part is when they just don't care any more about parts of their job that were really important to them earlier (Leatz and Stolar, 1993). (iii) Mental Exhaustion Leatz and Stolar (1993) claim that mentally exhausted people are found to be dissatisfied with themselves, their jobs, and life in general, while feeling incompetent or inferior. Over time, mental exhaustion causes people to see customers, clients, or colleagues as sources of irritation and problems rather than as challenges or opportunities. They also tend to believe that there is something wrong with themselves because the werk that once gave them such pleasure has gone stale. Then they add self-blame to the mental exhaustion mix. Managers who reach this state often no longer care about their goals or the people they manage. Family and friends are perceived as just one more demand on them in terms of time, patience, and their resilience to this pressure. FACfORS

LEADING TO MANAGERIAL

BURNOUT

A variety of individual and organizational factors contribute to "managerial burnout. "Organizations pay a high cost for managerial burnout which manifests itself as low productivity, lack of initiative, rapid employee turnover and low motivation. Seven major organizational factors have been identified which lead to burnout among managers. These are: powerlessness, a high-stress level, ineffective communication, organization-incumbent misfit, ad hocism, authoritarian leadership styles and odious "isms" such as casteism, regionalism, communalism, sectarianism, sexism, groupism,etc. Burnout can be due to two types offactors: some relating to the environment and others relating to the person's self. Some of these factors are detailed below. SOME ENVIRONMENTAL (i) Organizational

FACTORS

Climate

According to Leatz and Stolar (1993), it is important to understand two Management

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Mohan, Chauhan and Chauhan 133

things about burnout. First of all, the root cause does not lie within the person suffering from it. The biggest cause is a dysfunctional work environment that permits unrelenting levels of stress, frustration, and pressure for long periods of time, yet offers few rewards to people for putting up with all of that. Second, if we subscribe to the 1earn-do-teach cycle theory, there a potential that burnout can occur several times during our working lives (as we master each new job function we are given). Work environment can significantly affect the burnout rates of highly motivated people by helping or preventing them from reaching their goals and with those goals, their peak performance. Given the high costs of lost motivation, turnover, tardiness, absenteeism, poor delivery of services, and so on, organizations have a high stake in trying to prevent burnout (Pines and Aronson, 1981). (ii) Management

Support

Drory and Shamir (1988) found management support to be a major correlate of burnout. Other variables that have been found to have an effect on burnout include: role conflict; role ambiguity; the task dimension of autonomy; variety; task significance and extra-organizational variables of community support; and family role conflict. Golembiewski, Munzenrider and Stevenson (1986) suggested that poor work conditions modified by wor-k group and personal characteristics lead to burnout and other outcotnes, such as physical symptoms, poor performance, and low productivity. Moreover, supervisory styles and practices such as consideration are inversely related to burnout (Seltzer and Numerof, 1988). (iii) Organizational

Commitment

Jackson, Turner and Brief (1987) and Leiter and Maslach (1988) found burnout to be associated with low organizational commitment. As such, burnout serves as a trigger for job turnover. Clearly, from the organizational perspective, the outcomes of burnout are costly, either from the negative attitudinal aspects or from the behavioural aspects of job performance and eventual turnover. These negative outcomes are magnified when combined with stress and its correlates.

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134 Managerial Burnout: A Study ofthe Managers

(iv) Non-communication Veninga and Spradley (1981) found in their study that one of the most tension-producing bosses is the one who does not communicate. In some ways it is easier to work for an openly hostile boss; at least you know where you stand. The silent boss creates three tension-producing problems. First, silence places you squarely in situation of "role-conflict." Second, most silent bosses produce "occasional panics," since they are non-communicative, they seldom let subordinates know about future plans and corresponding work-flow patterns. Consequently, new demands hit the subordinate unexpectedly. A third point of tension comes from the fact that except for your pay cheque, the silent boss does not provide rewards for working.

PERSON RELATED FACTORS (i) Role Efficacy Burnout is not a stressor per se; rather it arises from the cumulative effect of multiple role-stressors. Thus, in a particular role several sources of stress are present (conflict, ambiguity, overload) and though individually these rolestressors may not be dysfunctional, the cumulative effect of these stressors can overwhelm the individual's coping resources, thereby resulting in burnout. Viewed in this context, stress and burnout may have similar effects on role efficacy. Research shows that persons with high role efficacy experience less role-stress, anxiety, and work related tensions (Sen, 1982). Another study by Dixit and Rao (1992) and a more recent one by Mohan and Chauhan (1997) have shown a negative and significant correlation between role-stress and role efficacy,

(ii) Stress While some tend to view burnout and stress as identical concepts that can be used interchangeably, recent studies have distinguished between the two, emphasizing their differences and, in some cases, their causal relationship. Maslach and Jackson (1982) view work pressure as one of the determinants ofburnout. Friesen and Sarros (1989) have found that only one burnout dimension, i,e" emotional exhaustion was closely related to work stress. Management

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Mohan, Chauhan and Chauhan 135 Etzion (1988) argues that the accumulation of empirical data calls for a redefit;lition of the burnout concept as a separate entity different from but related to stress. Unlike explicit stressors on the job, burnout is caused by vague and elusive stressors, difficult to identify and record, creating a slow and hidden process of psychological erosion. This process of erosion can continue for a long time without being detected. Consequently, a person may arrive at exhaustion without going through the alarm stage and therefore may fail to develop resistance to continuous stress.

(iii) Locus of Control

Another variable closely related to factors, such as job satisfaction and commitment, is locus of control. Internal-external locus of control is described as a concept that seeks to determine whether individuals attribute the cause or control of events to themselves or to their environment (Rotter, 1966; Blau, 1987). Empirical evidence indicates that the tendency of "internals" is to believe that their own actions produce outcomes, whereas "externals" believe that outcomes are the result of contingencies rather than their own actions. Blau (1987) found locus of control to be a moderating variable in the relationships between the two facets of satisfactionpromotion and pay-to organizational commitment in terms of withdrawal intentions and turnover. AIM OF THE STUDY The present study attempts to observe whether the extent of burnout is different in the three sectors-government, public, and private. The work climate in these three sectors appears to be different, but whether this has different effects on the psycho-social self-perception or not has to be'seen. This study also attempts to see whether burnout is related to the psychological variable of "locus of control" and "role efficacy" among the middle-level managers. METHOD The study was conducted by using the field survey method by administering structured questionnaires to individual managers from the government, pubManagement

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136 Managerial Burnout: A Study ofthe Managers lic and private sectors. The burnout inventory (Warley, 1992) used for the present study is based on the view of burnout as alienation. The instrument incorporates three kinds of factors that playa critical role in the development ofburnout: (i) perception of job content; (ii) perception of immediate supervisor; and (iii) perception of the organization. The other two questionnaires used for the study were: (i) Locus of Control Inventory-Udai Pareek (1982), and (ii) Role Efficacy-Udai Pareek (1980: 143-45). The Locus of Control Inventory by Pareek (1982) is based on Levenson's scale which has been modified to measure internality and externality in the organizational context. It is a thirty-item instrument which contains ten statements each for Internality (I), Externality-Others (EO), and Externality-Chance (EC). A locus of control orientation is reflected in the way a person views what happens in an organization; that is, how much control the person believes he has in important organizational matters, how much control the person believes is held by certain others, and to what degree the person believes events are matters of luck. The Role Efficacy Scale measures efficacy on 10 dimensions: (1) Centrality vs. Peripherality, (2) Integration vs. Distance, (3) Proactivity vs. Reactivity, (4) Creativity vs. Routinism, (5) Linkage vs. Isolation, (6) Helping vs. Hostility, (7) Superordination vs. Deprivation, (8) Influence vs. Powerlessness, (9) Growth vs. Stagnation, and (10) Confrontation vs. Avoidance. The questionnaires were administered on a sample consisting of 129 managers from the government (23), public (55), and private (51) sectors belonging to the middle-level of management. The sample from government also included lAS officers. For this study we take "middle-level" as including any level of seniority above first-line supervisor and below chief executive. RESULTS

The scores obtained on the questionnaires were processed for more eaningful data by calculating the respective means and SDs for burnou~ and its three dimensions, locus of control (three dimensions) and role efficacy and its ten dimensions. To test the significance of variance between means of the three sectors, simple one-way ANOYA was done. The F-values for burnout, locus of control and role efficacy along with means and SDs are Management

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i_IIII •••• llIIi

••

_---lInI •

Mohan, Chauhan and Chauhan 137 presented in Tables-I, 2 and 3 respectively. Since there were no significant sectoral differences on the main dimensions of burnout, locus of control and role efficacy among the three sectors, the data were pooled for the purpose of finding the product moment correlations between the above three. Table-4 shows the correlations of bum out with locus of control and role efficacy. ANALYSIS OF FINDINGS

Inter-Sectoral Difference (a) Burnout The current study revealed that the managers from the three sectors did not differ either in terms of overall burnout orin its three sub-dimensions: perception of job content; perception of immediate supervisor; and perception of the organization. All the three means were above 4. This could be attributed to the fact that though they belonged to different sectors, they were all from the middle-level, and thus they may have been experiencing similar pressures because of the similarity in the position they occupied in their hierarchies. The work respective culture seemed to be subdued by the positioning effect. As per the norms of the burnout inventory used for the study a score below 3 indicates a high potential for burnout. Scores in the 3-4 range indicate a degree of satisfaction that can be deceiving. An average score shows that one is experiencing an ambiguous state that is neither fulfillment nor burnout. In other words, things are perceived as OK and one may not be motivated to change. Scores of5-6 indicate highjob satisfaction and fulfillment. As the scores of all the three sectors were above 4.5, we can conclude that the managers did not experience any burnout. On the c0!1trary, they can be said to have been experiencing job satisfaction and fulfillment to some extent. The results of some recent studies (Mohan and Chauhan, 1996; 1997) also did not find any significant difference in the overall stress.experienced by the managers from the three sectors (government, public and private).

"Management

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138 Managerial Burnout: A Study of the Managers

(b) Locus of Control Further, the managers from the three sectors also did not differ in their orientation in terms of their locus of control. As per the norms of LOC (Pareek, 1982), an internal score of 33 or above indicates high internality tendency, a score of29 to 32 shows high trust in one's ability to control what happens to oneself in an organization and is likely to lead to effective use of the ability. In the present study it has been found that the managers from the government and private sectors have scored above 29 and those from the public sector 27.80. It can be inferred from the above that irrespective' of the sector to which the managers belong, they all have an internal orientation. Further, it can be said that managers from the private sector and government have a greater internal orientation as compared to those from the public sector. On the external (Others) dimension, a score of 30 or above indicates dysfunctional dependence on significant others for achieving one's goals, a score of 21-29 reflects a realistic dependence on supervisors, peers ,and subordinates, 17-20 shows an independent orientation and a score below 17 indicates counter-dependence. Irrespective of the organization to which they belonged, all the managers in the present study showed an independent orientation, the scores being 19.35 for the public sector, 19.13 for the government and 18.45 for the private sector. Thus, it can be concluded that in general, managers from all the three sectors have an internal orientation. In the present study, though the F-values were not significant for the three main dimensions ofInternal, External (Others) and ExternaL(Chan<:;e), on some of the sub-dimensions viz., Advancement (0), Career (C) and Reward (C), these were found to be significant. It was observed that on the dimension of Advancement (Others) the mean score was the highest in the case of managers from the public sector, followed by those from the government and private sectors which implies that the managers in the public sector perceive their prospects for advancement in career to depend more on the significant others in the organization. On the dimensions of Career (Chance) and Reward (Chance), again the scores for the private sector were found to be the lowest and the government scored the most which implies that managers from the private sector do not attribute their career advancement and prospects for reward to depend on the Chance factor.

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(c) Role Efficacy As far as role efficacy is concerned, the scores did not vary significantly among the sectors on the total role efficacy and role efficacy index. However, on three of the sub-dimensions namely helping relationship, superordination and confrontation, the F-values were found to be significant. A similar finding was that of a study by Mohan and Chauhan (1997) where the role efficacy of the managers from the three sectors was not found to be significantly different. On the dimension of superordination, the managers from the public sector scored the highest (2.20) followed by those from the government (2','17) and the private (1.45) sectors. The F-value on this dimension was found to be 3.86 which is significant at the 0.05 level. On the dimension of helping relationship, again the managers from the public sector scored the highest (3.62) followed by those from the private (3.29) and government (2.91) sectors. Here, the F-value was found to be 3.31 which is significant at the 0.05 level. The high score of the public sector on the dimension of helping relationship is justified as there is a high degree of inter-dependence among the different functional areas and even among the members of one area because of the lack of autonomy and diffused accountability. Similarly a high score on the dimension of superordination in the public sector can be explained in terms of their objective being different from that of the private sector. Public sector is seen as a "model employer" and is expected to work for a superordinate goal-providing social security and welfare. On the dimension of confrontation, the F-value was 3.51 (significant at 0.05). On this dimension, the highest score was again that of the pu~lic sector (3.95), which was followed by the private (3.80) and the government (3.57) sectors. The results of the present study are in line with an earlier study by Mohan and Chauhan (1997) which also did not find any sectoral differences in role efficacy. ANALYSIS OF CORRELATION

RESULTS

One of the objectives of the present study was to see whether locus of control and role efficacy affect one's perception of burnout. Hence, correlations were found amongst these three variables. Management

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140 Managerial Burnout: A Study ofthe Managers Burnout and Locus of Control The present study has shown a significant negative correlation between burnout and internal locus of control (see Table-4). It is generally observed that individuals with an internal orientation experience lower levels of stress as they are self-confident and trust their ability to influence the outcomes related to their jobs. Seen in this context, it is quite natural that there will be a positive correlation between burnout and external locus of control, which has been the finding ofthis study. Thus, it is seen that the greater the external orientation of an individual in terms ofhislher dependence on significant others for the achievement ofhislher goals, the greater is hislher potential for experiencing burnout. It has been observed by Pareek (1982) that people with an internal locus of control are less likely to perceive their jobs to be stressful. Since burnout is the consequence of excess stress, it was expected that locus of control would have a moderating effect on burnout. The above assumption has been justified by the present study which yielded a negative correlation between burnout and internal locus of control. Burnout and Role Efficacy In the present work, burnout has been found to have significant negative correlation with role efficacy and all its sub-dimensions (see Table-4). Since burnout is indicative of dissatisfaction and unfulfilment and role efficacy relates to the effectiveness of an individual in a particular role, it can be implied that the role efficacy of a person experiencing burnout is likely to be lower than that of one who does not experience burnout. Das (1984) studied the moderating impact of role efficacy on job behaviour and independent variables like organizational climate and role stress and found that increased work-related tension had an overall negative relationship with role efficacy. Research shows that persons with high role efficacy experience less role-stress, anxiety, and work-related tensions (Sen, 1982). Another study by Dixit and Rao (1992) and a more recent one by Mohan and Chauhan (1997) found a negative and significant correlation between role-stress and role efficacy. Role Efficacy and Locus of Control In the present study, role efficacy was found to have significant positive Management

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Mohan, Chauhan and Chauhan

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correlation with internal locus of control and a significant negative correlation with External (Others) and External (Chance) (see Table-5). Some earlier studies (Sen, 1982; Surti, 1983) have aiso shown positive correlation between role efficacy and internality and negative correlation between role efficacy and externality (both relating to others and chance). CONCLUSION It has been observed that burnout does adversely affect an individual's effectiveness in an organization. Organizations therefore need to provide their managers with a conducive organizational climate so that they do not develop a sense of alienation. At the individual level, managers need to find ways and means of maintaining their motivation, sense of commitment and belonging towards the organization. Since locus of control has a moderating effect on burnout, one of the ways to reduce the impact of burnout on individuals is to develop an internal orientation and become proactive rather than reactive. As organizations move towards flatter and leaner structure with reduction in the levels of hierarchy, middle managers need to find new roles for themselves as team leaders, change-agents and facilitators. Those who are able to take advantage of the challenging opportunities and transform themselves will emerge as the managers of tomorrow, i.e., managers with a "vision." REFERENCE Adams, 1. D. (1978) "Improving Stress Management," Social Change, 8(4). Blau, G. 1. (1987) "Locus of Control as a Potential Moderator of the Turnover Process," Journal o/Occupational Psychology, 60. Das, G. S. (1984) Purposeful Job Behaviour and its Determinants, National Institute of Bank Management (Mimeo), Bombay. Dixit, N. and T.v. Rao (1992) "New HRD Professionals: Competencies, Role Efficacy and Role Stress in Managing Transition," in Udai Pareek, R. Padaki and M. R. R. Nair (ed.) The HRD Response. New Delhi: Tata McGraw Hill. Drory, A. and B. Shamir (1988) "Effects of Organizational and Life Variables on Job Satisfaction and Burnout," Group and Organisational Studies, 13. Etzion, D. (1988) "Understanding the Dynamics of Bum out Through Cross-Cultural Research: Reflections on the Comparison Between Israelis and Americans." Working Paper No. 965/88, Tel Aviv, Tel Aviv University, The Israel Institute of Business Research. Management

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142 Managerial Burnout: A Study ofthe Managers -(1984) "Moderating Effects of Social Support on the Stress-Burnout Relation. ship," Journal of Applied Psychology, 69. Firth, H., and P. Britton (1989) "Burnout, Absence and Turnover Amongst British Nursing Staff," JournalofOccupational Psychology, 62. Friesen, D., and Sarros, 1. C. (1989) "Sources of Burnout Among Educators," Journal of Organizational Behaviour, 10. Golembiewski, R.T., R. F. Munzenrider and 1. G. Stevenson (1986) Stress in Organization: Toward a Phase Model of Burnout. New York: Praeger. Jackson, S. E., 1. Turner and A. Brief( 1987) "Correlates of Bum-out among Public Service Lawyers," Journal of Occupational Behaviour, 8 ( 4). Kim, B. S. (1990) "Alternative Models ofBurnoutPhases: Test of the Three MBI Sub-dimensions, Concurrent Validity, and Utilities." Unpublished Doctoral Dissertation, University of Georgia. Lauderdale, M. (1982) Burnout: Strategies for Personal and Organisatiof}al Life: Speculations on Evolving Paradigms. San Diego, CA: Learning Concept. Leatz, A. Christine and W. Mark Stolar (1993) "When Work Gets To Be Too Much," World Executive Digest, November. Leitr, M.P., and C. Maslach (1988), "The Impact of Interpersonal Environment on Burnout and Organizational Commitment," Journal of Organizational Behaviour, 9. Maslach, C. (1982) "Understanding Burnout: Definitional Issues in Analyzing a Complex Phenorneoon,"in W. S. Paine (ed.), Job Stress and Burnout: Research, Theory and Intervention Perspectives. Beverly Hills: Sage Focus Editions. Maslach, C. (1976) "Burnout," Human Behaviour,S. Maslach, C. and S. E. Jackson (1982) "The Measurement of Experienced Burnout," Journal of Occupational Behaviour, 2. --( 1984) "Burnout in Health Professions: A Social Psychological Analysis,"in G. Sanders and 1. Sils (eds.), Social Psychology of Health and Illness. Hillsdale, NJ: Lawrence Erlbaum. Matteson, M.T. and I. M. Ivancevich (1987) Controlling Work Stress: Effective Human Resource and Management Strategies. San Francisco: Jossey Bass Publishers. Mohan, Vidhu and Daisy Chauhan (1996) "A Comparative Study of Organizational Role Stress Amongst Managers of Government, Public and Private Sectors," A Paper Abstracted for the NITIE/PRAACHI National Conference on "Behavioural Sciences and Effective Management" Bombay, January. --( 1997) "Organisational Role Stress as Related to Efficacy Amongst Managers of Governrnent, Public and Private Sectors," VISION: The Journal of Business Perspective, 1(2). Pareek, U. (1980) "Dimensions of Role Efficacy," in 1.W. Pfeiffer and J. E. Jones (eds.) The 1980 Annual Handbookfor Group Facilitators. San Diego, Calif.: University Associates. Management

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Pareek, U. (1982) Role Stress Scale Manual. Ahmedabad: Navin Publications. Pines, Ayala M., and E. Aronson (1981) Burnout: From Tedium to Personal Growth New York: The Free Press. Rotter, 1. B. (1966) "Generalized Expectencies for Internal vs. External Control of Reinforcement," Psychological Monographs, 80. Seltzer, 1. and R. E. Numerof (1988) "Supervisory Leadership and Subordinate Burnout," Academy of Management Journal, 31. Sen, P. C. (1982) "Organisational Role Stress and Coping: A Theory and Agenda for Action," in D. M. Pestonjee and Udai Pareek (ed.) Studies in Organisational Role Stress and Coping. Jaipur: Rawat Publications. Surti, K. (1983) "Role Stress and Coping Styles of Working Women," Doctoral Dissertation in Psychology, Gujarat University. Veninga, R. L. and 1. P. Spradley (1981) The Work Stress Connection: How to Cope with Job Burnout. Canada, Pub. Little: Brown & Company Limited. Warley, W. R. (1992) Developing Human Resources. Pfeiffer & Company. Vidhu Mohan, Ph. D., is Professor, Department of Psychology, Punjab University, Chandigarh. She has published more than 170 papers in journals of national and international repute. She has also conducted about 100 workshops and organized numerous courses on personal development, sensitivity training, motivation, organizational behaviour, communication, transaction analysis, stress management, MBO, leadership styles, etc. for various organizations and government officials. She has been a visiting faculty to many otheriinstitutions. She is member on many boards and committees such as UGC, ICCW, Public Service Commissions, Police Training Centre of Mount Abu, etc.

s. P. Chauhan is working in the administration department with Management DevelopmentInstitute, Post Box No. 60, Mehruali Road, Gurgaon-122 001. He is currently pursuing his Ph. D. on "Professional Obsolescence" at Department ofPsychology, Punjab University. His articles have appeared in journals like Indian Journal of Training and Development and MDI Management Journal. His areas of research interest are organizational behaviour and human resource development. Daisy Chauhan, Ph. D., is Research Officer in the area of Human Behaviour and Organization Development with Management Development Institute, Post Box No. 60, Mehruali Road, Gurgaon-122 001. She has taken part in Several research! consultancy assignments at MDI. Her articles have appeared injournals like Indian Journal of Training and Development, Personnel Today, Vision, and Indian Academy of Applied Psychology. She is also the editorial coordinator of the MDI Journal and MDI Quarterly Bulletin. Her areas of interest are stress and motivation.

