Partnership at Work

The Quest for Radical Organizational Change

Bill Roche, John Geary

• Publisher: Routledge
• Year: 2006
• Print ISBN:
  9780415650694
• Edition: 1
• eBook ISBN:
  9781134408412
• Topic: Business
• Subtopic: Business General
• Index: Business

The partnership established between the Irish Airports Authority and its trade unions in the mid-1990s was groundbreaking in promoting union and staff involvement in all aspects of company decision-making. This book charts the progress, achievements and obstacles faced by the partnership based on full access to the partners, documents, observations on how the partnership functioned and three surveys of the company's workforce.

1 Understanding voluntary partnership

The subject of this book is the functioning and effects of voluntary partnership arrangements between management, unions and employees. The book draws on a significant case study of voluntary partnership in the Irish Airports’ Authority, Aer Rianta. This chapter sets the scene for the detailed examination of the Aer Rianta partnership throughout the book. It examines the concept of voluntary partnership and outlines the main themes and questions that have focused the study of voluntary partnership arrangements in general.

Approaches and features

The emergence on a widespread basis of various forms of co-operative employment relations arrangements in workplaces and enterprises is an important feature of the past two decades. Initiatives to foster co-operative employment relations have emerged in unionized and non-union workplaces and in the public and private sectors of the advanced economies (US Department of Labor 1996; EPOC 1997; Gill and Krieger 2000; Roche 2000; 2002). In Anglo-Saxon countries neither legislation nor collective agreements mandate works councils as a standard vehicle for employee or union representation in workplace or company decision-making. In these countries, especially the UK, Ireland, the United States, Canada, New Zealand and Australia, the incidence of voluntary co-operative arrangements has been significant, and these arrangements have provided an important channel for employee and union voice in organizational decision-making. Voluntary cooperative arrangements have attracted academic attention in the Anglo-Saxon countries, either directly or as features of broader programmes of innovation in work organization and employment relations (Cooke 1990; Appelbaum and Batt 1994; Cutcher-Gershenfeld and Verma 1994; Kochan and Osterman 1994; Ichniowski et al. 1996; Boxall and Haynes 1997; Guest and Peccei 1998; Knell 1999; Verma and Chaykowski 1999; Roche and Geary 2000; 2004; Osterman et al. 2001; Rubinstein and Kochan 2001; Geary and Roche 2003; Terry 2003a and b; Kelly 2004).

The involvement of trade unions in the design and operation of new forms of shared decision-making in firms and workplaces is widely viewed as the critical factor differentiating the concept of partnership from the more general issue of employee involvement or new forms of work organization. Partnership arrangements introduced in co-operation with unions often include both direct and indirect or representative means of engaging employees and union members in organizational decision-making. Notwithstanding the significance of voluntary partnerships in the unionized sectors of Anglo-Saxon countries and the growing academic interest in what they represent and why they have emerged, it remains striking how little rigorous attention has been devoted at the micro-level to the functioning, antecedents and effects of partnership arrangements. William Cooke’s 1990 book, Labor–Management Co-operation, based on a study of US manufacturing, remains the most detailed survey-based analysis of the antecedents, features and effects of partnership in the US. More recently, Guest and Peccei (2001) have examined the features and effects of partnership arrangements in companies affiliated to the Involvement and Participation Association (IPA) in the UK, while Roche and Geary (2000) have examined the incidence in Ireland of approaches to handling change based on partnership and involvement. The case-study literature has been dominated by a small number of North American exemplars, in particular the Saturn Plant (Rubinstein and Kochan 2001), the Shell Sarnia plant in Canada (Heckscher 1988) and the General Motors-Toyota NUMMI joint venture in California (Grattan 1997). Exemplary and brief case studies have also been reported in the UK literature (Knell 1999). Only recently have rigorous case studies been reported in the UK, based on the experiences of companies such as United Distillers and Allied Distillers Limited (Marks et al. 1998). Kelly (1999; 2004) has also presented an important critique of some cases that have been widely regarded as exemplars of partnership in the UK, including Blue Circle Cement, Hyder (Welsh Water) and Asda.

