Managing Competitive Crisis: Strategic Choice and the Reform of Workrules

Citation

Tzafrir, S. (2002), "Managing Competitive Crisis: Strategic Choice and the Reform of Workrules", International Journal of Manpower, Vol. 23 No. 7, pp. 672-674. https://doi.org/10.1108/ijm.2002.23.7.672.1

Understanding the phenomena of managing competitive crisis between companies and employers’ associations in Britain is of paramount importance for managers operating in Britain. The crisis seriously affected the management of work relations in Britain between 1979 and 1991. In the past, industrial relations in Britain have been strongly influence by both economics and legislation. On the one hand, national economies have suffered from periods of recession and unemployment. On the other, Conservative governments have taken an aggressive approach towards unionized employees as well as legal restrictions and an assertive stance towards bargaining with trade unions.

According to the author, “the study reveals an intricate and multi‐faceted pattern of evolution in the institutions and conduct of industrial relations”. He further states that “broadly common competitive shock created various trajectories of procedural and substantive rule reform”. The implication is that exploring the way in which employers could act in different situations or under uncertainty can be a major challenge facing managers today. To do this, the author uses the “strategic choice” model of Kochan et al. (1986) as an initial base for inquiry. Within this framework, it is crucial to take into account the three levels of industrial relation systems:

1. 1.

   (1) long‐term strategy and policy‐making;

2. 2.

   (2) collective bargaining and personnel policy; and

3. 3.

   (3) workplace and individual‐organization relationship.

However, the author argues that the strategic choice studies fail to address the politics and the uncertainties of managerial decision‐making. The author suggests modifying these conditions into a new industrial relations model for competitive crisis.

While this book is based on longitudinal research, it is basically an interview survey of 50 predominantly highly unionized British companies collected at two points in time – 1979 and 1991. Thus, the book is biased in its assessments by a focus on unionized companies, in addition to a focus on low‐tech plants. While the author attempts to develop easily understood techniques to summarize the data using short tables and elementary scales of classification, it would have been more desirable to employ non‐linear statistics, because of the small number of organizations in the sample, to mine the data base more fully.

Drawing on his extensive longitudinal research, Wright identified five characteristics essential to understand the process of competitive crisis: environmental pressures, environmental uncertainty, managerial frames of reference, workplace situation, and workrule change. He asserts that learning to interpret these characteristics can lead managers to increase their ability to cope with crisis. Wright believes this type of analysis explores the “black box” view of management policy‐making in industrial relations.

The author, in this book, has examined the competitive crisis model at multiple levels of analysis. The model tightly links environmental pressures and environmental uncertainty with managerial frames of reference for each firm. “The outcomes may be that frames of reference differ substantially from firm to firm, even between those companies trading in similar product markets and labor markets, and with comparable institutional characteristic”. By contrast, other models focused their attention on industry within a set of generic environmental factors. The advantage of this approach is that it brings into focus the unique managerial characteristic integrated into specific organizational cultures that are woven into their organizational environment. Indeed, a large organization can have units with totally different cultures. In sum, the competitive crisis model reflects, in a way, the resource‐base view by strengthening the important role of managers and their responsibility in interpreting and constructing their specific organizational environment.

The managing competitive crisis model offers real value to three groups of managers who work in unionized companies. One is the policy‐maker who recognizes that analyzing an organizational environment is critical for survival in an uncertain and changing world. A second group is the human resource management practitioners responsible for assisting these managers. For both groups, the book provides a fertile ground of how to examine minutely competitive crisis. For a third group, trade union representatives, the book is a powerful weapon for understanding and learning from the past on how to implement certain ideas in the future. It would also be of significant interest to individuals interested in understanding current unionized issues and the critical role that policy‐makers play in managing crises. In sum, the book attempts to gives an explicit framework for understanding competitive crisis and the critical role of management policy‐makers in resolving these crises.