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Table-l ANOV of Scores of Burnout of Managers from Government, Public and Private Sectors

ORS df=2

Mean Sq.

Government (n = 23) Mean SD

Public (n = 55) Mean SD

Private (n = 51) Mean SD

JOBC

0.02

0.08

4.70

0.56

4.70

0.52

4.66

0.57

SUPER

0.05

0.12

4.68

0.81

4.66

0.64

4.61

0.62

ORG

0.34

0.53

4.28

0.84

4.31

0.74

4.45

0.85

BURNOUT

0.00

4.59

0.63

4.60

0.53

4.61

0.55

Note:

JOBC SUPER ORG BURNOUT

Perception of Job Content Perception of Supervisor = Perception of Organization = Total Burnout = =

Table-2 ANOV A of Scores of Locus of Control of Managers from Government, Locus df=2 of Control

Mean Sq.

INTERNAL GEN EFF INF ACC CA ADV REW EXTERNAL GEN EFF INF ACe

(0)

Government (n = 23) Mean SD

Public and Private Sectors

Public (n = 55) Mean SD

Private (n = 51) Mean SD

29.51

.84

29.04

6.73

27.80

6.63

29.22

4.58

3.63 2.99 .47 .12 1.67 1.04 .38

.84 .96 .80 .12 1.60 1.65 .23

4.04 10.39 3.17 2.48 2.96 3.39 2.61

2.46 2.02 .83 1.08 1.22 .78 1.20

3.87 9.87 3.20 2.40 2.89 3.16 2.44

2.33 1.82 .65 1.08 1.12 .90 1.34

4.39 10.25 3.02 2.49 3.24 3.43 2.39

1.56 1.59 .84 .81 .79 .67 1.27

11.02

.24

19.13

8.79

19.35

6.77

18.45

5.89

1.99 .51 .32 .35

.75 .08 .23 .24

4.70 5.52 1.65 1.96

i.74 2.94 1.30 1.26

4.38 5.76 1.45 1.95

1.58 2.44 1.20 1.21

4.20

1.63 2.29 1.12 1.15

5.65 1.53 2.10

----------------------------------------

CA ADV REW

.98 3.15 .84

.84 2.34* .64

1.74 2.13 1.48

1.32 1.25 1.20

1.82 2.22 1.80

1.04 1.21 1.22

1.55 1.75 1.71

1.01 1.06 1.03

EXTERNAL (C)

7.09

.20

10.91

7.40

10.73

5.77

10.12

5.38

GEN EFF INF ACC CA ADV REW

.10 .71 .17 .67 2.38 1.10 2.95

.03 .17 .36 .74 2.77* .73 2.93*

2.35 2.96 .48 .78 1.43 1.87 1.04

2.04 2.18 .85 .95 1.16 1.29 1.30

2.35 3.18 .38 .75 .95 2.24 1.07

1.73 1.96 .62 1.11 .89 1.28 1.05

2.27 3.25 .33 .55 .92 2.16 .63

1.66 2.02 .65 .76 .84 1.16 .77

Note:

*Significant at 0.05 External (Others) EXT (0) External (Chance) EXT(C) General GEN Effectovemess EFF Influence INF Acceptability ACC Career CA Advancement ADV Reward REW

Table-3 ANOV A of Scores of Role Efficacy of Managers Roledf=2 Efficacy

Mean Sq.

CENTRALITY INTEGRATION PROACTIVITY CREATIVITY INTER-ROLE LINKAGE HELP. RELATIONSHIP SUPERORDINA TION INFLUENCE GROWTH CONFRONTATION

0.78 1.66 1.47 0.55 1.09 4.24 8.48 0.41 0.51 1.19

TOTAL ROLE EFFICACY ROLE EFFICACY INDEX .Significant at 0.05

0.71 1.54 0.79 0.25 0.74 3.31 * 3.86* 0.36 0.33 3.51 *

from Government,

Public and Private Sectors

Government (n = 23) Mean SD

Public (n = 55) Mean SD

Privat~ (n = 51) Mean SD

2.74 3.26 2.26 3.17 3.22 2.91 2.17 2.91 2.91 3.57

2.47 3.18 2.60 2.95 3.35 3.62 2:20 2.69 2.87 3.95

0.88 0.96 1.41 1.50 1.06 0.85 1.30 1.02 1.17 0.23

2.67 2.88 2.69 2.92 3.06 3.29 1.45 2.78 2.71 3.80

1.25 1.09 1.19 1.60 1.36 1.27 1.62 1.10 1.20 0.63

1.05 1.10 1.60 1.15 1.20 1.38 1.59 1.16 1.44 0.95

43.82

0.91

29.09

8.82

29.84.

5.68

28.02

7.27

121.36

0.90

81.78

14.69

83.03

9.48

80.00

12.11

Table-4 Correlation Correlations: (1) LOC: INTERNAL LOC General SuccesslEffectiveness Influence Acceptability Career Advancement Reward EXTERNAL (OTHERS) General SuccesslEffectiveness Influence Acceptability Career Advancement Reward EXTERNAL (CHANCE)

Between Burnout, JOBC

-.53 -.45 -.46 -.29 -.34 -.32 -.35 -.17 .42 .34 .28 .31 .26 .29 .09 .48 .57

Locus of Control & Role Efficacy

SUPERVIS

** ** ** ** ** ** ** ** ** ** ** * ** ** .**

-.45 -.35 -.36 -.26 -.21 -.35 -.35 -.20 .50 .35 .30 .32 .34 .40 .25 .48 .45

PERORG

** ** ** * * ** ** ** ** ** ** ** ** * ** **

-.53 -.44 -.46 -.25 -.36 -.33 -.38 -.17 .29 .35 .09 .14 .21 .18 .15 .35 .40

BURNOUT

** ** ** * ** ** ** ** ** * ** **

-.59 -.49 -.49 -.32 -.36 -.40 -.42 -.21 .47 .41 .26 .30 .31 .34 .19 .49 .56

** ** ** ** ** ** ** * ** ** * ** ** ** ** **

.22 040 .24 .36 .16 .33 .37

* ** * **

** ** ** ** **

** ** ** *

-.38 -040 -.29 -.30 -.36 -.20 -.25 -.24 -.38 -.18

** **

-.53 -.53

** **

047 045 .35 045 .22 .35 .36

** ** **

Centrality Integration Proactivity Creativity Inter-Role Linkage Help Relationship Superordination Influence Growth Confrontation

-048 -.50 -.51 -043 -047 -.16 -.31 -.32 -.51 -.22

** ** ** ** **

Total Role Efficacy Role Efficacy Index

-.69 -.69

General SuccesslEffectiveness Influence Acceptability ~areer Advancement Reward

* * ** **

** **

.37 .34 .26 .35 .24 .16 .35

** ** * ** *

Al 045 .30 044 .25 .33 042

** ** ** ** * ** **

-040 -045 -.32 -.38 -047 -.28 -.22 -.28 -049 -.13

** ** ** ** ** ** * ** **

-049 -.52 -044 -AI -.50 -.24 -.30 -.34 -.53 -.21

** ** ** ** ** * ** ** ** *

-.60 -.60

** **

-.70 -.70

** **

(2) ROLE EFFICACY:

* * **

Table-S Correlation Between Locus of Control and Role Efficacy Correlations

Centrality Integration Proactivity Creativity Inter-Role Linkage Help Relationship Superordination Influence Growth Confrontation

.37 ** .24 ** .43 ** .18 .19 .07 .06 .24 * .38 ** .27 **

-.25 * -.34 ** -.39 ** -.17 -.26 * -.01 -.13 -.25 * -.31 ** -.20

-.41 -.41 -.39 -.18 -.36 -.09 -.13 -.19 -.42 -.29

Total Role Efficacy Role Efficacy Index

.40 ** .40 **

-.39 ** -.39 **

-.47 ** -.47 **

** ** ** **

** **

REVIEW ARTICLE HUMAN RESOURCE PLURALISM

STRATEGY

AND WORKPLACE

Debi S. Saini

Christopher Mabey, Graeme Salaman and John Storey, Human Resource Management: A Strategic Introduction. Oxford: Blackwell, 1998. xii+590 pp. Price not mentioned, paper. Hallie Preskill and Rosalie T. Torres, Evaluative Inquiry for Learning in Organizations. Thousand Oaks (California): Sage, 1999. xxv+218 pp. $27. 95 paper. Brian Towers, The Representation Gap: Change and Reform in the British and American Workplace. London: Oxford University Press, 1997. xviii+294 pp. ÂŁ16.99 paper.

I. AGENDA OF HUMAN RESOURCE MANAGEMENT The popularization of the concept of human resource management (HRM) can be located in the publication of literature on excellence. The emergence of "excellence literature" in management began mainly with Peters and Waterman's book, In Search of Excellence. This was followed by several other books emphasizing concerns such as reengineering, learning organization, benchmarking, competency management, among others. Proliferation of such literature has resulted into what is sometimes described as the "Heathrow Management Theory" (Burrel, 1989).1 The theory makes a claim for the integrative role of corporate culture through what is now popularly described as "Soft" as opposed to "Hard" strategy of human resource management (HRM). While hard HRM strategy emphasizes greater concern for cost reduction, increased control, better surveillance; soft HRM emphasizes the need Management & Change, Volume 3, Number I (January-June 1999) ~ 1999 Institute for Integrated Learning in Management. All Rights Reserved.

152 Review Article far increased autanamy, participatian, trust, and empawerment. A very impartant wark recently braught aut by Secretan (1996)2 can be said to. be a camplete illustratian af saft HRM in aperatian. Advacating the impartance af satisfying the need afthe "saul" and nat just afthe "bady," he has argued in this baak a case far making warkplaces, "sanctuaries." At such warkplaces emplayees came to. derive meaning af life thraugh wark, and wark itself is treated by them as a spiritual practice. He has shawn that it is nat utapian to. think af creating such a cultural milieu in arganizatians. Both the saft and hard sides af HRM have been influenced by Japanese management, which has became a catchward in Eurapean and especially British management. Emplayers in the western warld laak at Japanizatian as a treasure af efficaciaus management practices, and are making all aut effarts to. vigarausly imitate the Japanese management cancepts. Taylarist and Fardist management styles are giving way to. Tayataism.3 Kaizen (cantinuaus impravement), Kanban (just in time), empawerment and trust, cammitment, and carparate culture are same af the HRM cancepts which are receiving strategic facus in all peaple-management effarts, in Japan as also. elsewhere. HRM discaurse is assuming strategic impartance in view afthe develapments in the business enviranment. The farces praduced by glabalizatian and the cansequent fierce campetitian resulting fram it have thrawn the emplayers into. a chaatic business enviranment, where uncertainty is pervasive and the anly canstant need is change. The emplayers are frantically searching strategies to. help them survive and cape with the fiercest war af campetitian ever faught in the business warld, perhaps far the first time in human civilizatian. Thus, they are wanting to. fight high casts af praductian and the inflexibility in the labaur market created by unians. There is increasing interest in imitating the practices af ather cauntries to. see what cauld be learned. Whether advacates af hard ar saft HRM, they have came to. realize that the key facus aftheir strategy has to. be emplayees and their mast efficaciaus utilizatian (hard HRM) ar emplayee autanamy and empawerment (saft HRM). The new thinking emphasizes, amang athers, multi-disciplinary teams, develaping knawledge warkers, prafessianal culture daminated by values af cammitment and results, and greater attentian an peer to. peer relatianships. All these are cansidered essential far develaping self-renewal capacities. Mast multinatianal carparatians (MNCs) have invested heavily in HRM to. aperatianalize this thinking; athers are fallawing suit to. remain campetitive. A new set af Management

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Saini 153 HRM agenda has evolved so as to enable the employers to choose appropriate HR interventions as per their constraints and requirements. In the 1980s human resource strategy or strategic human resource management (SHRM) was the most talked-about subject amongst strategy-makers and the top management echelons at the global level. Corporates have been showing greater confidence about the potential benefits of strategic use of human resources. In the 1990s still newer concepts emerged within the rubric of human resource strategy, such as learning organization, performance management, diversity management, competency management, among others. These are some of the most talked-about concepts in the management development programmes even today, HR academics have now begun talking of measuring and evaluating these efforts. Also, the corporate world is now witnessing a trend towards internationalization of HRM. This paper attempts to identify issues in contemporary HRM strategy at the global level and seeks to draw out lessons for corporates in general as well as in India. The discussion is based mainly on the handling of issues in the books under review. The book by Mabey et at. is one of the most professionally written textbooks on HRM that I have read. Preskill and Torres's book reflects the emergence ofa newer area--developing a culture of "enquiry" where a community of practitioners enquire daily about their progress and use their learning to improve themselves as individuals, as groups, and as the organization. Towers's book is one of the finest compendiums on a comparative perspective of US and UK industrial relations as influenced by the globalization syndrome and the HRM movement. It tells us what HR strategy is doing to pluralism at the workplace and what is expected to be the future course of things at the workplace. II. HRM IN INDIA It is high time that academics and top management personnel in developing countries including India read the writings on the wall that they are in a truly chaotic environment. More often than not hew developments in technology including management technology emerge in the advanced systems and are later adopted in less-developed systems. The poorer sense of professionalism and sophistication and the general inertia in the latter inhibit the adaptation to changed practices. Usually, there'is a time lag in the adaptation of newer practices, though with the information revolution, this Management

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period is becoming shorter. Thus, the shorter the adaptation period the greater wili be the benefits derived from such operationalization of new knowledge but it has to be within the contexuality of cross-cultural realities. While there is a focus on HR strategies being adopted by corporates including learning and evaluative inquiry in this regard, skepticism always prevails regarding whether these strategies can succeed within the framework of unitarism on a long-term basis. We in developing countries have to go far ahead from our present attitude of lackadaisicalness in adopting new knowledge in HRM. It is important that we move away from the present half-hearted approach to HRM strategy in this part of the world, especially in the area of its softer side. Of course, the Indian scenario shows that we have demonstrated our awareness about the need to build business strategy on the edifice of people or human resource focus. A surVey conduced by Xaviers Labour Relations Institute (XLRI), Jamshedpur-a premier institute of personnel management in India-showed that the most important function of management that MBAs should learn is human resource development (HRD); next to it in importance, it found, is Infotech & Systems (Sukumar, 1997:107). Rhetorically, HRD is becoming a buzz word in Indian corporate circles; in reality, however, HRD in the Indian context is mostly practiced more in the hardest of the "hard" sense. The primacy ofHRD over HRM demonstrates that HRM in such countries has to mainly serve employer needs. Thus, many view HRD as a sophisticated rejuvenation of crude Taylorism which denudes the workplace of even a semblance of countervailing power. That is why, we increasingly witness attempts towards human resource practices aimed at obliterating unionization and exacerbating flexibility. Of course, this is not to say that the western world is totally free from such differences between rhetorics and realities [see, for example, Legge (1995)]. Personnel managers in India as in the West are being re-named as Managers-HRD or HRM, both in private and public sectors. By way of a movement, however, HRM thinking has not reached a sufficiently advanced stage in this part of the globe. From a large number of seminars and conferences that I have participated in, I have found quite some short-termism, confusion and lack of clarity about conceptual interrelations and the relevance of various HR interventions on the part ofHR managers. If not few, only some of the major interventions ofHRD are being talked about in the non-MNC corporate India. Also, little attempts are made to knit these intervention& in a well-articulated, coherent HR strategy in its wider framework. Management

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Saini 155 Be that as it may, employers as well as management schools all over, including in India, have to be more professionally involved in carving out such HR strategy, and get away from their piecemeal and ad hoc approach to people management. And, management schools need to devise courses to meet the needs of the industry in developing strategic awareness ofhuman resource management. However, the Indian situation in this regard is dismal. This is borne out by almost non-existent literature on human resource strategy in the Indian context. Most syllabi are still dominated by the traditional PM & IR (Personnel Management and Industrial Relations) dichotomy. Even though courses in personnel management have been mostly renamed as HRM, the focus of teaching is still the traditional functions of personnel management with some tinkering here and there. One does find fleeting glimpses in the HRM syllabi of words such as "proactive," "integrated," "strategy," and so on. There is an urgent need to bridge this gap; in this context the three books which are being subjected to review here offer a variety of newer perspectives (For an attempt of this nature in the Indian context, see Saini and Khan, 1999; and Sodhi, 1999).4 The books referred to here are important contributions to the literature on HRM in general and in relation to the western business world in particular. Indian corporates and academics have a great deal to learn from these remarkable additions to HRM literature. Mabey et al.'s book has the potential of becoming one of the finest text books in the subject, not just in the whole of Europe but all over. Preskill and Torres's book seeks to audit and re-Iook at learning activities in organizations, thusmo-vlng the discourse on learning still further--concretizing it in terms of continuous processes of questioning and debating. Towers's book is perhaps the finest of all the books written by him, whether in IR or HRM, and focuses on the IR dimension of HRM and the globalization debate and compares developments in this'regard in the UK and the US.

m. IS STRATEGIC

HRM POSSIBLE?

HRM strategy is a complex and contentious issue. On one hand, HRM swears by phrases such as "our people are our greatest asset," yet its essential ingredients include: restructuring, flexibility, re-engineering, lean production, downsizing. Union leaders, that is why, often view HRM only as a blunt instrument to manufacture employees' consent through practising paternalism or authoritarianism. Thus, even though it promises empowerManagement

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156 ReviewArticle ment through greater involvement of employees, the fact remains that such initiatives are merely managerialist in orientation. Academics are far from having agreed on an acceptable definition of HRM; more so 'due to the above glaring contradictions in the HRM projections. This has led especially British academics to use HRM in its "hard" and "soft" dichotomy (Storey, 1989; Legge, 1995). Often both soft and hard are seen to co-exist at most workplaces for core and peripheral workers respectively. Textbooks on HRM generally overlook this simple problematic in the concept of HRM and uncritically eulogize its various elements. Thus, the success of human resource strategy becomes suspect. The book by Christopher Mabey et aI. is one of the few textbooks on the subject which comprehensively analyze this reality in discussing various topics on HRM. To produce a textbook for students which has intellectual ferment and yet which communicates a coherent, tight, indepth analytic framework is not a simple task, especially in a controversial area such as HRM. Legge's (1995) book on HRM can be viewed as reflecting the extreme viewpoint in this regard, though it has got perhaps the highest amount of respect from HRMacademics all over. She has devel()p~d perhaps the most powerful and theoretically regorous critique of HRM projections. That type of critiques however, are less useful to practising managers, especially because her work is charged of undermining the positive side of the HRM rhetoric. Interestingly, Mabey et aI.' s book ideally intertwines the above perspectives with the needs of managers and HRM students, and in the ultimate analysis emerges as an outstanding textbook on the subject, leaving behind all other texts on the subject. The book is divided into six parts consisting of 18 chapters. Apart from the introductory part others include: managing performance,'managing structures, managing learning, managing change, and managing meaning. As a central concern, the book explores the question: Is SHRM actually possible? It acknowledges that SHRM places great emphasis on organizational "learning, and also that learning acculturation especially of the senior management limits exploration and information ... [and] inhibits learning in fundamental issues." The book asks, whether SHRM can overcome such short-termism. Indeed, it succeeds remarkably well in holistically exploring this common-running question in its 18 chapters. The book emphasizes the need for encouraging organizational members to think the unthought of or the unthinkable and discuss the undiscussable and dismantle the in-built defensiveness by managers against new insights. The Management

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authors have projected-unlike, for example, Legge's thesis which considers HRM more of an eyewash-that there is a great deal that is exciting and interesting in SHRM, and therefore it should be taken very seriously. However, it does so subject to the caveat that some of the features ofSHRM are based on unacceptable and flawed assumptions and therefore need radical critical attention. That is why, the book does not simply descrjbe and analyze but critiques as well. In fact, this is the most distinctive feature of the book-juxtaposing recommendations and prescriptions with-critiques. That has enabled the text book to be "the set text for one of the largest MBA programmes in Europe"(p. 3). Some ofthe other important features ofthe book include: lucidity and coherence in expression; research base [John Storey, one of the most-quoted authors on British HRM, is its co-author]; contextuality in the existing literature; comprehensive mapping of what is happening in the field; its primacy on theory in analyzing issues; and presentation. In fact, the presentation has been enriched by the presence oflearning objectives, boxes, caselets, research results, summaries and discussion questions. I tend to feel that every teacher in HRM strategy in India and elsewhere should make this book a basic text just for, if not for anything else, its emphasis on theory. I have often seen management teachers arguing that management schools must not emphasize reliance on theory but must focus on operational aspects. I feel business schools which allow such thinking to surface in their programmes are heading towards decay. The first edition of the book was co-authored by Christopher Mabey and Graeme Salaman. Perhaps, its success and attraction, among others, induced John Storey to join in this second edition. This had led to a greater research base and theoretical underpinning so well known in Storey's scholarly work, eventually making this as one of the finest books on HRM anywhere. It will be a benchmark text and envy for all prospective authors on the subject. While all chapters are well-developed, those on performance management and management oflearning especially strike me. The discussion in the former on the impact of the world system on international division of labour helps in a better understanding of the issues in country-level SHRM. It is well-known that HR strategies swear especially in the name of soft-HRM instrumentalities such as empowerment and autonomy. The problem is so not just in developing countries, but one often notices elements of hypocrisy in such claims everywhere. Mostly, the problem is of Management