No agreed definition or conceptualization of partnership exists in either the academic or policy literatures (Guest and Peccei 2001: 208). Three broad and overlapping approaches to conceptualizing partnership can be identified. Two of these treat partnerships involving unions within more general portrayals of partnership that encompass employee involvement and non-union companies. The first broad approach to conceptualizing partnership focuses on the principles and practices that shape co-operative employment relations arrangements. Thus, Guest and Peccei (1998; 2001) and Knell (1999) locate partnerships in which unions are involved within more general co-operative employment relations arrangements operating on the basis of a series of principles and ‘beliefs and attitudes’ which are seen as anchoring a distinctive set of partnership practices. Working on the basis of the definition and conceptualization of partnership developed by UK-based lobby group the Involvement and Participation Association, and a survey of IPA member companies, Guest and Peccei (1998; 2001) undertook a study of partnership practices. Through the survey they largely inductively establish the principles, attitudes and beliefs and practices associated with partnership. The principles of partnership are seen to entail ‘good treatment of employees now and in the future’, including an affirmation of financial participation and the disclosure of business information; the principles of (accepting) ‘employee rights and benefits’, including the right to independent representation; on the employee/union side, partnership is seen also to involve ‘employee responsibilities’ in such areas as flexibility, commitment to business goals and a willingness to bring about improvements in production processes (Guest and Peccei 1998: 20). The ‘beliefs and attitudes’ underlying partnership involve an acceptance of the role of trade unions and a willingness to accommodate multiple interests in the running of the enterprise. The partnership practices that are seen to flow from such principles, attitudes and beliefs include direct employee involvement, representative involvement in decisions regarding employment issues and broader organizational policies; flexible forms of job design and a focus on quality; the use of performance management systems; employee share ownership programmes (ESOPs); communication practices; harmonized terms and conditions of employment and practices aimed at promoting employment security (Guest and Peccei 1998: 24).

Adopting such an approach, Guest and Peccei established that some IPA ‘partnership’ companies harboured considerable ambiguity regarding the role and legitimacy of trade unions and the degree to which multiple interests needed to be recognized and accommodated in the running of companies. Evidence also emerged of managements’ emphasis on employee contribution and less than balanced recognition of the principle of ‘mutuality’. Finally, the incidence of ‘partnership practices’ is seen to vary significantly (1998; 2001). As the features of unionized IPA member companies are not reported separately, no definite conclusion can be reached as to whether the unionized partnerships mirror the survey findings in general in reflecting ambiguous and diverse attitudes towards unions, employee contribution and mutuality, as well as variable levels of involvement, representative structures and partnership practices. Following the broad template of the approach of Guest and Peccei, Knell’s (1999) study of exemplary cases of partnership in the UK also locates unionized partnerships within more general co-operative industrial relations arrangements and seeks to isolate ‘a core set of values’ that represent a ‘partnership philosophy’. The core values of partnership are seen to involve ‘trust and honesty’, mutuality, the creation of a common vision, open management, reaching agreement without coercion, multifaceted employee voice mechanisms, a stress on involvement, ownership and responsibility, employment security (sometimes qualified in terms of ‘employability’), fair reward and an emphasis on quality (Knell 1999: 19–22).

A second broad approach to conceptualizing partnership again incorporates unionized partnerships within the more general category of the ‘mutual gains enterprise’ (Kochan and Osterman 1994). What is distinctive about this approach, which draws extensively on US exemplary cases, is that it presents a multi-level model of ‘principles guiding the mutual gains enterprise’ (Kochan and Osterman 1994: ch. 3). At the ‘strategic level’, business strategies that assign priority to quality and innovation are seen to be necessary underpinnings of the mutual gains enterprise; top management commitment and ways of providing an effective voice for human resource issues and priorities in strategy-making and governance are also presented as generic principles at a strategic level (Kochan and Osterman 1994: 55–8). At a ‘functional human resource policy level’, commitment to mutual gains is seen to require staffing practices that promote ‘employment stabilization’, investment in training and development and compensation practices contingent on performance, especially contingent compensation practices such as profit- and gain-sharing that are seen to reinforce co-operation, contribution and participation (Kochan and Osterman 1994: 52–5). Finally, Kochan and Osterman also identify a series of workplace-level practices that underpin mutual gains enterprises, including high standards of employee selection, broad job task design and teamwork, employee involvement in problemsolving and a climate of trust and co-operation (Kochan and Osterman 1994: 47–52).

