- Email: [email protected]
Power sharing in industry
Book Reviews Edited by Harry Jones Models and Prokctiom of Demand in Post-War Britain, by A. DEATON,Chapman & Hall, London (1975), 261pp. £7.50
(hardback). This book is the first in a new series, Cambridge Studies in Applied Econometrics; in many ways it will be a continuation of the earlier and well-respc~ed 'Programme for Growth' series produced by The Cambridge Growth Project under the direction of Professor Richard Stone. The new studies are intended to concentrate in more detail on certain parts of the overall model rather than to present overall assessments of the economy. The first study concerns consumer demand and takes as its starting point Stone's famous Linear Expenditure System, devoting considerable space to the econometric problems of estimation thrown up by this and similar systems. Empirical results are reported too, together with some tentative forecasts for 1975 and 1980. The treatment is fairly mathematical and technical and demands prior knowledge of the area on the part of the reader. Nevertheless it is encouraging to find the author making the following comment ' . . . although science may require mathematical techniques, the mere use of mathematies does not create science. The introduction of mathematieal standards of rigorous argument...does not guarantee any correspondence between theory and reality'. The author is also suitably modest about the likely predictive ability of his estimated model at a time of unprecedented chang=; in relative prices. Still, the text will be largely for the specialist though, from such a renowned stable, it is one with which the practising economist ought to have some acquaintance. It should also be of interest to long range planners who base their assessments on such macro-economic data at the national level as is dealt with by this author. As an account of the present state of play in this complex area, Angus Deaton's book is likely to be one of the best. J. B m P ~ NIESR London (165)
Power Shariag in Industry, by I. MAc~r~i'~, Gower Press,
London (1975), 180pp. £4.75 (hardback). Basically this book is concerned with e~nployee participation, that is to say, with the distribution of responsibility amongst those who have a planning function and those who carry out the activities by which the company earns its income. With participation, the Company, its employees, its managers and directors, must consider together the long term prospects of the concern measured in economic values, the clearest of which is the value added. This is the measure of the firm's effectiveness and can be the guide to the proportion which can be awarded to the employees, but ' . . . without a strong and dedicated participative effort, this would merely be a dessicated accounting exercise'. As Adrian Cadbury says in the foreword to the book, progress depends upon a process of accommodation between the various groups that together make up the enterprise. Professor MacBeath handles the whole subject by a three part approach. The first covers Participation in Practice; the employee reward through a just monetary reward coupled
92
with methods of measurement as well as the other elements ofj0b enrichment and satisfaction. The second section deals with Participation by Rule; the organisation of the mode of participation in decision sharing--works councils and two tier boards of the kind favoured by the TUC and aiming to have the power of veto over major investment decisions, mergers or takeovers and closures or major deployment. The third section is titled The Power to Share with the si~t sub-title of Taking Risks with People. One reader o f the book consulted by this reviewer stated that ' . . . one very valuable aspect described is that of the interaction between those who plan the schemes and those who are to 'participate'--and particular importance is given to accountability. Again the possible conflicting interests of decision-makers are recogoised, as is the human and economic cost of inept decisions. The book draws attention to the inate conflict between decisions made in the commercial world, for the need for rapid assessment and decision making --and 'participation' which inevitably means delay and possible disclosure of sensitive issues. It treats fully the issues that arise from this conflict--the balance of advantage between rapid decision making on the one hand and the collective resistance or loss of performance if employees do not understand and become 'grudging in spirit'. In other words a more lengthy decision process (and consequent higher cost) may prove acceptable if it results in a much better performance over time. Seen from the seat of the long range planner such matters are of great importance'. The book is valuable, practical and readable. The economics of participation are well described and the social aspects, though clearly set out, are not allowed to obscure those aspects of the enterprise which determine whether or not the company will survive. All that this book deals with is very topical and should be viewed in conjunction with the concept of the Planning Agreements as between Government and industry--and which, under conditions to be confirmed, are foreseen to be 'di.c~nsable' (negotiable?) to employees as part of Power Sharing in Industry. "" The book also includes a useful section on definitions and referenc~ for further reading. Not only a book for corporate long range planners, but for all executives concerned with people, e.g. personnel specialists, and in particular, chief executives. H. J o ~ et al. (172)
Corporate Models Today: A New Tool for Financial Management, by P. H. GP.n'~YeRand J. WOOL~R,Instituteof Chartered Accountants in England and Wales, London (1975), 316pp. £7.00 (hardback). 'Corporate Models Today' is both an extremely practical book and a work of scholarship. Extensively researched, the book is eminently readable, yet also a useful work of reference. A 'must' for corporate planners. In defining the structure of the book, the authors postulate a series of questions: • How may, and how do, companies acquire corporate models ? • What are the main types of models that a company may develope ?