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acculturated mindsets of the management and its refusal to explore the validity of alternative possibilities. Sometimes, this happens due to market exigencies rendering the soft-HRM strategies redundant. This, for example, happened in late 1990s when the keenly competitive climate. led many European enterprises to switch back to hard HRM strategies. It we want to prevent such reversals we need to build long-term perspectives of organizations matching upto the standards such as those set by Lance Secretan's (1996) work. However, corporates often show only facades of allegiance to soft HRM even in situations where there are no such compulsions to woo the harder side of people management. Mabey et al.'s book rightly reminds the strategists that: "it is important to distinguish between consensus from control, commitment from compliance, behavioural changes from attitudinal (or even values) change, and the genuine migration of cultural norms from the superficial manipulation of meanings and symbols, mission statements and corporate logos" (p. 8). While this critically written text deserve ample admiration, I would like to mention that the leadership issue has not found any mentiop in the book. It is now widely claimed that only such organizations will be able to successfully compete in the new millenium which have attracted and developed leader-managers (Hickman, 1998; Judge, 1999). Transformational leadership is being advocated by several scholars [see in the Indian context, for example, Pareek (1999)]. It is difficult to sustain soft-HRM strategies without due emphasis on it as a conscious choice. I also feel that a chapter on diversity management would have greatly added to the value of this text. Likewise, now when management of competencies is becoming so critical in strategic HRM, this topic should have been a separate chapter and not just a part of the one on training and development. Overall, however, the authors deserve kudos for developing this unique text which, I must say, will be difficult to emulate. The book, despite critiquing of several existing formulations, ultimately projects a ray of hope in the philosophy of HRM and the possibility of SHRM. IV. HRM AND EV ALUA TIVE ENQUIRY FOR LEARNING IN ORGANIZATIONS Within the HRM thinking, the need for Human Resource Development (HRD) perhaps assumes the greatest significance. This is especially so in developing countries like India where managers often use the terms HRM Management

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and HRD interchangeably. The scope of HRD involves close links with strategy and practice as well as with the more concrete processes of training and development. HRD processes have a sigrrificant impact on organizational and individual learning. Organizations often view learning merely as a set of transactions, which leads to only limited success. Such an approach could be effective in stable environments. In view of the chaotic business environment, learning becomes a very sensitive and complex issue and needs to be integrated into the overall organizational philosophy, and thus needs greater attention related to design, nourishment and sustenance of a learning culture. The emergence of the concept of learning organization has further enhanced the strategic importance of individual, team and organizational learning. Mabey et al.'s book gives pride of place to learning by devoting three well-developed chapters to it. Preskill and Torres's book too endorses Mabey et al.'s perspectives on learning by viewing it as a critical aspect of HRD, and by especially focusing on the concept of "evaluative inquiry" in learning and discussing how it can "contribute to the development, maintenance, and growth of organizations in a dynamic, unstable, unpredictable environment." It acknowledges the need for Ii shift from traditional, rational, hierarchical, solid and predictable structures to more fluid processes based on a netWork of relationships. This of course necessitates listening, communicating and group facilitation (multidisciplinary teams) skills so as to respond to the exigencies of the new workplace scenario. The approach enunciated helps to know the way to achieve creative use of knowledge that exists in the minds of organizational members so that they can redefine their company. In this regard innovation strategy is becoming quite popular [see, for example, Amidon (1997)]. Preskill and Torres's book discusses how evaluative enquiry will facilitate the realization of goals such as these. As opposed to mere accumulation of information for decision-making and action (as was done by evaluators in their role) evaluative enquiry is more concerned with "questioning and debating" the values of what people do in an organization. The authors view evaluative inquiry as "a kind of a public philosophy in which organization members engage in dialogue with clients and other stakeholders about the meariing of what they do and how they do it" (p. xx). As explained by the authors, evaluative inquiry for organizational learning and change involves: focusing on programme and organizational processes as well as outcomes; shared individual, team and organizational Management

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learning; education and training of organizational practitioners in inquiry skills; modeling the behaviours of collaboration, cooperation, and participation; searching for ways to create greater understanding for variables that affect organizational success and failure; and using a diversity of perspectives to develop understanding for organizational issues. The authors claim no originality for the fundamental idea of such an inquiry; but they have refined the existing not-too-well-elaborated perspectives on this concept on the basis of their cumulative experiences in teaching, evaluation, conducting research on evaluation practices, and providing consulting services in related areas. Thus, they have re-conceptualized the traditional perspective of evaluation to help organizations cope with the complex challenges of a global economy and the knowledge era. Among others, the book explains, how learning occurs at various levels. It discusses the four learning processes that facilitate evaluative inquiry: dialogue, reflection, asking questions; identifying and clarifying values, beliefs, assumptions and knowledge; how to carry out the inquiry; and need for infrastructural support (consisting of culture, leadership, communication, systems and structures) to facilitate the inquiry. The central thread running through the whole book is the authors' belief that evaluative inquiry can be a catalyst oflearning change and renewai in organizations. The methodology articulated emphasizes learning as a continuing and not just a transactional process. The authors have made their f9rmulations on the basis of their experience and 28 in-depth interviews conducted over a period of two years in organizations that were attempting to implement organizational learning practices. They have especially focused on: how the organization becomes interested in organizational learning principles and practices; the nature of organizational support required for operationalizing learning practices; the strategies used to facilitate learning; and organizations' perceptions about concrete outcomes of implementing organizational learning practices. A significant feature of the book is that almost every kind of organization was chosen for conducting interviews to know how these organizations were evaluating their learning-related efforts, which included an education department, an automobile company, and a hospital. The book combines an interesting integration of principles oflearning organizations and of evaluation so as to facilitate organizational development. The reader gets exposure not just to theoretical issues but also help in developing action plans for conducting evaluative inquiry. The focus on research-based Management

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formulations is the greatest strength of the book. A number of prescriptions for conducting evaluation have thus been suggested. Even though, evaluation exercises are mostly believed to be aspects of hard HR strategies, I must say that in the present case evaluation carries the connotation of questioning oneself as a process of continuous improvement. I feel the biggest achievement of the book is that it helps building learning perspectives for individuals, teams and organizations which eventually foster self-organization, creativity, systems thinking, team work and thus, a sense of fulfilment. The whole approach to the issue tends to be facilitative for greater employee involvement, which has become so critical in the HR strategy today. And the fact that the evaluation inquiry performed by organizational members and not external consultants helps in more effective integration of individual and organizational goals. The book, no doubt, is a valuable addition to the literature on evaluation and learning in organizations. It will facilitate the building of a greater openness to new ideas and decloging of mindsets, to eventually facilitate pursuing soft HRM strategies. It will not only interest the academics and the HR personnel but also the OD and HRD consultants as a sysi~matic path to organizational renewal. Organizations in developing countries need to show greater sensitivity to issues raised in this book so as to catch up fast the learning exigencies created by the globalization phenomnon. V. HRM AND WORKPLACE PLURALISM How do we relate issues in "HRM strategy" and "evaluative enquiry for learning in organizations" with those raised in the discourse on industrial democracy? Can the latter be intertwined with the basic spirit of the HRM philosophy? The HRM concept by implication claims to eventually subsume the employee relations and workplace democracy agenda within its strides; it seeks to link labour justice issues with the economic outcome of employee efforts and not the political power enjoyed by the collective of which the employee is a part. The idea has, however, not been accepted without reservations. Such perspectives have found greater acceptability in countries like the USA; pluralism is still said to survive in the UK despite the prosperity of HRM there even as it is under tremendous strain (Storey, 1989). The success of labour struggle is always intimately connected with the state attitude to it (Saini, 1999); the post-globalization developments all over show that the state now puts primacy on efficiency Management & Change, Volume 3, Number I (January-June

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than democracy, thus diluting its concern for social justice. The labour history period between the Second World War and the beginning of the globalization phenomenon reflects the hey days of social justice. During this period social justice was projected as an important societal concern. This enabled labour movement attain strength al1d influence in the advanced world, and at least a semblance of it in the lessdeveloped world. Especially in Britain, the post-liberalization 1980s and 1990s gave rise to the weakening of state protection to labour and the emergence of trends reflecting unitarist-paternalist or authoritarian-industrial relations at the global level. One of the important reasons for the catastrophic decay of workplace pluralism is the progressive decline in mass production and permanent employment due to globalization. Unitarism is being reinforced and legitimized by the human resource management (HRM) movement. Towers's book is an illustration of matured scholarship which helps us understand the "widening representation gap" in industrial relations (IR) in this era in the US and the UK. Whether one agrees with his central formulation or not he deserves to be saluted for having produced this immensely readable comparative treatise on developments in the US and the UK industrial relations. The existing literature on comparative industrial relations is quite scanty, and more so that involving comparison of British and American perspectives. Towers's book fills a void, which was long overdue. It marks an important event in the comparative IR scholarship. It unravels the hidden and not-so-hidden public-policy initiatives on labour relations. The book focuses on industrial relations in the US and the UK in the post-liberalization period. In both countries unionization or collective bargaining have declined with exceptionally great speed. It unravels the dynamics of the emergence ofa more cooperative and less adversarial industrial relations. The invincibility of these policies is being legitim1'zed by the fact that they have come to stay even as today both the countries (US since 1992 and UK since 1997), in a way, have labour governments but neither is able to pursue active pro-labour industrial relations policies. The book explains the economic, political, legal and public policy contexts of trade unions in the two countries; analyzes the scale and pace of trade unions and explains their decline; and assesses an agenda as to how far, and by what means, the trade unions can help themselves by their bootstraps raising to retrieve the power they have been losing at a fast pace.

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The key argument of the book is contained in chapter 5, which talks about democracy and efficiency in the workplace. Towers has argued in the book that the "case for employees' unimpeded access to independent representation of their interests is primarily to be made on political grounds," even as he has maintained that positive association between democracy and efficiency at the workplace can take place where there is supportive management-backed IR climate. Among others, this chapter discusses the role of Japanization in workplace transformation. The two interestitl;~ cases of Rover-Honda and the General Motors plant at Fremont are discussed to explain workplace transformation in commercial terms. An important subsection of this chapter is titled: Human Resource Management, whereby HRM is viewed as an alternative to collective bargaining to work as an instrumentality of workplace justice in the new era. The empirical evidence suggests, Towers argues, that the HRM model-Hard or Soft-has achieved substantial improvements in performance usually only on greenfield (meaning union-free) sites. And in Britain these companies are only either American or Japanese. Thus comes out a serious questioning of the HRM potential in establishing a lasting workplace justice system especially in the British context and the reinforcement of Towers's thesis. Change and reform in the British and the US workplaces are discussed in chapters 6 and 7 respectively. In the penultimate chapter, Towers discusses the widening of the representation gap. In this regard he considers two approaches towards bridging this gap-work councils and labour-management partnerships. However, an important question is, can unions without state solicitude attain it? He discusses this possibility in the concluding chapter in reference to both British and American industrial relations. Here, he analyzes the British Conservative Government's hostile public policy, which has been partially changed by the election of a labour government in May, 1997. There have been political initiatives in the US as well; but it has been argued that the prospects for narrowing the representation gap have only marginally improved. Ultimately, the analysis cautions against the increase in the representation gap to be of serious consequences to the dignity of democratic rights and to the working of industry itself. When we see the present state of workplace pluralism in the context of the UK and the US two opposite scenarios are discernible. The UK situation shows that trade union organization is still alive and in some cases firmly intact. Employers there, have no doubt regained managerial preManagement

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1999)

164 Review Article rogatives and control to a substantial extent by the use of HRM interventions such as decentralization and flexibility-promotion mechanisms. Still, however, they have largely used cooperation rather than confrontation devices in manufacturing union consent. Towers reads a ray of hope in these realities for the industrial democracy nay pluralism to survive there. One notices a substantial decline in USA's global dominance due to international competitive forces, leading to far-reaching changes in attitudes towards workplace pluralism in general. The Dunlop Commission (US Department of Labour, 1994) has estimated that 70 percent of US employers used outside consultants to undermine the influence of collectivism in IR rulemaking. It also revealed that 40 percent of the workplaces could not secure collective bargaining agreements after winning certification. Large-scale use of devices such as employment of contingent, nonpermanent employees in the form of part-time, ad hoc, temporary and contract workers is being reported at the US workplace. This has undermined the possibility of spread of collectivist thinking in IR there. Towers, however, foresees this to result in "a negative influence on productivity" (chapters 5 and 7). Analysis made by Towers gets reinforcement from the Dunlop Commission's emphasis on the need for encouraging participation-and involvement and removing constraints on union growth. Towers has not entirely questioned the potentiality of HRM. He admits that HRM's claim of "participative quality-of-working-life aspects" is achievable (p. 139). However, he cautions against its potential of sweeping away pluralism. He reminds that "the empirical association of HRM with fewer grievances and lower absenteeism than collective bargaining may be because bf its suppression of dissent ... rather than softening of conflictual attitudes." Undoubtedly, in the new era collective dissent will feel pressure on itself. But the question is: will it happen generally as a way of workplace structuring. What about the gold collar worker who wants to match the oppressive attitude of his employer with his walk-away power? Towers may argue that it was there any way in the earlier dispensation too. However, we are likely to have a much larger workforce belonging to this category in the new scenario where a large number of service industries have or are likely to come up employing knowledge worker, who may not be interested in collectivist arrangements such as unions and may seek performance-related compensation package. I do not mean that it can be a sufficiently satisfactory alternative in all situations. It will be a real question whether soft HRM model as a movement can sweep away other modManagement

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els of employee representation. The answer to that depends on whether soft HRM can establish institutional channels for managing discontent. Towers has argued that it is possible only on greenfield (union-free) sites. I wish the champions of soft HRM model could prove him wrong. Otherwise, all what he has so brilliantly argued will require an extremely serious consideration. It is, however, certain that in developing economies labour as a class for securing its rights is by and large doomed. There will be considerable pressure on minimum standards of employment themselves, not to talk of equitable sharing of industrial gains. Ideals of "sanctuaries"propagated by Secretan (1996) and those inherent in projections of soft-HRM-model proponents in general are hortatory, but can be adopted by those employers who can deliver results by following them. There is another point that needs consideration. Globalization may alter the concept of class itself. Instead oflabour and management, we might witness an intensification of the class of high performers and average performers. Performance-related pay will exacerbate such a class-formation. If the former group can become larger and gets rewarded even as per notions of hard HRM, this will undermine the traditional conceptions of labour-management interest dichotomy. Also, we are now witnessing new forms of participation, new flexible system of production requiring a new (perhaps more social) worker, and a new model of strategic management. These models have led to the emergence of what Legge (1995) says an "enterprise" culture. The supervisor is tending to be redundent and the group is becoming its own collective supervisor, which can be said to be a kind of collective self-management. These developments will have impact on traditional class formations, bringing in new classes or sub-classes. But Towers has argued that the fundamental concept of interest between labour and management has not been removed by cooperation, and thus remains intact. His analysis so lucidly made, has created immense interest. Apart from building a strong case of workplace pluralism, the most significant feature of this work is the exemplary coherence in the formulations, which reflects wonderful editing. I read this book from cover to cover; in my ultimate judgement, I am reminded of the words of Oscar Wilde, "I wish I had said that." VI. TOWARDS A CONCLUSION It is to be admitted that HRM has come to stay-wliether Management

in its hard or soft

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Review Article

version. It is the effect and not the cause of globalization. Its most salutary consequence is that it will lead to minimum wastage of human and financial resources at the macro level. It will also give rise to innovation, benchmarking, and reorganizing of business and professional activities as per the cannons of market exigencies. However, the biggest chal!enge it throws to industry is salvaging the mechanisms for exercise of right to dissent by employees so as not to lead to diminution in productivity. Therefore, HRM strategy will have to put primacy on developing various ways for learning and critiquing by the employees so as to become a way of workplace life. And, it has to take the ultimate charge of managing these changed perspectives. Those organizations which can develop transformationalleadership [See, for example, Pareek (1999)] at their various levels of working will be better placed competitively. The first two books have discussed these issues at length and have projected the hope that HRM strategy is possible. It should be noted, however, that the entire issue is linked with a variety of other structural determinants of competitive performance. The issues are not merely behavioural or attitudinal, but have wider ramifications of interest group industrial politics. We have practiced for long, employee representation through collectives as a significant human right, and not just as a democratic right. This is also acknowledged by Article 23 of the Universal Declaration of Human Rights. At what cost can we' undermine it? Towers has examined this issue from various angularities but the most important of these is whether HRM strategy can afford to ignore the representation gap caused by it. Thus the question will continue to remain the subject of a great debate: is human resource strategy really possible? NOTES 1.

Burrel (1989: 307) labels these books as Heathrow Management Theory as they are available at most airport book-shops and are found attractive by most business executives as useful aid to their performance. Mabey et al. (1998) report that, among others, this literature includes: Peters and Waterman's In Search of Excellence (1982) of which 1,22,000 copies were sold in the first two months of publication, and has sold more than 5 million copies world-wide; Stephen Covey's Seven Habits (1989) which has sold more than 6 million copies world-wide; Hammer and Champy's Reengineering the Corporation (1993) which has sold more than 2 million copies.

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Undoubtedly, these books are referred to in management seminars and discussions invariably even in India. In the emerging chaos in business environment this literature has been viewed as of considerable help. Secretan (1996) suggests such changes in management policies that will "restore respect for the soul and create workplaces that are akin to sanctuaries" and "make work part of spiritual practice." Toyotoism epitomizes flexible specialization arid de-emphasizes division of labour (Taylorism) and mass production (Fordism). Sodhi's (1999) work is part of a network project in eight Asian (including India) and ten OECD countries coordinated by a team of international scholars, which include Thomas Kochan (MIT, US), Anil Verma (Toronto, Canada) and R.D. Lancebury (Sydney, Australia). It represents perhaps the first major analysis of developments, through cases, in the fields of IR and HRM in India in the globalization era. Similarly, some of the leading HRM and IR academics in India including some from overseas have analyzed the challenges which HRM faces in general and in the Indian context in particular in the edited volume by Saini and Khan (1999). Also see Venkata-Ratnam (1997), and Saini (1997; 1998).

REFERENCES Amidon, Debra M. (1997) Innovation Strategy for the Knowledge Economy: The Ken Awakening. Boston: Butterworth-Heineman. Burrel, G. (1989) "The Absent Centre: The Neglect of Philosophy in Anglo-American Management Theory," Human Systems Management, 8. Hickman, Gill Robinson (ed.) (1998) Leading Organizations-Perspectillesfor a New Era. Thousand Oaks: Sage . . Judge, William Q. (1999) The Leader's Shadow: Exploring and Developing Executive Character. Thousand Oaks: Sage. Legge, Karen (1995) Human Resource Management: Rhetorics and Realities. London: Macmillan. Mabey, Christopher, Denise Skinner and Timothy Clark (1998) Experiencing Human Resource Management. London: Sage. Pareek, Udai (1999) "Leadership for 21st century organizations," in Debi S. Saini and Sami A. Khan (eds.) (1999) (forthcoming). Saini, Debi S. (1999) "Towards Organizing Labour Struggle under the Legal Framework of Social Justice: Rhetoric and Reality." Paper presented at the workshop of CROP Programme ofInternational Social Science Council on "Law & Poverty III: Law as a Tool for Combating Poverty" held at International Institute for the Sociology of Law, Onati, Spain, May 19-21, 1999. Saini, Debi S. (1998) "Emerging Challenges for Managing People in New Business Scenario," Paradigm. 2 (1). Management

& Change. Volume 3. Number 1 (January-June

\999)

168 Review Article Saini, Debi S. (1997) "Globalization, Human Resource Management and Trade Unions," Management & Change, 1 (2). Saini, Debi S. and Sami A. Khan (1999) (eds.) Human Resource Management: Challenges for the New Era (Forthcoming). Secretan, Lance H.K. (1996) Reclaiming Higher Ground: Creating Organizations that Inspire the Soul. New Delhi: Sage Publications. Sukumar, R. (1997) "Wanted: The Multi-skilled MBA," Business Today, December 7-21. Sodhi, 1. S. (1999) Industrial Relations and Human Resource Management in Transition. New Delhi: Shri Ram Centre for Industrial Relations and Human Resources. Storey, 1. (ed.) (1989) New Perspectives on Human Resource Management. London: Routledge. US Department of Labour (1994) Fact Finding Report-Commission on the Future of Worker-Management Relations (Also called John T. Dunlop Commission Report), Washington DC, USA. Venkata-Ratnam, C. S. (1997) "Labour-Management Relations in an Era ofGlobalization," Management & Change, 1 (1). Debi S. Saini, Ph.D., is Professor-Human Resource Management Area, Institute for Integrated Learning in Management, 3, Lodhi Institutional Area, Post Box No. 3127, Lodhi Road, New Delhi-l 10 003. He earlier served at Gandhi Labour Institute, Ahmedabad and University of Delhi. His areas of research and consultancy include: industrial relations, labour law, human resource management, and negotiation. He has edited or authored five books mostly in these areas. His present academic involvements include: writing a volume on "Social Security Law in India" to form part of the International Encyclopaedia of Laws being published by Kluwer Law International, The Netherlands; and editing Management & Change. He is a consultant to ILO and a member of Editorial Board of Industrial Relations Journal, UK. He was recently invited to a workshop on "Law as a Tool for Combating Poverty,"organized by the CROP programme of International Social Science Council held at International Institute for Sociology of Law, Onati, Spain, where he made a presentation linking labour justice issues with the sociology of labour law framework in India.