The final approach focuses directly on cases of partnership involving unions and conceptualizes partnership mainly in terms of the structures of decision-making arrangements that are put in place to promote co-operation between management and unions and management and employees. Thus, Cooke’s major work on partnership in US manufacturing focuses on direct (team-based) and representative (committee-based) ‘co-operative efforts’ that occur outside traditional contract negotiation; contain formalized mechanisms for union and/or employee inputs into management decision-making, and are intended to improve performance in a variety of ways (Cooke 1990: 3). Cooke’s approach includes as instances of partnership cases where companies remain ambiguous or even hostile towards unionization (Cooke 1990: ch. 3). A second example of this broad approach is provided by a seminal paper by Cutcher-Gershenfeld and Verma (1994). Drawing on North American exemplars, these researchers focus on cases of partnership where unions and managements are involved in ‘joint governance’ arrangements. These arrangements are distinguished from initiatives of the type identified by Cooke, which are regarded as a long-established feature of North American industrial relations (Cutcher-Gershenfeld and Verma 1994: 551). Joint governance involves an ‘ongoing formal process where workers and their immediate supervisors or union and management leaders bear joint responsibility for making decisions (Cutcher-Gershenfeld and Verma 1994: 551; emphasis in the original). Joint responsibility means the equal sharing of decisionmaking power, understood in the procedural sense that the joint committees, forums or groups addressing issues subject to co-operation consist of equal numbers of labour and management representatives, or operate on a consensus basis – implying that either side enjoys the power of veto (Cutcher-Gershenfeld and Verma 1994: 551–2). In the cases portrayed by Cutcher-Gershenfeld and Verma as instances of joint governance, the scope of decision-making is sometimes narrow (i.e. it may be restricted to a single issue such as training or contracting out) and sometimes broad, encompassing multiple issues and extending possibly to the fundamentals of competitive strategy. In some instances of joint governance of broad scope, for example, Saturn or Shell Sarnia, it would appear that co-operative engagement between management and unions effectively subsumes collective bargaining, rather than operating on a parallel track, as in the definition proposed by Cooke.

Clearly a good deal of overlap exists between these approaches to defining and conceptualizing partnership. Particularly striking is the symmetry between the approach of Guest and Peccei, with its emphasis on principles, attitudes and beliefs leading to practices, implying a hierarchical ordering of attributes of partnership and the more concrete multi-level model of Kochan and Osterman. Equally clearly, it emerges that empirical cases falling within the scope of unionized partnerships consistent with these definitions and conceptualizations may be characterized in practice by varying levels of acceptance of such principles as the legitimacy of unions and their role in decision-making; by varying degrees of emphasis on mutual gains as distinct from the expected contribution of employees; by varying forms of governance, both with respect to the scope of joint initiatives and with respect to the degree of decision-making power accorded to unions; by varying employment and human resource practices; and varying relationships between co-operative ‘voice’ channels and established collective bargaining arrangements.

While this variability or diversity of postures and practices has emerged mainly, as it were, in ‘cross-section’ in the literature outlined in this section, it is also plausible to suppose that individual cases of partnership may reveal considerable variability in longitudinal terms: with important changes in postures, functioning and effects occurring as partnerships develop, confront barriers and challenges and adapt in the face of attempts by the parties to grapple with problems and challenges and their experiences of successes and failures along the way. This raises the issue of the dynamics of partnership arrangements and of the influences that may shape these dynamics. Such influences are considered in outline here to provide a basis for the thematic focus of this study. Individual chapters of the book will review the literature pertaining to influences on partnership in more detail.

Influences and dynamics

Strategy and governance

The literature on partnership has adopted from the wider human resource management (HRM) literature the premise that the viability of co-operative forms of industrial relations depends on the firms involved pursuing competitive strategies that assign priority to quality and innovation rather than depending solely on cost-based competition to secure advantage. Unless such attributes as commitment, motivation, loyalty and skill are required for firms to compete successfully, partnership may be impossible to sustain over time (Kochan and Osterman 1994: ch. 3). Even where competition pivots in important respects around quality and innovation, strains may arise as firms seek to accommodate to pressures on costs and to short-term, cost-related commercial challenges (Colling 1995). A further important issue with respect to the viability of partnership arrangements is the longterm viability of quality-differentiated commercial strategies in industries and markets subject to deregulation and increasingly intense cost pressures (Colling 1995; Crouch and Streeck 1997).

Even where competitive postures may be conducive to partnership, it is recognized that specific mechanisms for integrating human resource and industrial relations policies and practices with strategic decision-making, for example influential human resource executives, works councils or similar structures, have an important bearing on the viability of partnership arrangements (Kochan and Osterman 1994: ch. 3). Only thus can those policies and practices be taken into direct account when strategic options and opportunities are being considered and strategic choices are being made. Without specific mechanisms for ‘strategic integration’, strategic and operational priorities and decisions may become disconnected, leading to a possible proliferation of tensions and contradictions.

The priority accorded to partnership arrangements and ultimately their sustainability is also widely understood as being predicated on wider systems of corporate governance in firms, and in particular the influence of capital markets versus bank-based credit in financing firms’ capital requirements (Kochan and Osterman 1994: ch. 5; Streeck 1997; Ferner and Quintanilla 1998). In the case of public sector organizations, where the state may be the main or sole ‘shareholder’, the posture of governments towards governance is of obvious importance, particularly as it is well documented that both managements and unions in the public sector routinely attempt to win support for, or to block, employment and employment relations proposals through complex and often informal dealings with senior civil servants and ministers and even with back-bench and local politicians (Ferner 1988; Hastings 1994; 2003).