LONG RANGE PLANNING
(hardback). This book is the first in a new series, Cambridge Studies in Applied Econometrics; in many ways it will be a continuation of the earlier and well-respc~ed 'Programme for Growth' series produced by The Cambridge Growth Project under the direction of Professor Richard Stone. The new studies are intended to concentrate in more detail on certain parts of the overall model rather than to present overall assessments of the economy. The first study concerns consumer demand and takes as its starting point Stone's famous Linear Expenditure System, devoting considerable space to the econometric problems of estimation thrown up by this and similar systems. Empirical results are reported too, together with some tentative forecasts for 1975 and 1980. The treatment is fairly mathematical and technical and demands prior knowledge of the area on the part of the reader. Nevertheless it is encouraging to find the author making the following comment ' . . . although science may require mathematical techniques, the mere use of mathematies does not create science. The introduction of mathematieal standards of rigorous argument...does not guarantee any correspondence between theory and reality'. The author is also suitably modest about the likely predictive ability of his estimated model at a time of unprecedented chang=; in relative prices. Still, the text will be largely for the specialist though, from such a renowned stable, it is one with which the practising economist ought to have some acquaintance. It should also be of interest to long range planners who base their assessments on such macro-economic data at the national level as is dealt with by this author. As an account of the present state of play in this complex area, Angus Deaton's book is likely to be one of the best. J. B m P ~ NIESR London (165)
Power Shariag in Industry, by I. MAc~r~i'~, Gower Press,
London (1975), 180pp. £4.75 (hardback). Basically this book is concerned with e~nployee participation, that is to say, with the distribution of responsibility amongst those who have a planning function and those who carry out the activities by which the company earns its income. With participation, the Company, its employees, its managers and directors, must consider together the long term prospects of the concern measured in economic values, the clearest of which is the value added. This is the measure of the firm's effectiveness and can be the guide to the proportion which can be awarded to the employees, but ' . . . without a strong and dedicated participative effort, this would merely be a dessicated accounting exercise'. As Adrian Cadbury says in the foreword to the book, progress depends upon a process of accommodation between the various groups that together make up the enterprise. Professor MacBeath handles the whole subject by a three part approach. The first covers Participation in Practice; the employee reward through a just monetary reward coupled
92
with methods of measurement as well as the other elements ofj0b enrichment and satisfaction. The second section deals with Participation by Rule; the organisation of the mode of participation in decision sharing--works councils and two tier boards of the kind favoured by the TUC and aiming to have the power of veto over major investment decisions, mergers or takeovers and closures or major deployment. The third section is titled The Power to Share with the si~t sub-title of Taking Risks with People. One reader o f the book consulted by this reviewer stated that ' . . . one very valuable aspect described is that of the interaction between those who plan the schemes and those who are to 'participate'--and particular importance is given to accountability. Again the possible conflicting interests of decision-makers are recogoised, as is the human and economic cost of inept decisions. The book draws attention to the inate conflict between decisions made in the commercial world, for the need for rapid assessment and decision making --and 'participation' which inevitably means delay and possible disclosure of sensitive issues. It treats fully the issues that arise from this conflict--the balance of advantage between rapid decision making on the one hand and the collective resistance or loss of performance if employees do not understand and become 'grudging in spirit'. In other words a more lengthy decision process (and consequent higher cost) may prove acceptable if it results in a much better performance over time. Seen from the seat of the long range planner such matters are of great importance'. The book is valuable, practical and readable. The economics of participation are well described and the social aspects, though clearly set out, are not allowed to obscure those aspects of the enterprise which determine whether or not the company will survive. All that this book deals with is very topical and should be viewed in conjunction with the concept of the Planning Agreements as between Government and industry--and which, under conditions to be confirmed, are foreseen to be 'di.c~nsable' (negotiable?) to employees as part of Power Sharing in Industry. "" The book also includes a useful section on definitions and referenc~ for further reading. Not only a book for corporate long range planners, but for all executives concerned with people, e.g. personnel specialists, and in particular, chief executives. H. J o ~ et al. (172)
Corporate Models Today: A New Tool for Financial Management, by P. H. GP.n'~YeRand J. WOOL~R,Instituteof Chartered Accountants in England and Wales, London (1975), 316pp. £7.00 (hardback). 'Corporate Models Today' is both an extremely practical book and a work of scholarship. Extensively researched, the book is eminently readable, yet also a useful work of reference. A 'must' for corporate planners. In defining the structure of the book, the authors postulate a series of questions: • How may, and how do, companies acquire corporate models ? • What are the main types of models that a company may develope ?
LONG RANGE PLANNING