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BOOK REVIEWS

Business and Economic

Environment

I. G. Patel, Economic Reform and Global Change. New Delhi: Macmillan India Ltd., 1998. vi+ 328 pp. Rs. 280 hard. This volume based on sixteen lectures delivered by the author between 1985 and 1997 covers enormous ground. The lectures classified under five broad themes vary from personal reminiscences to policy formulation. The five sections are: economics in a changing world, economic reforms in India, prospects of the Indian economy, education and development, and global change .. Patel's deep insight into the theory and practice of economic policy is borne out at the outset in the introductory essay on India's unfinished reform agenda. The main thrust is on a clear sifting of the available international experience of other countries which shows a large variation across countries as regards the different regimes and policies under which high growth was realized. Patel's priority in case ofIndia is the improvement in the area of public finance and more widely the working ofthe public sector. The more fundamental issue that lies at the root in all areas of the reform process is creation of a new environment which leads to autonomy coupled with transperancy of decision-making ability of the governments to regulate markets rather than control them and more widely to enforce the agreed and nationally approved rules. Patel considers a large number of areas where reforms are needed; but as one can appreciate, the discussion is rather brief. Some of these are, however, taken up in greater detail in the subsequent chapters. Part-I of the book which attempts to review some of the new themes in development economics begins with the Stamp Memorial Lecture delivered in 1985. Patel is very rightly critical of the realm of economic policy being excessively preoccupied with short-run stabilization rather than with questions of efficiency and longrun growth. He goes on to consider questions of social justice and social infrastructure. He also argues for planning with a change in its content and mode of execution. The next two chapters are based on Patel's more recent lectures-one at the World Bank in 1993 and the other in memory of Dr. Lakdawala in 1996. As expected, these two lectures are more in tune with the issues and preceptions that are current~y in the forefront. Part-II of the book, consisting of chapters 4 through 9, focuses on India's economic reforms. It examines the policy regime brought in by Rajiv Gandhi besides specific issues like financial liberalization and the mechanism of policy formulation. In the last chapter, Patel focuses on the interaction between politicians, bureauManagement

';9 1999 Institute for Integrated

170 Book Reviews crats and professional experts. Part-III ventures to probe into the future. It examines India's prospects of emerging as an economic giant, the state of the economy two decades from now, and challenges we would face over the next century. Part-IV has two chapters, one of which deals with the role of education in economic development and the other with British higher education system. The purport of the latter is the extent to which education can be an export item and whether it can be subjected to a process of marketization. The last two chapters deal with international economic governance focusing on the IMF, the World Bank and the GATT. Both of these are based on lectures delivered in 1994 and 1995 and deal with a number of issues concerning the developing world. Patel has unusual credentials as an economist and as a man at the helm of policy-making in India for several years. Needless to mention in addition his having been Director, London School of Economics; Governor, Reserve Bank of India; Finance Secretary, Government oflndia; and Director, Indian Institute of Management, Ahmedabad. Patel has also had a number of important assignments with international organizations including IMF. Given this the volume under review has to be taken a serious note of considering that many of the chapters were written more than a decade back and that the last few years have witnessed major changes in the policy regime and perceptions of the ends as well as the means of economic policy. Patel's views may not be flawless. All the same, one is struck by the fact that the cornmon theme and the common thread that runs through every essay is one of balanced thinking on analytical issues and the need for pragmatism with regard to policy-formulation. This is well in line with what one would expect from one who has been on both sides of the game and has had to deal with such a wide variety of issues at various levels. The volume is quite readable and worth going through by both the specialist as well as the amateur. V. Pandit (Dr.) Professor of Economics, Delhi School of Economics, University of Delhi, Delhi110007.

, Terence J. Byres (ed.) The Indian Economy: Major Debates since Independence. New Delhi: Oxford University Press, 1998.424 pp. Rs. 575 hard. The book under review is an important addition to the existing work on the Indian economy. While it reflects a view from the left with which many may not be in full sympathy, the comprehensiveness of the presentation will help not only the leftists but also others who disagree with them. The second chapter titled, "The Creation of the Tribe of Pundits Called Economists," undoubtedly will become a compulsory reference for anyone working on Management

& Change, Volume 3, Number I (January-June

1999)

Book Reviews

171

the history of Indian economists. Apart from the substance, the chapter contains interesting anecdotes and descriptions about towering personalities that make good reading such as the brief account ofB. R. Shenoy, "a prophet before his time," who was an active opponent of state intervention and planning, and the reported transformation of Jagdish Bhagwati from a "planner" to a neo-liberal. So is the description of Pitambar Pant-unquestionably one of the outstanding figures of Indian planning, second only to the towering figure of Professor P. C. Mahalanobiswho also produced a detailed report that provided the basis for India going metric. The account of the "final failure" of Planning Commission's Deputy Chairman, D. R. Gadgil to put into practice what he had so consistently and persistently preached before joining the Planning Commission, has the quality of a gripping tragedy. The papers by Sudip Chaudhuri on "Debates on Industrialization" and Rathin Roy on "Debates on Indian Fiscal Policy" are comprehensive accounts of the main issues. As is to be expected, distributive issues are important in both the papers. Chaudhuri captures the debate about the "home market" and exports in a succinct way. His export pessimism, apprehensions about transnational corporations, and belief in the efficiency ofIndian industry are clear from the paper. Roy's three-way classification of the debate on fiscal policy-the classical Marxists, the liberal pluralists, and the followers of new political economy-is a neat way oflooking at the issues. His description of the debates on Indian fiscal policy as "Riches among Sterility" may, however, be a bit unkind. Prabhat Patnaik describes the debates on planning with his usual inimitable lucidity. Both Patnaik's and Jayati Ghosh's papers on liberalization debate highlight the importance of land reforms, the pessimism about price as a tool to stimulate supply response in agriculture, and a general apprehension about the expanding role of international finance capital in the world economy. What strikes the reader the most is that while the concern of the swadeshi lobby is quite different from that of the left, the agenda of both appear to coincide on the external liberalization front. Forget that the Government's performance in the areas of its core businesses-law and order, primary education, primary health centres, water supply systems and roads-leaves a lot to be desired. Furthermore, never mind the evidence to the contrary from the profit and loss accounts of the public sector. The left's main distinction lies in the faith it reposes in the Government's ability to run businesses. AshokLahiri (Dr.) Director, National Institute of Public Finance and Policy, 18/2, Satsang Vihar Marg, Special Institutional Area, New Delhi-II 0067. Philippe Cadene and Mark Holmstrom, Decentralized Production in India. New Delhi: Sage Publications, 1998.413 pp. Rs. 525 hard. This edited collection of case studies by sociologists, social anthropologists Management

& Change, Volume 3, Number

I (January-June

and 1999)

172 Book Reviews economists suggests how industrial districts or (efficient) networks of small but technically and economically interdependent fIrms can provide more jobs and help achieve economic growth. The volume contains thirteen chapters, including an introduction and a conclusion, and the contributory chapters are divided into four parts. In the Introduction, Mark Holmstrom, while discussing the concepts of industrial districts and flexible specialization, also explores the prospects and problems of small fIrms in Incia. Holmstrom reiterates the argument for encouraging smaller fIrms, ranging from amorphous informal sector to high technology and sometimes capital intensive fIrms, that iflarge fIrms cannot provide enough jobs, or if they are too inflexible to seek and supply new markets, then Small and Medium Enterprise (SMEs) can fill the gap. He also cites the various reasons why India has encouraged the small firms, and restricted the growth of the large ones. Holmstrom sets the theme of the book by emphasizing the well-recognized fact that in the wake of increasing competitiveness, ever faster technological change and innovation, production methods and labour need to become more flexible. Quoting from Semlinger (1990), he distinguishes flexibility which takes the form of active versatility from that of passive pliability, (sometimes distinguished as high road and low road flexibility,) offensive and defensive flexibility and suggests that small firms often resort to the latter kind of flexibility. Papers in the first section of the book discuss issues relating to industrial districts, decentralized production and flexible specialization. Arnaldo Bagnasco discusses the successful experience of the third Italy as a dynamic example of the revival of successfully networked small firms. He hastens to add that the firms in the third Italy have worked efficiently in the market only because they were embedded in a dense and complex web of relations with local culture and society (p.57). In the next chapter, Hubert Schmitz and Khalid Nadvi discuss the experiences of small firms from rich industrial countries like Germany, industrializing countries like Brazil, and less-developed countries in South Asia. They found that in South Asia, shared identity often played an active part in providing the basis for interpersonal relations, for notions of trust and reciprocity, and for providing social sanctions that limit the boundaries of accepted competitive behaviours. Caste and ethnic identities were found to be important criteria in delineating social groups in small firm clusters. Based on his work in Rajasthan, Philippe Cadene unravels the complexity of the social subsystems, which the industrial clusters constitute. The next three chapters by Mark Holmstrom on engineering and electronics in Bangalore, Paul Kattuman on the Indian bicycle industry and Meenu Tewari on the role of the State in Ludhiana' industrial regime discuss the theme of making of the Indian industrial districts. Mark Holmstrom focuses on the different aspects of flexible specialization, i.e., technology, market-led innovation, networks and employment and the work-process. Paul Kattuman identifies the conditions that were suitable for labour and entrepreneurship to self-organize into an industrial district, Management

& Change, Volume 3, Number

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Book Reviews

173

while Meenu Tewari argues for the need to examine historically and intersectorally how work is organized and how it changes over time. Peter Knorringa's paper on Agra's footwear industry shows how outdated technologies, and internal caste-based antagonism between makers and sellers; work as obstacles to take advantage of the networked small fIrms. Veronique Dupont analyzes some facets of industrial clustering and flexibility in the small-scale textileprinting industry in western Gujarat, and Theo Van Der Loop identifIes several factors that make cooperation between building-construction firms in South India very diffIcult. The last section of the book includes two papers on the politics of industrial districts, and discusses the role of business associations, which provide services to entrepreneurs and relations with governments. In the concluding chapter, Cadene makes observations on the recent developments in the Indian industrial districts, and the relevance of traditional networks to new economic activities. He concludes that entrepreneurs who playa central role in local development do not have a clearly defIned social position, which he interestingly attributes to the close overlap between merchants and industrialists in the Indian economy, the close ties between entrepreneurs and family/community structures, (undue) importance of partnerships, the manner in which productive labour is organized and the role played by intermediaries in the production process. This edited volume, no doubt, is an invaluable addition to the little researched theme on the role of small fIrms in globalized India in an increasingly competitive environment. Reading the book has personally enriched me and I am sure it makes an immensely interesting reading to all interested in the revival of industrial districts and flexible specialization. Kuriakose Mamkoottam (Dr.) Professor, Faculty of Management Studies, University of Delhi, Delhi-II 0 007.

Bibek Debroy (ed.) Challenges of Globalization. New Delhi: Rajiv Gandhi Institute for Contemporary Studies and Konark Publishers Pvt. Ltd., 1998. xxii+492 pp. Rs. 500 cloth. Globalization has redefIned the economic, political and even social agenda all over the globe. It provides both opportunities and challenges to state, industrial groups, and people in general. Its working in some countries has demonstrated promise in potential while in others it reflects pitfalls and despair. Despite the debate, nations have very little options in further strengthening it; it seems to have become a prerequisite for speedier development. However, the debate still continues. The book under review contains one of the finest collections of papers on the various facets of globalization brought out by the Rajiv Gandhi Institute for ConManagement

& Change,

Volume 3, Number

1 (January-June

1999)

174 Book Reviews temporary Studies (RGICS), New Delhi. Fifteen distinguished economists and administrators have contributed these papers, most of whom have made substantial contribution to policy making and implementation. They include: Oktay Venal, 1.G. Patel, Mehboob-ul- Haq, Ismail Serageldin, Godwin Obasi, Padma Desai, John Elhott, Gilbert Etienne, P. N. Dhar, C. K. Prahlad, among others. The essays comprehensively cover different aspects of globalization and answer questions such as: what is meant by globalization? What are its challenges? Do forces of globalization lead to inequitable development across countries or do they produce uniform benefits? What is its impact on the gender gap and on the present and future generations? How can countries best tap the opportunities thrown open by globalization? How does India fit into the globalization syndrome? Nine of the papers focus on global developments in general; the remaining six have substantially focused on India. In the lead paper, Oktay Venal has argued that the first industrial revolution did not spread to countries beyond Europe and North America due to difficulties of technology transfer but the second industrial revolution, i.e., communication revolution being witnessed presently, has enabled a quicker transfer of technology. Deepak Nayyer contrasts globalization of the late 19th century with the present one. He has made a case for prudent macro-management and active intervention by the state in minimizing social costs or negative externalities of globalization. 1.G. Patel fmds seeds of a new inequity in five different aspects in the new phase of globalization. Among others, he laments that governance of existing global institutions like the WTO, the Security Council, the IMF, the World Bank is not equitable or democratic. Mehboob-ul-Haq makes a case for the evolution ofa global civil society. Sustainable development is the main focus ofIsmail Serageldin and Godwin Obasi. Padma Desai has focused on the Gorbachev Reforms, which she argues were slow because market reforms were not clearly unders!ood by those at the helm of affairs. ~. Out of the six papers which focus on India, the one by Gyohten identifies India's role in the development of Asia-Pacific economies. Gilbert Etienne's paper compares China, India and Pakistan and identifies weak links in economic performance in these countries. His specific focus is on agriculture, electricity, transportation networks and public sector. P. N. Dhar argues that economic reforms in India must be coupled with the task of reshaping external relations. C. K. Prahlad's paper suggests that for successful globalization of the Indian economy we need to work on two dimensions: building a world-scale domestic market by further opening up of the economy to new products and services, and building more professional competitors. The essays have been preceded by an articulately written introduction by Bibek Debroy, Director ofRGICS. He has tried to knit the themes handled in the title of the book. His introduction is insightful and helps the reader in grasping the book better through a helping hand.

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Book Reviews

175

This volume has a great potential of further fomenting the globalization debate by involving in it even the non-economists and those who are not professional social scientists, eventually helping the case of the champions of globalization. It clears several misapprehensions which people have about this concept. The essays have in fact raised more questions than they have answered. The book's strengths include: rigorous but jargon-free analyses, extremely simple language, and almost flawless editing. As Sonia Gandhi has pointed out in the foreword, in adopting globalization policies what we need is 110tjust new institutional framework at the global level but a changed mindset. While the quality of essays is of a high order, it should be pointed out that especially in a huge developing country like India, the globalization debate can never be adequate unless it substantially raises and answers questions on unemployment, labour market functioning and labour law reforms. In fact, in the context of large, developing countries-and especially in democracies like India-any globalization agenda are bound to be controversial. It is mainly for this rea~on that the Indian labour law framework continues to be hostile to the globalized economic framework. No government has dared to alter it. Incidentally, there is no paper to cater to these issues. We do have several specialists in this area, in India as well as elsewhere, at least one of whom should have been approached to write on this theme. One comes across a large amount of often uncritical comments by people from various walks of life-from Parliamentarians to academics to trade- union leaders-:-related to the impact of globalization on labour. Especially when the book targets a large audience, such a paper ought to have been sought. While some argue that globalization philosophy per se is anti-employment especially in the short-run, common people wish to expect that there should be a minimum attack on dignity of labour, quality of worklife, and industrial pluralism. The book should have touched upon these aspects more directly, rather than merely by implication. Labour markets and their built-in inequalities do fmd a place in the paper by Krishna Ahooja-Patel but her analysis confines to the exploitation of women's labour in the drive to increase productivity. All in all, it is ajoy to read this book which is undoubtedly a great contribution from the Rajiv Gandhi Foundation to the globalization debate. It will surely allay many unfounded apprehensions and answer several queries so as to put the issues on the right pedestal. A very comprehensive index at the end further adds to its value. The book has been produced highly professionally, and truly upto the standards of the' globalized era. Debi S. Saini (Dr.) Professor-HRM Area, Institute for Integrated Learning in Management, Post Box No. 3127, 3, Lodhi Institutional Area, Lodhi Road, New Delhi-ll0 003.

Management

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1999)

176 Book Reviews Arun Monappa and Mahrukh Engineer, Liberalization and Human Resource Management: Challenges for the Corporations of Tomorrow. New Delhi: Response Books, 1999. 217 pp. RS.195 paper. Even before the Narasirnha Rao government initiated the liberalization process in 1991, industry was already facing the pressures of competition and the need to cut costs. Organizations were able to take stiff measures because the market demanded and the trade unions were largely incapable of resisting these measures. Organizational responses typically included farming out business, ancillarization, closing down unprofitable units, and downsizing. In this context, managing human resources had a "darker" side, reflecting as it did in retrenchment, Voluntary retirement scheme (VRS), stiffer productivity bargaining agreements, unilateral increases in workload and reduced manning levels. All these issues are now old hats and such organizational responses have already been elaborately documented quite some time ago. Since then, the problems facing the industry are of a different type. Generally speaking, organizations do not have to worry too much on managing a recalcitrant workforce or militant unions. Managing the negative side of workplace governance has now been replaced with the need to integrate and motivate employees for qualitatively higher organizational performance. The need to reduce operating costs, downtime, wastage and increase productivity is certainly there. But this need to produce "more for less" is being seconded by the need to produce better quality goods and services. For organizations to survive and grow in this competitive market, this is the mantra. Inputs like technology and higher investment do playa role, but they soon even out. The only cutting edges organizations are left with are its people and enabling mechanisms. The irony is that while organizations claim that human resources are their biggest assets, in real terms they do precious little to harness the immense potential of their employees to ens!lre superior organizational performance. A recent study by Pfieffer documents this widespread organizational tendency. The first problem of the book under review is that it undertook a survey of 22 companies to "seek the views ofCEOs and senior professionals shaping the human resource policies and destinies of various organizations" (emphasis added). Now the problem with "views" is that often they represent the ideal state, and not necessarily the ground reality, as Pfieffer's study has so powerfully demonstrated. This methodological problem has been further compounded by the treatment of the survey findings. References to the survey findings have not been treated in a unified manner; rather they lie scattered throughout the book as passing references. The reader is therefore confused, if not clueless, as to what exactly the surveyed organizations state, much less do. Perhaps the greatest limitation of the book is the absence of a frame of reference, either conceptual or action frame. A student or practising manager must know Management

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how an organization can go about harnessing its human resources for enhanced performance; what actions to initiate and under what conditions. The book under review singularly fails in this direction. This failing has been seriously compounded by short references to virtually every term even remotely associated with human resource lexicon (stretching from poverty, education, privatization, subsidies, National Renewal Fund, to delayering, reengineering and benchmarking). Obviously, having a cursory familiarity with such terms can be of little comfort or help to the reader. The "action steps" do not help either, because before a manager embarks on reengineering, he must first be clear if such an intervention. is at all required in his organization. Nor is there any discussion on the pitfalls or references to the many failed attempts on this score. If the book had provided even a few reasonably detailed case studies, perhaps the readers themselves would have overcome the above limitations. Instead, boxed items provide us with such information: (i) "Importantly, Tata'Steel also managed to raise labour productivity by 30%" (p. 25); (ii) "SAIL and ITI are good examples of Indian public sector corporations undertaking a hierarchy reduction exercise" (p.54); or (iii) "Five teams have been formed at American Express to reengineer processes in organizational development (sic), performance management, staffing, skilling and the reward systems" (p. 102). Readers do not get a clue how these were managed, the facilitating parameters or the associated problems. Of late, performance management has emerged as a powerful tool to improve organizational performance in a comprehensive manner. The book does deal with this aspect at some length (pp. 151-66). Alas, the treatment reflects the same lack of conceptual clarity evident throughout the book. It neither defines what performance management is all about, nor does it provide the basic understanding that performance management is an organic activity woven together by a network of organization design, systems, processes and practices. So, if a reader wants to familiarize himself with possibly all the terms associated with HR/IR and what is happening where (but not the why and how aspects), this is certainly the book for him. And, considering the proclivity of most HR practitioners, it may not, after all, be a bad idea. Somnath Ghosh (Dr.) Professor, Human Resources and Industrial Relations, Centre for International Management, A-231, Okhla Industrial Area, New Delhi-II 0019.

Atul Sarma, Germit Faber and Pradeep Kumar Mehta, Meeting the Challenges of the European Union: Prospects of Indian Exports (Indo-Dutch Studies on Development Alternatives). New Delhi: Sage Publications, 1997. 346 pp. Rs. 425 cloth. This study is an excellent example of an interactive collaboration between Indian Management

& Change,

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I (January-June

199<))

178 Book Reviews and Dutch scholars under the Indo-Dutch Studies on Development Alternatives (IDPAD). Exports playa crucial role in India's new market-driven economic policies, progressively ushered since 1991. The European Union (EU), which has completed its market unification with the launching of its new currency, the euro, constitutes the largest market for India's exports. This has presented both challenges as well as opportunities for Indian exporters. This makes the present study of vital significance. Divided into three parts, the volume first outlines the changing policy environment in both India and the EU, in the context of the general global environment, particularly the impact of the Uruguay Round. In the second part, the authors rigorously analyze India's export performance with the EU in terms of growth, composition, market share, and other relevant indicators. They identify the commodities which currently dominate India's exports to the EU while drawing attention to those items which are in the dominating as well as promising class (including exportable and residual). Applying a number of analytical tools, the authors also evaluate India's competitive strength in the ED market compared to its competitors from other non- EU countries. Part 1 of the book relating to the changing policy environment has attempted to take note of the changes in the policy regime in India as well as those relating to the EU in its unification process and the newly emerging trading environment in the wake of the Uruguay Round agreements, and to assess these sets of forces on Indian exports. The study has also attempted to identify the areas for concerted policy initiatives to facilitate rapid Indian export growth in the EU market. The worth of the study is enhanced by an attempt to obtain some insights from the real actors in the field, viz. Indian exporters and the EU importers ofIndian goods on the basis of a primary survey. The final part of the book contains the responses of both Indian exporters and European importers ofIndian goods to the various policy changes. Based on their responses, together with insights obtained from the analysis of research data, the authors suggest a number of policy initiatives-general as well as sector-specific to enhance India's penetration into the EU market in the emerging environment. The authors contend that it is no mean achievement that India could improve its growth performance during the period of protracted recession in the EU but this growth performance is marked by the fact that Indian exports are largely confined to only two member states of the EU, viz., the UK and Germany, accounting for more than half of its total exports to the EU. The study further highlights the not so obvious fact that the Indian exports to the EU relate to the sectors in which EU exports grow the least. This sets a limit to the Indian export growth in the EU unless the product mix is changed and larger access in terms of covering wider areas in the EU market is targeted. The authors point out yet another limitation of the Indian exports to the EU, viz., a high degree of concentration of three commodity categories, viz., textiles, Management

& Change.