Organizational boundaries

Discussions of how competitive strategy may dovetail with the creation and maintenance of partnership commonly take as given that the boundaries of the business unit will remain stable over the medium term. It has recently been argued that when such an assumption is untenable, major difficulties may arise with respect to the attraction or durability of partnerships (Osterman et al. 2001: ch. 3; Rubinstein and Heckscher 2003). Rubinstein and Heckscher (2003: 192) note that, while radical initiatives in ‘co-management’ in the US (the term, as they use it, appears cognate to ‘joint governance’) have been shown to lead to higher productivity and lower cost, the diffusion of partnership arrangements of this kind has nevertheless remained limited, while existing initiatives are under pressure. Rather than attributing this state of affairs mainly to such inertial forces as ‘old-line thinking on the part of managers and union leaders’, Rubinstein and Heckscher believe that it may reflect the cardinal priority now attributed by businesses to achieving flexibility in turbulent markets (2003: 195–6).

Partnership is seen to impose constraints on flexibility as a consequence of expectations and assurances with respect to the maintenance of pay and job security and commitment to training and retraining. In turbulent competitive conditions, firms are seen to focus on core competencies to secure competitive advantage. They may as a consequence promote the vertical disintegration of their operations: divesting themselves of non-core activities and entering a series of alliances with other companies that may include resort to outsourcing (Rubinstein and Heckscher 2003: 196–7). Such an approach may be seen by firms to offer greater flexibility and promise than partnership. Rubinstein and Heckscher accept that it remains an open question whether competitive forces promoting vertical disintegration may become so generalized and intense as to displace partnership of the kind that has become familiar in North America. They nevertheless suggest the possible emergence of a qualitatively new kind of ‘networked partnership’ that crosses organizational boundaries – the prototypes of which are barely visible at present (2003: 202–3). What is important in the present context is the observation, informed by empirical observation of some of the leading US initiatives in co-management, that turbulent markets and fluid organizational boundaries may pose serious challenges even to those partnerships seen to be capable of delivering the highest flexibility and the most impressive results with respect to costs, productivity and quality.

Senior management

Closely related to the basis on which firms seek to compete and the role of industrial relations and human resource arrangements in firms’ competitive postures, is the issue of corporate values or ethos (Kochan and Osterman 1994; Osterman 1994). It is recognized that, while market pressures are important influences on the choices that firms make, such choices are seldom determined by markets alone. Corporate values may thus be significant in shaping firms’ strategies and their choice of employment systems and specifically in sustaining partnership-based approaches to employment relations (Kochan and Osterman 1994: ch. 4; Guest and Peccei 1998; Jacoby 1997). Senior management is recognized as being of pivotal importance in underwriting and communicating values that emphasize stakeholding and viewing employees as resources in a partnership context (see especially Kochan and Osterman 1994: 56–8).

Top management support is also generally recognized as a prerequisite for sustained human resource and industrial relations innovation, especially so when the innovations involved seek to alter radically the status quo and involve significant challenges to vested interests (Kochan and Osterman 1994: ch. 3). In normative models of change, top-level management is commonly seen as pivotal in articulating and communicating a vision of change and in signalling to lower-level management the priorities and behaviours that will find favour or result in sanctions. This view has been underlined in the literature on partnership (see Appelbaum and Batt 1994; Cutcher-Gershenfeld and Verma 1994; Knell 1999). If top-level managers are seen as the key articulators, communicators and agents reinforcing changes and innovation, senior line managers often emerge in the wider HRM literature as the ‘heroes’ of programmes of change and innovation (Kochan et al. 1986; Guest 1987; Storey 1992; Storey and Sisson 2002; Hastings 2003). Forced to accommodate to external commercial pressures, it is senior line managers who are seen to establish the main strategic and operational parameters of change programmes in human resources and industrial relations – commonly in the context of a realignment of power and roles as between line managers and personnel specialists. Where senior line managers drive change programmes and assume responsibility for new practices, the sustainability of innovations is seen to be enhanced. Such a model of the transformative role of senior line managers has again entered the literature on partnership (see especially Kochan et al. 1986).

Middle managers

Middle manage...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Illustrations
• Preface
• 1 Understanding voluntary partnership
• 2 The case and research methods
• 3 The emergence and development of partnership
• 4 Partnership and commercial strategy
• 5 Senior managers
• 6 Middle managers
• 7 Trade unions
• 8 Employee attitudes and behaviour
• 9 Dual commitment
• 10 The breakdown of partnership
• 11 Advocates, critics and partnership
• Appendix
• Bibliography