Forks in the Road: Workplace Governance and the Global Marketplace

• Author: Anil Verma
• Pages: 217-234

217

CHALLENGE OF WORKPLACE GOVERNANCE

Forks in the Road: Workplace

Governance and the Global Marketplace

The context for business changed quite dramatically in the last two decades

of the twentieth century. The forces of deregulation, freer trade, new

technologies and demographic shifts have increased competitive pressures

facing all businesses. Workplace governance, or the rules and procedures by

which workplaces are run, evolved in most countries in an era of relatively

stable markets and technology. The new economic environment is challenging

and testing many of these old rules.

Governance, a term borrowed from political theory, describes the web of

rules, structures and processes that any society develops to ensure an orderly

achievement of its goals. Governance in free societies takes the form of an

elected legislature, the judiciary and an executive branch. Since the essence of

governance is a set of rules and structures to determine and achieve goals it is

not difficult to apply these concepts to the workplace.

A quick review of history would show that different types of workplace

governance regimes have emerged during different periods. Moreover, different

types of regimes have been dominant during various historical periods. For

example, non-union workplaces were the norm before the 1940s in North

America. Even within non-union establishments, there were discernibly

different philosophies governing the workplace. Later, when unions began to

grow in the 1940s another set of workplace governance rules were developed

with input from labour. More recently, service industries that are knowledge

intensive have been growing rapidly. These firms acquire and develop

knowledge to produce the services they sell. Internal processes in these

organisations tend to be different from the goods producing industries.

Accordingly, these organisations have tended to develop other distinguishable

forms of workplace governance.

In this chapter, I outline some trends in workplace governance that are

likely to develop over the next few years. Although my analysis draws most

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218 HUMAN RESOURCE DEVELOPMENT

explicitly on the North American experience, its thrust is directed at workplaces

everywhere, including the developing countries such as those in the Caribbean.

There are several reasons to assert the global nature of workplace changes.

Katz and Derbishire (2000) demonstrate that many changes occurring at the

workplace level are truly global in nature. It is true that many national and

historical differences keep some institutional practices divergent. However,

many trends and pressures for change at the workplace level, such as quality,

are unmistakably global.

In the remainder of the chapter, emerging trends in unionised workplaces

such as joint labour-management governance is discussed, then, in the second

section, tendencies towards worker representation and participation, that are

evident in non-union workplaces are discussed. The last section briefly

discusses knowledge intensive work and workplaces where the union-non-

union distinction is not as salient as the nature of work in determining

workplace governance systems.

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Governance applied to the workplace means a set of rules, procedures

and structures that govern allocation of resources at the workplace. These

resources can be time and materials in the traditional sense but it also includes

privileges, responsibilities and rights of all individuals. During the early days

of the Industrial Revolution, workplace governance was, generally, a matter

for managers to decide. Indeed, this was one of their principal tasks. On the

other hand, industrial relations theorists such as Commons (1934) and others

saw growing labour involvement in the workplace as a form of “industrial

governance.” Slichter (1941) argued that, just as common law and judicial

reviews complement statutory law, so do work rules and grievance procedures

complement written agreements and procedures at the shopfloor. He suggested

that the development of rules and dispute resolution procedures at the

workplace was essentially a form of industrial governance.

In a model explicated elsewhere, I have argued that external pressures

such as deregulation, freer trade, new technologies and demographic shifts

can be theorised to influence workplace practices through an impact on

customer preference for higher quality, new innovations and lower cost (Verma

and Irvine 1992; Verma and Weiler 1994). In order to deliver higher quality

and innovations, firms need to move towards a set of human resource policies

that include flexible work organisation, employee involvement, incentive-

based compensation and better skills through training. Thus, a direct link

can be drawn between external competitive pressures and workplace practices