------------~""l~,

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1999)

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Book Reviews

179

leather and pearls (largely diamonds), account for around three-fifths of the total Indian exports to the EU. The same could be said of products represented within the three commodity categories. Having observed this, it is not clear how "a wide pre~ence of Indian goods in the EU, even if negligible, reflects the diversified structure of the Indian economy" (p. 324). It is, however, heartening to note a discernible tendency for Indian commodities, such as chemicals, base metals, vehicles, machinery and plastics associated with higher technology and skill both within the three dominating categories as well as outside them. The authors contend that the present incentive structure encouraging large business houses can not add too much. This is so because the bulk of Indian exports in fact produced by the small-scale sector suffers from shortage of funds for technological upgradation. It may be stated here that th(: integration of a number of individual markets into a large-sized uniform market may also mean largesized orders in some specified products. This raises the issue of the policy of reservation for this sector. The authors also point to the infrastructural bottlenecks that constrain the export effort. These relate to uncertain power supply, inefficient road transport, poor credit, and ill-equipped port facilities. To make matters worse, there is wide divergence between policy intentions and their actual implementation. It is the shared view of exporters that complicated procedural and operational requirements often lead to delays in delivery schedules (p. 326). The authors have pointed to the need to streamline the incentive schemes so as to make them mutually consistent. Not only this, the very nature of these schemes involving export subsidies have recently been put to task by the EU, stating them to be WTO inconsistent! The authors have stated that Indian exporters seem to be catering to the lower segment of the market, particularly in the dominant textile groups. There is no harm in such a specialization as long as they retain a competitive edge in these sectors. They nevertheless need to augment their investment for modernization in order to cater to the higher end market segment. Instead, they seem to be interested in quick profits, thereby foregoing the more challenging option of moving into more sophisticated lines of production which holds the promise for the future. The value of the study is to some extent diminished by not including the countries which became members on the fourth enlargmement in 1995, viz. Austria, Finland, and Sweden. A matter for further concern is that East-European countries such as Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, et~. have already made a formal request for membership. It may be noted in this context that geographical proximity and common history and culture confer an advantage on the suppliers in East-European countries over Indian exporters in the ED. Another matter for concern is the immense competition that India is facing from other developing (particularly ACP countries of Africa, which have preferenManagement

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1 (January-June

1999)

180 Book Reviews rial access to the EU market) as also from countries such as Turkey which have entered into a customs union (effectively zero tariff) with the EU. In such a situation, the GSP through which the EU accorded duty relief to developing countries, will increasingly lose value. Perhaps the study could have highlighted India's competitiveness vis-a-vis its competitors in terms of the relative unit costs in competing products to bring out more clearly the future thrust of India's export strategy. Finally, noting the close link between trade and investment, the new strategy may warrant our manufacturers/exporters to tie-up investment with their European counterparts having marketing skills, to move production to more sophisticated value-added products. The book is silent on these possibilities. The authors deserve to be complimented for bringing out this study at a time when the EU has launched a common currency. This considerably improves India's opportunities for making entry into a wider unified market even though the challenges are equally daunting. Given this context, the policy options that this study highlights provide an opportunity for our manufacturers/exporters to overcome the constraints and to seize the opportunities. Indernath Mukherji (Dr.) Professor, School of Social Sciences, Jawaharlal Nehru University, New Mehrauli Road, New Delhi-l 10 067.

General Management Arun Wakhlu, Managingfrom the Heart: Unfolding Spirit in People and Organizations. New Delhi: Response Books, A Division of Sage Publications India Pvt. Ltd., 1999.239 pp. Rs. 425 c1oth!Rs. 245 paper. Gerhard Plenert, World Class Manager: Olympic Quality Performance in the New Global Economy. New Delhi: Excel Books, 1998. xvi+430 pp. Rs. 450 cloth. People management has never been more important than it}s today. For achieving organizational excellence and competitive advantage, organizations worldwide are striving hard to inculcate the right kind of value system among their employees. A plethora of literature has emerged suggesting people's involvement and empowerment in that regard. And it has been well established now that much of excellence depends on how do you look at your set of people and what kind of learning ambience you create for them. The first book under review, Managing from the Heart: Unfolding Spirit in People and Organization by Wakhlu (e-mail: oshiana@bom3.vsnl.net.in) is one of the important contributions in this regard and marks the culmination of his ten years of hard work as a consultant and trainer. Wakhlu in his endeavours has Ma:lagement

& Change, Volume 3, Number

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Book Reviews

181

discovered some key principles which make the working in teams and organization more peaceful and prosperous and bring joy to life for everyone. The author views that there is already an enormous amount of information on areas such as communication, values, thinking, learning and spiritual traditions but only a few books hold it all together in a unified single framework, and the present volume is an attempt towards this direction where vast amounts of information and ideas from authentic ancient wisdom have been synthesized and presented in an integrated form as a new paradigm of management thought. The book consists often chapters dealing with topics ranging from thinking to team-building to leadership to networking. In chapter I, introducing the theme, the author emphasizes on three important realities oflife i.e., insight, its integration, and inspired action, which intertwined together make the managing of the people from the heart a pleasing possibility. Chapter 2 presents ideas about living from the heart through meditation. Referring to Sufi whirling, transcendental meditation, Vipassana , Siddha Samadhi, Yoga and Osha's methods, the author suggests that the objective of all these methods are the same leading towards the purification ofthe heart. It is upto the individual to trust the peace of his heart to guide him to the right method and to be a good manager. Meditation benefits individual as well as organizations and people have the feeling of worthiness and self-respect; the level of energy and vitality is increased and the feelings of anxiety and hostility get decreased. As a result, creativity unfolds, better team-work occurs and individual performance reaches its pinnacle. Wakhlu feels that organizational excellence has its genesis in good thinking (p.82). In chapter 3, he provides insights for understanding the importance of good thinking and how the mind works. Different ways to enhance our capacity for creative thinking using interesting metaphors and references are given at the end of the chapter. Chapter 8 provides insight on team-working, and the crux of the message according to the author is "existence is one whole symptoms of working together joyfully." New learning emerges from team-work and problem-solving, and leadership is nothing but inculcating learning in individuals and teams which leads to unfold joy and keep the frontiers of excellence expanding. Citing the reasons for the failure of team-working, the author feels that most teams fail because all aspects of good team-working are not paid attention together or because teamworking is not wholesome. Defining wholesome, the author opines: wholesomeness is about boundarylessness. It is holding apparent contradictions together and harmonizing polarities. It is being comfortable with both night and day, with breathing in and breathing out, and peacefully integrating apparently opposite forces such as stability and progress (p. 185). Chapter 9 titled: "Leadership-- The Art of Wholesomeness" is the most imporManagement

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1 (January-June

1999)

182 Book Reviews tant part of the book. Leadership is defined as the process of unfolding and channelizing human energies for worthwhile and life-affirming ends. Leadership is nothing but ensuring balance and focus by creating useful change, inspiring vision and involving and empowering followers to take decisions and have a feeling of peace, joy and ease. The language of the book appears to be lucid, simple and inviting to the readers. Good use of metaphors, anecdotes and pictorial representation will make the reading more comprehensive and interesting specially for management practitioners. But at times, the author appears to be immensely philosophical which may create problem in relating one's actualities to the philosophy in a given context. The second book under review, Wold Class Manager: Olympic Quality Performance in the New Global Economy by Plenert is an outcome of the combination of his experiences in the industry and teaching and research. It is divided into four parts consisting of nineteen chapters. Plenert in this book introdues a new breed of manager i.e., the world class manager who makes change happen by incorporating systems which facilitate change rather than being just affected by change. The author first classifies managers using five Cs: Cash, Crisis, Conflict, Cool and Change managers. He identifies change manager as the best who searches for challenges in competitiveness and thrives on positive, goal focused changes using opportunities which make his work more exciting. Further classifying them on theory-X, theory-Y and theory-Z dimensions, the author comes out with fifteen types of manager and calls theory-Z change manager as world class manager (WCM). A WCM is a sunrise manager who involves employees and shows 'l~adership attributes facilitating the change to occur. Part two of the book provides world class strategies for managing organization. In this part, the author deals with global management strategies, time-tomarket strategies, integration, information, and measurement strategies, and valueadded strategies. In part three, world class management tools are provided. Reacting on different change model, Plenert summarizes that the best model for anyone is the one which he customizes for himself and his organization. In the last part of this book, fourteen success factors have been shortlisted for being world class managers. The first and foremost thing suggested at the end is not to waste time and to get involved in identifying areas of change, prioritizing them and then boldly going for it, one small step at a time. The book is the first Indian reprint of 1995 original edition from the US. In all, it will provide a good reading to management students and practitioners which is replete with quotes and figures. However, the superfluity of key terms and concepts loosens the focus and novelty of the text. Sami A. Khan (Dr.) Associate Professor-HRM Area, Institute for Integrated Learning in Management, 3, Lodhi Institutional Area, P. B. No. 3127, Lodhi Road, New Delhi-II 0003. Management

& Change, Volume 3, Number 1 (January-June

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BookReviews

183

Corporate Governance

c. V. Baxi (00.) Boardroom-2007.

New Delhi: Excel Books, 1998.212 pp. Rs. 325

hard. Corporate governance is a new terrain for the Indian manager. The Cadbury Committee report, supplemented by our own ClI's (Confederation ofIndian Industry) code has given a fillip to issues in corporate governance. The subject is not new. The understanding is. The economic, financial and industrial-organizational theories surrounding the aspect of governance have been well researched in the western world-obviously as the modern corporation has evolved in that milieu and the western capital markets are admittedly the precursors of related developments in our country. Against this, we have just a clutch of studies and publications in India examining the perspectives, structures and processes of corporate governance. The board is indeed central to the process of corporate governance. There are two facets that need examination. The first is the structure of the boards-both the legal requirements and the general practice; and the other is the process aspect. Fashionably, these have been termed as the "hard" and "soft" sides of corporate governance. While the first deals with the law, the second is often drawn into the vortex of values and ethics. The book under review looks at both these aspects. It is an edited compilation of the proceedings of a seminar funded by the British Council and supported by the Standing Committee on Public Enterprises (SCOPE). It contains a theoretical overview and also a comprehensive summary of the discussions. The first chapter takes an overall view of the emerging issues in corporate governance and refers to the developments worldwide and those in India. The chapter. gives particular emphasis to the board structures and processes. Recognizing the major role of the public enterprises, the book has devoted a substantial portion to examining the special concerns of this sector (strangely though, there is no reference to the recommendations of the specially commissioned study of the SCOPE titled "Corporate Governance & PSUs" of October 1997 or its earlier draft version). The next chapter by the editor debates the possible range of objectives for the board and the strategies of communication. The possible dilemmas and trade-offs among business objectives, market-structure objectives, financial objectives, technical objectives, legal and regulatory objectives, social objectives, environmental objectives, intellectual leadership objectives and entrepreneur objectives have been well-_documented. An interesting chapter in the book is about "Measuring the Board's Performance" which recognizes the methodological limitations and yet attempts at a typology and criteria. The advanced models in measuring corporate governance or the attempts of the global consulting firms such as the McKinsey for estimating it have not figured. Several other issues of improving the board's performance have also been brought into the limelight. Figures at various points Management

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1999)

184 BookReviews make the reading quite interesting. The fourth chapter titled "Building Responsive Boards" is based on the presentations by Colin J. Coulson Thomas. 'It deals with the varieties of the boards, types of boards, types of stakeholders, functions of the boards, the distinction between board and management, the organization and functioning of the board, qualities of directors, their selection, monitoring and control and the like. This chapter would be very useful for readers who wish to quickly understand the board and its functioning. The theoretical papers conclude at that point and the rest of the book, except the last chapter, is devoted to the summary of discussions at different locations. These discussions are centered around board strategy, structure, composition and effectiveness, and ethics and corporate governance-thus covering the "hard" and "soft" sides of governance. The last chapter titled "Future Directions" attempts at indicating the challenges in integrating board issues with macro-economic changes, the need for improving the structure and composition of the board, and increasing the levels of participation and the like. Suggestions emanating from the seminar have been listed under this chapter and a few of them are follows: "It was suggested that only when an individual has the requisite qualities, he or she should be made a director, rather than the present practice of appointing a division head on the board. Therefore, proper procedures for selection and induction are important;" "There is a need to draw a distinction between directors and management in terms of roles, responsibilities, board and management team, etc;" "The posts of CEO and chairman should preferably be separate;" "There should be a performance appraisal system for directors to identify deficiencies of knowledge, skills, and attitudes. There should be a selection committee who will interview the directors;" "The issues of regulation, shareholder's rights, and knowledge base of board are crucially important for board effectiveness;" "In respect of board committees, such aspects as roles and responsibilities of nomination committees, audit committees and other committees, collective responsibilities, among others are important areas, which the board should pay attention to;" "The major function of the board is to provide direction and long-term strategy, evaluate management performance, evaluate current performance, and maintain ethical and legal practices;" "The debate in the boardroom should focus on legal, financial, and internal accountability issues;" "In the case of public enterprises we need to delineate the specific issues of power and accountability. These enterprises will need to be free from overlapping jurisdiction of multiple controlling authorities. Clarity on the role and contributions of the suggested model of supervisory board is essential;" "One onhe problem areas, which needs to be resolved urgently, relates to the quality of information flows at the board level. This is one of the crucial determinants of the board effectiveness;" 'The board has responsibilities to develop a comprehensive code of ethics and ensure its compliance. In this regard, we may stress the dimensions of accountability, transparency, quality of management, and independence of Management

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the board." The book is an interesting addition to the Indian literature on this subject, which indeed has been rather limited. It is a good compendium ofthe happenings at an important seminar held on the subject and should interest practicing managers and members of the board in both public and private sector companies. The editor of the book, an eminent academician, has made great efforts at not only contributing to the book in the main but .also recording diligently the discussions and the summaries. The bibliography lists several good titles for further reading and analysis. Y. R. K. Reddy (Dr.) Chairman-Yaga Consulting Pvt. Ltd., 8-2-695/A/l, Road No. 12, Banjara Hills, Hyderabad-500 034.

Organization Theory and Organization Thinking Stewart R. Clegg, Eduardo Ibarra-Colado and Luis Bueno-Rodriquez (eds.), Global Management: Universal Theories and Local Realities. London: Sage, 1998. xi+308pp.ÂŁ

18.99 paper.

The book under review re-examines issues in global management caused by the globalization phenomenon. Globalization has made a powerful impact on management and organizational theories. As we know, management theory has promoted various representations, legends and myths that have shaped actions of practicing managers. But the important question is whether these universal management theories have consistent relevancy even within local contextualities. The book essentially explores-through various chapters written by distinguished management theorists from various countries-the dichotomy between "universalism" aad "locality." In sum, the book points out a tension between attempts at universalism and the pulls of situational particularisms in which specific substantive values can be seen as inherently present. These values could be the raison d'etre for a successful organization or could prove destructive and disorganizing. This is quite like the way organizational culture could be facilitative for organizational change or as one resisting change. Essentially, the essays challenge the idea that we can universally apply the rationalities of organization theory; they rather find application in quite different settings and diverse realities, with quite locally contingent results. The papers through which the above key theoretical question is sought to be explored were presented at an international colloquium organized by the APROS (Asia Pacific Researchers in Organization Studies) in the Mexican city ofCuernavaca in December 1995. Mainly, the papers deal with how local realities in the ambience of which practicing managers work resist universal theories. Management

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1999)

186 Book Reviews The book consisting of thirteen chapters is divided into four parts. The three chapters consisting of the first part titled "Global Myths that Changed the World" has attempted to deconstruct the global myths of management universalism. This part emphasizes that the universal management theory requires local error without which truth could not be transparent. It reveals that while the organizational logic presumes a universal character but in reality a diverse world co-exists with such universalist character. It examines how new recipes were developed in the postFordist/Taylorist management era to give way to more flexible forms of organization, which is the hallmark of the emerging context for globalization today. The first part however examines how far western values such as individualism, leadership, competition, initiative, etc. can fit in different cultures universally. As these often come in clash with community-held values, the universal theory may be looked only as a tool to shape individual and group behaviour. It is, however, doubted whether this tool is value-neutral. The book begins with a paper by Graham Sewell in which he gives a historical account of how universal strategies developed. Albert Mills and Jean Hatfield's paper titled "From Imperialism to Globalization" has shown how US textbooks containing the global agenda of management theories are totally silent about local realities. The three papers in the first part including that of Richard Dunford have attempted to explode global management universalism as a myth, which the management gurus have not attended to while coming out with their new recipes as discernible from what G. Burrell elsewhere has described as, "Heathrow Management Theory." The four papers in the second part-titled Remaking the World Locally--highlight the key role that local values play in organizational action. Victor Soria's paper shows that the World Bank's organizational paradigm emphasizing "adaptive" management based on certain specific universal values is failing. Bruno Grancelli's paper on Post-Soviet Management points out inadequacy of certain values for developing economic culture. It demonstrates that we cannot create market by mere state proclamation or base this process in the advice of consultants. Strangely, that is why, Russians are learning Weber's lessons on bureaucracy, a need of the local exigencies and considered obsolete by contemporary management thinkers. The last two papers in this part show that we often mistakenly take for granted the key role that local values play, and how these values affect the nature of theories, their prospects for implementation and their effectiveness when put in specific contexts. Part three, consisting of three papers critiques the global world of management theories by discussing: total quality management (TQM), intelligent organizations, and post-modernity and self-regulating systems in organizational action. Mihaela Kelemen deconstructs TQM, which is known to be perhaps the most commonly adopted aspect of global best-practice management. He unravels the implicit power relations that are hidden in the TQM concept. He shows how the top management tries to internalise TQM by super-imposing its own account on people's interpretaManagement

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tions. Stewart Clegg and Thomas Clarke, in their paper on intelligent organizations, show that competitive advantages that a country enjoys may be destroyed by organizational learning, especially if it is of exploitative type. Luis Montano studys the metaphorical nature of informal relations and their self-regulating role in organizations. This is also perhaps one of the best papers in the book, which is theoretical very rich too. In the three papers in the last part, the book opens up new approaches. Fernando Leal,s paper recommends a method of organizational dialogue and collaboration involving mutual negotiation of complementary views for settling different interests, values and conflicts. The next paper emphasizes collaboration as a political theory of organization-political here should be taken as conflict requiring debate and negotiation as opposed to application of settled rules. The last chapter by Royston Greenwood and others examines how professional services firms have not chosen the universalistic route in becoming global, and how they have developed styles of management which have roots in the national origin of the original form! s from'which the international firm has emerged. I must say that reading this book was a very learning experience for me. It enables management scholars to underscore how important it is their formulations formulating to be theoretically significant; something which is ignored by the flourishing management education industry in India and elsewhere. The papers help us to understand that it is dangerous to uncritically eulogize the excellence literature as universalistic without gauging the diversity of the milieu in which these theories are sought to be applied. It thus explodes as myth the "modem" as opposed to I post-modem orientations of organization theories. It should caution us that when the world globalizes the related sub-systems signifying specific value-differences may not move the same direction. It thus discounts the convergence thesis of management experts. Of course, it doesn't say that convergence will not take place even in the long run. This question in fact has not been addressed. But the longrun may be too long in the real sense of the term. The book is critical yet constructive. It will serve the needs of research students in comparative management, organization studies, human resource management and international management. It helps us to know thc~other side of global management. I must however say that the editors have not fully succeeded in making the book quite readable. A lot more is desired to develop coherence and fill the missing links. I wish a person like Luis Montano or Graham Sewell was taken as one of the editors who could contribute towards this cause. This apart, Global Management is a very important work in organization and management theory. It cautions against the uncritical euphoria for the contemporary excellence literature. It also serves the cause of diversity management as also cross-cultural management. Since diversity management is also attributed to the globalization syndrome, from this point of view the book may not be said to be a critique of universalistic theory but a complement to it. Management

& Change, Volume 3, Number

1 (January-June

1999)

188 BookReviews Debi S. Saini Professor-HRM Area, Institute for Integrated Learning in Management, P. B. No. 3127,3, Lodhi Institution~l Area, Lodhi Road, New Delhi-lID 003.

John Hassard and Ruth Holiday (eds.) Organization Representation: Work and Organization in Popular Culture. Thousand Oaks: Sage, 1998. x+271pp. £ 15.99 hard. The book under review is a collection of thirteen scholarly contributions edited by Hassard and Holiday. It invites us to share a variety of insights into the way in which an organization is represented in the popular media. Film, literature, television and journalistic representations are enveloped in "popular media." The editors underline that the focus of the book is frequently the material largely undiscussed in mainstream organization theory, as popular culture offers more dramatic, more intense and more dynamic representations of organization than management trends. Is such a shift meaningful for a better appreciation of the sociology of organization? Certainly it is. If it is, then what is the difference due to such an approach? To quote from the well constructed introduction of the book, "organization studies texts presented rationality, organization and monolithic power relations, popular culture plays out sex, violence, emotion, power struggle, the personal consequences of success and failure, and disorganization upon its stage." The book is divided into four parts: (i) Realism and Representation, (ii) Sex and Violence, (iii) Men and Supermen, and (iv) Organizational Future. There are fourteen appropriate illustrations also which enhance the value of each of the contributions in the context of comparing image and reality as well as fact and fiction about organizational dynamics. There has been an ongoing debate among social scientists about realism and representation in popular culture. Often it has been suggested that media are inclined towards idealization or sensationalization or trivialization of organizational setting and behaviour depending upon a definite ideological persuasion. Therefore, their construction and critique of organizational society are irrelevant but the editors assert that this debate has become political and significant since the 1960s' after the publication of the work on ideology by 1. Althussar (for Marx: London, New Left-Books, 1970) and on discourse by M. Foucault (Power/Knowledge: Selected Interviews and other writings 1972-1977 (Bordon, Brighton (ed.), Harvester Press, 1980) and the Foucault Reader (P. Rabinow, Harmondsworth( ed.), Penguin, 1986). They problematized the notion of the truth taking it beyond the text. The truth can only be established by reference to the social context in which such truths are produced. This demands contextualization of representation of reality and. the recognition of possibilities of alternative interpretations of representation depending upon life experiences or cultural situations. Here the media or the c~lture indusManagement

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& Change, Volume 3, Number

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Book Reviews

189

try is presented as an ideological tool which positions the audiences and readers in collusion with the system through politically pacifying meanings and messages. The contributions of Antonio Gramsci, Frankfurt school, structuralism and poststmcturalism are summarized in the introduction to signify the major theoretical orientations in the debate about reality and representation. The synoptic view of American and British films and television programmes about family life, policy, hospitals, corporations, women and work, political culture, success stories and futuristic visions provides interesting insights into the nature of media-society interrelations and interactions in the field of popular representation of organizations. The book is a bridge between social sciences and popular culture for enhancing our knowledge about the visualization ofthe world of work and organization in the popular culture. It also brings the students of organizational theory face to face with complex issues like morality, violence, sexuality and social conditioning. The section on organizational futures has very interesting discussions about human agency vis-a-vis technology. Cyborganisms, visual organization, and futuristic representation are appropriately introduced through separate articles in this context. Organization Representation is a necessary book for all those who are interested in exploring the representations of the complex and ever-changing world of work and organizations in popular culture. It is a well-organized collection and all the entries are easily readable and equally relevant. The book has a cross-disciplinary focus and is a significant contribution in the context of the interface between the media, management science, sociology, and cultural studies. Anand Kmnar (Dr.)

Reader-Department of Sociology, School of Social Studies, Jawaharlal Nehm University, New MehrauliRoad, New Delhi-1 10067.

Organizational Behaviour D. M. Pestonjee, Stress and Coping-The Indian Experience (2nd ed.). New Delhi: Sage Publications, 1999.322. pp. Rs.425 c1oth/Rs.225 paper.

Stress has become an integral part of our every-day lives. Han Selye, a pioneer investigator of the human body's adaptive responses, has written, "no one can live without experiencing some degree of stress all the time." Managers, whatever their level in the hierarchy, often fall victim to this modem demon. This phenomenon throws everything in disarray. Therefore, understanding this overwhelming phenomenon becomes a foremost priority for any organization whose people might be buckling under its massive force. Management

& Change, Volume 3, Number

I (January-June

1999)

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190 Book Reviews Managers, today, operate in a very uncertain and unpredictable environntJ.ent, and their foremost function is to make decisions under the accelerative thrust ofthe modem business environment. New needs, new markets, new technologies, new customers, new products, and novel emergencies demand rapid response. The reason why contemporary managers feel hurried and upset (or stressed out) is that transience, novelty and diversity pose contradictory demands and thus place them in an excruciating double-mind. In 1951, Albert Camus, a great philosopher and writer noted in his diary: "every achievement is a servitude; it compels us to a higher achievement." A modem "go getter" manager will certainly not agree to this easily, but if one ponders over the word "compels," one might see some light, some truth, some analogy with one's own reality, personal or professional. Achievement is a psychological upper. No doubt that laurels of success look and feel good but they demand a great price. One of the manifestations of such price is "stress." It is against this background that the book by Pleustonic makes its second appearance. A good seven years ago the first edition of this book hit the stalls and ran into several reprints. It was the time when liberalization was the catchword, everyone was flying high, overstimulated and treading forward into unknown territories. Seven years later, we realize that the newness of circumstances brought about a revolutionary change in the nature of organizational life and the decisions managers were called upon to make. The rapid injection of novelty into the environment had upset the delicate balance of the "programmed" and the "non-programmed" in our organizations and private lives. This is why a fresh look at certain aspects of Indian managers' life is a welcome step. The book is well-timed and is much needed. The book addresses most aspects of stress and its management. It follows a well-tried pattern in which the reader, who could be a beginner as well, finds it easy to swim through the theoretical sea of stress management. Consisting of eight chapters, festooned with adequate tables and figures, the book introduces to the reader the basic concepts of stress, definitions, theories and approaches-drawing concepts and inferences that the book is not a treatise on stress, but an attempt to assimilate a large mass of research information that has been generated by scholars in India. The first chapter introduces us to the concepts of stress and burnout, providing a bird's eye view of the various approaches to understanding "stress." Though these approaches are briefly presented but the charts and tables assist the reader to understand and comprehend these approaches in a useful manner. The second chapter involves the reader's mind in understanding the relationship between physiology and stress. There is a lot of "medical" jargon in it to be understood by the reader. The author has delved into the endocrinology of stress, explaining briefly the effects of stress on the endocrine glands and subsequently its effects on human behaviour. There are also rather brief insights into the environment and social factors and their interplay with stress. The last part of this chapter Management

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& Change, Volume 3, Number

I (January-June

1999)

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Book Reviews

191

provides the reader some interesting reports about the effects ofIndian indigenous drugs. After informing the reader about life events in the third chapter in the following two chapters, the author goes on to describe the organizational aspects of stress. These chapters are insightful for understanding concepts such as role stress at both the organizational level and at a smaller group/team level. He also introduces to the reader the ways and means of measurement of role stress. In chapter 6, the author talks about coping strategies: Various theoretical approaches are presented and discussed but the best part is where the author has shared the experience and methods used to beat stress in real-life situations in major Indian corporations. Although this has been done very briefly but it is an enlightening part of the book, which provides us useful insights into the real problems faced by on-the-job managers and organizations. After taking us through the psychology of stress in the seventh chapter, the author embarks upon the task of delineating strategies for coping with stress. This chapter is proactive as it nudges the reader by asking questions like: What can the organization do? What can an individual do? It also explains various methods to counter stress, ranging from awareness to physical exercise including yoga and meditation. An interesting chart is included towards the end of the chapter which is christened as an "Action Plan." This chart delineates stress into individual organizational and societal levels and prescribes various techniques and strategies for stress reduction and prevention. Overall, this book provides food for thought for managers, researchers and students of organizational behaviour and management, who ultimately have to deal with the vexed problem of stress. One thing that needs special mention is that the book is a veritable source of understanding stress in the Indian context and takes the toil of Pestonjee further by means of research and concept development. Shabir A. Bhat (Dr.) Reader, Department of Management Studies, University of Kashmir, Srinagar, Jammu & Kashmir-190 006.

J. P. Das (ed.), Working Mind: An Introduction to Psychology. New Delhi: Sage Publications India Pvt. Ltd., 1998. 278 pp. Rs. 175 paper. The book under review is, as the author says, a long answer to a short questionWhat is psychology about? Chapter 1 is titled just that and introduces, to the reader, the ambit of psychology and the context under which behaviour takes place. In this introductory chapter, the author discusses the relation of mind, body and soul and goes on to discuss historical revolutions like behaviorism, cognitive psychology, etc. The reader also gets to know the different branches of psychology. Management

& Change, Volume 3, Number

1 (January-June

1999)

192 Book Reviews In chapter 2, the author discusses the various methods of gathering information viz., observation, introspection experiments and clinical methods. Interestingly, the author reproduces an example of a clinical report as well as inventories and questionnaires. Thus, the reader actually gets an idea of what the author wants to explain by self-administration and participation. Chapter 3 discusses the physiological basis of behaviour wherein the nervous systems, brain and synapse are discussed. The chapter is short, simple and easily understandable, especially to a new reader, who may not have had biology as his subject in school. Chapters 4,5,6 and 7 deal with perception, learning and remembering, thought processes and language. These are fairly abstract concepts specially when they have to be explained to a lay reader and can become tedious and difficult to read. However, the author has done an excellent job in being simple, succinct and clear in his explanations. A special feature in this book is the Indian references which the author keeps making. To the Indian reader, it becomes that much simpler to understand, since he can relate to these references easily, as compared to examples from the western culture. From a vantage point, wherein the author knows the western culture and of course the culture from where he came, the book is a good blend of eastern and western influences. Another good feature of these chapters is that theories which psychologists have put forward are not discussed in detail, which could put off the first-time reader. The reader gets an overview ofthe theories, and consequently, has the option to pursue them in detail through further reading. In the chapter on "Thought and Language" the section on socio-cultural origins of cognition is particularly interesting and many introductory books on psychology don't give this insightful viewpoint to their readers. From here, the author goes on to creative thinking; thus he has not devoted a whole chapter to creativity, but just whetted the appetite of the reader. In fact, the reviewer feels that the author should have discussed this concept in greater detail, in the light of the growing interest and relevance of creative thinking in contemporary life. Chapters 8, 9 and 10 cover topics of which most people have some awareness, i.e., emotion and motivation, intelligence, and personality. The author starts emotion with a story about King Dashratha which is emotive and totally in sync with the Indian and lay reader and an interesting way to hold the reader's attention. Also, the glossary of some concepts which originate from social psychology, at the end of the chapter leaves the chapter short and yet informative enough to whet the appetite of the new reader. Intelligence has again been dealt with in a similar manner, with tests of intelligence in India given some thought. Thus the reader gets first hand information about where India is on the "Intelligence" map. In this chapter, the reviewer felt the absence of the introduction to the concept of emotional quotient EQ, which was introduced to us by Daniel Goleman and is definitely worth a mention. The novice should be kept aware of what is the latest in any area, for him to choose where he would like to delve deeper to develop his own interest area. At Management

& Change,

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the end of the chapter the author has given a beautiful poem in retardation, which literally adds poetry to the chapter. The chapter on personality is well written, but once again his Indian references catch the eye. His relating the personality of Chandrashekar, the famous Indian physicist to the Indian personality concept of Sattvik, Tamsik and Rajasvik is interesting and clarifies, further, the trait theory of the The Bhagwad Gita. The last chapter in the book is on Language-the learning and understanding of it. It is well explained with usual examples from day to day life; he normally draws from his own experiences, at home or from work. Thus, one can say that the book is short, precise and simply written. He gives, at the end of each chapter references, questions and suggested reading which is very helpful to the lay reader-the reader knows what to refer, in case his interest is aroused. The questionnaires and inventories give the reader an awareness of his own self, and stimulate his urge to know more. Practical tips related to the subject are also given, e.g., in the chapter on memory, the author has a sub-heading of how to improve learning and memory, a definite help for those who have a memory problem. The book is a good introduction to a first-time reader, who wants to know what psychology is all about. Some topics however, could have been included, which are conspicuous by their absence and have relevance to contemporary society viz., adulthood and old age, different forms of therapy and assessment testing. For a student of psychology, statistics and its relevance should also have been included. Overall, this is an excellent book for a lay reader; however, for students of psychology-even for beginners-the book is too simple and too brief and definitely needs more theoretical inputs to make it comprehensive and complete. Tripti Pande-Desai Assistant Professor-OB Area, Institute for Integrated Learning in Management, Post Box No. 3127, 3, Lodhi Institutional Area, Lodhi Road, New Delhi-ll 0003.

Business Communication John White and Laura Mazur, Strategic Communications Management-Making Public Relations Work. Hyderabad: Universities Press, 1999. xvi+277 pp. Rs. 260 paper. In today's changing business scenario, when globalization is blurring national boundaries, forcing organizations to streamline themselves for carrying out their strategic objectives effectively and adopting technologies that make communications "global and virtually transparent," strategic use of business communications

Management

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Volume 3, Number

J (January-June

1999)

194 Book Reviews is not just a "fashionable and representative" function but more so, a mandatory survival and growth tactic. Public Relations (PR) is no more just an image-building activity but an honest way of defining a company's relationship with its different corporate audiences. Examining and managing this change in the role of public relations is the focus of the book under review. Communications assume a significant role in times of crises when managers need to protect the strategic interests of a company such as at times of corporate take-over battles, environmental or industrial mishaps, or during conflicts between management and interest groups. This book draws on corporate cases and exemplifies how PR can be managed effectively in such difficult situations. The authors of this book go beyond the general ambit ofPR and cover areas such as environmental management, business culture and ethics. The authors have, apart from analyzing common PR issues faced by companies, quite successfully demonstrated that communications-not any longer a "soft" area of management-also provides competitive edge, as important as cost-cutting and becoming leaner and fitter. This is why, the authors argue, that "it is crucial for companies to begin to put public relations on a higher platform and treat it in its most literal sense of fostering consistent relationships with their publics." The book deals with four major areas related with PR, i.e., public relations and communications management, special areas of practice, managing relationships, and ethical issues in the practice and the future of PR. The first part discusses the main ingredients of PR and its contribution to strategic planning and decisionmaking. It also delineates options for management and budgeting, control and evaluation. The second part throws light on areas such as media relations, marketing and internal communications, public affairs and crisis management. Part three examines relations with customers and suppliers, investors, the community and pressure groups. The fourth part explores the framework of ethical and legal issues in which companies have to operate and the future of public relations for both its practitioners and users. The first part begins with the premise that public relations "should be an approach, more than a technique; a framework that ensures consistency and maintains transparency, not a means to hide uncomfortable facts." The idea rings convincing because in today's age of instant mass communication technologies, the reality will emerge soon enough before the public and the company might take a beating in its image. Now, how much does PR contribute to strategic planning and management decision-making? Though some eminent management gurus including Philip Kotler consider PR as a marketing support activity, the authors here disagree. They quote several studies in this regard, the most important being the 1993 study conducted by the International Association of Business Communications (IABC) which surveyed more than 300 companies in UK, USA and Canada. The survey found that the CEOs of these companies valued communications highly, estimating that it gives a 184 percent return on investment! Similarly, the authors Management

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contend that PR-be it internal or external-is part of the overall task of management. In the second part several issues such as the breadth and depth of the media, relationships with jou~lists, the need for consistency in the message, and the role of consultants have been briefly touched. A small section has been given that surveys media relations across Europe. The authors predict that media relations will undergo some profound changes because of the impact of the information highways. The chapter on marketing communications clarifies the widely held confusion between marketing and communications. Recognizing the significance of public affairs, the authors have devoted a full chapter to it. They have defined the various hues of this specialized area and why it is becoming increasingly important in a boundary less business world. The last section in this chapter deals with crisis management. Part three of the book starts with managing relationships. It studies the relatIonships among customers and suppliers, investor relations, the community, and pressure and interest groups. In this section, they have examined the roles played by the marketing and PR staff in handling various relations. Part four of the book analyzes ethical and legal issues. The most important issue has been identified as the environmental concern that also includes the question of civil rights, equal opportunities for women, armaments, and nuclear power, among others. The last chapter discusses the future of public relations and defines the roles that the PR practitioners will have to play in the time to come. The entire book has been fashioned on a particular pattern-the authors raise an issue, juxtapose the available thoughts on the given subject, establish the most convincing idea by using empirical data and surveys and then move on to the next topic. This style is convenient for the professionals in this field who also are the target audience of this publication. The major strength of this book is the inclusion of innumerable case studies of various multinational companies operating in Europe and the US. This book will help articulate a rigorous PR perspective for Indian PR professionals, and should serve as the writing on the wall in the years to come. bfar RAnjum Editorial Coordinator, Institute for Integrated Learning in Management, Post Box No. 3127, 3, Lodhi Institutional Area, Lodhi Road, New Delhi-l 10 003.

Entrepreneurship S. J. Phansalkar, Making Growth Happen: Learning From First-Generation Entrepreneurs. New Delhi: Response Books,1999. 230 pp. Rs.195 paper. In a highly readable work, written in simple and straight language without being Management

& Change, Volume 3, Number

1 (January-June

1999)

196 Book Reviews circumlocutory at all yet maintaining readers' interest in the theme, S. J. Phansalkar unfolds success stories often firms, viz., (I) Ashima Syntex Ltd., (2) Biocon India Ltd., (3) Doctor Reddy's Lab. Ltd., (4) Mastek Ltd., (5) Praj Industries Ltd., (6) Sudha Oils and Chemical Industries Ltd., (7) Orchid Chemicals and Pharmaceuticals Ltd., (8) Sun Pharmaceutical Industries Ltd., (9) Sumangal Prakashan (P) Ltd., and (10) V. Guard Industries Ltd. These firms satiate a wide variety of human and industrial needs ranging from calendars and distillery process equipment to enzymes and software with a geographical spread largely over the southern and the western industrial belt. The oldest firm was born in 1973 and the youngest one in 1993. Each of them had attained a turnover level of about RS.300 million in a decade or had come to be recognized as a success story by the market, customers and the investment community. The work is based on the author's original research and is divided into ten chapters highlighting the noteworthy features of the management practices in these successful companies on a functional basis, viz., marketing, finance, manufacturing and logistics, organizational issues, and management of human resource. An interesting output of this extensive research in ten firms is an array of observations. A firm in order to succeed identifies a product that is in the growth phase of PLC. These firms satisfy the 'market' s felt needs and take a strong proactive stance in the matter. Pre- and post-sales support is a prominent feature of their marketing strategy. They seldom use advertising as a weapon to success. Their debt-equity ratio hovers by and large around one, reflecting their greater reliance on use of equity and owned funds. The major use of capital has been in financing working capital, thus ensuring both liquidity and financial stability. For manufacturing, the choice falls on new, superior, or even state of the art technologies; and effecting improvements in its logistics, called bootstrapping, has been their consistent feature. They carefully plan asset expansion to move along their sales growth, thus avoiding creation of idle capacities and blocking of scarce fmancial resources. Of no less significance are organizational and management issues. The increasing complexity of business demands decentralization of decision-making, or at least substantial increase in the participation of key functionaries. These firms have graduated from small-size to medium/large-size and a majority of them are in the widely held company form of organizations, though the original pioneer still retains a substantial stake. However, none of them suffers from the cheap greed of hundreds of other fly-by-night operators who make an issue of shares, gobble up money from a gullible public and scarcely work for corporate objectives announced to the public through prospectus. As far as systems of work and extent offormalization are concerned, different firms are at different stages of organizational development ranging from relatively informal decision-making (second stage) to high decentralization, highly formal communication system, extensive and intensive use of IT and near-complete depersonalization of management (fifth a~nal phase). These successful companies share the values of informal work culture, thorough Management

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professionalism, open and transparent work systems and focus on constant development of an individual's potential. The management philosophy is to decrease control orientation; develop formal and structured systems of work; and emphasize team-work, participation and organizational learning. Virtually, all of them have lower employee turnover than their peers in the industry. A clearly defined product market posture has been a major commonality of successful companies. The growth path followed has been through market' penetration, geographic expansion of markets and widening the product line, in that order. They have heavily relied on their knowledge and expeltise for efficient management of the manufacturing process, or on technology and developed competitive edge in product quality and consistency. Synergies have been derived out of the manufacturing or "operating technology" (a learnt and developed organizational routine for certain operations). Despite heavy odds, these firms find new methods of working (unusual or uncommon decisions), which get results in a critical aspect of their business. These firms enjoy core competence in the field of manufacturing of the chosen product-line. They have particularly developed core competencies in the skill of identifying a product and/or technology for making it and commercializing its manufacture. Not surprisingly, most of the successfulcompanies maintain a functional form of organization with varying degrees offormalization. Some of them organize on product basis in so far as marketing is concerned but remain functional in the overall sense. Making Growth Happen is a product ofthe author's research. The very title of the book suggests that growth occurs if the following conditions are satisfied or growth is contingent upon the factors or prescriptions or precepts that Phansalkar identifies: Do not try your hand in every conceivable thing. Choose a product line for which the market is growing. Avoid excessive leverage or trading on other's money. Instead of blocking your money in fixed assets, build up your current assets. Bootstrap and try to make little changes in manufacturing or logistics of purchase, storage and transport so as to reduce 'costs and at least maintain, if not improve, the quality. Innovate by fmding newer ways of doing things. Change your mindset and transit to WHC (widely held company), professionalize and delegate, become formal, structured and accountable. Let people work not for you as individuals, but for their companies as organizations. Taking a cue from Peters and Waterman's book, In search of Excellence, attempts have been made in different economies to identify common attributes in successful companies, but all these studies suffer from the same criticism as the trait approach to understand leadership phenomenon does. Any model listing common characteristics or any bundle of traits is prescriptive and normative in nature and lacks predictive power, especially so in a highly dynamic environment. There exists little causal relationship between success and those attributes. That is, no research exists to suggest that firms which failed lacked these attributes wholly or Management

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198 Book Reviews partially. The author has, of course, tried to find an escape route by using a disclaimer: "I suspect that while one may not have demonstrable evidence of it, I have tried to bring out only those features that I never found in the hundreds of enterprises which are stagnant and sick" (p. 28). Undeniably, these are all text-book ideal situations, but what bundle of these prescriptions and what degree thereof makes an enterprise succeed or fail is a debatable issue. Better would have been to select some such cases which went down for failure of observing a particular prescription. Citing such cases would have added much to its value. Besides, the presentation of the material is highly repetitive and leaves much to be desired. Interestingly, this research as well has suffered the same pangs of birth as any other research in the corporate sector, ifbase{i on primary data, does. Transparency l and opelll1ess are yet to become hallmarksofthe Indian firms. One can imagine the degree of unwilling ness to cooperate in other firms if successful; and growing firms are reluctant to share their success stories with the outside world, especially when first-generation successful entrepreneurs often take pride in their performance. Things become little easier if a survey is carried out by a governmental or national organization, such as success stories of 29 or so entrepreneurs were brought out some time back by the Entrepreneurship Development Institute of India, Ahmedabad. This very fact makes it a bold attempt on the part of an individual and a remarkable encouraging act on the part of the funding organization, NDDB. For his incisive and sharp intellect, Phansalkar deserves kudos! His work should prove highly enriching, enlightening and exciting to the new as well as the existing entrepreneurs who wish to chart their course for growth. R. A. Sharma (Dr.) Professor, Department of Financial Studies, University of Delhi South Campus, Benito Juarez Road, New Delhi-II 0021.

Creativity in Management Gerald Nadler, Shozo Hibino, and John Farrell, Creative Solution Finding. New Delhi: Excel Books, 1998. ix+ 498 pp. Rs. 495 hard. G. P. Gupta (ed.) Management by Consciousness-A Spirituo- Technical Approach. New Delhi: Excel Books, 1999. vii +202 pp. Rs. 175 hard. Thinking is one of the most important activities that human beings do. We think and we do, which is the basic way oflooking at our history of civilization. The book under review examines our conventional modes of thinking. Further, the authors have devised the full-spectrum thinking system that they proclaim to be superior to

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Book Reviews 199 the conventional thinking approach. The premise of their challenge is that the oldfashioned so-called research-method thinking cannot solve all the modern day problems. Modern problems need modern and unconventional methods of thinking if they are to be redressed and solved. The authors contend that our contemporary problems like social and moral decay, collapse of political structures, poverty, population, immigration, environmental degradation and conditions of racism and civil war persist because we keep on trying to solve them with conventional methods. They instead offer their fullspectrum thinking which consists of seven steps: uniqueness, purposes, solutionafter-next, systems, limited infomiation collection, people design and betterment timeline. Each step has been described in detail in the later chapters. However, because oflack of practical illustrations, the above mentioned seven points float at the level of ideas only. The approach is scholarly and research-based as far as referencing and developing of the germane ideas are concerned. The book is divided into four parts. The introduction of the book gives the basic premise and a brief view of the full-spectrum thinking. The first part of the book discusses the difficulties we face when we try to solve a problem using the 400 years old research method. The authors sketch out the fact of how we fail in addressing our major problems. Finally, they show how our problems and our thinking paradigms are proving to be incompatible, and how there is an urgent need of making a paradigm shift vis a vis our thinking approach. Part two deals with the history of thinking accompanied by a literature survey of thinking research. Part three of the book develops the principles and processes of the new paradigm of thinking. This is supported by latest research. In the last part, the authors suggest situations where we can adopt the new creative ways of thinking. It also talks about the incorporation of the traditional way of thinking into the full-spectrum approach. Overall, the book is fairly exhaustive in its approach. The authors have embraced a simple and straight narrative which is light on the reader. It would have been more useful had it contained, as noted earlier, illustrations as turnaround cases. Nevertheless, this is a good attempt at introducing new dimensions in creative solution rmding. The need for afresh thinking and a new approach to management is also the theme of the other book under review. Management by Consciousness is a collection of essays contributed by eastern and western scholars that examines western management practices from an eastern philosophical perspective, finds fault with them and suggests a spiritual approach to solve the problems under scrutiny. This trend of suggesting inculcation of the "soul" in the material world of business management is a new paradigm that is emerging in both the west and the east. The murmur of human values in management has become the crying need of the hour. This small but ~eatly produced book further substantiates this contemporary be-

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200 BookReviews lief. The authors point out that management is harmony of human endeavours and the western approach to it is underscored by unlimited production and profiteering wherein the man as a worker gets snowed under as a commodified machine. This has led to the birth of a soulless management system and we need a fresh thinking style if we want to rectify it. In the first three chapters of the book, the above noted paradigmatic premise has been set which also includes the yogic approach to management and management by intuition. The authors have discussed the consciousness approach to management in four parts: the first deals with men, materials and methods; the second with the resources, ideals and concepts of harmony; the third with responsibility, powers and freedom; and the fourth with money, motivation and progress. The first part emphasizes on factors such as attention to employees, attention to other living beings (including plants!), attention to tools and machines (they also are supposed to have souls!!), and attention to systems. The rest of the portions of this technique have been derived from philosophies of the Gita and Shri Aurobindo' s teachings. The following two chapters overview the philosophy of management and the significance of human values in management. Only the last two chapters finally unfold the main management technique given in the book's title: the spirituo-technical approach. There is nothing new in that approach-only the ideas expressed in the previous chapters have been cobbled together here. At times the book reads as repetitively superfluous. The authors have talked of management practices neither with any allusion to a theoretical framework nor to any satisfactory practical example from the real world. In the present form, the book is far from being a serious work on the promised area. Without going to the extent of condemning it to be a puerile effort, it might not be out of place to suggest that books like this are nothing but another celebration of the Indian fad to expose our philosophy with a shallow understanding of the universe one is talking of. Zafar H. Anjum (Dr.) Editorial Coordinator, Institute for Integrated Learning in Management, Post Box No. 3127, 3, Lodhi Institutional Area, Lodhi Road, New Delhi-I 10 003.

Human Resource Management J. S. Sodhi, Industrial Relations and Human Resources Management in Transition. New Delhi: Shri Ram Centre for Industrial Relations and Human Resources, 1999.374 pp. RS.300 hard. This important study was sponsored by the International Development Research Centre, Canada at the Shri Ram Centre for IR&HR with Professor J. S. Sodhi as the Management

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Book Reviews 201 leader of the research project. However, the study design owes its inspiration to a larger international project coordinated by several leading scholars in North America. This is called the Network Project located in eight Asian and ten OECD countries. The present book is the outcome of the fieldwork conducted by Sodhi and his former colleagues in the Shri Ram Centre in eight Indian companies. In the international research project its place will be that of the country report describing and evaluating the policies and pr'actices in IR&HR in India. The international study is broadly guided by five objectives listed in chapter 2; it is only in relation to them that a comparative study ofIR and HR in a particular region would make sense but even if the international dimensions of the Network Project are left alone, this book should be read for the detailed case material presented on the eight Indian companies. They have been selected on the criteria of market competition. Competition is indeed a fact of life which even the trade unions now acknowledge as generating great pressure for improvement in quality, cost reduction and greater satisfaction provided to the customers generally. In this respect the commencement of the project in India was well timed, and the publication of this book should find a wide readership. In reading the book, however, one is left with the uneasy feeling that perhaps it could have been better. The study was meant to be a team-work, and it started in this manner, but there are problems with teams comprising of scholars of different disciplinary backgrounds and varied interests like each investigator may view the project in his own disciplinary and career perspective. Moreover, the field covered happens to be very wide. This required a rather complete understanding of the industry structure, the market in which the specific company was operating, and the particular business strategy it had adopted for survival and growth. Next, the proQlems of market competition within India and in foreign markets, and the associated difficulties arising in the spheres of product quality, cost of placing the product in the market and skills of the workforce would need to be grasped. Thereafter, the investigator might focus attention on the principal desideratum of the study and answer the question: in what ways, has the company been able to reorient its IR and HR policies and practice to harmonize them with its overall business strategy? The question may be more difficult to find answer to because unlike HR which 'has traditionally remained a management function, IR is only partly so. In India it is largely a creation of statute and deeply regulated by the state machinery, it is also greatly politicized and much riven by factionalism and political rivalry. On the other hand the HR systems have been viewed as possessing extraordinary elasticity, expanding in times of growth and conversely declining when profits are led or business prospects unpromising. The case studies provide ample evidence as to its under-developed condition. Industrial relations in an enterprise show characteristics common to other firms in the industry as well as the particular region in which it may be located. Moreover, every firm has its own history of IR conflicts and compromises; so in Management

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202 Book Reviews every case, it may be necessary to briefly delve into the past in order to determine the prospects a well intentioned management had of harmonizing its IR practices and policies with an overarching philosophy of human resource management. A reading of case studies would show that the firm level managements have vastly different degrees of freedom in this regard, and in the generally disharmonious realm of industrial relations they have had to contend with varying kinds of constraints. On the other hand, the ones that wished to upgrade their HR systems could proceed fast but without bothering to integrate the two subsystems into one magnificent whole. I could not help detecting yet another problem connected with the field work. The question is: who keeps the upper hand while conducting an interview, is it the interviewer who asks questions in a friendly, informal setting or the skilled, sophisticated manager who provides answers and the needed company-based information? In more than one case study, it appears the leadership role passed on to the managers who simply provided the researcher with so much information and statistical data that these could not be analyzed and sifted. These undigested statistical tables merely reveal the uncomfortable fact that the researcher simply could not cope with the data load or had no time to do so. The author makes no mention of coordination-related organizational problems he encountered during the course of the study. I do not know whether he ever had the full complement of the sanctioned staff needed for conducting the research project. What I do know is that he had to struggle with the problem of steady depletion of staff as one researcher after another left the SRC. In fact, he too left to join the IMI, and there arose the inevitable problem of managing the various coordinates of the study even as he allocated his time between work at the new organization and the field work. The ,fact that the book has been finally published is almost entirely due to the author's commitment, steadfastness and hard work. It is then ot surprising that the written work shows weaknesses, such as unevenness in the presentation of the eight case studies and an occasional loss of analytical focus. The book should be read for its strong points. First, the author's endeavour to establish the linkages between a company performance and its IR and HR practices is noteworthy. In the case of Modi Xerox it has been possible to list the company's achievements first, followed by a list of achievements by the union. He then blandly states what he observed that the uncomplaining union is viewed in some quarters as a stooge of the management. Second, the salient features of the company specific IR and HR practices are usually clearly brought out. For instance, in the aBC Bank, the President of the Federation was a retired employee of the bank and had been on the post for the last 45 years! The management found him to be a big bottleneck because no matter how hard they endeavoured to move forward, indeed to move away from the past, he continued to relate the present with the past policies and practices. Overall, in most of the branches the management met with resistance from employees because the unions did not show any appreciation for Management

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the changes being introduced in the bank, particularly computerization. Third" the book has been written with a positive outlook towards possibilities of change, and in every case study he strives to show, sometimes by way of suggestions, how further progress could still be made through the general atmosphere permeated by reluctance if not resistance to change. I may note that in large part it is possible to see the future in a brighter light mainly because every company included in the sample has done well, and achieved considerable progress sometimes in the face of considerable difficulties. The Escorts Ltd. could be cited as an example. Incidentally, the narrative of this company shows that an aburidance of welfare measures fmanced by the company has not produced any positive feed back in terms of enhanced productivity. The company also knew that it had large scale potential redundancies and there should be retrenchment, but in practical terms it was afraid of the consequences of such a policy initiative and so little progress was actually made. I would commend the book to teachers, students and practicing managers. However the readers should read the case studies with some care in order to sift out the information that is relevant and leave out what is not. C. K.Johri (Dr.) Formerly Senior Professor, Shri Ram Centre for IR&HR, F-3, I. P. College Flats, Indraprastha College, Sham Nath Marg, Delhi-II 0054.

Duncan ChappeD and Vittorio Di Martino, Violence at Work. Geneva: ILO, 1998. xi +165 pp. Swiss Francs 25 paper. This book, published by the International Labour Office, is a report on violence at work written by Duncan Chappell, an Australian criminologist in association with Vittorio Di Martino, who works with International Labour Organization (ILO). The book starts with establishing the importance of this subject through some vignettes about violence at work and through a brief outline of violence at work in some of the developed and developing countries in the world. It reports some patterns and trends related to violence at workplaces, most notable among these the summary of the fmdings from an international survey of crime victims. Further, it tries to explain of violence at work and details responses to violence at work ranging from national legislation and corporate responses to international action. Finally, it concludes with some lessons for future actions. The authors defme the scope of the book as addressing the problem of violence at work. They also admit that despite a world wide coverage, the report, due to lack of availability of good quality information, concentrates on the industrialized countries. The book acknowledges the vastness of the field covering causes of violence and then concentrates on providing a review of the principal explanaManagement

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204 Book Reviews tions of violence at work in Chapter 3, Moreover, the report claims to have paid only limited attention to some specific forms of violence at work, which have been addressed separately by the ILO elsewhere, These include occupational stress, alcohol, and dug abuse and sexual harassment, child labour, migrant workers and violence related to terrorist attacks and military action, The report "is intended to provide a basis for understanding the nature of violence at work, and to suggest ways of preventing this violence in the future" (page 18), The report is a welcome step towards addressing a very important workplace issue of our times. However, it leaves, even a sympathetic reader, dissatisfied on two kind of issues, First, the sins of commission-the treatment of issues it talks about. Secondly, the sins of omission- issues which it leaves out due to one pretext or other, In the rest of this review we deal with these two types of issues separately, The book is too large in size for the kind of things it ultimately says, I am reminded of the adage "one picture is worth a thousand words" in this context. The nature and number of insights I gained from a movie called Mad City, directed by Costa Gavras about the violence at the workplace was far greater than this book, though the book took almost thrice as long to go through, This disproportionate size is due to the following two reasons: First, the book wastes too much space trying to establish some links which it cannot or which are obvious anyway, Secondly, there are instances where the book devotes endless space to graphs and tables without putting them to full use, For example, the pie charts and the bar diagrams strewn across the book are not supplemented by the text. Of course, they can be perfect substitutes. Long tables, such as the one on page 53-55 about the world homicide statistics, are not put to much use in the narrative scheme of the book. In fact in this case, the table contradicts something which has been said later by the authors. On page 56 it is said that "violence is more common in those societies characterised by widespread poverty and inequality." However, even a cursory look at the table mentioned earlier does not support this assertion, Similarly, the last chapter, titled Beyond Violence, is largely a summary of the book and not actually anything beyond violence, The book clearly shows a dissonance between the projected intentions and the actual presentation, They claim that they are going to look at day to day life instead of sensational incidents, They don't. In chapter 6 (page 124) they state that the chapter is going to close by an account of the actions taken by multinational corporations. The chapter does not have any such account. More than once, the book states (for example see page 145) that workplace violence is "a structural, strategic problem rooted in wider social, economic, organizational and cultural factors," However, it does not satisfactorily outline these factors. It also claims more tha~ once that it's not merely the physical violence, but the psychological violence too, which should be paid attention to, But the book does not pay much attention to the psychological violence. The authors want to have their cake and eat ittoo, On page 67 they clearly point out that incidents of workplace violence are deeply Management

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Book Reviews 205 rooted in their contexts and anyone solution would not hold good for all the contexts. However, that does not stop them from prescribing a framework and best practices for tackling the workplace violence. The book is about violence and not about workplace violence, as claimed by the authors. Moreover, it seems concentrated in the United States of America and Australia. It fails to make the jump from contextual to conceptual. For example, one of the sources quoted by the report had a category called "persons with dogs." This category is retained without attempting to make it more general. This act of not fulfilling its promise makes the reader a bit angry due to the self congratulatory note which the book adopts at many points (for example see page 53, footnote 5, about an earlier report on violence in Australia authored by one of the authors of this volume). Any further report should keep few things in mind which I have placed under the second category, called the sins of omission. It is true that there is not much data available about workplace violence in the developing countries. However, to leave them from any such report altogether and then to claim a global coverage would be quite misplaced. A related point is the fundamental assumption behind the work that workplaces are normally benign and it is not employers, but employees, customers and strangers which are responsible for workplace violence. The book emphasizes this many a times. For example, the organizational framework on page 63 or the "hazardous agent" typology on page 103 exclude employers as possible hazardous agents. This is a wilful negligence of contrary evidence. Violence has been, right from the days of slave trade, a viable (though abominable) strategy of disciplining and supervision. This strategy is still in use wherever there are no effective forces questioning its moral and legal basis. This violence is both physical and psychological. The authors mention Deming, the quality Guru, in the context of one of his famous fourteen points of action to make management more amenable to making a workplace conducive to produce high quality output. This is driving fear out of the workplace. Even here, they misinterpret him. According to Deming, this fear was related to management actions which create fear such as victimizing, snooping, etc., and not some stray act of violence by some deranged person as the authors would have us believe. Violence has been and remains a strategy of domination in various relationships including those of employees-employer, customer ..supplier etc. A proper understanding of violence cannot come with the total exclusion of structural, organisational and cultural issues. For example, much of the violence in the service industry can be attributed to absence of transparent customer grievance redressal mechanisms and operating in the might is right mode. How a customer and a server are driven to violence is not always a matter of personal temperament only. The frequent physical violence related to bus workers in Calcutta and other similar places also has something to do with the unimaginable crowd in the peak hour low Management

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206 Book Reviews moving unruly traffic. The stoning of the woman constable on the local train also brings out the fact about lesser number of trains on route. Right since the days of slave labour, employers in many workplaces continue to use violence as a supervision strategy. Examples like brick kiln workers, domestic helps, construction workers, agricultural workers and child workers, etc. abound. Periodic violence against the trade union activists and also at times against the employers have roots in the workplace and not in the individual's personalities. In India itself during the last decade, killings of Shankar Guha Niyogi and Dutta Samant corroborate this. In workplaces with multiple unions and history of violent relationship between employers and employees and/or unions, there continue to be cases of violence against both employees and employers or managers. In fact there are many workplaces which have a macho work culture where violence is a part of the daily routine. Army and tea gardens would be some of the examples of these sorts of work places. Ifwe come to psychological violence, the numbers increase. Its not unknown, even in the fairly modern workplaces, for the higher managers to use abusive language against their subordinates. In fact many of the sales people in different companies use a language full of sexual innuendo and violence against competitors. Cases of bullying by people higher in the hierarchy are quite common. Similarly, if we also take marginalization at the workplace and refusal to delegate as forms of violence, as suggested by the authors, numbers of violent incidents would increase manifold. I am reminded of a general practice in the Indian companies to use something called a pool for deployment of employees. In one company, all the union leaders were put in this pool and were deprived of any work assignment for a long period of time. During my interviews with some of them, all of them stated that this had tremendous negative psychological impact on them. Similarly, many companies are putting employees who they want to opt for so-called voluntary retirement schemes, into such pools. Mobbing is also quite common, especially in workplaces which have diversity. I know of a south Indian clerical employee in a management school in Calcutta who had to change his name to sound like a local name to escape cases of daily harassment. The suggestions made by the book in terms of how to overcome and prevent workplace violence, though necessary, are not adequate. An overly legalistic approach adopted by the authors may not lead to much success. Firstly, there are laws already in place about safety and health related aspects of the workplace. But they are not getting implemented. Even with an activist judiciary, ifthe executive is sleeping, we cannot go very far. Inil recent case of sexual harassment in a law court, filed by a group of women employees, out of the three accused, two managers and a peon level employee, only the peon level employees was found to have a limited role in harassment. For the managers, there was not enough evidence ( read no witnesses were willing to testify). This succinctly captures the perils of a legalistic approach without attempting a corresponding social change. In any case the time Management

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taken to dispose off cases in Indian courts itself may prove to be a limiting factor in the use of a legal approach. Overall, this book is a good beginning which needs to be taken further through another report-a ~eport which focuses on workplace violence; which also recognizes that employers are as much hazardous agents as any other groups; which situates workplace violence in its wider context; which does not use quantitative data just for enhancing its legitimacy; and which supplements quantitative methods with other suitable methods. Till the time that book comes on the scene, it may not be a bad idea to see the movie I had talked about earlier. Vidyanand Jha Assistant Professor, 11MCalcutta, Joka, DH Road, P. O. Box 16757, Alipore PO, Calcutta.700 027.

Marketing Management Laura Mazur and AnnikHogg, The Marketing Challenge. Hyderabad: ties Press, 1993.298 pp. Rs.210 paper.

Universi-

M. J. Xavier, Marketing in the New MiUennium: 36 Trends That Will Change Business and Marketing. New Delhi: Vikas Publishing, 1999. 264 pp. RS.240 hard. Change is the focus-be it the market or the structure. Change is the challenge-be it the inside (within the corporate entity) or the outside (business environment). It is, however, ironic that despite the changes-viz., companies becoming more "market-driven," "customer-focused;" and the market vengently dominating corporate thinking as never before in recent years-the discipline and functions of marketing itself and the role of marketing departments in organizations in particular have remained underrated and confused. The challenge of conceptual understanding in the wake of a fast-changing corporate environment and developing an acceptable framework of marketing, therefore, are big challenges before business firms today and perhaps at least in the imminent near future too. The two volumes under review try to defme and examine the emerging challenges before marketing. Mazur and Hogg have attempted an analysis on the functional side by defining what these challenges are M. J. Xavier, on the other hand, taking an evolutionary view of marketing, tries to examine the question: who is posing these challenges? Let us examine the first aspect of the challenge aaalyzed by the authors of the first book. That is the issue of creation of a true and integral marketing culture with Management

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208 Book Reviews an international perspective undoubtedly engulfing all and every part of an organizations today. The authors have been brilliantly successful in weaving this argument around and through key marketing functions throughout their analysis. EIU, a London based organization, produced three reports in 1990 and 1991 comprising of extensive interviews with major European corporate personalities which have provided the basic background for the authors of this work. The first part of the book examines the main environmental trends and places the framework of "GlobalSetting" under which companies have to operate. The authors here analyze how an increasingly complicated marketing environment with globalization of markets, recent political upheavals, demographic, regional and technological changes have forced marketers all over the world to adapt to multidimensionality; and hence, a deeper and more refined understanding of environment has become very crucial. Using imaginatively the live examples and experiences of well-known companies, they have summarized the marketing challenges in a very apt manner with concise and optimum use of statistical evidence on this voluminous environmental debate on marketing issues which has provided valuable insights into this entire spectrum of issues. Manzur and Hogg have then focused on marketing strategies that are needed to be reformulated in response to changes and challenges of global and local trends in the subsequent chapters . . Interspersed with examples of the world's most renowned companies and their response on generating appropriate marketing strategies, this section could provide a very rich source for further conceptualization for researchers. How these companies have organized and coordinated for marketing advantages, and how they have built processes across markets apart from providing practical insights could be immensely useful for academia and researchers to ensure further debate about it for serious conceptualization and drawing further lessons. These illustrations and small cases based on the world's leading multinationals need to be, however, analyzed in depth and tested against available theoretical evidence. This probably was beyond the scope of such a small booklet trying to comment on major marketing challenges. Written with a logical framework and succinct summaries at the end of each chapter, this highly readable book succeeds in provoking the reader and must find a priority on the bookshelf of all those who are either interested in designing or learning about innovative marketing strategies or wish to enrich the analysis further or even probate for practical response. Marketing in the New Millennium by M. J. Xavier seems to be a very ambitious and indeed a gigantic project where the author has "traced the evolution of marketing" correlating it with "contributions from other disciplines" in order to save the marketing discipline from the myopia of "cosmetic issues of advertising and image-building!" This exercise has been conducted perhaps, in order to find answers to the questions: how and why marketing challenges have occurred and what could be the prescriptions for companies, especially top managements, to meet these issues in the next millennium. The real trouble with such noble intenManagement

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tions is that the author wishes top managements, responsible for strategic marketing, to integrate the operationality with an endless list of functions and disciplines that range from vague ones such as: revival of ancient medicine, respect for ancient knowledge, grandma's goodies, soul-searching, etc., to customer value management, network marketing, e-commerce, cyber distribution, beyond customer satisfaction, supply chain management, process reengineering, service blueprinting, and corporate revitalization. All these disciplines naturally summarized with bullet point precision are ready to be exploited by practising managers in a book of 264 pages (printed with large font size and with subject, name, brand/company index along with an appendix included)! The writer's penchant for name dropping (or subject dropping!) is so much that even in the "Appendix" he could not refrain from listing topics such as Regional Conflicts and Separatist Movements, Hindu Nationalism and Extremism, Rising Population, Class and Caste struggle, Shifting Political Paradigms as trends affecting marketing in the new millennium. Of course, the author does not always feel obliged to analyze even one of these trends with any meaningful details or establishing linkages in the context of marketing! Among his choice of visible visionaries optimistic about India, the name dropping of George Orwell (p. 249) says it all !!! , Incidentally, George Orwell's vision of despair about brutalized and manipulated humanity where the world is bitterly divided and is perpetually at war is reflected in his world famous satirical novel "Nineteen Eighty-Four" (published in 1949) which is widely known. Of course, our author is too busy finding names and coining new sentences and therefore, he finds it irrelevant to pause, check and be discreet in his choices. Unfocussed to say the least and dangerouly confused to say it more appropriately, the readers will find thisjoumey very tedious if they could remain patient till the last sentence of the book. In fact, in view of the enormity of the environmental trends that the author has listed it would be impossible for anyone to critically review even anyone set of these (political, economic, cultural, religious) trends meaningfully. Besides, how from such a vast list of topics and disciplines the author could confine to only 36 trends [the book boldly announces its subtitle as: "36 Trends That Will Change Business and Marketing"] is a mystery to this reviewer. It could well have been 360 or perhaps even 3600! The rapid marketing environmental changes of the last two decades have definitely produced compelling reasons for marketers to rethink approaches and newer pardigms. Designing newer and befitting strategies, creating appropriate marketing structure and systems, however, needs critical review and indepth examination of many related factors. Marketing professionals will undoubtedly have to analyze the functions with broader view of the world but that needs serious contemplation and establishing firm linkages between marketing function and environmental issues. Mere cursory glance will not do. Management & Change, Volume 3, Number I (January-June 1999)

210 Book Reviews To summarize, I am painfully tempted to use the author's own choice of a quotation as the last line quite suitable for his work: "If you don't know where you are going any road will take you there."-W. Whitman (p. 245).

M.S. Verma (Dr.) Professor-Marketing Area, Institute for Integrated Learning in Management, Post Box No. 3127, 3, Lodhi Institutional Area, Lodhi Road, New Delhi-lID 003.

M. L. Bhasin (ed.) Cases in MarketingManagement. 1999. xii +410 pp. RS.250 paper.

New Delhi: Excel Books, â&#x20AC;˘ .

Any programme that claims to train participants with managerial skills has to be attuned to the real world. One has to go beyond standard textbooks and seek for applications in real life. Another requirement, for developing decision-making skills, is the analysis of either real-life situations or the closely simulated ones. This necessity led to the development of case studies. While an extremely useful tool, especially so in marketing, the case study has been much maligned, mainly because of a failure to understand case analysis or methods of handling case discussion in the class-room. The failure emanates from two sources: first, the study itself and second, the instructor concerned. Unfortunately, many of the Indian case studies are nothing more than case histories, where what was done has been described in detail. This violates the very premise of the concept. An ideal case study takes the reader to the stage where a decision has to be made and leaves him there. A second cause for concern is the methodology. While the Harvard model is widely used, the student should be left free to choose his or her own methodology. Thirdly, there are many ways of solving any case and almost every treatise on case analysis stresses that there are no right or wrong solutions. In class, a case discussion is participative and the instructor acts as a moderator. Unfortunately, in most business schools cases become presentation-based. Barring these lacunae, possibly the most frustrating part for an Indian professor is the absolute dearth oflndian case studies. Most institutes follow the Harvard or other sources. A few, like 11M-Ahmedabad, XLRI, etc. have developed their own cases. Apart from one compilation by Professor Jain and others from IIMAhmedabad, and an older one by Professor Subhash Jain from the same institute, there seems to exist hardly any book on the Indian case studies in marketing . . In this context, M. L. Bhasin needs to be justly praised. Anyone who brings out a publication on case studies in marketing cannot be thanked enough by the case-starved marketing faculty of the country. The book has eighty-five case studies arranged into thirteen parts. Major areas of marketing such as market environment and sales forecasting, buyer behaviour, segmentation, product policy, pricing, distribution etc., have been adManagement

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equately covered. The sequence, however, is somewhat perplexing. The section on advertising and sales promotion is followed, surprisingly, by marketing research and the book ends with, almost as an afterthought, with services marketing. Perhaps the sequence followed by almost all major textbooks would have added to the logical continuity of the book. Further, there is some strange pairing oftopics, such as buyer behaviour and segmentation presented as one section. So far as the individual cases are concerned, they range from extremely gifted write-ups to poorly written cases which hardly deserve to be called as case studies. Time-tested and very well-known cases like Saptarshi Industries (Khurana and Dholakia), ABC Corporation (Bhandari), Neelameghant's Andrew Oil Co. and Sengupta's short but brilliant piece oli Pears cannot be praised enough. We, in fact, have been brought up on some of these cases. Other well-written cases that need special mention are Aditya Tube (Sarin), and Pepsi (Sarin and Chaturvedi). Unfortuantely, Bhasin has juxtaposed these gems with ca~es like "Future Demand for Formulations"-a two-and-a-halfpage description ofa regression analysis followed by questions like "critically examine the method used ... ," Where is the case? The book is full of these kinds of exhibits. The effect is very much like a collection which carries pieces by world-famous writers along with ones drafted by school students. Some judicious surgery would have improved the book to a great extent. A very minor but strange incidence is the recurrence of appendages like "AlMA, Dec. 1995," presumably examination questions, at the end of cases that have been reproduced with the permission of AlMA, 11M-Ahmedabad and other institutes. In conclusion, despite the negatives, I congratulate Bhasin for bringing together a set of case studies that can be used selectively after assessing the profile and capabilities of the students that one has to address. Gautam Bhattacharya Professor-Marketing Area, Institute for Integrated Learning in Management, 3, Lodhi Institutional Area, PostBox No. 3127, LodhiRoad, New Delhi 110003.

Rick Arons, Euromarketing. Rs.7S0 hard.

New Delhi: Global Business Press, 1994. 277 pp.

Paul Gibbs, Doing Business in the European Union. New Delhi: Global Business Press, 1994. 234 pp. Rs.SSO paper. Doing business with the gigantic sized and now with greater economically and monetarily unified market of Europe is of strategic significance to any country or company. Tremendous opportunities of business that this market offers need to be understood and analyzed against the background of recent expansion, developManagement

& Change, Volume 3. Number

1 (January-June

1999)

212 BookReviews ment of the European union unification process in the post maastricht era. The two volumes under review provide different perspectives about the European union's role as a marketplace. Euromarketing by Rick Arons claims to provide a practical view of marketing into this new enlarged Europe. The book attempts to show how marketing executives can be successful by adopting suitable strategies in today's Europe. Aron has been successful in building an insider's perspective into European market by focusing on the causes of changes within Europe and dwelling upon the intricacies of enlarged European' union. The author has posed some interesting questions on investments and trade restrictive mechanism that still prevails and which is relevant for firms dealing with European business in general but of crucial importance for the American finns. The question of industry specific selective protectionism and the response of individual European countries in protecting their commercial interest-be it well known French and Belgian farm interest lobbies or German auto , manufacturing firms-has been debated through country experiences. The book provide a rare insight into the challenges of selling to the global market place using Europe as a base. How in view of enlargement and diversification of European companies business houses from outside continents need to adopt suitable strategies is thus the theme debated extensively in this work. The polemics of diverse range of subsidies and indirect support by sovereign governments in EU and relatively greater government restrictions (as compared to US) on investment and on exports provide a very insightful background against which the scope for American firms had been examined. Consolidation of single market has produced different kinds of impact and implication for different industries in term of-bordefcontrol, trade barriers, technical standards and R&D costs-thus paving or restricting opportunities for strategic alliances, and joint ventures. Industry specific scope for alliances, therefore, have been rightly examined giving examples of American and Japanese companies in the European markets. The author has analyzed the above developments in new emerging industries such as telecommunication, semi-conductor or even software industries, on the one hand, and has also provided indepth analyses on traditional sectors such as banking, pharmaceuticals and insurance. Rick Arons as an independent management consultant has amassed very intensive information on these industries over the years which has been detailed in a very interesting and lively manner. This has enhanced the readablity of the book and has helped in comprehension of complex issues. Strategic alliances in European union have been highlighted through the examples of both big as well as smaller companies. It is a realitytlJ.~t forming such alliances for expansion into these markets could prove to be fruitful only under certain circumstances. Although the author brings home the key aspects of such conditions for successful partnering in EU market, yet nowhere has he tried to make an incisive attempt to critically study the role of various factors (conducive or otherwise) in promotion of these successful strategic choices. The value of this Management

& Change,

Volume 3. Number

1 (January-June

1999)

Book Reviews 213 work would have enhanced immensely if the author had attempted a cause-tiffect analysis of these factors. Paul Gibbs' joumey into Europe begins by providing an astute analysis on the development of EU before giving us country-by-country pecularities of markets, consumer analysis, and differing business practices in European countries. It is known to all that the march to unification begining from formation ofEEC through the Treaty of Rome in 1957 to the creation of common currency in the form ofEuro has not been free from obstacles although Gibbs would make us believe so. The author has detailed various aspect ~f unification process till the ratification of Maastricht Treaty in 1993 paving the way for monetry and economic union in a rather simplistic manner. The process, as is well known, has been far from smooth to say the least. In fact, the conflict and bitter debates on the question of enlargement of EU process, divergent sovereign national interests of the nation states are not only a subject of fierce debate in various parliaments but there has been a very vast and rich documentation through various perspectives that has developed on EU related matters in recent past. In view of this, one wonders, if Gibbs should not have been slightly more discreet and identified delineating with clarity at least major obstacles, and should have chosen some major themes of confrontation among these sovereign states and various lobbies for an indepth analysis. In the absence of the above, the first-time reader of the developments about European union might construe as if unification process has been very orderly and without any problems which is farthest from the truth. In fact, major conflicting economic interest among the European Nation should have provided a basic background for further analysis which has not been focused well by the author. His treatment as country-by-country guide, however, gives a detailed and a very practical account of business practices. Some useful contact addresses provided by the author about each country will be of good value to practitioners. Although the same could not be said about the socio-economic breakdown, media-spend and consumption pattern which have been merely listed, and remains untested and outdated. The author has failed in offering any vigorous analysis either at one point of time or on trends which reflect changes over the years which could have been more indicative of the rise or decline of opportunities and hence the basis for future forecasts. The book, however, provides useful sources for practitioners searching to strengthen their commercial link" in ED. Are there any lessons that can be learnt for Illdia in this vast unified market on the basis of these two readings? The answer is yes. The interaction of American firms as analyzed by Rick Arons and practical down-to-earth country-by-country analysis on behavioural patterns and consumers trends by Paul Gibbs suggest succinctly that newer strategies will have to be designed for effectively conducting business with European firms in this constantly-changing economic powerhouse, i.e., European Union. Companies that take cognizance of this special condition and study consumer preferences and emerging business sub-culture under the Management & Change, Volume 3, Number 1 (January-June 1999)

214 BookReviews unified legal, political and institutional framework will have the best chances of expanding their businesses in ED and thus maximizing their profits. M.S. Verma (Dr.) Professor-Marketing Area, Institute for Integrated Learning in Management, 3, Lodhi Institutional Area, P. B. No. 3127, Lodhi Road, New Delhi-I 10 003.

Management of Banks Vasant C. Joshi and Vinay V. Joshi, Managing Indian Banks- The Challenges Ahead. New Delhi: Response Books (A Division of Sage), 1999. 251 pp. RS.350 cloth. Financial sector reforms have been the center-stage of economic liberalization. This is,basically due to the fact that the reform process was initiated in the backdrop of two serious crises. One, the precarious balance of payment position. Two, the threat of solvency confronting the banking system, which with the help of defective accounting practices, was able to conceal its real problem. Over the last eight years many of the problems and practices, which were relevant in the pre-liberalization era have been addressed to, but there are still many to be addressed. The challenges were/are of a very high order. Some of the concerned areas like strengthening of capital base; prudential and tighter norms for income recognition, classification of assets, provisioning for bad debt; relaxation of consortium regulations; pragmatic policy regarding credit delivery system; introduction of asset-liability management; new norms of rating, etc., have been to some extent, looked into. Against this background, the book Managing Indian Banks- The Challenges Ahead by Vasant C. Joshi and Vinay V. Joshi has been a useful one. It contains fourteen important chapters. Chapters on corporate planning, balance sheet-SWOT analysis, risk management, asset-liability management, analyzing treasuries will help the bankers and others in the financial sectors to get a very good first-hand knowledge of the topics. People from this sector who are still not familiar with these concepts will fmd the book extremely helpful. The authors, in the preface of the book have mentioned that the provocations behind writing the book have been two-fold. First, to make aware the bankers and financial industry personnel of the changes being brought about in this sector. Second, as to what is to be done to manage the bank more efficiently. As far as the first endeavour is concerned, the authors have done fairly good work. However, people who will look for ideas as to how to tackle the new challenges, may to some extent be disappointed. Experiences from bankslFI's which have done reasonably well in the management ofNP A or bringing about innovative instruments or effecManagement

& Change, Volume 3, Number 1 (January-June

1999)

BookReviews 215 tive financing schemes and so forth, would have been of value to the readers. On the whole, the book is a useful exercise. It provides fundamental inputs on many contemporary topics. It also includes readings on the regulatory framework, and rating methodology. The book's small size and lucidity make it a handy title to add to a banker's personal library.

Debasis Sanyal (Dr. ) Associate Professor-Finance Area, Management Development Mehrauli Road, Sukbrali, Gurgaon-122 001.

Management

& Change. Volume 3. Number

Institute, New

I (January-June

1999)

BOOKS RECEIVED

The following books have been received for review purpose. All India Management Association, Business-led HR Strategies. New Delhi: Excel Books, 1999. ix+175 pp. RS.125 paper. AlMA & AMEXCEL, Personnel Effectiveness and Development. New Delhi: Excel Books, 1999.131 pp. RS.125 paper. AlMA & AMEXCEL, Indian Busines-Strategiesfor Competitiveness. New Delhi: Excel Books, 1999. vii+152 pp. RS.145 paper. AlMA & EXCEL Books, Towards India Incorporated? New Delhi: Excel Books, 1998. 288 pp. RS.150 paper. Arons, Rick, Euromarketing. New Delhi: Global & Probus, 1991. 278 pp. Rs. 750 hard. Bharat, Nikhil (ed.) Emerging Issues in Management-A Case Collection. New Delhi: Excel Books, 1998. vi+232 pp. RS.125 paper. Bird, Drayton, Commonsense Direct Marketing. New Delhi: Global & Kogan Page, 1989. 347 pp. RS.750 hard. Byres, Terence J., The Indian Economy-Major Debates Since Independence. New Delhi: Oxford University Press, 1998. 424 pp. RS.575 hard Cairncross, Frances, Green Inc. Hyderabad: Universities Press, 1999. x+ 277 pp. RS.210 paper. Chatterjee, Bhaskar, Executive Guide to HRM. New Delhi: Excel Books, 1999. 135 pp. RS.95 paper. Clegg, Stewart R., Eduardo Ibarra-Colado and Luis Bueno Rodriquez (eds.) Global Management. London: Sage, 1999. xi+308 pp. ÂŁ 18.99 paper. Crosby, Barbara c., Leadership for Global Citizenship. Thousand Oaks: Sage, I999. xiii+217 pp. $24.95 paper. Debroy, Bibek (ed.) Challenges of Globalization. New Delhi: Rajiv Gandhi Institute for Contemporary Studies & Konark Publisher Pvt. Ltd., 1998. 492 pp. RS.500 cloth. Dushi, P. B., Investment Record Book. New Delhi: Vikas, 1999. v+ 152 pp. RS.150 paper. Gibbs, Paul, Doing Business in the European Union. New Delhi: Global & Kogan Page, 1996. 234 pp. RS.550 paper. Grant, Alastair, Presentation Perfect. New Delhi: Excel Books, 1999. 106 pp. RS.1I 0 paper. Gupta, G.P., Management by Consciousness. New Delhi: Excel Books. 1999. 202 pp. RS.175 hard. Hardingham, Alison, Psychology for Trainers. Hyderabad: Universities Press, 1998. vi+ 177 pp. RS.170 paper. Management & Change. Volume 3. Number 1 (January-June 1999) ~ 1998 Institute for Integrated Learning in Management. All Rights Reserved.

218 Books Received ILO, Technical and Ethical Guidelines for Workers' Health Surveillance. Geneva: ILO, 1999. v+41 pp. Swiss Francs 15, paper. Jain, P. C. (ed.) Handbookfor hard.

New Entrepreneurs. Delhi: OUP, 1998. xv+317 pp. RS.595

James, Judi, People Talk. New Delhi: Excel Books, 1998. xii+ 78 pp.'Rs. I00 paper. Judge, William Q., The Leader's Shadow-Exploring Thousand Oaks: Sage, 1999. xx+2 I6 pp. $62 hard.

and Developing Executive Character

Kanungo, Rabindra N. (ed.) Entrepreneurship & Innovations Models for Development. New Delhi: Sage, 1998. 366 pp. RS.395 cloth. Khurana, Rakesh & A. N. Ravichandran, Strategic Management. New Delhi: Global, 257 pp. RS.250 paper. Lobo, F. L., Sales & Distribution Management. New Delhi: Global, 1998.225 pp. RS.250 paper. Mabey, Christopher, Graeme Salaman and John Storey, Human Resource Management-A Strategic Introduction. UK: Blackwell Business, 1998. xii+590 pp. Price not mentioned, paper. Marrimala, Mathew J., Entrepreneurial Policies and Strategies-The New Delhi: Sage, 1999.346 pp. RS.375 cloth.

Innovators Choice.

Mathew, P. M., Finance for Small Enterprises in India. Cochin: Institute of Small Enterprises and Development, 1998. 114 pp. RS.I 15 hard. Mazur, Laura and Aunik Hogg, The Marketing Challenge. Hyderabad: Universities Press, 1999. xv+ 298 pp. RS.270 paper. Monappa, Arun and Mahrukh Engineer, Liberalization and Human Resource ManagementChallenges for the Corporations of Tomorrow. New Delhi: Sage, 1998. 2 17 pp. RS.350 cloth/Rs. I95 paper. Moorthi, Y. L. R., Brand Management: The Indian Context. New Delhi: Vikas, 1999. xi+ 171 pp. Rs. 275 hard. Murthy, D. B. N., Managing Quality: A Practical Guide to Customer Satisfaction. New Delhi: Response Books, 1999. 226 pp. Rs. 185 paper. Nadler, Gerald, Shozo Hibino & John Farrell, Creative Solution Finding. New Delhi: Excel Books, 1998. xi+498 pp. Rs.495 hard. N'Daba, Louis & Jane Hodges Aiberhard, HIV/AIDS and Employment. Geneva: ILO, 1998. 71 pp. 15 Swiss Francs, paper. Pestonjee, D. M., Stress & Coping-The 1998. 321 pp. RS.425 cloth/225 paper.

Indian Experience (2nd ed.). New Delhi: Sage,

Phansalkar, S. J. , Marketing Growth Happen-Learningfrom New Delhi: Sage, 1999.230 pp. RS.350 cloth/195 paper.

first generation Entrepreneurs.

PreskilI, Hallie & Rosalie T. Torres, Evaluative Inquiry for Learning in Organizations. Thousand Oaks: Sage, 1999. xxv+218 pp. $27.95 paper. Ramu, S. Shiva, Restructring and Break-ups. New Delhi: Response Books, 1999. 249 pp. Rs.350 cloth.

Management

& Change, Volume 2, Number 2 (July-December

Iti.GiD.h"4IJIKUl.i.".LLd.:

•••.

Ii&U"i,:=C::===Jd"UIi","

1998)

:,£Sit.li£

BooksReceived 219 Rao, S. L. & I. Natarajan, Markets for Consumer Products in India. New Delhi: Global, 1994. 90 pp. Rs. 250 paper. Rao, T. V., Appraising and Developing Managerial Performance. New Delhi: Excel Books, 1999. 313 pp. Price not mentioned, paper. Sherosky, Frank 1., Perfecting Corporate Character. New Delhi: Excel Books, 1999. x+ 299 pp. RS.175 paper. Singh, Avtar, Company Law (l2th edu.). Lucknow: Eastern Book Co., 1999. cxii+663 pp. RS.200 paper. Singh, AÂĽtar, Sanvida Vidhi (Hindi). Lucknow: Eastern Book Co., 1999. xxxi+261 pp. Rs.90 paper. Singh, K.P., Infrastructure in India. New Delhi: Excel Books, 1999.2\ 0 pp. Rs-350 hard. Sodhi, J. S., Industrial Relations and Human Resource Management in Trausition. New Delhi: ShriRam Centre for IR&HR, \999. viii+374 pp. RS.300 cloth. Srinivasan, S., Cash and Working Capital Management. New Delhi: Vikas, 1999. ix+228 pp. RS.350 hard. Srinivasan, T. N., Developing Countries and the Multilateral Trading System. Delhi: OUP, 1998. x+ \40 pp. RS.395 hard. Towers, Brian, The Representation Gap: Change and Reform in the British and American Workplace. New York: OUP, \997. x+294 pp. ÂŁ16.99 paper. Underwood, Lynn, Intelligent Manufacturing. Hyderabad: Universities Press, 1999. xi + 221 pp. RS.2\5 paper. Venkata Ratnam, C. S., Managing People. New Delhi: Global Business Press, 1992. 198 pp. RS.380 hard. Wakhlu, Arun, Managingfrom 245 paper.

the Heart. New Delhi: Response Books, 1999.239 pp. Rs.

Welford, Richard and Richard Starkey (eds.) Business and the Environment. Universities P~ess, 1999. xx+284 pp. Rs. 275 paper.

Hyderabad:

White, John and Laura Mazur, Strategic Communications Management-Making Public Relations Work. Hyderabad: Universities Press, 1999. xvi+277 pp. Rs. 260 paper. Xavier, M. J., Marketing in the New Millennium. New Delhi: Vikas, \999. xi+ 264 pp. RS.240hard. Zbar, Vic, Key Management Concepts-Unlocking 10 of the best Management Hyderabad: Universities Press, 1999. x+ \90. RS.\25 paper.

Books.

Zbar, Vic, Managing the Future-Unlocking 10 of the best Management Books. Hyderabad: Universities Press, \999. x+ 129 pp. Rs.\ 00 paper.

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& Change, Volume 2, Number 2 (July-December

1998)

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